Vaso Corporation posts higher Q2 2026 profit
Vaso Corporation reported modestly higher revenue from continuing operations and a smaller overall loss for the six months ended June 30, 2026, while continuing to exit its IT services businesses.
Rhea-AI Filing Summary
Vaso Corporation reported modestly higher revenue from continuing operations and a smaller overall loss for the six months ended June 30, 2026, while continuing to exit its IT services businesses. Revenue from continuing operations was $11.2 million in the quarter and $21.0 million year-to-date, up 8% and 3% from 2025, driven mainly by higher GE Healthcare (GEHC) diagnostic imaging equipment deliveries in the professional sales services segment and stronger equipment sales in China.
Gross margin from continuing operations remained high at 79% in the quarter. Quarterly operating income from continuing operations improved to $974,000, and net income from continuing operations was $840,000, versus $323,000 a year earlier. For the first half, Vaso had a small net income from continuing operations of $115,000, but a total net loss of $343,000 including discontinued operations, an improvement from a $1.3 million loss in 2025.
The IT segment is now presented as discontinued operations after the sale of VasoHealthcare IT in November 2025 and the agreement to sell NetWolves for $14.5 million in cash, signed July 31, 2026. Discontinued operations generated a net loss of $458,000 in the first half. Vaso ended June 30, 2026 with $38.3 million in cash and cash equivalents and working capital of $22.3 million. Deferred commission revenue reached $41.5 million, reflecting strong order bookings under the long-term GEHC sales representation agreement, which runs through 2030. GEHC accounted for 94% of total revenue and a large share of receivables, highlighting significant customer concentration.
Positive
- Revenue growth: Continuing-operations revenue rose to $11.2 million for the quarter and $21.0 million year-to-date, increases of 8% and 3% versus 2025.
- Profitability improvement: Net income from continuing operations was $840,000 for the quarter and $115,000 year-to-date, versus a $143,000 loss in the prior-year period.
- Adjusted EBITDA turnaround: Adjusted EBITDA from continuing operations improved to $1.1 million for the quarter and $0.1 million year-to-date from $0.1 million and ($0.5 million) in 2025.
- Strong liquidity: Cash and cash equivalents were $38.3 million with working capital of $22.3 million at June 30, 2026, and the company expects sufficient cash flow for at least 12 months.
- Large deferred revenue base: Deferred commission revenue totaled $41.5 million, with $20.9 million long term, indicating significant contracted business not yet recognized as revenue.
- Strategic divestiture: The signed sale of NetWolves for $14.5 million in cash completes the exit from network and IT services, simplifying the business focus.
- Long-term GEHC agreement: The exclusive GE Healthcare sales representation agreement was amended in December 2025 to extend through December 31, 2030, providing long-term visibility.
Negative
- Ongoing net loss: Despite improvement, the company recorded a total net loss of $343,000 for the six months ended June 30, 2026.
- Discontinued-operations drag: Net loss from discontinued IT operations was $458,000 year-to-date, following a $1.1 million loss in the prior-year period.
- Customer concentration: GE Healthcare accounted for 94% of total revenue and up to 91% of receivables, creating significant dependence on a single partner.
- Equipment margin pressure: Equipment segment gross margin declined from 73% to 60% in the quarter and from 73% to 57% year-to-date, partly due to lower SaaS margins.
- Higher operating costs: Selling, general and administrative expenses increased to $16.1 million for the first half, up $344,000 year-over-year, reflecting higher personnel and other costs.
Filing Explained
The July 31 NetWolves sale is recorded as completed, converting the IT exit from a pending transaction into a completed divestiture.
Vaso reports that the
For the six months ended
The filing’s named forward item is liquidity: Vaso says it expects operating cash flow to satisfy obligations for at least the next twelve months.
Key Figures
Key Terms
discontinued operations financial
held for sale financial
deferred revenue financial
performance obligations financial
Adjusted EBITDA financial
fair value hierarchy financial
Earnings Snapshot
FAQ
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
For the quarterly period ended
For the transition period from _______________ to ______________
Commission File Number:
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| incorporation or organization) | Identification Number) |
(Address of principal executive offices)
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Securities registered pursuant
to Section 12 (b) of the Act:
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 ☐ No
Number of Shares Outstanding of Common Stock,
$.001 Par Value, at August 12, 2026 –
Vaso Corporation and Subsidiaries
INDEX
| PART I – FINANCIAL INFORMATION | 1 | |
| ITEM 1 - FINANCIAL STATEMENTS | 1 | |
| CONDENSED CONSOLIDATED BALANCE SHEETS as of June 30, 2026 (unaudited) and December 31, 2025 | 1 | |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025 | 2 | |
| CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025 | 3 | |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) for the Six Months Ended June 30, 2026 and 2025 | 4 | |
| NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) | 5 | |
| ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 21 | |
| ITEM 3. Quantitative and Qualitative Disclosures About Market Risk. | 28 | |
| ITEM 4 - CONTROLS AND PROCEDURES | 29 | |
| PART II - OTHER INFORMATION | 30 | |
| ITEM 1 – LEGAL PROCEEDINGS | 30 | |
| ITEM 1A. Risk Factors. | 30 | |
| ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds. | 30 | |
| ITEM 3. Defaults Upon Senior Securities. | 30 | |
| ITEM 4. Mine Safety Disclosures. | 30 | |
| ITEM 5. Other Information. | 30 | |
| ITEM 6 – EXHIBITS | 30 |
Page i
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
| June 30, 2026 | December 31, 2025 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts and other receivables, net of an allowance for credit losses and commission adjustments of $ | ||||||||
| Receivables due from related parties | ||||||||
| Inventories, net | ||||||||
| Deferred commission expense | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets held for sale | ||||||||
| Total current assets | ||||||||
| Property and equipment, net of accumulated depreciation of $ | ||||||||
| Operating lease right of use assets | ||||||||
| Goodwill | ||||||||
| Intangibles, net | ||||||||
| Other assets, net | ||||||||
| Investment in EECP Global | ||||||||
| Deferred tax assets, net | ||||||||
| Noncurrent assets held for sale | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued commissions | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Operating lease liabilities - current | ||||||||
| Sales tax payable | ||||||||
| Deferred revenue - current portion | ||||||||
| Notes payable - current portion | ||||||||
| Due to related party | ||||||||
| Current liabilities held for sale | ||||||||
| Total current liabilities | ||||||||
| LONG-TERM LIABILITIES | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Deferred revenue, net of current portion | ||||||||
| Other long-term liabilities | ||||||||
| Noncurrent liabilities held for sale | ||||||||
| Total long-term liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES (NOTE O) | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 1
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(in thousands, except per share data)
| Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues | ||||||||||||||||
| Managed IT systems and services | $ | $ | $ | $ | ||||||||||||
| Professional sales services | ||||||||||||||||
| Equipment sales and services | ||||||||||||||||
| Total revenues | ||||||||||||||||
| Cost of revenues | ||||||||||||||||
| Cost of managed IT systems and services | ||||||||||||||||
| Cost of professional sales services | ||||||||||||||||
| Cost of equipment sales and services | ||||||||||||||||
| Total cost of revenues | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Operating expenses | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Research and development | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ||||||||||||
| Other (expense) income | ||||||||||||||||
| Interest and other income, net | ||||||||||||||||
| Total other income, net | ||||||||||||||||
| Income (loss) before income taxes | ( | ) | ||||||||||||||
| Income tax expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) from continuing operations | ( | ) | ||||||||||||||
| Net loss from discontinued operations, net of tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other comprehensive income (loss) | ||||||||||||||||
| Foreign currency translation gain | ||||||||||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Income (loss) per common share | ||||||||||||||||
| - basic and diluted - continuing operations | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
| - basic and diluted - discontinued operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| - basic and diluted | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Weighted average common shares outstanding | ||||||||||||||||
| - basic | ||||||||||||||||
| - diluted | ||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 2
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(in thousands)
| Accumulated | ||||||||||||||||||||||||
| Additional | Other | Total | ||||||||||||||||||||||
| Common Stock | Paid-in- | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Loss | Equity | |||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Foreign currency translation gain | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||
| Shares withheld for employee tax liability | - | ( | ) | ( | ) | |||||||||||||||||||
| Foreign currency translation gain | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share-based compensation | - | |||||||||||||||||||||||
| Foreign currency translation gain | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Share-based compensation | ||||||||||||||||||||||||
| Foreign currency translation gain | - | |||||||||||||||||||||||
| Net income | - | |||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 3
Vaso Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
| Six Months Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities | ||||||||
| Depreciation and amortization | ||||||||
| Deferred income taxes | ||||||||
| Loss from investment in EECP Global | ||||||||
| Provision for credit losses and commission adjustments | ||||||||
| Share-based compensation | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts and other receivables | ||||||||
| Due from related parties | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Deferred commission expense | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other assets, net | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued commissions | ( | ) | ( | ) | ||||
| Accrued expenses and other liabilities | ( | ) | ( | ) | ||||
| Sales tax payable | ( | ) | ( | ) | ||||
| Deferred revenue | ||||||||
| Other long-term liabilities | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities | ||||||||
| Purchases of equipment and software | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Payroll taxes paid by withholding shares | ( | ) | ||||||
| Proceeds from note payable | ||||||||
| Repayment of notes payable and finance lease obligations | ( | ) | ( | ) | ||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||
| Effect of exchange rate differences on cash and cash equivalents | ( | ) | ||||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | ||||||||
| Cash and cash equivalents - beginning of period, including cash from discontinued operations | ||||||||
| Cash and cash equivalents - end of period, including cash from discontinued operations | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION | ||||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid | $ | $ | ||||||
| SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Initial recognition of operating lease right of use asset and liability | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
Page 4
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
Prior to the two divestitures described below,
Vaso Corporation (the “Company”) principally operates in
| ● | IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc. (“VasoTechnology”), primarily focuses on managed network technology services. As described in Notes C and P, the NetWolves managed network services operations are reported as discontinued operations, no longer included in segment disclosures, and were divested on July 31, 2026. Historical results of VasoHeathcare IT Corp, the other operation within the IT segment, and which was sold in November 2025, continue to be presented in the comparative prior-year IT segment disclosures; |
| ● | 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 GE Healthcare Technologies, Inc. (“GEHC”) into the healthcare provider middle market; and |
| ● | Equipment segment, operating through a wholly-owned
subsidiary VasoMedical, Inc., which in turn operates through Vasomedical Solutions, Inc. (“VasoSolutions”) for domestic business
and Vasomedical Global Corp. (“Vasomedical Global”) for international business, respectively, primarily focuses on the design,
manufacture, sale and service of proprietary medical devices and software,. VasoSolutions also manages the domestic operation of EECP
Global Corporation (“EECP Global”), in which the Company holds a |
The Company’s website is www.vasocorporation.com.
VasoTechnology (IT Segment)
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”). VasoTechnology consisted of a managed network and security service division (NetWolves), until July 2026, upon which time NetWolves was sold to COEO Solutions, LLC, and a healthcare IT application VAR (value added reseller) division, VasoHealthcare IT (“VHC-IT”), until November 2025, upon which time the Company sold VHC-IT to Nano-X Imaging Ltd (Nasdaq: NNOX). As such, the Company has completed its exit from the network and IT services businesses under VasoTechnology (IT segment).
VasoHealthcare (Professional Sales Service Segment)
VasoHealthcare commenced operations in 2010, in conjunction with the Company’s execution of its exclusive sales representation agreement with GEHC to further the sale of certain medical capital equipment in certain domestic market segments. Its current offerings consist of:
| ● | GEHC diagnostic imaging equipment and ultrasound systems; |
| ● | GEHC service agreements for the above equipment; |
| ● | GEHC training services for use of the above equipment; and |
| ● | GEHC and third-party financial services for the above equipment. |
Page 5
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
VasoMedical (Equipment Segment)
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 VasoSolutions 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, including cloud-based software suite and algorithm in the form of a SaaS (software as a service) subscription; |
| ● | MobiCare® multi-parameter wireless vital-sign monitoring system; and |
| ● | EECP® therapy systems for non-invasive, outpatient treatment of ischemic heart disease. |
This segment uses its extensive in-house knowledge and intellectual property for cardiovascular devices and software coupled with its engineering resources to cost-effectively create and market its proprietary technology. It sells and services its products to customers in the U.S. and China directly and sells and/or services its products in the international market mainly through independent distributors.
Divestiture of NetWolves
During the second quarter of 2026, the Company determined that its NetWolves operations met the criteria to be classified as a discontinued operation, and, as a result, its historical financial results are reflected in the Company’s condensed consolidated financial statements as discontinued operations, and assets and liabilities were retrospectively reclassified as assets and liabilities held for sale. See Note C - DISCONTINUED OPERATIONS of the notes to condensed consolidated financial statements.
On July 31, 2026, the Company, VasoTechnology, NetWolves, and COEO Solutions, LLC, an Illinois limited liability company (“Buyer”), entered into an Equity Purchase Agreement (the “Purchase Agreement”), pursuant to which Buyer purchased from the Company and VasoTechnology all of the issued and outstanding membership interests of NetWolves.
The base purchase price under
the Purchase Agreement was $
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, 2025, as filed with
the SEC on March 31, 2026.
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.
Page 6
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
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 most significant of these estimates include the allowance for commission adjustments, the valuation of deferred tax assets, and the assessment of possible impairment of goodwill and intangible assets. 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.
Recently Issued Accounting Standards To Be Adopted
In November 2024, the FASB
issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation
of Income Statement Expenses, which requires disclosure of disaggregated information about certain income statement line items in the
notes to the financial statements. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within
annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact
of adopting this standard on its Consolidated Financial Statements.
In September 2025, the FASB issued ASU No. 2025-06 (“ASU 2025-06”), ASU No. 2025-06, Intangibles—Goodwill and Other — Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. ASU 2025-06 updates the cost capitalization threshold for internal-use software development costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. This authoritative guidance is effective for annual periods beginning after December 15, 2027, and interim periods within those annual reporting periods. The Company is currently evaluating the effect of this new guidance on its Consolidated Financial Statements.
NOTE C – DISCONTINUED OPERATIONS
The Company classifies assets as held-for-sale (“disposal group”) in the period when all of the relevant criteria to be classified as held for sale are met. These criteria include management’s commitment to sell the disposal group in its present condition and the sale being deemed probable of being completed within one year. Assets held for sale are reported at the lower of their carrying value or fair value less cost to sell. The fair values of disposal groups are estimated using accepted valuation techniques, including indicative listing prices. The Company considers historical experience, guidance received from third parties, and all information available at the time the estimates are made to derive fair value. Any loss resulting from the measurement is recognized in the period when the held for sale criteria are met. The Company assesses the fair value of a disposal group, less any costs to sell, each reporting period it remains classified as held for sale and reports any subsequent changes as an adjustment to the carrying value of the disposal group, as long as the new carrying value does not exceed the initial carrying value of the disposal group. Assets held-for-sale are not amortized or depreciated.
Page 7
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
As of June 30, 2026, the NetWolves operations, previously reported in the IT segment, of the Company met the criteria for classification as held for sale and accordingly, was measured at the lower of its carrying value or its fair value less costs to sell. The Company determined that the held for sale disposal group has met the criteria to be disclosed as discontinued operations as it represents a significant strategic shift that will have a major effect on the Company’s operations and financial results.
The results of the disposal group are presented as discontinued operations in the condensed consolidated statements of operations and, as such, have been excluded from both continuing operations and segment results for all periods presented. Further, the assets and liabilities of the disposal group are presented separately as assets and liabilities held for sale in the condensed consolidated balance sheets for the current period and all prior periods presented. The condensed consolidated statements of cash flows are presented on a consolidated basis for both continuing operations and discontinued operations. Unless otherwise noted, reference within the notes to condensed consolidated financial statements relates to continuing operations.
The financial results of the disposal group are presented as net loss from discontinued operations, net of income taxes on the Company’s condensed consolidated statements of operations. The following table presents the major components of financial results of the Company’s disposal group for the periods presented:
| Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Gross profit | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Operating loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) income | ||||||||||||||||
| Interest and other income, net | ||||||||||||||||
| Loss on disposal of fixed assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net loss from discontinued operations before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income tax benefit (expense) | ( | ) | ( | ) | ||||||||||||
| Net loss from discontinued operations, net of income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Page 8
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
The following table represents the aggregated carrying amounts of classes of assets and liabilities that are classified as held for sale on the condensed consolidated balance sheets for the periods presented:
| June 30, 2026 | December 31, 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts and other receivables, net of an allowance for credit losses and commission adjustments of $ | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets held for sale | ||||||||
| Property and equipment, net of accumulated depreciation of $ | ||||||||
| Operating lease right of use assets | ||||||||
| Goodwill | ||||||||
| Intangibles, net | ||||||||
| Other assets, net | ||||||||
| Deferred tax assets, net | ||||||||
| Total noncurrent assets held for sale | $ | $ | ||||||
| LIABILITIES | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | ||||||||
| Accrued commissions | ||||||||
| Accrued expenses and other liabilities | ||||||||
| Operating lease liabilities - current | ||||||||
| Sales tax payable | ||||||||
| Total current liabilities held for sale | ||||||||
| LONG-TERM LIABILITIES | ||||||||
| Operating lease liabilities, net of current portion | ||||||||
| Total noncurrent liabilities held for sale | ||||||||
The following table presents significant non-cash items and capital expenditures of discontinued operations for the periods presented:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Depreciation and amortization | $ | $ | $ | $ | ||||||||||||
| Credit loss expense | ||||||||||||||||
| Capital expenditures | ||||||||||||||||
Page 9
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
NOTE D – 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 June 30, 2026 | Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||
| Professional sales service | Equipment | Professional sales service | Equipment | |||||||||||||||||||||||||||||
| IT segment | segment | segment | Total | IT segment | segment | segment | Total | |||||||||||||||||||||||||
| Software sales and support | ||||||||||||||||||||||||||||||||
| Commissions | ||||||||||||||||||||||||||||||||
| Medical equipment sales | ||||||||||||||||||||||||||||||||
| Medical equipment service | ||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||
| Professional sales service | Equipment | Professional sales service | Equipment | |||||||||||||||||||||||||||||
| IT segment | segment | segment | Total | IT segment | segment | segment | Total | |||||||||||||||||||||||||
| Software sales and support | ||||||||||||||||||||||||||||||||
| Commissions | ||||||||||||||||||||||||||||||||
| Medical equipment sales | ||||||||||||||||||||||||||||||||
| Medical equipment service | ||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Three Months Ended June 30, 2026 | Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 | |||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Page 10
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Transaction Price Allocated to Remaining Performance Obligations
As of June 30, 2026, the aggregate
amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts
approximated $
| (in thousands) | ||||||||||||||||
| Fiscal years of revenue recognition | ||||||||||||||||
| 2026 | 2027 | 2028 | Thereafter | |||||||||||||
| Unfulfilled performance obligations | $ | $ | $ | $ | ||||||||||||
Contract Assets and Liabilities
Contract
receivables include trade receivables, net and long-term receivables (recorded in Other assets in the condensed consolidated balance sheets).
Contract liabilities arise in our VasoHealthcare business, where we bill amounts for certain milestones in advance of customer
acceptance of the underlying equipment. Such amounts aggregated approximately $
During the three and six months
ended June 30, 2026, we recognized approximately $
Page 11
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
The following table summarizes the Company’s contract receivable and contract liability balances:
| (in thousands) | ||||||||
| 2026 | 2025 | |||||||
| Contract receivables - January 1 | ||||||||
| Contract receivables - June 30 | ||||||||
| Increase (decrease) | ( | ) | ( | ) | ||||
| Contract liabilities - January 1 | ||||||||
| Contract liabilities - June 30 | ||||||||
| Increase (decrease) | ||||||||
The decrease in contract receivables in the first six months of 2026 and 2025 was due primarily to collections exceeding billings, while the increase in contract liabilities reflects order bookings exceeding deliveries.
NOTE E – SEGMENT REPORTING AND CONCENTRATIONS
Prior to the two divestitures
described below, Vaso Corporation principally operated in
| ● | IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc., primarily focused on healthcare IT and managed network technology services. As described in Note C, the NetWolves managed network services operations are reported as discontinued operations and no longer included in segment disclosures. Historical results of VasoHeathcare IT Corp, the other operation within the IT segment and which was sold in November 2025, continue to be presented in segment disclosures; |
| ● | 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 and software. |
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, which is a non-U.S. GAAP financial measure (defined as 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 are allocated to each segment. Such costs previously allocated to NetWolves were removed from the results of the discontinued operations, as such costs will continue, and were reallocated to the professional sales services and equipment segments. 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.
Page 12
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Summary financial information for the segments is set forth below:
| (in thousands) | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenues from external customers | ||||||||||||||||
| IT | $ | $ | $ | $ | ||||||||||||
| Professional sales service | ||||||||||||||||
| Equipment | ||||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||
| Gross Profit | ||||||||||||||||
| IT | $ | $ | $ | $ | ||||||||||||
| Professional sales service | ||||||||||||||||
| Equipment | ||||||||||||||||
| Total gross profit | $ | $ | $ | $ | ||||||||||||
| Significant segment expenses | ||||||||||||||||
| Selling, general & administrative | ||||||||||||||||
| IT | $ | $ | $ | $ | ||||||||||||
| Professional sales service | ||||||||||||||||
| Equipment | ||||||||||||||||
| Corporate | ||||||||||||||||
| Total selling, general and administrative | $ | $ | $ | $ | ||||||||||||
| Other segment items | ||||||||||||||||
| Equipment | ||||||||||||||||
| Total other segment items | $ | $ | $ | $ | ||||||||||||
| Operating income (loss) | ||||||||||||||||
| IT | $ | $ | $ | $ | ( | ) | ||||||||||
| Professional sales service | ||||||||||||||||
| 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 capital expenditures | $ | $ | $ | $ | ||||||||||||
Page 13
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
| (in thousands) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Identifiable Assets | ||||||||
| Professional sales service | ||||||||
| Equipment | ||||||||
| Corporate | ||||||||
| Total assets | $ | $ | ||||||
Other segment items are
research and development costs. GE Healthcare accounted for
NOTE F – NET INCOME (LOSS) PER COMMON SHARE
Basic earnings (loss) per common share is based on the weighted average number of common shares outstanding, including vested restricted shares, without consideration of potential common stock. Diluted earnings per common share is based on the weighted average number of common and potential dilutive common shares outstanding.
Diluted earnings (loss) per share were computed based on the weighted average number of shares outstanding plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
| (in thousands) | ||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Basic weighted average shares outstanding | ||||||||||||||||
| Dilutive effect of unvested restricted shares | ||||||||||||||||
| Diluted weighted average shares outstanding | ||||||||||||||||
The following table represents common stock equivalents that were excluded from the computation of diluted earnings per share for the three and six months ended June 30, 2026 and 2025, because the effect of their inclusion would be anti-dilutive.
| (in thousands) | ||||||||||||||||
| Three months ended June 30, | Six months ended June 30, | |||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Restricted common stock grants | ||||||||||||||||
Page 14
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
NOTE G – SHORT-TERM INVESTMENTS AND FINANCIAL INSTRUMENTS
Cash and cash equivalents represent cash and short-term, highly liquid investments either in certificates of deposit, treasury bills, money market funds, or investment grade commercial paper issued by major corporations and financial institutions that generally have maturities of three months or less from the date of acquisition.
The Company complies with the provisions of ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). Under ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date.
In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows:
Level 1
Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.
Level 2
Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.
Level 3
Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.
The carrying amount of assets and liabilities including cash and cash equivalents, accounts receivable, prepaids, accounts payable, accrued expenses and other current liabilities, approximated their fair value as of June 30, 2026 and December 31, 2025, due to the relative short maturity of these instruments. Property and equipment, intangible assets, capital lease obligations, and goodwill are not required to be re-measured to fair value on a recurring basis. These assets are evaluated for impairment if certain triggering events occur. If such evaluation indicates that impairment exists, the respective asset is written down to its fair value.
Page 15
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
The following table presents information about the Company’s assets measured at fair value as of June 30, 2026 and December 31, 2025:
| (in thousands) | ||||||||||||||||
| Quoted Prices | Significant | |||||||||||||||
| in Active | Other | Significant | Balance | |||||||||||||
| Markets for | Observable | Unobservable | as of | |||||||||||||
| Identical Assets | Inputs | Inputs | June 30, | |||||||||||||
| (Level 1) | (Level 2) | (Level 3) | 2026 | |||||||||||||
| Assets | ||||||||||||||||
| Cash equivalents invested in money market funds and treasury bills | $ | $ | $ | $ | ||||||||||||
| Quoted Prices | Significant | |||||||||||||||
| in Active | Other | Significant | Balance | |||||||||||||
| Markets for | Observable | Unobservable | as of | |||||||||||||
| Identical Assets | Inputs | Inputs | December 31, | |||||||||||||
| (Level 1) | (Level 2) | (Level 3) | 2025 | |||||||||||||
| Assets | ||||||||||||||||
| Cash equivalents invested in money market funds and treasury bills | $ | $ | $ | $ | ||||||||||||
NOTE H – ACCOUNTS AND OTHER RECEIVABLES, NET
The following table presents information regarding the Company’s accounts and other receivables as of June 30, 2026 and December 31, 2025:
| (in thousands) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Trade receivables | $ | $ | ||||||
| Unbilled receivables | ||||||||
| Allowance for credit losses and commission adjustments | ( | ) | ( | ) | ||||
| Accounts and other receivables, net | $ | $ | ||||||
Contract receivables under “Revenue from Contracts with Customers (“ASC 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 ASC 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 credit losses 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.
Page 16
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
NOTE I – INVENTORIES, NET
Inventories, net of reserves, consisted of the following:
| (in thousands) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Raw materials | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| $ | $ | |||||||
The Company maintained reserves
for slow moving inventories of $
NOTE J – GOODWILL AND OTHER INTANGIBLES
Goodwill is attributable to the FGE reporting unit within the Equipment segment. The components of the change in goodwill are as follows:
| (in thousands) | ||||||||
| Six Months Ended | Year Ended | |||||||
June 30, 2026 | December 31, 2025 | |||||||
| Beginning of period | $ | $ | ||||||
| Foreign currency translation adjustment | ||||||||
| Impairment | ||||||||
| End of period | $ | $ | ||||||
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 table:
| (in thousands) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Customer-related | ||||||||
| Costs | $ | $ | ||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Patents and Technology | ||||||||
| Costs | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Software | ||||||||
| Costs | ||||||||
| Accumulated amortization | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Patents and technology are
amortized on a straight-line basis over their estimated useful lives of
Page 17
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Amortization expense amounted
to $
Amortization of intangibles for the next five years is:
| Years ending December 31, | (in thousands) | |||
| Remainder of 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| $ | ||||
NOTE K – OTHER ASSETS, NET
Other assets, net consisted of the following at June 30, 2026 and December 31, 2025:
| (in thousands) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Deferred commission expense - noncurrent | $ | $ | ||||||
| Trade receivables - noncurrent | ||||||||
| Other, net of allowance for loss on loan receivable of $ | ||||||||
| $ | $ | |||||||
NOTE L – ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consisted of the following at June 30, 2026 and December 31, 2025:
| (in thousands) | ||||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Accrued compensation | $ | $ | ||||||
| Accrued expenses - other | ||||||||
| Order reduction liability | ||||||||
| Other liabilities | ||||||||
| $ | $ | |||||||
Page 18
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
NOTE M - DEFERRED REVENUE
The changes in the Company’s deferred revenues were as follows:
| (in thousands) | ||||||||
| Six Months Ended | Year Ended | |||||||
| June 30, 2026 | December 31, 2025 | |||||||
| Deferred revenue at beginning of period | $ | $ | ||||||
| Net additions: | ||||||||
| Deferred extended service contracts | ( | ) | ||||||
| Deferred commission revenues | ||||||||
| Recognized as revenue: | ||||||||
| Deferred extended service contracts | ||||||||
| Deferred commission revenues | ( | ) | ( | ) | ||||
| Deferred revenue at end of period | ||||||||
| Less: current portion | ||||||||
| Long-term deferred revenue at end of period | $ | $ | ||||||
NOTE N – RELATED-PARTY TRANSACTIONS
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
Income (Expense) on its condensed consolidated statements of operations. For the three months ended June 30, 2026 and 2025, the Company’s
share of EECP Global’s loss was approximately $
NOTE O – 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 December 2025, the Company concluded an amendment of the GEHC Agreement with GEHC, originally signed on May 19, 2010 and previously extended in 2012, 2015, 2017 and 2021. The amendment extended the term of the original agreement, which began on July 1, 2010, through December 31, 2030, subject to early termination by GEHC without cause with certain conditions. Under the agreement, VasoHealthcare is the exclusive representative for the sale of select GEHC diagnostic imaging and ultrasound products to specific market accounts in all 50 states of the United States and the District of Columbia. 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.
Page 19
Vaso Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (unaudited)
Employment Agreements
On December 31, 2022, the
Company executed an Employment Agreement with the President of its VasoHealthcare subsidiary, Ms. Jane Moen, which provides for a twenty-seven
month initial term with extensions, unless earlier terminated by the Company, but in no event can it extend beyond the earlier of December
31, 2026 or the termination of the GEHC Agreement. The Employment Agreement provides for annual base compensation of $
NOTE P – SUBSEQUENT EVENTS
On July 31, 2026, the Company, VasoTechnology, NetWolves, and COEO Solutions, LLC, an Illinois limited liability company (“Buyer”), entered into an Equity Purchase Agreement (the “Purchase Agreement”), pursuant to which Buyer purchased from the Company and VasoTechnology all of the issued and outstanding membership interests of NetWolves.
The base purchase price under
the Purchase Agreement was $
Page 20
Vaso Corporation and Subsidiaries
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information contained in this report contains forward-looking statements (as such term is defined in the Securities Exchange Act of 1934 and the regulations thereunder). These forward-looking statements may include projections of, or guidance on, the Company’s future financial performance, expected levels of future revenue and expenses, anticipated growth strategies, and anticipated trends in the Company’s business or financial results. When used in this report, words such as “anticipates”, “continue”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential”, “future”, “intends”, the negative of these terms and similar expressions identify forward-looking statements. Any forward-looking statement made by the Company in this document is based only on the Company’s current expectations, estimates and projections about future events and financial trends affecting the financial condition of its business based on information currently available to the Company and speaks only as of the date when made. Forward-looking statements are not historical facts or guarantees of future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, many of which are outside of the Company’s control. Actual results may differ materially from this forward-looking information and therefore, should not be unduly relied upon. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions, including the possibility of a downturn or disruptions in the U.S. economy; the impact of U.S. tariff policies; the effect of the dramatic changes taking place in IT and healthcare; continuation of the GEHC agreement; the impact of competitive technology 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; and the risk factors reported from time to time in the Company’s SEC reports. 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
Our Business Segments
Vaso Corporation (“Vaso”) was incorporated in Delaware in July 1987. Prior to the two divestitures described below, we principally operated in three distinct business segments in the healthcare and information technology industries. We managed and evaluated our operations, and reported our financial results, through these three business segments.
| ● | IT segment, operating through a wholly-owned subsidiary VasoTechnology, Inc. (“VasoTechnology”), primarily focuses on managed network technology services. As described in Note C, the NetWolves managed network services operations are reported as discontinued operations and no longer included in segment disclosures. Historical results of VasoHeathcare IT Corp, the other operation within the IT segment and which was sold in November 2025, continue to be presented in segment disclosures; |
| ● | 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 GE HealthCare Technologies, Inc. (“GEHC”) into the healthcare provider middle market; and |
| ● | Equipment segment, 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, primarily focuses on the design, manufacture, sale and service of proprietary medical devices and software. |
The Company has ended its operations in the IT segment after the sale of VHC-IT in November 2025 and the sale of NetWolves in July 2026.
Page 21
Vaso Corporation and Subsidiaries
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 contained in this report, and see “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, 2025 as filed with the SEC on March 31, 2026.
Unless otherwise noted, this Management’s Discussion and Analysis of Financial Condition and Results of Operations relates solely to our continuing operations and does not include the operations of NetWolves. See Note C – Discontinued Operations of the notes to condensed consolidated financial statements for additional information about the disposal group. The IT segment reported no amounts in 2026 as a result of the divestiture of VasoHealthcare IT in November 2025. Certain corporate overhead costs previously allocated to NetWolves were removed from the results of the discontinued operations as such costs will continue, and were reallocated to the professional sales services and equipment segments.
Results of Operations – For the Three Months Ended June 30, 2026 and 2025
Revenues
Total revenue for the three months ended June 30, 2026 and 2025 was $11,187,000 and $10,331,000, respectively, representing an increase of $856,000, or 8% year-over-year. On a segment basis, revenue in the IT, professional sales services, and equipment segments (decreased)/increased ($1,058,000), $1,750,000, and $164,000, respectively.
Commission revenues in the professional sales service segment were $10,494,000 in the second quarter of 2026, an increase of $1,750,000, or 20%, as compared to $8,744,000 in the same quarter of 2025. The increase in commission revenues was due primarily to higher deliveries of diagnostic imaging equipment, partially offset by decreased deliveries of ultrasound products, by GEHC in the second quarter of 2026, as compared to the second quarter of 2025, and by lower blended commission rates. 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 GEHC prior to customer acceptance of the equipment are recorded as deferred revenue in the condensed consolidated balance sheets. As of June 30, 2026, $41,513,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $20,903,000 was long-term. As of June 30, 2025, $38,112,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $20,350,000 was long-term. The increase in deferred revenue is principally due to higher value of new orders booked than of the delivered equipment during the 12-month period (see Note M to the condensed consolidated financial statements).
Revenue in the equipment segment increased by $164,000, or 31%, to $693,000 for the three-month period ended June 30, 2026 from $529,000 for the same period of the prior year, due primarily to higher equipment deliveries in our China operations.
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Vaso Corporation and Subsidiaries
Gross Profit
Gross profit for the three months ended June 30, 2026 and 2025 was $8,889,000, or 79% of revenue, and $7,941,000, or 77% of revenue, respectively, representing an increase of $948,000, or 12% year-over-year. On a segment basis, gross profit in the IT segment decreased $469,000, while professional sales service segment and equipment segment gross profit increased by $1,385,000, or 20%; and $32,000, or 8%, respectively.
Professional sales service segment gross profit was $8,470,000, or 81% of segment revenue, for the three months ended June 30, 2026 as compared to $7,085,000, or 81% of the segment revenue, for the three months ended June 30, 2025, reflecting an increase of $1,385,000, or 20%. The increase in absolute dollars was primarily due to higher commission revenue, as well as to lower blended cost of commission rates. Cost of commissions in the professional sales service segment of $2,024,000 and $1,659,000, for the three months ended June 30, 2026 and 2025, 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 condensed consolidated balance sheets until the related commission revenue is recognized.
Equipment segment gross profit increased to $419,000, or 60% of segment revenues, for the second quarter of 2026 compared to $387,000, or 73% of segment revenues, for the same quarter of 2025. The $32,000, or 8%, increase in gross profit was the result of higher revenue in our China operations, partially offset by lower SaaS margins in the US.
Operating Income
Operating income for the three months ended June 30, 2026 and 2025 was $974,000 and $93,000, respectively, representing an increase of $881,000, or 948%, due primarily to the increase in gross profit, partially offset by higher selling, general, and administrative (“SG&A”) costs. On a segment basis, the IT segment recorded no operating income in the second quarter of 2026 and operating income of $18,000 in the second quarter of 2025; the professional sales service segment recorded operating income of $1,462,000 in the second quarter of 2026 as opposed to operating income of $556,000 in the same period of 2025; and the equipment segment recorded an operating loss of $220,000 in the second quarter of 2026 as compared to an operating loss of $177,000 in the same period of 2025.
Operating income in the professional sales service segment increased by $906,000 to $1,462,000 in the three-month period ended June 30, 2026 as compared to operating income of $556,000 in the same period of 2025, due primarily to higher gross profit, partially offset by higher SG&A costs. The equipment segment reported an operating loss of $220,000 in the second quarter of 2026, compared to an operating loss of $177,000 in the second quarter 2025, an increase in loss of $43,000, due mainly to higher research and development (“R&D”) expenses in our U.S. operations and higher SG&A costs in our China operations, partially offset by higher gross profit.
SG&A costs for the three months ended June 30, 2026 and 2025 were $7,703,000 and $7,681,000, respectively, representing an increase of $22,000, or less than 1%, year-over-year. On a segment basis, there were no SG&A costs in the IT segment in the second quarter of 2026 and $451,000 in the second quarter of 2025; SG&A costs in the professional sales service segment increased $479,000 due mainly to additional sales personnel costs in the diagnostic imaging sector; and SG&A costs in the equipment segment increased $30,000 due mainly to higher personnel costs in China. Corporate costs not allocated to segments decreased $36,000, due mainly to lower investor relations costs, in 2026.
R&D expenses increased by $45,000, or 27%, to $212,000 in the second quarter of 2026 from $167,000 for the second quarter of 2025, primarily due to higher personnel costs in our US operations.
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Vaso Corporation and Subsidiaries
Adjusted EBITDA
We utilize Adjusted EBITDA in evaluating our performance internally, and this non-U.S. GAAP financial measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Management believes that this non-U.S. GAAP financial measure, in addition to U.S. GAAP measures, is also useful to investors to evaluate the Company’s results.
Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered a substitute for net (loss) 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. Investors should recognize that the Company’s presentation of this non-U.S. GAAP financial measure might not be comparable to similarly-titled measures of other companies limiting its usefulness as a comparative measure.
A reconciliation of net income from continuing operations to Adjusted EBITDA is set forth below:
| (in thousands) | ||||||||
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net income from continuing operations | $ | 840 | $ | 323 | ||||
| Interest expense (income), net | (297 | ) | (289 | ) | ||||
| Income tax expense | 387 | 28 | ||||||
| Depreciation and amortization | 120 | 74 | ||||||
| Share-based compensation | 2 | 9 | ||||||
| Adjusted EBITDA from continuing operations | $ | 1,052 | $ | 145 | ||||
Adjusted EBITDA from continuing operations increased by $907,000, to $1,052,000 in the quarter ended June 30, 2026 from $145,000 in the quarter ended June 30, 2025. The increase was attributable mainly to the increases in net income and income tax expense.
A reconciliation of net loss from discontinued operations to Adjusted EBITDA is set forth below:
| Three Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net loss from discontinued operations | $ | (296 | ) | $ | (520 | ) | ||
| Interest expense (income), net | (3 | ) | (8 | ) | ||||
| Income tax (benefit) expense | (65 | ) | 12 | |||||
| Depreciation and amortization | 119 | 118 | ||||||
| Share-based compensation | - | - | ||||||
| Adjusted EBITDA from discontinued operations | $ | (245 | ) | $ | (398 | ) | ||
Adjusted EBITDA from discontinued operations increased by $153,000, to ($245,000) in the quarter ended June 30, 2026 from ($398,000) in the quarter ended June 30, 2025. The increase was attributable mainly to the decreases in net loss and income tax expense.
Interest and Other Income (Expense)
Interest and other income (expense) for the three months ended June 30, 2026 was $253,000 as compared to $258,000 for the corresponding period of 2025. The decrease in interest and other income (expense) was due primarily to lower other income in the second quarter of 2026 in our China operations, partially offset by higher interest income.
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Vaso Corporation and Subsidiaries
Income Tax Expense
For the three months ended June 30, 2026, we recorded income tax expense of $386,000 as compared to $28,000 for the corresponding period of 2025. The $358,000 increase arose mainly from lower deferred tax assets.
Net Income from continuing operations
Net income from continuing operations for the three months ended June 30, 2026 was $840,000 as compared to $323,000 for the three months ended June 30, 2025, representing an increase of $517,000. Income per share of $0.00 was recorded in the three-month periods ended June 30, 2026 and 2025. The principal cause of the increase in net income was the increase in operating income, partially offset by higher income tax expense.
Results of Operations – For the Six Months Ended June 30, 2026 and 2025
Revenues
Total revenue for the six months ended June 30, 2026 and 2025 was $20,982,000 and $20,464,000, respectively, representing an increase of $518,000, or 3%, year-over-year. On a segment basis, revenue in the IT, professional sales service, and equipment segments (decreased)/increased ($2,045,000), $2,280,000 and $283,000, respectively.
Commission revenues in the professional sales service segment were $19,729,000 in the first half of 2026, an increase of $2,280,000, or 13%, as compared to $17,449,000 in the first half of 2025. The increase in commission revenues was due primarily to increased deliveries of diagnostic imaging equipment, partially offset by lower deliveries of ultrasound products, by GEHC in the first half of 2026, as compared to the first half of 2025, and by higher blended commission rates. The Company 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 GEHC prior to customer acceptance of the equipment are recorded as deferred revenue in the condensed consolidated balance sheets. As of June 30, 2026, $41,513,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $20,903,000 was long-term. As of June 30, 2025, $38,112,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $20,350,000 was long-term. The increase in deferred revenue is principally due to higher value of new orders booked than of the delivered equipment during the 12-month period (see Note M to the condensed consolidated financial statements).
Revenue in the equipment segment increased by $283,000, or 29%, to $1,253,000 for the six-month period ended June 30, 2026 from $970,000 for the same period of the prior year, principally due to higher equipment deliveries in our China operations.
Gross Profit
Gross profit for the six months ended June 30, 2026 and 2025 was $16,410,000, or 78% of revenue, and $15,577,000, or 76% of revenue, respectively, representing an increase of $833,000, or 5% year-over-year. On a segment basis, gross profit in the IT segment decreased $885,000; gross profit in the professional sales service segment increased $1,712,000, or 12%; and gross profit in the equipment segment increased $6,000, or less than 1%.
Professional sales service segment gross profit was $15,692,000, or 80% of segment revenue, for the six months ended June 30, 2026 as compared to $13,980,000, or 80% of the segment revenue, for the six months ended June 30, 2025, reflecting an increase of $1,712,000, or 12%. The increase in absolute dollars was primarily due to higher commission revenue, partially offset by higher blended cost of commission rates. Cost of commissions in the professional sales service segment of $4,037,000 and $3,469,000, for the six months ended June 30, 2026 and 2025, respectively, reflected commission expense associated with recognized commission revenues.
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Vaso Corporation and Subsidiaries
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 condensed consolidated balance sheets until the related commission revenue is recognized.
Equipment segment gross profit increased to $718,000, or 57% of segment revenues, for the first half of 2026 compared to $712,000, or 73% of segment revenues, for the same half of 2025. The $6,000, or less than 1%, increase in gross profit was primarily the result of higher revenue partially offset by lower ARCS® cloud-based SaaS margins in our U.S. operations.
Operating Loss
Operating loss for the six months ended June 30, 2026 and 2025 was $80,000 and $519,000, respectively, representing a decrease in loss of $439,000, or 85%, due primarily to higher gross profit, partially offset by higher SG&A costs. On a segment basis, the IT segment recorded an operating loss of $0 and $52,000 in the first half of 2026 and 2025, respectively; the professional sales service segment recorded operating income of $1,346,000 in the first half of 2026 as compared to operating income of $800,000 in the same period of 2025; and the equipment segment recorded an operating loss of $595,000 in the first half of 2026 as compared to an operating loss of $442,000 in the same period of 2025.
The professional sales service segment reported operating income of $1,346,000 in the first half of 2026, an increase of $546,000 from operating income of $800,000 in the six-month period ended June 30, 2025, due to higher gross profit, partially offset by higher SG&A costs. The equipment segment reported an operating loss of $595,000 in the first half of 2026, compared to an operating loss of $442,000 in the first half 2025, an increase in loss of $153,000 due mainly to higher SG&A and R&D costs.
SG&A costs for the six months ended June 30, 2026 and 2025 were $16,095,000 and $15,751,000, respectively, representing an increase of $344,000, or 2% year-over-year. On a segment basis, SG&A costs in the IT segment were $0 and $937,000 in the first half of 2026 and 2025, respectively; SG&A costs in the professional sales service segment increased by $1,167,000 due mainly to higher personnel cost in the diagnostic imaging sector; and SG&A costs in the equipment segment increased by $108,000 due mainly to higher personnel costs in our China operations. Corporate costs not allocated to segments increased $6,000 due mainly to higher legal and accounting costs, partially offset by lower investor relations costs.
R&D expenses were $395,000, or 2% of revenues, for the first half of 2026, an increase of $50,000, or 15%, from $345,000, or 2% of revenues, for the first half of 2025. The increase is primarily attributable to higher personnel and software development costs in the equipment segment.
Adjusted EBITDA
We utilize Adjusted EBITDA in evaluating our performance internally, and this non-U.S. GAAP financial measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Management believes that this non-U.S. GAAP financial measure, in addition to U. S. GAAP measures, is also useful to investors to evaluate the Company’s results.
Adjusted EBITDA is not a measure of financial performance under U.S. GAAP and should not be considered a substitute for net (loss) 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. Investors should recognize that the Company’s presentation of this non-U.S. GAAP financial measure might not be comparable to similarly-titled measures of other companies limiting its usefulness as a comparative measure.
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Vaso Corporation and Subsidiaries
A reconciliation of net income (loss) from continuing operations to Adjusted EBITDA is set forth below:
| (in thousands) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net income (loss) from continuing operations | $ | 115 | $ | (143 | ) | |||
| Interest expense (income), net | (539 | ) | (528 | ) | ||||
| Income tax expense | 261 | 56 | ||||||
| Depreciation and amortization | 235 | 126 | ||||||
| Share-based compensation | 19 | 16 | ||||||
| Adjusted EBITDA from continuing operations | $ | 90 | $ | (473 | ) | |||
Adjusted EBITDA from continuing operations increased by $563,000 to $90,000 in the six-month period ended June 30, 2026 from ($473,000) in the same period ended June 30, 2025. The increase was primarily attributable to lower net loss and higher depreciation and amortization and income tax expense in the six months ended June 30, 2026.
A reconciliation of net loss from discontinued operations to Adjusted EBITDA is set forth below:
| Six Months Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| (unaudited) | (unaudited) | |||||||
| Net loss from discontinued operations | $ | (458 | ) | $ | (1,129 | ) | ||
| Interest expense (income), net | (9 | ) | (18 | ) | ||||
| Income tax (benefit) expense | (129 | ) | 24 | |||||
| Depreciation and amortization | 237 | 226 | ||||||
| Share-based compensation | - | 1 | ||||||
| Adjusted EBITDA from discontinued operations | $ | (359 | ) | $ | (896 | ) | ||
Adjusted EBITDA from discontinued operations increased by $537,000 to ($359,000) in the six-month period ended June 30, 2026 from ($896,000) in the same period ended June 30, 2025. The increase was primarily attributable to lower net loss, partially offset by the change from income tax expense to income tax benefit in the six months ended June 30, 2026.
Interest and Other Income (Expense)
Interest and other income (expense) for the six months ended June 30, 2026 was $455,000 as compared to $432,000 for the corresponding period of 2025. The increase in interest and other income was due primarily to higher interest income on money market and short-term Treasury bill balances due to higher invested amounts, partially offset by lower interest rates.
Income Tax Expense
We recorded income tax expense of $261,000 and $56,000 for the six-month periods ended June 30, 2026 and 2025, respectively. The increase arose mainly from lower deferred tax assets.
Net Loss
Net loss for the six months ended June 30, 2026 was $343,000 as compared to $1,272,000 for the six months ended June 30, 2025, representing a decrease in loss of $929,000. Loss per share of ($0.00) and ($0.01) was recorded in the six-month periods ended June 30, 2026 and 2025, respectively. The principal cause of the decrease in net loss was lower operating loss from both continuing and discontinued operations, partially offset by higher income tax expense in the six months ended June 30, 2026.
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Vaso Corporation and Subsidiaries
Liquidity and Capital Resources
Cash and Cash Flow
We have financed our operations from working capital during the six months ended June 30, 2026. At June 30, 2026, we had cash and cash equivalents of $38,291,000 and working capital of $22,323,000, compared to cash and cash equivalents of $34,081,000 and working capital of $21,714,000 at December 31, 2025.
Cash provided by operating activities was $4,819,000, which consisted of net loss after adjustments to reconcile net loss to net cash of $500,000 and cash provided by operating assets and liabilities of $4,319,000, during the six months ended June 30, 2026, compared to cash provided by operating activities of $6,229,000 for the same period in 2025. The changes in the account balances primarily reflect a decrease in accounts and other receivables of $7,238,000 and an increase in deferred revenue of $2,919,000, partially offset by decreases in accrued commissions of $1,400,000 and accrued expenses of $4,158,000.
Cash used in investing activities during the six-month period ended June 30, 2026 was $963,000 for the purchase of equipment and software.
Cash used in financing activities during the six-month period ended June 30, 2026 was $146,000 for the repayment of notes payable and finance lease obligations.
Liquidity
The Company expects to generate sufficient cash flow from operations to satisfy its obligations for at least the next twelve months.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable to smaller reporting companies.
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Vaso Corporation and Subsidiaries
ITEM 4 - CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures under the Exchange Act are 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 is 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 June 30, 2026 and have concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2026.
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 June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Vaso Corporation and Subsidiaries
PART II - OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
Information with respect to this item may be found in Note O Commitments and Contingencies under “Litigation”, in the accompanying notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
ITEM 1A. Risk Factors.
Not applicable to smaller reporting companies.
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Mine Safety Disclosures.
Not applicable.
ITEM 5. Other Information.
During the six months ended June 30, 2026, no director
or officer of the Corporation
ITEM 6 – EXHIBITS
| Exhibits | |||
| 3(i) | (a) | Restated Certificate of Incorporation (incorporated by reference to Registration Statement on Form S-1, No. 33-46377 (effective 7/12/94)). | |
| (b) | Certificate of Designations of Preferences and Rights of Series E Convertible Preferred Stock (incorporated by reference to Report on Form 8-K dated June 21, 2010). | ||
| (c) | Certificate of Amendment to Certificate of Incorporation (incorporated by reference to Report on Form 10-Q for the quarter ended September 30, 2016). | ||
| 3(ii) | Bylaws (Incorporated by reference to Registration Statement on Form S-18, No. 33-24095). | ||
| 4 | Specimen Certificate for Common Stock (Incorporated by reference to Registration Statement on Form S-18, No. 33-24095). | ||
| 10.1 | Transaction Award Agreement between Vaso Corporation and Peter Castle | ||
| 10.2 | Amendment to Transaction Award Agreement between Vaso Corporation and Peter Castle | ||
| 31.1 | Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
| 31.2 | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||
| 32.1 | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||
| 32.2 | Certification of 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. | ||
| 101.INS | Inline XBRL Instance Document. | ||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
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Vaso Corporation and Subsidiaries
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/ Jonathan Newton | ||
| Jonathan Newton | ||
| Chief Financial Officer and Principal Accounting Officer | ||
Date: August 14, 2026
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