vaso_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒	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 ______________

Commission File Number: 0-18105

VASO CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

11-2871434

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification Number)

137 Commercial St., Suite 200, Plainview, New York 11803

(Address of principal executive offices)

Registrant’s Telephone Number (516) 997-4600

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐
Non-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 ☐ No ☒

Securities registered pursuant to Section 12 (b) of the Act: None

Number of Shares Outstanding of Common Stock, $.001 Par Value, at May 10, 2022– 175,127,878

Vaso Corporation and Subsidiaries

INDEX

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

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PART I – FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

Vaso Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	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

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Vaso Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except per share data)

	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

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Vaso Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

																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

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Vaso Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)

	Three months ended March 31,
	2022			2021
Cash flows from operating activities
Net loss	$	(344	)	$	(643	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation and amortization		453			596
Gain from investment in EECP Global		(16	)		(13	)
Provision for doubtful accounts and commission adjustments		151			263
Share-based compensation		7			9
Changes in operating assets and liabilities:
Accounts and other receivables		563			4,979
Inventories		(563	)		234
Deferred commission expense		25			(157	)
Prepaid expenses and other current assets		153			86
Other assets, net		(423	)		171
Accounts payable		(213	)		(171	)
Accrued commissions		(1,174	)		(1,124	)
Accrued expenses and other liabilities		(1,026	)		720
Sales tax payable		(40	)		(77	)
Deferred revenue		1,989			781
Due to related party		(279	)		(128	)
Other long-term liabilities		112			(51	)
Net cash (used in) provided by operating activities		(625	)		5,475

Cash flows from investing activities
Purchases of equipment and software		(195	)		(59	)
Purchases of short-term investments		(158	)		-
Net cash used in investing activities		(353	)		(59	)

Cash flows from financing activities
Repayment on revolving lines of credit		-			(1,525	)
Repayment of notes payable and finance lease obligations		(62	)		(1,276	)
Net cash used in financing activities		(62	)		(2,801	)
Effect of exchange rate differences on cash and cash equivalents		(14	)		(2	)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(1,054	)		2,613
Cash and cash equivalents - beginning of period		6,025			6,819
Cash and cash equivalents - end of period	$	4,971		$	9,432

SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION
Interest paid	$	19		$	168
Income taxes paid	$	-		$	16

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Initial recognition of operating lease right of use asset and liability	$	238		$	131

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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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;

	·	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.

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 VAR (value added reseller) 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.

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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. 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, 2021, as filed with the SEC on March 31, 2022.

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.

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Vaso Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

We are currently evaluating the effect that ASU 2016-13 will have on our consolidated financial statements and related disclosures.

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 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

	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
Revenue recognized over time	$	9,234	$	-	$	64	$	9,298	$	10,025	$	-	$	30	$	10,055
Revenue recognized at a point in time		769		6,607		335		7,711		1,228		4,655		581		6,464
	$	10,003	$	6,607	$	399	$	17,009	$	11,253	$	4,655	$	611	$	16,519

Transaction Price Allocated to Remaining Performance Obligations

As of March 31, 2022, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $87 million, of which we expect to recognize revenue as follows:

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

Contract Liabilities

Contract liabilities arise in our IT VAR, VasoHealthcare, and VasoMedical businesses. In our IT VAR 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 $544,000 and $407,000 at March 31, 2022 and December 31, 2021, respectively, and are included in accrued expenses and other liabilities in our condensed consolidated balance sheets.

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Vaso Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (unaudited)

In our VasoHealthcare business, we bill amounts for certain milestones in advance of customer acceptance of the underlying equipment. Such amounts aggregated approximately $26,945,000 and $24,955,000 at March 31, 2022 and December 31, 2021, respectively, and are classified in our condensed consolidated balance sheets as either current or long-term deferred revenue. In addition, we record a contract liability for amounts expected to be repaid to GEHC due to customer order reductions. Such amounts aggregated approximately $2,197,000 and $1,518,000 at March 31, 2022 and December 31, 2021, respectively, and are included in accrued expenses and other liabilities in our condensed consolidated balance sheets.

In our VasoMedical business, we bill amounts for post-delivery services and varying duration service contracts in advance of performance. Such amounts aggregated approximately $8,000 and $9,000 at March 31, 2022 and December 31, 2021, respectively, and are classified in our condensed consolidated balance sheets as either current or long-term deferred revenue.

During the three months ended March 31, 2022, we recognized approximately $2.6 million of revenues that were included in our contract liability balance at January 1, 2022.

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.

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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 March 31,
	2022			2021
	(unaudited)			(unaudited)
Revenues from external customers
IT	$	10,003		$	11,253
Professional sales service		6,607			4,655
Equipment		399			611
Total revenues	$	17,009		$	16,519

Gross Profit
IT	$	4,134		$	4,406
Professional sales service		5,306			3,665
Equipment		327			488
Total gross profit	$	9,767		$	8,559

Operating income (loss)
IT	$	(139	)	$	69
Professional sales service		237			(336	)
Equipment		(79	)		13
Corporate		(373	)		(285	)
Total operating income (loss)	$	(354	)	$	(539	)

Depreciation and amortization
IT	$	375		$	486
Professional sales service		11			38
Equipment		67			72
Corporate		-			-
Total depreciation and amortization	$	453		$	596

Capital expenditures
IT	$	151		$	24
Professional sales service		33			-
Equipment		10			35
Corporate		1			-
Total cash capital expenditures	$	195		$	59

	(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

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Notes to Condensed Consolidated Financial Statements (unaudited)

GE Healthcare accounted for 39% and 28% of revenue for the three months ended March 31, 2022 and 2021, respectively. GE Healthcare also accounted for $12.5 million or 85%, and $12.3 million or 80%, of accounts and other receivables at March 31, 2022 and December 31, 2021, respectively.

NOTE E –LOSS PER COMMON SHARE

Basic loss per common share is computed as loss applicable to common stockholders divided by the weighted-average number of common shares outstanding for the period. Diluted loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted to common stock.

The following table represents common stock equivalents that were excluded from the computation of diluted loss per share for the three months ended March 31, 2022 and 2021, because the effect of their inclusion would be anti-dilutive.

	(in thousands)
	Three months ended March 31,
	2022		2021
	(unaudited)		(unaudited)
Restricted common stock grants		2,247		3,691

NOTE F – ACCOUNTS AND OTHER RECEIVABLES, NET

The following table presents information regarding the Company’s accounts and other receivables as of March 31, 2022 and December 31, 2021:

	(in thousands)
	March 31, 2022			December 31, 2021
	(unaudited)
Trade receivables	$	19,890		$	21,197
Unbilled receivables		990			-
Allowance for doubtful accounts and commission adjustments		(6,199	)		(5,804	)
Accounts and other receivables, net	$	14,681		$	15,393

Contract receivables under Topic 606 consist of trade receivables and unbilled receivables. Trade receivables include amounts due for shipped products and services rendered. Unbilled receivables represent variable consideration recognized in accordance with Topic 606 but not yet billable. Amounts recorded – billed and unbilled - under the GEHC Agreement are subject to adjustment in subsequent periods should the underlying sales order amount, upon which the receivable is based, change.

Allowance for doubtful accounts and commission adjustments include estimated losses resulting from the inability of our customers to make required payments, and adjustments arising from subsequent changes in sales order amounts that may reduce the amount the Company will ultimately receive under the GEHC Agreement. Due from employees is primarily commission advances made to sales personnel.

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE G – INVENTORIES, NET

Inventories, net of reserves, consist of the following:

	(in thousands)
	March 31, 2022		December 31, 2021
	(unaudited)
Raw materials	$	763	$	744
Work in process		37		4
Finished goods		913		399
	$	1,713	$	1,147

The Company maintained reserves for slow moving inventories of $164,000 and $165,000 at March 31, 2022 and December 31, 2021, respectively.

NOTE H – GOODWILL AND OTHER INTANGIBLES

Goodwill of $14,375,000 is allocated to the IT segment. The remaining $1,351,000 of goodwill is attributable to the FGE reporting unit within the Equipment segment. The NetWolves and FGE reporting units had negative net asset carrying amounts at March 31, 2022 and December 31, 2021. The components of the change in goodwill are as follows:

	(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

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Notes to Condensed Consolidated Financial Statements (unaudited)

The Company’s other intangible assets consist of capitalized customer-related intangibles, patent and technology costs, and software costs, as set forth in the following:

	(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

Patents and technology are amortized on a straight-line basis over their estimated useful lives of ten and eight years, respectively. The cost of significant customer-related intangibles is amortized in proportion to estimated total related revenue; cost of other customer-related intangible assets is amortized on a straight-line basis over the asset’s estimated economic life of seven years. Software costs are amortized on a straight-line basis over its expected useful life of five years.

Amortization expense amounted to $151,000 and $214,000 for the three months ended March 31, 2022 and 2021, respectively.

Amortization of intangibles for the next five years is:

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

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE I – OTHER ASSETS, NET

Other assets, net consist of the following at March 31, 2022 and December 31, 2021:

	(in thousands)
	March 31, 2022		December 31, 2021
	(unaudited)
Deferred commission expense - noncurrent	$	2,253	$	2,018
Trade receivables - noncurrent		559		368
Other, net of allowance for loss on loan receivable of $412 at March 31, 2022 and December 31, 2021		61		60
	$	2,873	$	2,446

NOTE J – ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following at March 31, 2022 and December 31, 2021:

	(in thousands)
	March 31, 2022		December 31, 2021
	(unaudited)
Accrued compensation	$	1,252	$	2,397
Accrued expenses - other		1,265		1,799
Other liabilities		4,213		3,293
	$	6,730	$	7,489

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE K - DEFERRED REVENUE

The changes in the Company’s deferred revenues are as follows:

	(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

NOTE L – RELATED-PARTY TRANSACTIONS

The Company recorded interest charges aggregating approximately $0 and $54,000 for the three-month periods ended March 31, 2022 and 2021, respectively, payable to MedTechnology Investments, LLC (“MedTech”) pursuant to its promissory notes (“Notes”). The MedTech Notes were used in 2015 to partially fund the purchase of NetWolves, and, through several principal payments made in 2020 and 2021, were repaid in full in December 2021.

David Lieberman, the Vice Chairman of the Company’s Board of Directors, is a practicing attorney in the State of New York and a senior partner at the law firm of Beckman Lieberman & Associates LLP, which performs certain legal services for the Company. Fees of approximately $47,000 were billed by the firm for both the three-month periods ended March 31, 2022 and 2021, at which times no amounts were outstanding.

The Company uses the equity method to account for its interest in EECP Global as it has the ability to exercise significant influence over the entity and reports its share of EECP Global operations in Other (Expense) Income on its condensed consolidated statements of operations. For the three months ended March 31, 2022 and 2021, the Company’s share of EECP Global’s income was approximately $16,000 and $13,000, respectively, and included in Other (Expense) Income in its condensed consolidated statements of operations. At March 31, 2022, the Company recorded a net receivable from related parties of approximately $326,000 on its condensed consolidated balance sheet for amounts due from EECP Global for fees and cost reimbursements net of amounts due to EECP Global for receivables collected on its behalf.

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Notes to Condensed Consolidated Financial Statements (unaudited)

NOTE M – COMMITMENTS AND CONTINGENCIES

Litigation

The Company is currently, and has been in the past, a party to various legal proceedings, primarily employee related matters, incident to its business. The Company believes that the outcome of all pending legal proceedings in the aggregate is unlikely to have a material adverse effect on the business or consolidated financial condition of the Company.

Sales representation agreement

In October 2021, the Company concluded an amendment of the GEHC Agreement with GEHC, originally signed on May 19, 2010 and previously extended in 2012, 2015 and 2017. The amendment further extended the term of the agreement through December 31, 2026, subject to earlier termination with or without cause under certain circumstances after timely notice. Under the agreement, VasoHealthcare is the exclusive representative for the sale of select GE Healthcare diagnostic imaging products to specific market segments/accounts in the 48 contiguous states of the United States and the District of Columbia. The agreement may be terminated by GE Healthcare without cause subject to certain conditions. The circumstances under which early termination of the agreement may occur with cause include: not materially achieving certain sales goals, not maintaining a minimum number of sales representatives, and not meeting various legal and GEHC policy requirements.

Employment Agreements

On May 10, 2019, the Company modified its Employment Agreement with its President and Chief Executive Officer, Dr. Jun Ma, to provide for a five-year term with extensions, unless earlier terminated by the Company, but in no event can it extend beyond May 31, 2026. The Employment Agreement provides for annual compensation of $500,000. Dr. Ma shall be eligible to receive a bonus for each fiscal year during the employment term. The amount and the occasion for payment of such bonus, if any, shall be at the discretion of the Board of Directors. Dr. Ma shall also be eligible for an award under any long-term incentive compensation plan and grants of options and awards of shares of the Company’s stock, as determined at the Board of Directors’ discretion. The Employment Agreement further provides for reimbursement of certain expenses, and certain severance benefits in the event of termination prior to the expiration date of the Employment Agreement.

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

Except for historical information contained in this report, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this report, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions, including the current COVID-19 pandemic which has already adversely affected operating results; the effect of the dramatic changes taking place in IT and healthcare; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; continuation of the GEHC agreement and the risk factors reported from time to time in the Company’s SEC reports, including its recent report on Form 10-K. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

Unless the context requires otherwise, all references to “we”, “our”, “us”, “Company”, “registrant”, “Vaso” or “management” refer to Vaso Corporation and its subsidiaries

General Overview

COVID-19 pandemic

The COVID-19 pandemic has had a significant impact on the world economy and it is possible that some negative impact to the Company’s financial condition and results of operations may continue. At this time, we cannot reasonably estimate what the total impact may be. The pandemic has resulted in workforce and travel restrictions and created business disruptions in supply chain, production and demand across many business sectors. The pandemic continues to cause materials shortage and delivery delay in the diagnostic imaging business and our equipment segment. In addition, we have experienced the negative impact in the recurring revenue business in our IT segment as some of our customers have been adversely affected by the shutdown, and new business in this segment appears to be slower as well. The pandemic also may have a negative impact on our cash receipts as some customers request forbearance or a delay in their payments to us.

The pandemic may continue to impact our operations in 2022, depending on the duration of the pandemic and the timing and success of the reopening of the economy.

We have taken significant steps in our efforts to protect our workforce and our clients. Most of our employees have been working at least partially remotely and we have reopened our work sites consistent with the guidelines promulgated by the CDC and respective state governments.

Our Business Segments

Vaso Corporation (“Vaso”) was incorporated in Delaware in July 1987. We principally operate 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 business 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, 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.

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Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon the accompanying unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and the related disclosures at the date of the financial statements and during the reporting period. Although these estimates are based on our knowledge of current events, our actual amounts and results could differ from those estimates. The estimates made are based on historical factors, current circumstances, and the experience and judgment of our management, who continually evaluate the judgments, estimates and assumptions and may employ outside experts to assist in the evaluations.

Certain of our accounting policies are deemed “critical”, as they are both most important to the financial statement presentation and require management’s most difficult, subjective or complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. For a discussion of our critical accounting policies, see Note B to the condensed consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 as filed with the SEC on March 31, 2022.

Results of Operations – For the Three Months Ended March 31, 2022 and 2021

Revenues

Total revenue for the three months ended March 31, 2022 and 2021 was $17,009,000 and $16,519,000, respectively, representing an increase of $490,000, or 3% year-over-year. On a segment basis, revenue in the professional sales service segment increased $1,952,000 while revenue in the IT and equipment segments decreased $1,250,000 and $212,000, respectively.

Revenue in the IT segment for the three months ended March 31, 2022 was $10,003,000 compared to $11,253,000 for the three months ended March 31, 2021, a decrease of $1,250,000, or 11%, of which $1,090,000 resulted from lower NetWolves revenue, due primarily to lower professional services and COVID-related customer attrition, and $160,000 from lower healthcare IT revenue, due primarily to lower software sales. Our monthly recurring revenue in the IT segment accounted for $9,234,000 or 92% of the segment revenue in the first quarter of 2022, and $10,025,000 or 89% of the segment revenue for the same quarter last year (see Note C).

Commission revenues in the professional sales service segment were $6,607,000 in the first quarter of 2022, an increase of $1,952,000, or 42%, as compared to $4,655,000 in the same quarter of 2021. The increase in commission revenues was due primarily to an increase in the volume of underlying equipment delivered by GEHC during the period as well as a higher blended commission rate applicable to such deliveries. The Company only recognizes commission revenue when the underlying equipment has been accepted at the customer site in accordance with the specific terms of the sales agreement. Consequently, amounts billable, or billed and received, under the agreement with GE Healthcare prior to customer acceptance of the equipment are recorded as deferred revenue in the condensed consolidated balance sheet. As of March 31, 2022, $26,945,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $8,975,000 was long-term. At March 31, 2021, $18,472,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $6,090,000 was long-term. The increase in deferred revenue is principally due to an increase in new orders booked in the first quarter 2022.

Revenue in the equipment segment decreased by $212,000, or 35%, to $399,000 for the three-month period ended March 31, 2022 from $611,000 for the same period of the prior year, principally due to lower deliveries in our China operations as a result of COVID lockdowns in China.

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Gross Profit

Gross profit for the three months ended March 31, 2022 and 2021 was $9,767,000, or 57% of revenue, and $8,559,000, or 52% of revenue, respectively, representing an increase of $1,208,000, or 14% year-over-year. On a segment basis, gross profit in the professional sales service segment increased $1,641,000, or 45%, while gross profit in the IT and equipment segments decreased $272,000, or 6%; and $161,000, or 33%, respectively.

IT segment gross profit for the three months ended March 31, 2022 was $4,134,000, or 41% of the segment revenue, compared to $4,406,000, or 39% of the segment revenue for the three months ended March 31, 2021. The year-over-year decrease of $272,000, or 6%, was primarily a result of lower sales volume at NetWolves partially offset by higher margin product sales mix in the healthcare IT business.

Professional sales service segment gross profit was $5,306,000, or 80% of segment revenue, for the three months ended March 31, 2022 as compared to $3,665,000, or 79% of the segment revenue, for the three months ended March 31, 2021, reflecting an increase of $1,641,000, or 45%. The increase in absolute dollars was primarily due to higher commission revenue as a result of higher blended commission rate and higher volume of GEHC equipment delivered during the first quarter of 2022 than in the same period last year. Cost of commissions in the professional sales service segment of $1,301,000 and $990,000, for the three months ended March 31, 2022 and 2021, respectively, reflected commission expense associated with recognized commission revenues.

Commission expense associated with short-term deferred revenue is recorded as short-term deferred commission expense, or with long-term deferred revenue as part of other assets, on the balance sheet until the related commission revenue is recognized.

Equipment segment gross profit decreased to $327,000, or 82% of segment revenues, for the first quarter of 2022 compared to $488,000, or 80% of segment revenues, for the same quarter of 2021. The $161,000, or 33%, decrease in gross profit was the result of lower revenue in our China operations due to reduced delivery volume for the first quarter of 2022, partially offset by higher gross profit margin product mix during the quarter.

Operating Loss

Operating loss for the three months ended March 31, 2022 and 2021 was $354,000 and $539,000, respectively, representing an improvement of $185,000, or 34%, due primarily to higher gross profit. On a segment basis, the professional sales service segment recorded operating income of $237,000 in the first quarter of 2022 as opposed to an operating loss of $336,000 in the same period of 2021; the IT segment recorded an operating loss of $139,000 in the first quarter of 2022 as opposed to operating income of $69,000 in the same period of 2021; and the equipment segment recorded an operating loss of $79,000 in the first quarter of 2022 as opposed to operating income of $13,000 in the same period of 2021.

Operating loss in the IT segment was $139,000 for the three-month period ended March 31, 2022, a net change of $208,000 from operating income of $69,000 in the same period of 2021, due to lower gross profit partially offset by lower selling, general, and administrative (“SG&A”) and research and development (“R&D”) costs. The professional sales service segment reporting operating income of $237,000 in the three-month period ended March 31, 2022 as compared to an operating loss of $336,000 in the same period of 2021, an improvement of $573,000. The improvement was due to higher gross profit partially offset by higher SG&A costs. The equipment segment reported an operating loss of $79,000 in the first quarter of 2022, compared to operating income of $13,000 in the first quarter 2021, a decrease of $92,000. The decrease was due to lower gross profit partially offset by lower SG&A costs.

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SG&A costs for the three months ended March 31, 2022 and 2021 were $9,999,000 and $8,954,000, respectively, representing an increase of $1,045,000, or 12% year-over-year. On a segment basis, SG&A costs in the IT segment decreased by $14,000 in the first quarter of 2022 from the same quarter of the prior year due to reduced third-party commissions partially offset by higher personnel costs; SG&A costs in the professional sales service segment increased $1,069,000 due mainly to cost of national sales meeting (which was held online last year), and higher travel and personnel costs; and SG&A costs in the equipment segment decreased $97,000 due mainly to lower personnel costs. Corporate costs not allocated to segments increased $88,000 to $373,000 in the three months ended March 31, 2022 from $285,000 for the same period in 2021 due mainly to higher accounting and insurance costs.

Research and development (“R&D”) expenses were $122,000, or 1% of revenues, for the first quarter of 2022, a decrease of $22,000, or 15%, from $144,000, or 1% of revenues, for the first quarter of 2021. The decrease is primarily attributable to lower product development expenses and a reduction in technical staff in the IT segment.

Adjusted EBITDA

We define Adjusted EBITDA (earnings (loss) before interest, taxes, depreciation and amortization), which is a non-GAAP financial measure, as net income (loss), plus interest expense (income), net; tax expense; depreciation and amortization; and non-cash expenses for share-based compensation. Adjusted EBITDA is a metric that is used by the investment community for comparative and valuation purposes. We disclose this metric in order to support and facilitate the dialogue with research analysts and investors.

Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered a substitute for operating income, which we consider to be the most directly comparable U.S. GAAP measure. Adjusted EBITDA has limitations as an analytical tool, and when assessing our operating performance, you should not consider Adjusted EBITDA in isolation, or as a substitute for net income or other consolidated income statement data prepared in accordance with U.S. GAAP. Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

A reconciliation of net loss to Adjusted EBITDA is set forth below:

	(in thousands)
	Three months ended March 31,
	2022			2021
	(unaudited)			(unaudited)
Net loss	$	(344	)	$	(643	)
Interest expense (income), net		19			121
Income tax expense		12			18
Depreciation and amortization		453			596
Share-based compensation		7			9
Adjusted EBITDA	$	147		$	101

Adjusted EBITDA increased by $46,000, to $147,000 in the quarter ended March 31, 2022 from $101,000 in the quarter ended March 31, 2021. The increase was attributable to the decrease in net loss, partially offset primarily by the decrease in depreciation and amortization and interest expense.

Interest and Other Income (Expense)

Interest and other income (expense) for the three months ended March 31, 2022 was $22,000 as compared to $(86,000) for the corresponding period of 2021. The increase in interest and other income (expense) was due primarily to lower interest expense due to principal payments against the line of credit and other notes payable.

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Income Tax Expense

For the three months ended March 31, 2022, we recorded income tax expense of $12,000 as compared to income tax expense of $18,000 for the corresponding period of 2021. The decrease was due mainly from lower state income taxes.

Net Loss

Net loss for the three months ended March 31, 2022 was $344,000 as compared to $643,000 for the three months ended March 31, 2021, representing an improvement of $299,000, or 47%. Loss per share of $0.00 was recorded in both the three-month periods ended March 31, 2022 and 2021. The principal cause of the decrease in net loss is the change from operating loss to operating income in the professional sales service segment, an improvement of $573,000, as well as lower interest expense, partially offset by lower gross profit in the IT and equipment segments.

Liquidity and Capital Resources

Cash and Cash Flow

We have financed our operations from working capital. At March 31, 2022, we had cash and cash equivalents of $4,971,000 and negative working capital of $3,100,000, compared to cash and cash equivalents of $6,025,000 and negative working capital of $3,197,000 at December 31, 2021. $14,451,000 in negative working capital at March 31, 2022 is attributable to the net balance of deferred commission expense and deferred revenue. These are non-cash expense and revenue items and have no impact on future cash flows.

Cash used in operating activities during the three months ended March 31, 2022 was $625,000, which consisted of net loss after adjustments to reconcile net loss to net cash of $251,000 and cash used by operating assets and liabilities of $876,000, compared to cash provided by operating activities of $5,475,000 for the same period in 2021. The $6,100,000 decrease in cash provided by operating activities was due to the late arrival of a commission payment of $7,747,000 that was scheduled for March 2022 and the Company received in April 2022. The changes in the account balances primarily reflect decreases in accrued commissions and accrued expenses and other liabilities of $1,174,000 and $1,026,000, respectively, partially offset by an increase in deferred revenue of $1,989,000 and a decrease in accounts and other receivables of $563,000.

Cash used in investing activities during the three-month period ended March 31, 2022 was $195,000 for the purchase of equipment and software and $158,000 for the purchase of short-term investments.

Cash used in financing activities during the three-month period ended March 31, 2022 was $62,000 resulting from repayments of notes payable and finance lease obligations.

Liquidity

The Company expects to generate sufficient cash flow from operations to satisfy its obligations for the next twelve months.

It is anticipated that the COVID-19 pandemic may continue to adversely impact our operations during and beyond the remaining quarters of 2022, depending on the duration of the pandemic and the timing and success of the reopening of the economy.

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ITEM 4 - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures reporting as promulgated under the Exchange Act is defined as controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our CEO and our CFO have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of March 31, 2022 and have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2022.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting during the Company’s fiscal quarter ended March 31, 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 6 – EXHIBITS

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.

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In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	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: May 16, 2022

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