VASO Corp 10-Q for FY2022 Q3

VASO Corp (VASO)

10-Q 2022-11-14 For: 2022-09-30

Added on April 06, 2026

About this 10-Q

VASO Corp filed this 10-Q on November 14, 2022, covering the quarter ended September 30, 2022 (FY2022 Q3).

Headline figures

Quarter ended September 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $20.04M; up 8.7% from $18.43M a year earlier
Net income: $2.5M; up 283.7% from net income of $651K a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended September 30, 2022

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the transition period from _______________ to ______________

	Commission File Number: 0-18105

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 September 30, 2022 (unaudited) and December 31, 2021	3

	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021	4

	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) for the Three and Nine Months Ended September 30, 2022 and 2021	5

	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) for the Nine Months Ended September 30, 2022 and 2021	6

	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	7

ITEM 2 -	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	21

ITEM 4 -	CONTROLS AND PROCEDURES	29

PART II - OTHER INFORMATION		30

ITEM 6 –	EXHIBITS	30

	September 30, 2022			December 31, 2021
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	13,283		$	6,025
Short-term investments		5,438			629
Accounts and other receivables, net of an allowance for doubtful accounts and commission adjustments of $6,281 at September 30, 2022 and $5,804 at December 31, 2021		8,594			15,393
Receivables due from related parties		407			66
Inventories, net		1,714			1,147
Deferred commission expense		3,716			3,549
Prepaid expenses and other current assets		1,183			994
Total current assets		34,335			27,803

Property and equipment, net of accumulated depreciation of $9,681 at September 30, 2022 and $10,512 at December 31, 2021		1,478			2,172
Operating lease right of use assets		1,696			915
Goodwill		15,581			15,722
Intangibles, net		1,600			2,041
Other assets, net		2,791			2,446
Investment in EECP Global		948			1,043
Deferred tax assets, net		219			219
Total assets	$	58,648		$	52,361

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable	$	3,049		$	2,797
Accrued commissions		1,996			2,705
Accrued expenses and other liabilities		8,400			7,489
Finance lease liabilities - current		156			222
Operating lease liabilities - current		770			562
Sales tax payable		716			719
Deferred revenue - current portion		17,525			16,495
Notes payable - current portion		8			8
Due to related party		3			3
Total current liabilities		32,623			31,000

LONG-TERM LIABILITIES
Notes payable, net of current portion		17			23
Finance lease liabilities, net of current portion		112			218
Operating lease liabilities, net of current portion		927			352
Deferred revenue, net of current portion		9,367			8,470
Other long-term liabilities		1,071			988
Total long-term liabilities		11,494			10,051

COMMITMENTS AND CONTINGENCIES (NOTE N)

STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at September 30, 2022 and December 31, 2021		-			-
Common stock, $.001 par value; 250,000,000 shares authorized; 185,435,965 shares issued at September 30, 2022 and December 31, 2021; 175,127,878 shares outstanding at September 30, 2022 and December 31, 2021		185			185
Additional paid-in capital		63,939			63,917
Accumulated deficit		(47,253	)		(50,902	)
Accumulated other comprehensive income		(340	)		110
Treasury stock, at cost, 10,308,087 shares at September 30, 2022 and December 31, 2021		(2,000	)		(2,000	)
Total stockholders equity		14,531			11,310
	$	58,648		$	52,361

	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Revenues	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Managed IT systems and services	$	9,836			10,580		$	29,858		$	32,275
Professional sales services		9,439			7,246			24,900			16,872
Equipment sales and services		760			603			1,789			1,932
Total revenues		20,035			18,429			56,547			51,079

Cost of revenues
Cost of managed IT systems and services		5,741			6,341			17,952			19,536
Cost of professional sales services		1,570			1,692			4,545			3,677
Cost of equipment sales and services		188			136			409			407
Total cost of revenues		7,499			8,169			22,906			23,620
Gross profit		12,536			10,260			33,641			27,459

Operating expenses
Selling, general and administrative		9,978			9,501			29,584			27,646
Research and development		130			123			422			437
Total operating expenses		10,108			9,624			30,006			28,083
Operating income (loss)		2,428			636			3,635			(624	)

Other (expense) income
Interest and financing costs		(14	)		(61	)		(38	)		(267	)
Interest and other income, net		96			95			96			120
Gain on forgiveness of PPP loan		-			-			-			3,646
Loss on disposal of fixed assets		-			-			(2	)		-
Total other income, net		82			34			56			3,499

Income before income taxes		2,510			670			3,691			2,875
Income tax expense		(12	)		(19	)		(42	)		(87	)
Net income		2,498			651			3,649			2,788

Other comprehensive income
Foreign currency translation gain (loss)		(234	)		11			(450	)		41
Comprehensive income	$	2,264			662		$	3,199		$	2,829

Income per common share
- basic and diluted	$	0.01			0.00		$	0.02		$	0.02

Weighted average common shares outstanding
- basic		173,528			172,228			172,909			171,506
- diluted		174,892			174,196			174,513			173,562

																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
Share-based compensation		192		-		-			-			8		-			-			8
Foreign currency translation gain		-		-		-			-			-		-			51			51
Net income		-		-		-			-			-		2,780			-			2,780
Balance at June 30, 2021 (unaudited)		185,436	$	185		(10,308	)	$	(2,000	)	$	63,903	$	(54,865	)	$	46		$	7,269
Share-based compensation		-		-		-			-			8		-			-			8
Foreign currency translation gain		-		-		-			-			-		-			11			11
Net income		-		-		-			-			-		651			-			651
Balance at September 30, 2021 (unaudited)		185,436	$	185		(10,308	)	$	(2,000	)	$	63,911	$	(54,214	)	$	57		$	7,939

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
Share-based compensation		-		-		-			-			6		-			-			6
Foreign currency translation loss		-		-		-			-			-		-			(215	)		(215	)
Net income		-		-		-			-			-		1,495			-			1,495
Balance at June 30, 2022 (unaudited)		185,436	$	185		(10,308	)	$	(2,000	)	$	63,930	$	(49,751	)	$	(106	)	$	12,258
Share-based compensation		-		-		-			-			9		-			-			9
Foreign currency translation loss		-		-		-			-			-		-			(234	)		(234	)
Net income		-		-		-			-			-		2,498			-			2,498
Balance at September 30, 2022 (unaudited)		185,436	$	185		(10,308	)	$	(2,000	)	$	63,939	$	(47,253	)	$	(340	)	$	14,531

	Nine months ended September 30,
	2022			2021
Cash flows from operating activities	(unaudited)			(unaudited)
Net income	$	3,649		$	2,788
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		1,576			1,748
Loss from investment in EECP Global		95			35
Gain on forgiveness of PPP loan		-			(3,646	)
Provision for doubtful accounts and commission adjustments		236			545
Write-down of inventory		-			282
Share-based compensation		22			25
Changes in operating assets and liabilities:
Accounts and other receivables		6,502			2,669
Due from related parties		(343	)		(80	)
Inventories		(697	)		13
Deferred commission expense		(167	)		(589	)
Prepaid expenses and other current assets		(239	)		441
Other assets, net		(539	)		81
Accounts payable		261			(3,569	)
Accrued commissions		(560	)		146
Accrued expenses and other liabilities		849			2,388
Sales tax payable		20			(89	)
Deferred revenue		1,927			2,480
Due to related party		-			(233	)
Other long-term liabilities		84			9
Net cash provided by operating activities		12,676			5,444

Cash flows from investing activities
Purchases of equipment and software		(447	)		(367	)
Purchases of short-term investments		(5,000	)		-
Redemption of short-term investments		151			155
Net cash used in investing activities		(5,296	)		(212	)

Cash flows from financing activities
Repayment on revolving lines of credit		-			(3,025	)
Repayment of notes payable and finance lease obligations		(177	)		(2,823	)
Net cash used in financing activities		(177	)		(5,848	)
Effect of exchange rate differences on cash and cash equivalents		55			(13	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		7,258			(629	)
Cash and cash equivalents - beginning of period		6,025			6,819
Cash and cash equivalents - end of period	$	13,283		$	6,190

SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Interest paid	$	37		$	284
Income taxes paid	$	60		$	101

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Initial recognition of operating lease right of use asset and liability	$	1,332		$	639

	·	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 September 30, 2022 (unaudited)								Three Months Ended September 30, 2021 (unaudited)
			Professional sales								Professional sales
			service		Equipment						service		Equipment
	IT segment		segment		segment		Total		IT segment		segment		segment		Total
Network services	$	8,786	$	-	$	-	$	8,786	$	9,181	$	-	$	-	$	9,181
Software sales and support		1,049		-		-		1,049		1,399		-		-		1,399
Commissions		-		9,439		-		9,439		-		7,246		-		7,246
Medical equipment sales		-		-		727		727		-		-		570		570
Medical equipment service		-		-		32		32		-		-		33		33
	$	9,836	$	9,439	$	760	$	20,035	$	10,580	$	7,246	$	603	$	18,429

	Nine Months Ended September 30, 2022 (unaudited)								Nine Months Ended September 30, 2021 (unaudited)
			Professional sales								Professional sales
			service		Equipment						service		Equipment
	IT segment		segment		segment		Total		IT segment		segment		segment		Total
Network services	$	26,705	$	-	$	-	$	26,705	$	28,670	$	-	$	-	$	28,670
Software sales and support		3,153		-		-		3,153		3,605		-		-		3,605
Commissions		-		24,900		-		24,900		-		16,872		-		16,872
Medical equipment sales		-		-		1,696		1,696		-		-		1,835		1,835
Medical equipment service		-		-		93		93		-		-		97		97
	$	29,858	$	24,900	$	1,789	$	56,547	$	32,275	$	16,872	$	1,932	$	51,079

	(in thousands)
	Fiscal years of revenue recognition (unaudited)
	2022		2023		2024		Thereafter
Unfulfilled performance obligations	$	13,214	$	41,017	$	12,280	$	19,503

	(in thousands)
	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenues from external customers
IT	$	9,836		$	10,580		$	29,858		$	32,275
Professional sales service		9,439			7,246			24,900			16,872
Equipment		760			603			1,789			1,932
Total revenues	$	20,035		$	18,429		$	56,547		$	51,079

Gross Profit
IT	$	4,095		$	4,239		$	11,906		$	12,739
Professional sales service		7,869			5,554			20,355			13,195
Equipment		572			467			1,380			1,525
Total gross profit	$	12,536		$	10,260		$	33,641		$	27,459

Operating income (loss)
IT	$	(474	)	$	(77	)	$	(1,531	)	$	(254	)
Professional sales service		3,143			1,091			6,133			709
Equipment		24			(96	)		(132	)		(212	)
Corporate		(265	)		(282	)		(835	)		(867	)
Total operating income (loss)	$	2,428		$	636		$	3,635		$	(624	)

Depreciation and amortization
IT	$	263		$	512		$	1,367		$	1,413
Professional sales service		10			39			32			115
Equipment		45			73			177			220
Corporate		-			-			-			-
Total depreciation and amortization	$	318		$	624		$	1,576		$	1,748

Capital expenditures
IT	$	86		$	238		$	383		$	324
Professional sales service		-			-			40			3
Equipment		2			1			23			37
Corporate		-			3			1			3
Total cash capital expenditures	$	88		$	242		$	447		$	367

	Quoted Prices		Significant
	in Active		Other		Significant		Balance
	Markets for		Observable		Unobservable		as of
	Identical Assets		Inputs		Inputs		September 30,
	(Level 1)		(Level 2)		(Level 3)		2022
Assets
Cash equivalents invested in money market funds	$	7,826	$	-	$	-	$	7,826
Bank deposits (included in short term investments)		422						422
	$	8,248	$	-	$	-	$	8,248

	(in thousands)
	Nine months ended			Year ended
	September 30, 2022			December 31, 2021
	(unaudited)
Beginning of period	$	15,722		$	15,688
Foreign currency translation adjustment		(141	)		34
End of period	$	15,581		$	15,722

	(in thousands)
Years ending December 31,	(unaudited)
Remainder of 2022	$	100
2023		340
2024		271
2025		201
2026		145
	$	1,057

Exhibits

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
Date: November 14, 2022

	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/ Jun Ma.
		Jun Ma
		Title
		President and Chief Executive Officer
Date: November 14, 2022

		/s/ Michael J. Beecher .
		Michael J. Beecher
		Chief Financial Officer
Date: November 14, 2022

	(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.

		/s/ Jun Ma .
		Jun Ma
		President and Chief Executive Officer
Dated: November 14, 2022