Greetings, welcome to the Data Storage Corporation earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, David Waldman, Investor Relations. Please, you may begin. Thank you, and good morning, everyone, and welcome to Data Storage Corporation's first quarter 2023 business update conference call. On the call with us this morning are Chuck Piluso, Chairman and CEO; and Chris Panagiotakos, Chief Financial Officer. The company issued a press release this morning containing first quarter 2023 financial results, which is also posted on the company's website. If you have any questions after the call or would like any additional information about the company, please contact Crescendo Communications at 212-671-1020. Before we begin, I'd like to remind listeners that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended that are intended to be covered by the safe harbor created thereby. Forward-looking statements are subject to risks and uncertainties that cause actual results, performance, or achievements to differ materially from any future results, performance, or achievements expressed or implied by such forward-looking statements. Statements preceded by, followed by, or that otherwise include the words believes, expects, anticipates, intends, projects, estimates, plans and similar expressions or future or conditional verbs such as will, should, would, may, and could are generally forward-looking in nature and not historical facts, although not all forward-looking statements include the foregoing. Although the company believes the expectations reflected in such forward-looking statements are reasonable, it can provide no assurance that such expectations will prove to have been correct. Important factors that could cause actual results to differ materially from the company's expectations include, but are not limited to, the company's ability to leverage the scalability and performance of Flagship Solutions, the company's ability to benefit from the IBM cloud migration underway, the company's ability to position itself for future profitability, and the company's ability to maintain its Nasdaq listing. These risks should not be construed as exhaustive and should be read together with the other cautionary statements included in the company's quarterly report on Form 10-Q for the quarter ending March 31st, 2023, annual reports on Form 10-K, and current reports on Form 8-K filed with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it was initially made, except as required by law. The company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances, or otherwise. Now I turn the call over to Chuck Piluso. Please go ahead, Chuck. Thank you, David, and good morning, everyone. We continue to make strong progress as it relates to the implementation of the business initiatives that I highlighted on our last call. These initiatives are highly targeted to accelerate our growth and should assist in achieving our goal of long-term sustainable profitability. Historically, we've had an impressive 23% compounded annual growth rate since 2017, but we believe that through these initiatives, we can generate even stronger growth going forward. In fact, our near-term goal is to get to $50 million in high margin revenue run rate in the coming years through a combination of both strong organic growth and strategic acquisitions. Towards this end, we have a number of specific activities underway, including expanding our dedicated sales team, hosting revenue-driven sales events, growing our channel partner program at Flagship, Nexus, as well as CloudFirst, increasing our international footprint through strategic partnerships. Finally, we are actively exploring ways to increase our gross profit margins in Flagship and Nexus on recurring services closer to 50%, much like CloudFirst gross profit on subscription services. I'd like to note that we are still assimilating Flagship, including the recent realignment of management with Tom Kempster, Flagship's new president. All of our efforts are focused on the primary goal of efficiently deploying capital based on measurable returns while increasing our penetration into this multi-billion dollar marketplace. In fact, we are increasingly being sought out for our products, services, and proven ability to execute. Validating this, our work in process on executed subscription revenue contracts are over $5.5 million in total contract value, and is further supported by the increasing visitation to our websites with over 19,000 visitors in the first quarter alone. Additionally, we announced receiving a seven-figure order from a Forbes Global 2000 listed company. This order is from an existing customer from whom we have established relationship and which we believe will further demonstrate our ability to meet any and all of the needs of our customers, specifically large enterprise customers. To provide additional clarity for our shareholders on performance of each subsidiary, we have decided to break out our revenue by business segment. The first quarter is the second reporting period which we have done this. While we did report a decrease in revenue in the first quarter of 2023 when compared to 2022, I'd like to note that during the first quarter of 2022, we reported a $2.6 million equipment sale to an NFL team. Excluding this sale, our revenues increased 14% over the same period last year. As I mentioned in the past, we are focusing our efforts on recurring revenue. We're not turning away from equipment and software sales, and we continue to explore and take advantage of these opportunities since we have experience and we benefit from the cash injection. However, our long-term goal is steady profitability, which can only be sustained with long-term subscription-based contracts, which provide high margin recurring revenue streams. Concurrently, we're able to decrease our SG&A expenses by 13% from $2.5 million in the first quarter of 2022 to $2.1 million in the first quarter of 2023, which is a result of reallocating resources and eliminating redundant expenses. As a result, and very importantly, we've achieved profitability for the first quarter with $35,000 in net income and an adjusted EBITDA of $334,000 on revenue of $6.9 million for the first quarter of 2023. With a solid, experienced leadership team, we are focused on subsidiaries to secure long-term recurring revenue contracts. While we believe CloudFirst is hitting the mark, given its ability to sustain profitability on a standalone basis, we are extremely dedicated to having Flagship and Nexus achieve the same, thereby increasing overall profitability. We continue to drive the strategy by expanding our distribution channels while also increasing our digital and direct marketing programs, which have been performing well, giving our social and digital lead generation programs. CloudFirst alone has over 16,000 visitors to the website from the beginning of the year through April. Additionally, we continue to explore synergistic acquisitions that complement and enhance our current operations, including companies leading a technology trend or that add important technical staff and create economies of scale to improve our gross profit margins and net income. We will also drive growth by developing and managing collaborative solutions as well as embark on joint venture, joint marketing initiatives with our established distribution partners like IBM, our software vendors, IT resellers, managed service providers, application support providers, consultants, and others. Furthermore, we continue to believe there is a significant need for our solutions on a global scale, and we are pursuing growth opportunities internationally as these markets are increasing their use of multi-cloud solutions, which we are very well-positioned to handle. To give you a better sense of the market, there is an estimated 160,000 systems in the market with multiple partitions. In total, there are about 1 million of the unique partitions. Once virtualized, we typically price these partitions at a $36,000 per year, which equates to a global addressable market of roughly $36 billion in annual recurring revenue. It is also worth noting the average contract term is about 29 months, and we have maintained an impressive 94% renewal rate. Hopefully you can see with the effective rollout of these initiatives, we believe our profitability can accelerate and be maintained long term. Overall, we are positioning ourselves as a leader within the industry. There is very limited competition in the market today, and unlike others, we have a 20-year proven track record with an established first-class customer base. With approximately $11 million in cash and short-term investments and no debt, we can deploy capital effectively, execute on our strategic business initiatives, and substantially grow our business. We look forward to announcing additional accomplishments throughout the year. With that, I'd like to turn the call over to Chris Panagiotakos, our CFO, to discuss our first quarter financials. Please go ahead, Chris. Thank you, Chuck. Total revenue for the three months ended March 31st, 2023 was $6.9 million, a decrease of $1.8 million or 21% compared to $8.7 million for the three months ended March 31st, 2022. The decrease is attributed to a decrease in equipment sales during the current period. Cost of sales for the three months ended March thirty-first, 2023 was $4.8 million, a decrease of $1.2 million or 20% compared to $6 million for the three months ended March 31st, 2022. The decrease of 20% was mostly related to a decrease in equipment-related cost of sales. Selling, general, and administrative expenses for the three months ended March 31st, 2023 were $2.1 million, a decrease of $329,000 or 13% as compared to $2.5 million for the three months ended March 31st, 2022. The decrease is primarily attributed to a reduction in force, a decrease in software as a service expense, and a reduction in commissions. Adjusted EBITDA for the three months ended March 31st, 2023 was $334,165 compared to adjusted EBITDA of $604,492 for the same period last year. Net income attributable to common shareholders for the three months ended March 31st, 2023 was $50,666 compared to net income of $156,010 for the three months ended March 31st, 2022. We ended the quarter with cash and short-term investments of approximately $11 million at March 31st, 2023, compared to $11.3 million at December 31st, 2022. Thank you. I will now turn the call back to Chuck. Thanks, Chris. I'd like to open the call up for questions. Thank you. We will now be conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the questioning queue. You may press star two if you would like to remove yourself from the questioning queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the keys. One moment, please, while we pull for questions. Our first question comes from Matthew Galinko with Maxim Group. Hey, thanks for taking my questions. I guess, can we start with the Fortune 2000 deal that you announced late last week? Was that software equipment? Was that recurring? Anything you could add to, you know, how we could expect that to fall into your future results? Hi, Matt. The deal was software. We with this particular company, you know, we don't like to wait around for approvals from all these companies to have our press releases go through their organization, so we don't actually go through who actually the client is. This particular client, we provide managed services to this client, and that was a software sale. We expect that to recur every year, hopefully, but it does go out for bid. We consider it annual recurring revenue because we've had it for the previous year. You know, you need to compete for it and win it. It is a customer that we provide a number of different managed services, software related, patch management, things like that. Got it. I guess this year, was there an expansion of the scope of the contract or size, or is it relatively the same as the prior year? I believe it was expanded. Got it. Terrific. I guess maybe going to a couple of the growth drivers that you're looking at. You know, I think the first one you mentioned was expansion of the sales team. Anything new this quarter? Did you add, you know, a number of heads that you could point to or any notable hires? Just or generally, you know, how is the process of adding your new qualified reps? Sure. One example is Verizon's layoff of their sales organization of their mid-market has benefited us. We've hired two individuals, one to cover the South-Southeast U.S. for Nexus. Nexus also brought on someone in the New York metro area. That was good as well as we have other candidates that are lined up. Those are two examples of that. These layoffs, to some degree, has helped us, but the recruiting is ongoing. Got it. Terrific. Last one for me. You know, you called out the M&A pipeline again, or at least you called out M&A as a growth opportunity. Can you touch on the pipeline? Are you seeing a lot of, you know, possible acquisition targets? You know, are the valuations sort of in the right range these days? How do you think about that today? On the last call, I believe I stated that we put out somewhere between four or five term sheets last year alone. These typically were companies doing $10 million in revenue. You know, they had net income, but they were very small companies, really didn't have sales force. We decided to try to look on the larger side to move up north of $15 million, folks that are growing the business, have the recurring contracts going on. This year, we are looking internationally to find managed service providers, and we're looking at that. At the same time, folks that are really trying to grow the business, not someone that's been in the business for 25, 30 years, and they have a low golf handicap. Nothing that's wrong with that, but they're not, you know, they're not really growing the business. We are looking internationally with that as well, and we do have an investment bank that's under engagement to continue to look for, you know, M&A opportunities, but north of this $10 million, $10 million mark. You know, there's not folks that do exactly what we do, so it's not that we're focused on a CloudFirst where, you know, we have the $7.5 million of assets deployed in six data centers, and it's IBM AIX and IBM i. You know, we're looking for managed service providers that are growing the business. They're focused on cybersecurity. You know, cyber has an element of AI in it. We're looking, we continue to look, but we're just, you know, we're pretty selective, and we're just not jumping into things. We are looking internationally on the M&A side. Got it. If I could just add one more follow-up to that. I guess the international expansion, you know, comment that you made earlier, I guess, would be solved by you making a slightly larger, MSP-type international acquisition. Is that what you have in mind for international expansion? Is there also just organic, you know, partner expansion in the international market? Could you kind of touch on that? Sure. You know, for us to go into, for example, the U.K., and for us to, you know, set up a data center with some racks in two cities in the, in the U.K., it's not such a big deal for us. We really know how to do it well. What we're looking to do is we're looking for those MSPs that are providing similar services to us, as ABC did in 2017 with equipment and software focused in that same marketplace. If we can acquire one of those companies, you know, now all of a sudden we can deploy that. We have that folks that are part of our organization on board and running their own unit, their own subsidiary. We can still do that, and we can still move in, spend, you know, whatever it might be, a half a million dollars to get started in two cities based under our multi-tenant design for the CloudFirst has. We can do that, we are looking at the same time for acquiring MSPs, an MSP in that area. U.K. first, 'cause they're English speaking, it'll be a little easier for us. I don't think we're large enough now to say, "Oh, let's go into, you know, other parts of Europe, multilingual Asia," but the U.K. is a target. Got it. Thank you. Thanks, Matt. Our next question comes from Adam Waldo with Lismore Partners LLC. Good day, everyone. Chuck, thanks very much for taking my questions. I wonder if we can start just to flush out the recent enterprise win just a little bit more beyond Matt's questions a few minutes ago. You press released it obviously as a seven-figure deal. You've disclosed now on the call it's a software deal, we have a sense for what the margins look like. Can you give any more color as to sort of how far in the seven-figure deal it is, and you know, and to what extent there is opportunity for increased scope of sale for new services based on that sale? Sure. Hi, Adam. The, I believe it was, $2.2 million, Chris? Correct. $2.2 million. I think last year, don't hold me to it, I think it was $1.9 million. It continues to expand on that side. At the same time, this is an organization, a company that's growing very, very rapidly, and it's a Forbes Global 2000 company. We have project managers on this. We have technicians on this. This is through Flagship, we provide what's called patch management with BigFix and a number of other services to them. It is one of the larger accounts at Flagship. Tom Kempster and the team, sales team that works on that, along with the technicians, continue to try to penetrate more of this account. The relationship's good. I don't know if I could say more than that, you know, if there's proposals pending, but it's a constant working relationship. Just as an example, I believe that our project manager meets on the phone, he has set meetings twice a week with them. We're very deep with the account, and the account has significant opportunity to grow larger than what we're doing with them right now. No, that's very helpful. Stepping back a level, last quarter, you gave some helpful quantification in terms of the dollar value of your new business pipeline in your biggest segment, CloudFirst, some quantification of the, you know, step up in unsolicited inquiries coming from the website, if I'm remembering properly, in the 6,000 range in the first quarter. That was quite a bit higher than in the fourth quarter. I think you said earlier in today's call that you're now seeing about 19,000 so far. I don't know if that's year to date for 2023 or 19,000 new ones in the second quarter. Can you quantify a little bit more for us the dollar value of the new business pipeline as it stands right now in each of the three principal business segments and the size of the backlog and then any changes recently in your close rates? Thank you. That is a multi-answer. That's a lot of information to keep up. No, I know. I sort of bundled together a bunch there. Sorry. Let me try to break it out a little bit. Overall, on all three websites, first of all, we have Nexus, we have Flagship and CloudFirst. CloudFirst, which was the original Data Storage Corporation operating company that we changed the name last year to CloudFirst to avoid confusion and allow it to be more aligned with what it does, had 16,000 visitors to the website, I believe it was the first quarter, or let's call it through April. It increased because we started not just doing the I on the IBM, but also AIX. It's increased significantly. Hal Schwartz does a great job with the lead generation programs on that. It is really significant. The other two companies had the difference with the 3,000 additional visitors combined. It's only beginning now. Since we realigned management with that, Christy Cates, who's the director of marketing, she's been working with Tom. They are refreshing the Flagship website to be able to get that to be closer to a lead-generating machine that the CloudFirst is. That does take time. Nexus also is working on their website for lead generation on that. You know, the company that we've been with for a long time, CloudFirst, you know, it takes time to build up the SEO and all of the things that go on with that. We are working on that to be able to increase the inbound lead gen and visitors to both of the other websites. That is let's just call it through April on that. Fairly significant. On the pipeline, you know, CloudFirst uses Salesforce.com, so do the other two companies, subsidiaries. It's very sophisticated in the sense of what's rated at a 10% probability through a 90% probability. What we use is we use anything with a proposal is 20% or more, something that we're negotiating the final terms is a 90%. I believe it's over. Chris, do you remember? It's over $12 million in total contract value of the pipeline? I believe so. Yeah. I think it's over $12 million in that pipeline on total contract value. If that answers, that question. We had the website, we had the pipeline. You didn't ask me the question, Adam, about the $5.5 million in executed contracts that the service delivery team right now with CloudFirst is in the process of installing. I think that's probably significant. Oh, no, absolutely. Maybe I wasn't clear. I was sort of hinting at that in the backlog. That's the vast majority of the backlog at this point, right? Is the $5.5 million on the, on the CloudFirst side. Yeah. That's, you know, if you break that out- Yeah, that's a big uptick. The average term, you know, we have accounts that might be six months term to 60 months term. When you calculate it out, it's through a Salesforce calculations, it's a 29 month average. With $3,000 a month on our what I'll call the mode, the number that's occurring the most in billing, it's $3,000 a month. You know, it's fairly significant. Now, we don't really take too many annual contracts. I put that at $36,000 annually, it's typically $36,000 a month on average, 29 months. It is $5.5 million in contracts that were taken, that are executed, that are in the process of being installed. Right. Then finally, in terms of close rates, can you give some color or quantification around close rate changes here in the first quarter and into the second? Are they pretty stable? Are they improving? Can you quantify that, please? Well, you know, what happens is on Flagship, they have a smaller number of accounts than CloudFirst. Typically those accounts, the relationship with these very large accounts, whether that's the Miami Heat or, you know, accounts like that, the Falcons, you know, the close rate's extremely high. The population sample is smaller. Let's call it it's 50, whatever accounts, but the population is small. Their close rate's very high. You know, I'm gonna estimate it. It's probably like 80%. You know, when you take CloudFirst that's dealing with a much higher volume, I believe Hal Schwartz said it's around 23%. Don't hold me to that. Nexus, on the other side, I'm not exactly sure with, I would go with a one out of four on the close rate for John Camello and his running of Nexus. You know, with Flagship, the rate, I'm probably gonna just estimate it at around probably 80%. Very rarely they lose a deal. You know. Right. Sometimes the budget will be pushed up. By the way, it's the same thing for CloudFirst. You know, what's in the pipeline, sometimes it just gets delayed and pushes out because it, you know, it's a big deal to move someone's on-premise infrastructure to off-premise, and someone can easily delay that. Disaster recovery, you know, if someone just had a whole loss, you know, those things move kinda quick. I think Hal said on average, around 23%. Right. Tremendously helpful. Thanks very much. Excuse me. We are closing our question and answer session. Now, I would like to turn the floor back over to Chuck Piluso for closing comments. Please go ahead. Thanks, Priscilla. Thank you. Thank you all for the questions. We appreciate it. To wrap up, we are actively pursuing aggressive growth strategies and have effectively implemented our business initiatives that we believe will drive revenue and assist in sustainable profitability. We remain committed to reducing redundant expenses, streamlining operations, and maintaining a solid balance sheet to position ourselves as a leader within this industry. We are proud of our progress, and we look forward to reporting additional developments as they unfold. Thank you all for joining today. This concludes today's conference call. You may now disconnect your lines at this time. Thank you for your participation, and have a great-