VASO Corp 10-Q for FY2022 Q1

VASO Corp (VASO)

10-Q 2022-05-16 For: 2022-03-31

Added on April 06, 2026

About this 10-Q

VASO Corp filed this 10-Q on May 16, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $17.01M; up 3.0% from $16.52M a year earlier
Net loss: $344K; compared with a net loss of $643K a year earlier

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☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the quarterly period ended March 31, 2022

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

	For the transition period from _______________ to ______________

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

PART I – FINANCIAL INFORMATION			3

ITEM 1 - FINANCIAL STATEMENTS			3

CONDENSED CONSOLIDATED BALANCE SHEETS as of March 31, 2022 (unaudited) and December 31, 2021			3

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) for the Three Months Ended March 31, 2022 and 2021			4

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) for the Three Months Ended March 31, 2022 and 2021			5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) for the Three Months Ended March 31, 2022 and 2021			7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)			8

ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			19

ITEM 4 - CONTROLS AND PROCEDURES			24

PART II - OTHER INFORMATION			25

ITEM 6 – EXHIBITS			25

	March 31, 2022			December 31, 2021
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,971		$	6,025
Short-term investments		788			629
Accounts and other receivables, net of an allowance for doubtful accounts and commission adjustments of $6,199 at March 31, 2022 and $5,804 at December 31, 2021		14,681			15,393
Receivables due from related parties		346			66
Inventories		1,713			1,147
Deferred commission expense		3,524			3,549
Prepaid expenses and other current assets		842			994
Total current assets		26,865			27,803

Property and equipment, net of accumulated depreciation of $9,855 at March 31, 2022 and $10,512 at December 31, 2021		2,058			2,172
Opearting lease right of use assets		987			915
Goodwill		15,726			15,722
Intangibles, net		1,899			2,041
Other assets, net		2,873			2,446
Investment in EECP Global		1,059			1,043
Deferred tax assets, net		219			219
Total assets	$	51,686		$	52,361

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,584		$	2,797
Accrued commissions		1,267			2,705
Accrued expenses and other liabilities		6,730			7,489
Finance lease liabilities - current		208			222
Operating lease liabilities - current		510			562
Sales tax payable		680			719
Deferred revenue - current portion		17,975			16,495
Notes payable - current portion		8			8
Due to related party		3			3
Total current liabilities		29,965			31,000

LONG-TERM LIABILITIES
Notes payable, net of current portion		21			23
Finance lease liabilities, net of current portion		172			218
Operating lease liabilities, net of current portion		477			352
Deferred revenue, net of current portion		8,979			8,470
Other long-term liabilities		1,100			988
Total long-term liabilities		10,749			10,051

COMMITMENTS AND CONTINGENCIES (NOTE M)

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at March 31, 2022 and December 31, 2021
Common stock, $.001 par value; 250,000,000 shares authorized; 185,435,965 shares issued at March 31, 2022 and December 31, 2021; 175,127,878 shares outstanding at March 31, 2022 and December 31, 2021		185			185
Additional paid-in capital		63,924			63,917
Accumulated deficit		(51,246	)		(50,902	)
Accumulated other comprehensive income		109			110
Treasury stock, at cost, 10,308,087 shares at March 31, 2022 and December 31, 2021		(2,000	)		(2,000	)
Total stockholders’ equity		10,972			11,310
	$	51,686		$	52,361

	Three months ended March 31,
	2022			2021
Revenues
Managed IT systems and services	$	10,003		$	11,253
Professional sales services		6,607			4,655
Equipment sales and services		399			611
Total revenues		17,009			16,519

Cost of revenues
Cost of managed IT systems and services		5,869			6,847
Cost of professional sales services		1,301			990
Cost of equipment sales and services		72			123
Total cost of revenues		7,242			7,960
Gross profit		9,767			8,559

Operating expenses
Selling, general and administrative		9,999			8,954
Research and development		122			144
Total operating expenses		10,121			9,098
Operating loss		(354	)		(539	)

Other (expense) income
Interest and financing costs		(24	)		(135	)
Interest and other income, net		48			49
Loss on disposal of fixed assets		(2	)		-
Total other (expense) income, net		22			(86	)

Loss before income taxes		(332	)		(625	)
Income tax expense		(12	)		(18	)
Net loss		(344	)		(643	)

Other comprehensive loss
Foreign currency translation loss		(1	)		(21	)
Comprehensive loss	$	(345	)	$	(664	)

Loss per common share
- basic and diluted	$	(0.00	)	$	(0.00	)

Weighted average common shares outstanding
- basic and diluted		172,328			170,836

																Accumulated
											Additional					Other			Total
	Common Stock				Treasury Stock						Paid-in-		Accumulated			Comprehensive			Stockholders’
	Shares		Amount		Shares			Amount			Capital		Deficit			Loss			Equity
Balance at January 1, 2021		185,244	$	185		(10,308	)		(2,000	)	$	63,886	$	(57,002	)	$	16		$	5,085
Share-based compensation		-		-		-			-			9		-			-			9
Foreign currency translation loss		-		-		-			-			-		-			(21	)		(21	)
Net loss		-		-		-			-			-		(643	)		-			(643	)
Balance at March 31, 2021 (unaudited)		185,244	$	185		(10,308	)	$	(2,000	)	$	63,895	$	(57,645	)	$	(5	)	$	4,430

Balance at January 1, 2022		185,436	$	185		(10,308	)		(2,000	)	$	63,917	$	(50,902	)	$	110		$	11,310
Share-based compensation		-		-		-			-			7		-			-			7
Foreign currency translation loss		-		-		-			-			-		-			(1	)		(1	)
Net loss		-		-		-			-			-		(344	)		-			(344	)
Balance at March 31, 2022 (unaudited)		185,436	$	185		(10,308	)	$	(2,000	)	$	63,924	$	(51,246	)	$	109		$	10,972

	·	IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focuses on healthcare IT and managed network technology services;

	·	Professional sales service segment, operating through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, primarily focuses on the sale of healthcare capital equipment for General Electric Healthcare (“GEHC”) into the healthcare provider middle market; and

	·	Equipment segment, operating through a wholly-owned subsidiary VasoMedical, Inc., primarily focuses on the design, manufacture, sale and service of proprietary medical devices and software.

	·	Managed radiology and imaging applications (channel partner of select vendors of healthcare IT products).
	·	Managed network infrastructure (routers, switches and other core equipment).
	·	Managed network transport (FCC licensed carrier reselling over 175 facility partners).
	·	Managed security services.

	·	GEHC diagnostic imaging capital equipment.
	·	GEHC service agreements for the above equipment.
	·	GEHC training services for use of the above equipment.
	·	GEHC and third party financial services.

	·	Biox™ series Holter monitors and ambulatory blood pressure recorders.
	·	ARCS^® series analysis, reporting and communication software for ECG and blood pressure signals.
	·	MobiCare™ multi-parameter wireless vital-sign monitoring system.
	·	EECP^® therapy systems for non-invasive, outpatient treatment of ischemic heart disease.

	(in thousands)
	Three Months Ended March 31, 2022 (unaudited)								Three Months Ended March 31, 2021 (unaudited)
			Professional sales		Equipment						Professional sales		Equipment
	IT segment		service segment		segment		Total		IT segment		service segment		segment		Total
Network services	$	9,028	$	-	$	-	$	9,028	$	10,118	$	-	$	-	$	10,118
Software sales and support		975		-		-		975		1,135		-		-		1,135
Commissions		-		6,607		-		6,607		-		4,655		-		4,655
Medical equipment sales		-		-		368		368		-		-		577		577
Medical equipment service		-		-		31		31		-		-		34		34
	$	10,003	$	6,607	$	399	$	17,009	$	11,253	$	4,655	$	611	$	16,519

	(in thousands)
	Fiscal years of revenue recognition (unaudited)
	2022		2023		2024		Thereafter
Unfulfilled performance obligations	$	42,620	$	24,352	$	7,020	$	13,053

	(in thousands)
	March 31, 2022		December 31, 2021
	(unaudited)
Identifiable Assets
IT	$	23,325	$	23,144
Professional sales service		19,094		18,718
Equipment		7,357		7,144
Corporate		1,910		3,355
Total assets	$	51,686	$	52,361

	(in thousands)
	Three months ended		Year ended
	March 31, 2022		December 31, 2021
	(unaudited)
Beginning of period	$	15,722	$	15,688
Foreign currency translation adjustment		4		34
End of period	$	15,726	$	15,722

	(in thousands)
Years ending December 31,	(unaudited)
Remainder of 2022	$	412
2023		341
2024		272
2025		188
2026		144
	$	1,357

	(in thousands)
	March 31, 2022			December 31, 2021
	(unaudited)
Customer-related
Costs	$	5,831		$	5,831
Accumulated amortization		(4,347	)		(4,279	)
		1,484			1,552

Patents and Technology
Costs		1,894			1,894
Accumulated amortization		(1,807	)		(1,754	)
		87			140

Software
Costs		2,351			3,459
Accumulated amortization		(2,023	)		(3,110	)
		328			349

	$	1,899		$	2,041

	(in thousands)
	Three months ended March 31,
	2022			2021
	(unaudited)			(unaudited)
Deferred revenue at beginning of period	$	24,965		$	17,704
Net additions:
Deferred extended service contracts		-			(1	)
Deferred commission revenues		4,692			2,614
Recognized as revenue:
Deferred extended service contracts		(1	)		(1	)
Deferred commission revenues		(2,702	)		(1,832	)
Deferred revenue at end of period		26,954			18,484
Less: current portion		17,975			12,387
Long-term deferred revenue at end of period	$	8,979		$	6,097

	·	IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focuses on healthcare IT and managed network technology services;

	·	Professional sales service segment, operating through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, primarily focuses on the sale of healthcare capital equipment for GEHC into the healthcare provider middle market; and

	·	Equipment segment, primarily focuses on the design, manufacture, sale and service of proprietary medical devices and software, operating through a wholly-owned subsidiary VasoMedical, Inc., which in turn operates through Vasomedical Solutions, Inc. for domestic business and Vasomedical Global Corp. for international business, respectively.

31		Certifications of the Chief Executive Officer and the Chief Financial Officer pursuant to Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32		Certifications of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	VASO CORPORATION

	By:	/s/ Jun Ma
		Jun Ma
		President and Chief Executive Officer
		(Principal Executive Officer)

		/s/ Michael J. Beecher .
		Michael J. Beecher
		Chief Financial Officer and Principal Accounting Officer

1.	I have reviewed this quarterly report on Form 10-Q of Vaso Corporation and subsidiaries (the “registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

		/s/ Michael J. Beecher.
		Michael J. Beecher
		Chief Financial Officer

	(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

	(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.