UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
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| For the quarterly period ended |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |
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| For the transition period from _______________ to ______________ |
Commission File Number:
|
(Exact name of registrant as specified in its charter) |
| ||
(State or other jurisdiction of incorporation or organization) |
| (IRS Employer Identification Number) |
(Address of principal executive offices)
Registrant’s Telephone Number (
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
☒ | Smaller Reporting Company | ||
|
| Emerging Growth Company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
Securities registered pursuant to Section 12 (b) of the Act: None
Number of Shares Outstanding of Common Stock, $.001 Par Value, at November 12, 2021 –
Vaso Corporation and Subsidiaries
INDEX
Page 2 |
Table of Contents |
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
|
| September 30, 2021 |
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| December 31, 2020 |
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| (unaudited) |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
| $ |
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| $ |
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Short-term investments |
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Accounts and other receivables, net of an allowance for doubtful accounts and commission adjustments of $ |
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Receivables due from related parties |
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Inventories |
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Deferred commission expense |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net of accumulated depreciation of $ |
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Operating lease right of use assets |
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Goodwill |
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Intangibles, net |
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Other assets, net |
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Investment in EECP Global |
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Deferred tax assets, net |
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Total assets |
| $ |
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| $ |
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LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES |
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Accounts payable |
| $ |
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| $ |
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Accrued commissions |
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Accrued expenses and other liabilities |
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Finance lease liabilities - current |
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Operating lease liabilities - current |
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Sales tax payable |
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Deferred revenue - current portion |
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Notes payable - current portion |
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Due to related party |
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Total current liabilities |
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LONG-TERM LIABILITIES |
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Notes payable, net of current portion |
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Finance lease liabilities, net of current portion |
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Operating lease liabilities, net of current portion |
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Deferred revenue, net of current portion |
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Other long-term liabilities |
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Total long-term liabilities |
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COMMITMENTS AND CONTINGENCIES (NOTE N) |
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STOCKHOLDERS' EQUITY |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income |
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Treasury stock, at cost, |
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Total stockholders’ equity |
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| $ |
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| $ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 3 |
Table of Contents |
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
|
| Three months ended |
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| Nine months ended |
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| September 30, |
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| September 30, |
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| 2021 |
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| 2020 |
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| 2021 |
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| 2020 |
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Revenues |
| (unaudited) |
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| (unaudited) |
|
| (unaudited) |
|
| (unaudited) |
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Managed IT systems and services |
| $ |
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| $ |
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| $ |
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| $ |
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Professional sales services |
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Equipment sales and services |
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Total revenues |
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Cost of revenues |
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Cost of managed IT systems and services |
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Cost of professional sales services |
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Cost of equipment sales and services |
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Total cost of revenues |
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Gross profit |
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Operating expenses |
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Selling, general and administrative |
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Research and development |
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Total operating expenses |
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Operating income (loss) |
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| ( | ) |
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Other (expense) income |
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Interest and financing costs |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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Interest and other income, net |
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Gain on forgiveness of PPP loan |
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Gain on sale of equity in EECP Global |
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Total other (expense) income, net |
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| ( | ) |
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Income (loss) before income taxes |
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| ( | ) | |||
Income tax (expense) benefit |
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| ( | ) |
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| ( | ) |
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| ( | ) |
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Net income (loss) |
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| ( | ) | |||
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Other comprehensive income |
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Foreign currency translation income (loss) |
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Comprehensive income (loss) |
| $ |
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| $ |
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| $ |
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| $ | ( | ) | |||
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Income (loss) per common share |
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- basic and diluted |
| $ |
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| $ |
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| $ |
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| $ | ( | ) | |||
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Weighted average common shares outstanding |
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- basic |
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- diluted |
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 4 |
Table of Contents |
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
|
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| Accumulated |
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| Additional |
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| Other |
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| Total |
| ||||||||
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| Common Stock |
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| Treasury Stock |
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| Paid-in- |
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| Accumulated |
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| Comprehensive |
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| Stockholders’ |
| ||||||||||||||
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| Shares |
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| Amount |
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| Shares |
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| Amount |
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| Capital |
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| Deficit |
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| Loss |
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| Equity |
| ||||||||
Balance at January 1, 2020 |
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| $ |
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| ( | ) |
|
| ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
Share-based compensation |
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| - |
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| |||||||
Foreign currency translation loss |
|
| - |
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| - |
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| ( | ) |
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| ( | ) | ||||
Net loss |
|
| - |
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| - |
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| ( | ) |
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| ( | ) | ||||
Balance at March 31, 2020 (unaudited) |
|
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| $ |
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| ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
Share-based compensation |
|
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| - |
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| |||||||
Reclassify accumulated translation loss |
|
| - |
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| - |
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| ||||||
Foreign currency translation loss |
|
| - |
|
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| - |
|
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|
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| ( | ) |
|
| ( | ) | ||||
Net loss |
|
| - |
|
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| - |
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| ( | ) |
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| ( | ) | ||||
Balance at June 30, 2020 (unaudited) |
|
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| $ |
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| ( | ) |
| $ | ( | ) |
| $ |
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| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
Share-based compensation |
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| - |
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| |||||||
Foreign currency translation gain |
|
| - |
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| - |
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| ||||||
Net income |
|
| - |
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| - |
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Balance at September 30, 2020 (unaudited) |
|
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| $ |
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| ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
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Balance at January 1, 2021 |
|
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| $ |
|
|
| ( | ) |
|
| ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
| |||||
Share-based compensation |
|
| - |
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| - |
|
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|
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| ||||||
Foreign currency translation loss |
|
| - |
|
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| - |
|
|
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|
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|
|
|
|
|
| ( | ) |
|
| ( | ) | ||||
Net loss |
|
| - |
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| - |
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| ( | ) |
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| ( | ) | ||||
Balance at March 31, 2021 (unaudited) |
|
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| $ |
|
|
| ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ |
| ||||
Share-based compensation |
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| - |
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| |||||||
Foreign currency translation gain |
|
| - |
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| - |
|
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| ||||||
Net income |
|
| - |
|
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| - |
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| ||||||
Balance at June 30, 2021 (unaudited) |
|
|
|
| $ |
|
|
| ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
| |||||
Share-based compensation |
|
| - |
|
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| - |
|
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| ||||||
Foreign currency translation gain |
|
| - |
|
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| - |
|
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| ||||||
Net income |
|
| - |
|
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| - |
|
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| ||||||
Balance at September 30, 2021 (unaudited) |
|
|
|
| $ |
|
|
| ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 5 |
Table of Contents |
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
| Nine months ended |
| |||||
|
| September 30, |
| |||||
|
| 2021 |
|
| 2020 |
| ||
Cash flows from operating activities |
| (unaudited) |
|
| (unaudited) |
| ||
Net income (loss) |
| $ |
|
| $ | ( | ) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities |
|
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Depreciation and amortization |
|
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| ||
Deferred income taxes |
|
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| ( | ) | |
Loss from investment in EECP Global |
|
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| ||
Gain on forgiveness of PPP loan |
|
| ( | ) |
|
|
| |
Gain on sale of equity in EECP Global |
|
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|
| ( | ) | |
Provision for doubtful accounts and commission adjustments |
|
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| ||
Write-down of inventory |
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Share-based compensation |
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Changes in operating assets and liabilities: |
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Accounts and other receivables |
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| ||
Due from related parties |
|
| ( | ) |
|
| ( | ) |
Inventories |
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| ||
Deferred commission expense |
|
| ( | ) |
|
|
| |
Prepaid expenses and other current assets |
|
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| ||
Other assets, net |
|
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|
| ( | ) | |
Accounts payable |
|
| ( | ) |
|
| ( | ) |
Accrued commissions |
|
|
|
|
| ( | ) | |
Accrued expenses and other liabilities |
|
|
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|
| ( | ) | |
Sales tax payable |
|
| ( | ) |
|
| ( | ) |
Deferred revenue |
|
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| ( | ) | |
Due to related party |
|
| ( | ) |
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| ( | ) |
Other long-term liabilities |
|
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| ||
Net cash provided by operating activities |
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Cash flows from investing activities |
|
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|
Purchases of equipment and software |
|
| ( | ) |
|
| ( | ) |
Redemption of short-term investments |
|
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|
| ||
Proceeds from sale of equity in EECP Global |
|
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|
| ||
Net cash (used in) provided by investing activities |
|
| ( | ) |
|
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| |
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|
Cash flows from financing activities |
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Repayment on revolving lines of credit |
|
| ( | ) |
|
| ( | ) |
Proceeds from notes payable |
|
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| ||
Payroll taxes paid by withholding shares |
|
|
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|
| ( | ) | |
Repayment of notes payable and finance lease obligations |
|
| ( | ) |
|
| ( | ) |
Repayment of notes payable - related parties |
|
|
|
|
| ( | ) | |
Net cash (used in) provided by financing activities |
|
| ( | ) |
|
| ( | ) |
Effect of exchange rate differences on cash and cash equivalents |
|
| ( | ) |
|
| ( | ) |
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|
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
| ( | ) |
|
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| |
Cash and cash equivalents - beginning of period |
|
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| ||
Cash and cash equivalents - end of period |
| $ |
|
| $ |
| ||
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|
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION |
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Interest paid |
| $ |
|
| $ |
| ||
Income taxes paid |
| $ |
|
| $ |
| ||
|
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|
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES |
|
|
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|
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|
|
Initial recognition of operating lease right of use asset and liability |
| $ |
|
| $ |
| ||
Equipment acquired through note payable |
| $ |
|
| $ |
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 6 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
NOTE A - ORGANIZATION AND PLAN OF OPERATIONS
Vaso Corporation was incorporated in Delaware in July 1987. Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Vaso” or “management” refer to Vaso Corporation and its subsidiaries.
Overview
Vaso Corporation principally operates in three distinct business segments in the healthcare and information technology (“IT”) industries. We manage and evaluate our operations, and report our financial results, through these three business segments.
| · | IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focuses on healthcare IT and managed network technology services; |
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|
| · | 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 |
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|
| · | 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. |
VasoTechnology
VasoTechnology, Inc. was formed in May 2015, at the time the Company acquired all of the assets of NetWolves, LLC and its affiliates, including the membership interests in NetWolves Network Services, LLC (collectively, “NetWolves”). It currently consists of a managed network and security service division and a healthcare IT application division. Its current offerings include:
| · | 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. |
VasoTechnology uses a combination of proprietary technology, methodology and third-party applications to deliver its value proposition.
VasoHealthcare
VasoHealthcare commenced operations in 2010, in conjunction with the Company’s execution of its exclusive sales representation agreement (“GEHC Agreement”) with GEHC, which is the healthcare business division of the General Electric Company (“GE”), to further the sale of certain healthcare capital equipment in the healthcare provider middle market. Sales of GEHC equipment by the Company have grown significantly since then.
VasoHealthcare’s current offerings consist of:
| · | 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. |
Page 7 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
VasoMedical
VasoMedical is the Company’s business division for its proprietary medical device operations, including the design, development, manufacturing, sales and service of various medical devices in the domestic and international markets and includes the Vasomedical Global and Vasomedical Solutions business units (see Note M). These devices are primarily for cardiovascular monitoring and diagnostic systems. Its current offerings consist of:
| · | 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. |
This segment uses its extensive cardiovascular device knowledge coupled with its significant engineering resources to cost-effectively create and market its proprietary technology. It works with a global distribution network of channel partners to sell its products. It also provides engineering and OEM services to other medical device companies.
NOTE B – INTERIM STATEMENT PRESENTATION
Basis of Presentation and Use of Estimates
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the SEC on May 5, 2021.
These unaudited condensed consolidated financial statements include the accounts of the companies over which we exercise control. In the opinion of management, the accompanying condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of interim results for the Company. The results of operations for any interim period are not necessarily indicative of results to be expected for any other interim period or the full year.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, the disclosure of contingent assets and liabilities in the unaudited condensed consolidated financial statements and the accompanying notes, and the reported amounts of revenues, expenses and cash flows during the periods presented. Actual amounts and results could differ from those estimates. The estimates and assumptions the Company makes are based on historical factors, current circumstances and the experience and judgment of the Company’s management. The Company evaluates its estimates and assumptions on an ongoing basis.
Significant Accounting Policies and Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which provides new guidance regarding the measurement and recognition of credit impairment for certain financial assets. Such guidance will impact how we determine our allowance for estimated uncollectible receivables. In November 2019, the FASB issued ASU 2019-10, which changed the effective date of ASU 2016-13 for smaller reporting companies as defined by the SEC from first quarter of 2020 to the first quarter of 2023, with early adoption permitted. We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures.
Page 8 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Prior Periods’ Financial Statement Revisions
As disclosed in our 2020 Annual Report, we identified certain misstatements in our previously issued financial statements. The misstatements included misappropriation of funds by a mid-level management employee and partially recording certain regulatory fees billed to our customers as revenue. We assessed the materiality of the misstatements on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, (“ASC 250”) and concluded that the misstatements were not material to the prior annual or interim periods. However, in our 2020 Annual Report, we revised our previously issued 2019 consolidated financial statements to correct for these misstatements.
In connection with the filing of this Quarterly Report, we have revised the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), Cash Flows, and Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020, and the related notes to revise for those misstatements that impacted such periods.
|
| Consolidated Statement of Operations and Comprehensive Income (Loss) |
|
| Consolidated Statement of Operations and Comprehensive Income (Loss) |
| ||||||||||||||||||
|
| Three months ended September 30, 2020 (unaudited) |
|
| Nine months ended September 30, 2020 (unaudited) |
| ||||||||||||||||||
(in thousands, except per share data) |
| As Reported |
|
| Adjustment |
|
| As Revised |
|
| As Reported |
|
| Adjustment |
|
| As Revised |
| ||||||
Revenues |
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| ||||||
Managed IT systems and services |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||
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|
Gross Profit - IT segment |
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| ( | ) |
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| ( | ) |
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| ||||
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Operating expenses |
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Selling, general and administrative |
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| ||||||
Operating income/(loss) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||
|
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|
Net income/(loss) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | (352 | ) |
| $ | ( | ) | ||
|
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Comprehensive income/(loss) |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||
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Income/(loss) per common share |
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- basic and diluted |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) | ||
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|
| Consolidated Statement of Cash Flows |
| ||||||||
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|
| Nine months ended September 30, 2020 (unaudited) |
| ||||||||
(in thousands) |
|
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| As Reported |
|
| Adjustment |
|
| As Revised |
| |||
Net loss |
|
|
|
|
|
|
|
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|
| $ | (818 | ) |
| $ | (352 | ) |
| $ | (1,170 | ) |
Accounts payable |
|
|
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|
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|
|
|
|
|
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|
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
|
| Consolidated Statement of Changes in Stockholders' Equity |
| |||||||||||||||||||||
|
| Accumulated Deficit |
|
| Total Stockholders' Equity |
| ||||||||||||||||||
(in thousands) |
| As Reported |
|
| Adjustment |
|
| As Revised |
|
| As Reported |
|
| Adjustment |
|
| As Revised |
| ||||||
Balance at January 1, 2020 |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| ||
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Balance at March 31, 2020 (unaudited) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| ||
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Net loss |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
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Balance at June 30, 2020 (unaudited) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ |
| ||
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Net income |
| $ |
|
| $ | ( | ) |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ |
| ||||
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Balance at September 30, 2020 (unaudited) |
| $ | ( | ) |
| $ | ( | ) |
| $ | ( | ) |
| $ |
|
|
| ( | ) |
| $ |
|
Page 9 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
NOTE C – REVENUE RECOGNITION
Disaggregation of Revenue
The following tables present revenues disaggregated by our business operations and timing of revenue recognition:
|
| (in thousands) |
| |||||||||||||||||||||||||||||
|
| Three Months Ended September 30, 2021 (unaudited) |
|
| Three Months Ended September 30, 2020 (unaudited) |
| ||||||||||||||||||||||||||
|
|
|
| Professional sales service |
|
| Equipment |
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|
|
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| Professional sales service |
|
| Equipment |
|
|
| |||||||||||||
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
| ||||||||
Network services |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
Software sales and support |
|
|
|
|
|
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| ||||||||
Commissions |
|
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|
|
| ||||||||
Medical equipment sales |
|
|
|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Medical equipment service |
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
|
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|
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|
|
|
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|
| Nine Months Ended September 30, 2021 (unaudited) |
|
| Nine Months Ended September 30, 2020 (unaudited) |
| ||||||||||||||||||||||||||
|
|
|
|
|
| Professional sales service |
|
| Equipment |
|
|
|
|
|
|
|
|
|
| Professional sales service |
|
| Equipment |
|
|
|
|
| ||||
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
| ||||||||
Network services |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
Software sales and support |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Commissions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Medical equipment sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Medical equipment service |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
|
|
|
|
| Three Months Ended September 30, 2021 (unaudited) |
|
| Three Months Ended September 30, 2020 (unaudited) |
| ||||||||||||||||||||||||||
|
|
|
|
| Professional sales service |
|
| Equipment |
|
|
|
|
|
|
|
| Professional sales service |
|
| Equipment |
|
|
|
| ||||||||
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
| ||||||||
Revenue recognized over time |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
Revenue recognized at a point in time |
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
|
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|
| Nine Months Ended September 30, 2021 (unaudited) |
|
| Nine Months Ended September 30, 2020 (unaudited) |
| ||||||||||||||||||||||||||
|
|
|
|
|
| Professional sales service |
|
| Equipment |
|
|
|
|
|
|
|
|
|
| Professional sales service |
|
| Equipment |
|
|
|
|
| ||||
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
|
| IT segment |
|
| segment |
|
| segment |
|
| Total |
| ||||||||
Revenue recognized over time |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||||||
Revenue recognized at a point in time |
|
|
|
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|
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|
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|
|
|
|
|
|
|
|
|
|
|
| ||||||||
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
| $ |
|
Page 10 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Transaction Price Allocated to Remaining Performance Obligations
As of September 30, 2021, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $
|
|
|
|
| (in thousands) |
| ||||||||||
|
|
|
| Fiscal years of revenue recognition (unaudited) |
| |||||||||||
|
| remainder of 2021 |
|
| 2022 |
|
| 2023 |
|
| Thereafter |
| ||||
Unfulfilled performance obligations |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
Contract Liabilities
Contract liabilities arise in our healthcare IT, VasoHealthcare, and VasoMedical businesses. In our healthcare IT business, payment arrangements with clients typically include an initial payment due upon contract signing and milestone-based payments based upon product delivery and go-live, as well as post go-live monthly payments for subscription and support fees. Customer payments received, or receivables recorded, in advance of go-live and customer acceptance, where applicable, are deferred as contract liabilities. Such amounts aggregated approximately $
In our VasoHealthcare business, we bill amounts for certain milestones in advance of customer acceptance of the underlying equipment. Such amounts aggregated approximately $
In our VasoMedical business, we bill amounts for post-delivery services and varying duration service contracts in advance of performance. Such amounts aggregated approximately $
During the three and nine months ended September 30, 2021, we recognized approximately $
NOTE D – SEGMENT REPORTING AND CONCENTRATIONS
Vaso Corporation principally operates in three distinct business segments in the healthcare and information technology industries. We manage and evaluate our operations, and report our financial results, through these three reportable segments.
| · | 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, operating through a wholly-owned subsidiary VasoMedical, Inc., primarily focuses on the design, manufacture, sale and service of proprietary medical devices. |
Page 11 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
The chief operating decision maker is the Company’s Chief Executive Officer, who, in conjunction with upper management, evaluates segment performance based on operating income and adjusted EBITDA (net income (loss), plus interest expense (income), net; tax expense; depreciation and amortization; and non-cash stock-based compensation). Administrative functions such as finance, human resources, and information technology are centralized and related expenses allocated to each segment. Other costs not directly attributable to operating segments, such as audit, legal, director fees, investor relations, and others, as well as certain assets – primarily cash balances – are reported in the Corporate entity below. There are no intersegment revenues. Summary financial information for the segments is set forth below:
|
| (in thousands) |
| |||||||||||||
|
| Three months ended September 30, |
|
| Nine Months ended September 30, |
| ||||||||||
|
| 2021 |
|
| 2020 |
|
| 2021 |
|
| 2020 |
| ||||
|
| (unaudited) |
|
| (unaudited) |
|
| (unaudited) |
|
| (unaudited) |
| ||||
Revenues from external customers |
|
|
|
|
|
|
|
|
|
|
|
| ||||
IT |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Professional sales service |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Equipment |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total revenues |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Professional sales service |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Equipment |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total gross profit |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT |
| $ | ( | ) |
| $ |
|
| $ | ( | ) |
| $ | ( | ) | |
Professional sales service |
|
|
|
|
| 1,161 |
|
|
|
|
|
|
| |||
Equipment |
|
| ( | ) |
|
|
|
|
| ( | ) |
|
| ( | ) | |
Corporate |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
|
| ( | ) |
Total operating income (loss) |
| $ |
|
| $ |
|
| $ | ( | ) |
| $ | ( | ) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Professional sales service |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Equipment |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total depreciation and amortization |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IT |
| $ |
|
| $ |
|
| $ |
|
| $ |
| ||||
Professional sales service |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Equipment |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total cash capital expenditures |
| $ |
|
| $ |
|
| $ |
|
| $ |
|
|
| (in thousands) |
| |||||
|
| September 30, 2021 |
|
| December 31, 2020 |
| ||
|
| (unaudited) |
|
|
|
| ||
Identifiable Assets |
|
|
|
|
|
| ||
IT |
| $ |
|
| $ |
| ||
Professional sales service |
|
|
|
|
|
| ||
Equipment |
|
|
|
|
|
| ||
Corporate |
|
|
|
|
|
| ||
Total assets |
| $ |
|
| $ |
|
Page 12 |
Table of Contents |
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
GE Healthcare accounted for