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, 2024

 

☐ 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, 2024– 175,319,296

 

 

 

 

 

 

Vaso Corporation and Subsidiaries

 

INDEX

 

PART I – FINANCIAL INFORMATION 1
   
ITEM 1 - FINANCIAL STATEMENTS 1
   
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) as of March 31, 2024 and December 31, 2023 1
   
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (unaudited) for the Three Months Ended March 31, 2024, and 2023 2
   
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) for the Three Months Ended March 31, 2024, and 2023 3
   
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) for the Three Months Ended March 31, 2024, and 2023 4
   
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 5
   
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 20
   
ITEM 4 - CONTROLS AND PROCEDURES 24
   
PART II - OTHER INFORMATION 25
   
ITEM 6 – EXHIBITS 25

 

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)

 

   March 31,
2024		   December 31,
2023		 
   (unaudited)     
ASSETS        
CURRENT ASSETS        
Cash and cash equivalents  $19,536   $11,342 
Short-term investments   4,235    13,979 
Accounts and other receivables, net of an allowance for credit losses and commission adjustments of $9,508 at March 31, 2024 and $9,708 at December 31, 2023   7,465    12,377 
Receivables due from related parties   1,053    929 
Inventories, net   1,566    1,470 
Deferred commission expense   3,367    3,285 
Prepaid expenses and other current assets   1,776    1,717 
Total current assets   38,998    45,099 
           
Property and equipment, net of accumulated depreciation of $10,456 at March 31, 2024 and $10,538 at December 31, 2023   1,302    1,174 
Operating lease right of use assets   1,826    1,949 
Goodwill   15,562    15,588 
Intangibles, net   1,424    1,406 
Other assets, net   4,724    4,902 
Investment in EECP Global   652    683 
Deferred tax assets, net   4,956    4,956 
Total assets  $69,444   $75,757 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable  $2,976   $2,670 
Accrued commissions   326    2,411 
Accrued expenses and other liabilities   4,904    7,365 
Finance lease liabilities - current   75    72 
Operating lease liabilities - current   887    928 
Sales tax payable   685    699 
Deferred revenue - current portion   17,272    15,883 
Notes payable - current portion   147    9 
Due to related party   3    3 
Total current liabilities   27,275    30,040 
           
LONG-TERM LIABILITIES          
Notes payable, net of current portion   4    6 
Finance lease liabilities, net of current portion   5    25 
Operating lease liabilities, net of current portion   938    1,020 
Deferred revenue, net of current portion   14,157    16,317 
Other long-term liabilities   1,487    1,506 
Total long-term liabilities   16,591    18,874 
           
COMMITMENTS AND CONTINGENCIES (NOTE N)   
 
    
 
 
           
STOCKHOLDERS’ EQUITY          
Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at March 31, 2024 and December 31, 2023   
-
    
-
 
Common stock, $.001 par value; 250,000,000 shares authorized; 185,627,383 shares issued at March 31, 2024 and December 31, 2023; 175,319,296 shares outstanding at March 31, 2024 and December 31, 2023   186    186 
Additional paid-in capital   64,002    63,993 
Accumulated deficit   (36,205)   (35,032)
Accumulated other comprehensive loss   (405)   (304)
Treasury stock, at cost, 10,308,087 shares at March 31, 2024 and December 31, 2023   (2,000)   (2,000)
Total stockholders’ equity   25,578    26,843 
   $69,444   $75,757 

 

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
March 31,		 
   2024   2023 
Revenues        
Managed IT systems and services  $10,153   $10,274 
Professional sales services   8,127    8,125 
Equipment sales and services   458    637 
Total revenues   18,738    19,036 
           
Cost of revenues          
Cost of managed IT systems and services   5,958    5,834 
Cost of professional sales services   1,749    1,482 
Cost of equipment sales and services   113    158 
Total cost of revenues   7,820    7,474 
Gross profit   10,918    11,562 
           
Operating expenses          
Selling, general and administrative   12,195    11,143 
Research and development   191    157 
Total operating expenses   12,386    11,300 
Operating (loss) income   (1,468)   262 
           
Other (expense) income          
Interest and financing costs   (3)   (28)
Interest and other income, net   311    83 
Loss on disposal of fixed assets   (1)   (1)
Total other income, net   307    54 
           
(Loss) income before income taxes   (1,161)   316 
Income tax expense   (12)   (10)
Net (loss) income   (1,173)   306 
           
Other comprehensive income          
Foreign currency translation (loss) income   (101)   15 
Comprehensive (loss) income  $(1,274)  $321 
           
(Loss) income per common share          
- basic and diluted
  $(0.01)  $0.00 
           
Weighted average common shares outstanding          
- basic   175,119    173,628 
- diluted   175,119    175,201 

 

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)

 

   Common Stock   Treasury Stock  

Additional

Paid-in-

   Accumulated   Accumulated Other Comprehensive   Total Stockholders’ 
   Shares   Amount   Shares   Amount   Capital   Deficit   Loss   Equity 
Balance at January 1, 2023   185,436   $185    (10,308)   (2,000)  $63,952   $(39,837)  $(233)  $22,067 
Share-based compensation   -    
-
    -    
-
    13    
-
    
-
    13 
Foreign currency translation gain   -    
-
    -    
-
    
-
    
-
    15    15 
Net income   -    
-
    -    
-
    
-
    306    
-
    306 
Balance at March 31, 2023   185,436   $185    (10,308)  $(2,000)  $63,965   $(39,531)  $(218)  $22,401 
                                         
Balance at January 1, 2024   185,627   $186    (10,308)   (2,000)  $63,993   $(35,032)  $(304)  $26,843 
Share-based compensation   -    
-
    -    
-
    9    
-
    
-
    9 
Foreign currency translation loss   -    
-
    -    
-
    
-
    
-
    (101)   (101)
Net loss   -    
-
    -    
-
    
-
    (1,173)   
-
    (1,173)
Balance at March 31, 2024   185,627   $186    (10,308)  $(2,000)  $64,002   $(36,205)  $(405)  $25,578 

 

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)

 

   Three months ended
March 31,		 
   2024   2023 
Cash flows from operating activities        
Net (loss) income  $(1,173)  $306 
Adjustments to reconcile net (loss) income to net cash used by operating activities          
Depreciation and amortization   185    273 
Loss from investment in EECP Global   31    78 
Provision for credit losses and commission adjustments   25    21 
Share-based compensation   9    13 
Changes in operating assets and liabilities:          
Accounts and other receivables   4,876    2,420 
Inventories   (111)   (22)
Deferred commission expense   (82)   237 
Prepaid expenses and other current assets   59    (794)
Other assets, net   265    (596)
Accounts payable   307    (34)
Accrued commissions   (1,933)   (1,964)
Accrued expenses and other liabilities   (2,601)   (2,455)
Sales tax payable   (12)   (180)
Deferred revenue   (772)   750 
Due to related party   (124)   (196)
Other long-term liabilities   (19)   202 
Net cash used by operating activities   (1,070)   (1,941)
           
Cash flows from investing activities          
Purchases of equipment and software   (472)   (148)
Purchases of short-term investments   -    (5,070)
Redemption of short-term investments   9,616    5,070 
Net cash provided by (used in) investing activities   9,144    (148)
           
Cash flows from financing activities          
Proceeds from note payable   140    
-
 
Repayment of notes payable and finance lease obligations   (19)   (48)
Net cash provided by (used in) financing activities   121    (48)
Effect of exchange rate differences on cash and cash equivalents   (1)   (19)
           
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS   8,194    (2,156)
Cash and cash equivalents - beginning of period   11,342    11,821 
Cash and cash equivalents - end of period  $19,536   $9,665 
           
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION          
Interest paid  $2   $6 
Income taxes paid  $
-
   $23 
           
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES          
Initial recognition of operating lease right of use asset and liability  $115   $222 

 

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

 

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 GE HealthCare (“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.

 

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, NetWolves, and a healthcare IT application VAR (value added reseller) division, VasoHealthcare IT. 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 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 and ultrasound systems.

 

●GEHC service agreements for the above equipment.

 

●GEHC training services for use of the above equipment.

 

●GEHC and third-party financial services.

 

Page 5

 

 

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.

 

Achari Business Combination Agreement

 

As previously announced, the Company entered into a business combination agreement (the “Business Combination Agreement”), dated as of December 6, 2023, with Achari Ventures Holdings Corp. I, a Delaware corporation (“Achari”) (NASDAQ: AVHI), and Achari Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Achari (“Merger Sub”). The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of Achari. Upon the closing of the Business Combination Agreement (the “Closing”), we anticipate that Achari will change its name to “Vaso Holdings Corp.” or an alternative name chosen by the Company and reasonably acceptable to Achari (“New Vaso”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to collectively as the “Business Combination”.

 

Upon the Closing, New Vaso would have authorized shares of Class A common stock and Class B common stock. The Business Combination Agreement establishes a pro forma equity value of the Company at approximately $176 million, at $10.00 per share of Class A common stock. As such, we believe that the current Vaso stockholders would receive approximately 17.6 million shares of Class A common stock and the current Achari shareholders would maintain between 500 thousand and 750 thousand shares of Class A common stock depending on Achari’s unpaid expenses at the Closing and presuming the redemption of all outstanding public shares of Achari on or prior to the Closing. In addition, current Achari warrant holders would have outstanding warrants to purchase a minimum of 8.25 million shares of Class A common stock at an exercise price of $11.50 per share. No shares of Class B common stock are expected to be outstanding immediately after the Business Combination.

 

The Boards of Directors of Vaso and Achari have each approved the Business Combination, the consummation of which is subject to various customary closing conditions, including the filing and effectiveness of a Registration Statement on Form S-4 (as amended or supplemented, the “Registration Statement”) by Achari with the United States Securities and Exchange Commission (“SEC”), the filing of a proxy statement by Vaso with the SEC and clearance by the SEC, and the approval of a majority of shareholders of both Achari and Vaso of the proposed business combination (Vaso shareholders representing approximately 44% of Vaso’s outstanding shares have entered into support agreements committing them to vote in favor of the Business Combination). The Business Combination is expected to close in the second quarter of 2024.

 

Page 6

 

 

Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

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 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, 2023, as filed with the SEC on April 1, 2024.

 

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.

 

Correction of Prior Period Financial Statements

 

We record commission revenue for certain products in our professional sales service segment based on GEHC’s reporting and payment of such commissions to us. In late August 2023, GEHC informed the Company that its calculations for such products were partially inaccurate and had remitted excess commissions. The Company has taken immediate steps to implement additional internal control procedures whereby GEHC will provide additional information sufficient to assess the accuracy of such commission payments going forward. We assessed the materiality of this misstatement on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, (“ASC 250”) and concluded that the misstatements were not material to the prior annual or interim periods.

 

Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we have increased the accumulated deficit at January 1, 2023 by $808,000 to reflect $1,010,000 lower commission revenue and $202,000 lower commission expense, and corrected the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income, Cash Flows, and Changes in Stockholders’ Equity for the three months ended March 31, 2023, and the related notes to revise for those misstatements that impacted such periods.

 

Page 7

 

 

Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

The following are selected line items from the Company’s Condensed Consolidated Financial Statements illustrating the effect of these corrections:

 

   Consolidated Statement of Operations and Comprehensive Income 
   Three months ended March 31, 2023 
(in thousands, except per share data)  As Reported   Adjustment   As Revised 
Revenues            
Professional sales services  $8,310   $(185)  $8,125 
                
Cost of revenues               
Cost of professional sales services  $1,519   $(37)  $1,482 
                
Gross Profit - professional sales services segment  $6,791   $(148)  $6,643 
                
Operating income  $410   $(148)  $262 
                
Net income  $454   $(148)  $306 
                
Comprehensive income  $469   $(148)  $321 
                
Income per common share               
- basic  $0.00   $(0.00)  $0.00 
- diluted  $0.00   $(0.00)  $0.00 

 

   Consolidated Statement of Changes in Stockholders’ Equity 
   Accumulated Deficit   Total Stockholders’ Equity 
(in thousands)  As Reported   Adjustment   As Revised   As Reported   Adjustment   As Revised 
                         
Balance at January 1, 2023  $(39,029)  $(808)  $(39,837)  $22,875   $(808)  $22,067 
                               
Net income  $454   $(148)  $306   $454   $(148)  $306 
                               
Balance at March 31, 2023  $(38,575)  $(956)  $(39,531)  $23,357   $(956)  $22,401 

 

   Consolidated Statement of Cash Flows 
   Three months ended March 31, 2023 
(in thousands)  As Reported   Adjustment   As Revised 
Net income  $454   $(148)  $306 
Accounts and other receivables  $2,235   $185   $2,420 
Accrued commissions  $(1,927)  $(37)  $(1,964)

 

Recently Issued Accounting Standards To Be Adopted

 

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740), Improvement to Income Tax Disclosures, which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. The ASU is effective for annual reporting periods beginning with the year ending December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.

 

Page 8

 

 

Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvement to Reportable Segment Disclosures. This ASU enhances disclosures required for reportable segments in both annual and interim consolidated financial statements. The ASU, which requires retrospective application, is effective for annual reporting periods beginning with the year ending December 31, 2024, and interim periods beginning with the three months ending March 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.

 

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, 2024   Three Months Ended March 31, 2023 
       Professional
sales
service		   Equipment           Professional
sales
service		   Equipment     
   IT segment   segment   segment   Total   IT segment   segment   segment   Total 
Network services  $8,944   $
         -
   $
     -
   $8,944   $9,038   $
      -
   $
   -
   $9,038 
Software sales and support   1,209    
-
    
-
    1,209    1,236    
-
    
-
    1,236 
Commissions   
-
    8,127    
-
    8,127    
-
    8,125    
-
    8,125 
Medical equipment sales   
-
    
-
    427    427    
-
    
-
    606    606 
Medical equipment service   
-
    
-
    31    31    
-
    
-
    31    31 
   $10,153   $8,127   $458   $18,738   $10,274   $8,125   $637   $19,036 

 

   Three Months Ended March 31, 2024   Three Months Ended March 31, 2023 
       Professional
sales
service		   Equipment           Professional
sales
service		   Equipment     
   IT segment   segment   segment   Total   IT segment   segment   segment   Total 
Revenue recognized over time  $9,301   $
-
   $81   $9,382   $9,520   $
-
   $110   $9,630 
Revenue recognized at a point in time   852    8,127    377    9,356    754    8,125    527    9,406 
   $10,153   $8,127   $458   $18,738   $10,274   $8,125   $637   $19,036 

 

Transaction Price Allocated to Remaining Performance Obligations

 

As of March 31, 2024, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $94 million, of which we expect to recognize revenue as follows:

 

   (in thousands) 
   Fiscal years of revenue recognition 
   2024   2025   2026   Thereafter 
Unfulfilled performance obligations  $36,974   $26,240   $8,744   $22,376 

 

Contract Balances

 

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 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 $202,000 and $419,000 at March 31, 2024 and December 31, 2023, 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 $31,424,000,000 and $32,194,000 at March 31, 2024 and December 31, 2023, 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 $923,000 and $971,000 at March 31, 2024 and December 31, 2023, 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 $5,000 and $6,000 at March 31, 2024 and December 31, 2023, respectively, and are classified in our condensed consolidated balance sheets as either current or long-term deferred revenue.

 

The following table summarizes the Company’s contract receivable and contract liability balances:

 

   (in thousands) 
   2024   2023 
Contract receivables - January 1   13,398    15,306 
Contract receivables - March 31   8,644    12,338 
Increase (decrease)   (4,754)   (2,968)
           
Contract liabilities - January 1   33,589    33,861 
Contract liabilities - March 31   32,554    34,046 
Increase (decrease)   (1,035)   185 

 

The decrease in contract receivables in the first quarters of 2024 and 2023 was due primarily to collections exceeding billings. During the three months ended March 31, 2024, we recognized approximately $2.5 million of revenues that were included in our contract liability balance at January 1, 2024.

 

Costs to Obtain or Fulfill a Contract

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires that incremental costs of obtaining a contract are recognized as an asset and amortized to expense in a pattern that matches the timing of the revenue recognition of the related contract.  We have determined the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 are certain sales commissions paid to associates.  In addition, the Company elected the practical expedient to recognize the incremental costs of obtaining a contract when incurred for contracts where the amortization period for the asset the Company would otherwise have recognized is one year or less. 

 

Under Topic 606, sales commissions applicable to service contracts exceeding one year have been capitalized and amortized ratably over the term of the contract.  In our VHC IT business, commissions allocable to multi-year subscription contracts or multi-year post-contract support performance obligations are amortized to expense ratably over the terms of the multi-year periods.  VHC IT commissions allocable to other elements are charged to expense at go-live or customer acceptance.  In our professional sales services segment, commissions paid to our sales force are deferred until the underlying equipment is accepted by the customer.  We recognized approximately $579,000 and $605,000 of amortization related to these sales commission assets in “Cost of professional sales services” in the three months ended March 31, 2024 and 2023, respectively, and approximately $21,000 and $26,000 of amortization in “Selling, general and administrative” expense in the three months ended March 31, 2024 and 2023, respectively, in our condensed consolidated statements of operations and comprehensive income (loss).

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

At March 31, 2024 and December 31, 2023, our consolidated balance sheets include approximately $6,853,000 and $7,106,000, respectively, in capitalized sales commissions - primarily in our professional sales services segment - to be expensed in future periods, of which $3,367,000 and $3,285,000, respectively, is recorded in deferred commission expense and $3,486,000 and $3,821,000, respectively, representing the long-term portion, is included in other assets.

 

Significant Judgments when Applying Topic 606

 

Contract transaction price is allocated to performance obligations using estimated stand-alone selling price. Judgment is required in estimating stand-alone selling price for each distinct performance obligation. We determine stand-alone selling price maximizing observable inputs such as stand-alone sales when they exist or substantive renewal price charged to clients. In instances where stand-alone selling price is not observable, we utilize an estimate of stand-alone selling price based on historical pricing and industry practices.

 

Certain revenue we record in our professional sales service segment contains an estimate for variable consideration.  Due to the tiered structure of our commission rate, which increases as annual targets are achieved, under Topic 606 we record revenue and deferred revenue at the rate we expect to be achieved by year end.  We base our estimate of variable consideration on historical results of previous years’ achievement under the GEHC agreement.  Such estimate is reviewed each quarter and adjusted as necessary.  In addition, the Company records commissions for arranging financing at an estimated rate which is subject to later revision based on certain factors. 

 

The Company also records commission adjustments to contract liabilities in its professional sales service segment based on estimates of future order cancellations.  

 

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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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, 
   2024   2023 
Revenues from external customers        
IT  $10,153   $10,274 
Professional sales service   8,127    8,125 
Equipment   458    637 
Total revenues  $18,738   $19,036 
           
Gross Profit          
IT  $4,195   $4,440 
Professional sales service   6,378    6,643 
Equipment   345    479 
Total gross profit  $10,918   $11,562 
           
Operating income (loss)          
IT  $(420)  $(109)
Professional sales service   (7)   839 
Equipment   (294)   (25)
Corporate   (747)   (443)
Total operating income (loss)  $(1,468)  $262 
           
Depreciation and amortization          
IT  $155   $246 
Professional sales service   22    20 
Equipment   8    7 
Corporate   
-
    
-
 
Total depreciation and amortization  $185   $273 
           
Capital expenditures          
IT  $246   $85 
Professional sales service   2    50 
Equipment   224    13 
Corporate   
-
    
-
 
Total cash capital expenditures  $472   $148 

 

   (in thousands) 
   March 31, 2024   December 31, 2023 
Identifiable Assets        
IT  $21,776   $22,425 
Professional sales service   13,988    18,955 
Equipment   7,005    7,114 
Corporate   26,675    27,263 
Total assets  $69,444   $75,757 

 

GEHC accounted for 43% of revenue for both of the three-month periods ended March 31, 2024 and 2023. GEHC also accounted for $4.5 million or 60%, and $9.3 million or 75%, of accounts and other receivables at March 31, 2024 and December 31, 2023, respectively. No other customer accounted for 10% or more of revenue.

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

NOTE E – EARNINGS (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 (loss) 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 March 31, 
   2024   2023 
Basic weighted average shares outstanding   175,119    173,628 
Dilutive effect of unvested restricted shares   
-
    1,573 
Diluted weighted average shares outstanding   175,119    175,201 

 

The following table represents common stock equivalents that were excluded from the computation of diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023, because the effect of their inclusion would be anti-dilutive.

 

   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Restricted common stock grants   894    
-
 

 

NOTE F – SHORT-TERM INVESTMENTS AND FINANCIAL INSTRUMENTS

 

The Company’s short-term investments consist of bank deposits with yields based on underlying debt and equity securities and six-month US Treasury bills.  The bank deposits are carried at fair value of approximately $0 and $424,000 at March 31, 2024 and December 31, 2023, respectively, and are classified as available-for-sale.  Realized gains or losses on the bank deposits are included in net income. The US Treasury bills are classified as held-to-maturity and are carried at amortized cost of approximately $4,235,000 and $13,555,000 at March 31, 2024 and December 31, 2023, respectively. Their fair value at March 31, 2024 and December 31, 2023 is approximately $4,234,000 and $13,559,000, respectively, and the unrecognized holding (loss) gain is ($1,000) and $4,000 for the three months ended March 31, 2024 and 2023, respectively. The Company does not expect a credit loss for its short-term investments.

 

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.

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

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, short-term investments, accounts receivable, prepaids, accounts payable, accrued expenses and other current liabilities approximated their fair value as of March 31, 2024 and December 31, 2023, 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.

 

The following table presents information about the Company’s assets measured at fair value as of March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   Quoted Prices   Significant         
   in Active   Other   Significant   Balance 
   Markets for   Observable   Unobservable   as of 
   Identical Assets   Inputs   Inputs   March 31, 
   (Level 1)   (Level 2)   (Level 3)   2024 
Assets                
Cash equivalents invested in money market funds and treasury bills  $18,416   $
                -
   $
                -
   $18,416 

 

   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)   2023 
Assets                
Cash equivalents invested in money market funds and treasury bills  $10,522   $
                  -
   $
             -
   $10,522 
Bank deposits (included in short term investments)   424              424 
   $10,946   $
-
   $
-
   $10,946 

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

NOTE G – ACCOUNTS AND OTHER RECEIVABLES, NET

 

The following table presents information regarding the Company’s accounts and other receivables as of March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   March 31, 2024   December 31, 2023 
Trade receivables  $16,254   $22,085 
Unbilled receivables   719    
-
 
Allowance for credit losses and commission adjustments   (9,508)   (9,708)
Accounts and other receivables, net  $7,465   $12,377 

 

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 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.

 

NOTE H – INVENTORIES, NET

 

Inventories, net of reserves, consist of the following:

 

   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Raw materials  $761   $832 
Work in process   92    11 
Finished goods   713    627 
   $1,566   $1,470 

 

The Company maintained reserves for slow moving inventories of $164,000 at both March 31, 2024 and December 31, 2023.

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

NOTE I – GOODWILL AND OTHER INTANGIBLES

 

Goodwill of $14,375,000 is allocated to the IT segment. The remaining $1,187,000 of goodwill is attributable to the FGE reporting unit within the Equipment segment. The components of the change in goodwill are as follows:

 

   (in thousands) 
   Three months ended   Year ended 
   March 31,
2024		   December 31,
2023		 
Beginning of period  $15,588   $15,614 
Foreign currency translation adjustment   (26)   (26)
End of period  $15,562   $15,588 

 

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, 2024   December 31, 2023 
Customer-related        
Costs   $5,831   $5,831 
Accumulated amortization   (4,839)   (4,790)
    992    1,041 
           
Patents and Technology          
Costs   1,894    1,894 
Accumulated amortization   (1,894)   (1,894)
    
-
    
-
 
           
Software          
Costs   2,710    2,618 
Accumulated amortization   (2,278)   (2,253)
    432    365 
           
   $1,424   $1,406 

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

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 $74,000 and $90,000 for the three months ended March 31, 2024 and 2023, respectively.

 

Amortization of intangibles for the next five years is:

 

   (in thousands) 
Years ending December 31,    
Remainder of 2024   253 
2025   272 
2026   217 
2027   188 
2028   165 
2029   20 
   $1,115 

 

NOTE J – OTHER ASSETS, NET

 

Other assets, net consist of the following at March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Deferred commission expense - noncurrent  $3,485   $3,821 
Trade receivables - noncurrent   1,179    1,021 
Other, net of allowance for loss on loan receivable of $412 at March 31, 2024 and December 31, 2023   60    60 
   $4,724   $4,902 

 

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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

NOTE K – ACCRUED EXPENSES AND OTHER LIABILITIES

 

Accrued expenses and other liabilities consist of the following at March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Accrued compensation  $862   $2,482 
Accrued expenses - other   1,934    2,142 
Order reduction liability   923    971 
Other liabilities   1,185    1,770 
   $4,904   $7,365 

 

NOTE L – DEFERRED REVENUE

 

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

 

   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Deferred revenue at beginning of period  $32,200   $30,803 
Net additions:          
Deferred extended service contracts   2    2 
Deferred commission revenues   1,950    4,016 
Recognized as revenue:          
Deferred extended service contracts   (4)   (1)
Deferred commission revenues   (2,719)   (3,267)
Deferred revenue at end of period   31,429    31,553 
Less: current portion   17,272    14,234 
Long-term deferred revenue at end of period  $14,157   $17,319 

 

NOTE M – 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 (Expense) Income on its condensed consolidated statements of operations. For the three months ended March 31, 2024 and 2023, the Company’s share of EECP Global’s loss was approximately $31,000 and $78,000, respectively, and included in Other (Expense) Income in its condensed consolidated statements of operations. At March 31, 2024 and December 31, 2023, the Company recorded a net receivable from related parties of approximately $1,029,000 and $901,000, respectively, 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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Vaso Corporation and Subsidiaries

 

Notes to Condensed Consolidated Financial Statements (unaudited)

 

NOTE N – 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 extended the term of the original agreement, which began on July 1, 2010, through December 31, 2026, 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 products to specific market accounts in the 48 contiguous 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.

 

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.

 

On December 31, 2022, the Company executed an Employment Agreement with the President of its VasoHealthcare subsidiary, Ms. Jane Moen, to provide for a twenty-seven month initial term with extensions, unless earlier terminated by the Company, but in no event can it extend beyond December 31, 2026 or the earlier termination of the GEHC Agreement. The Employment Agreement provides for annual base compensation of $350,000. Ms. Moen shall be eligible to receive bonuses for each fiscal year during the employment term. The amount and the occasion for payment of such bonuses, if any, shall be based on employment status as well as achieving certain operating targets. Ms. Moen 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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Vaso Corporation and Subsidiaries

 

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 COVID-19 pandemic; 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 the conduct of 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

 

COVID-19 pandemic

 

The COVID-19 pandemic has had a significant impact on economies of the United States and China, 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. We have experienced 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.  In addition, revenues in our China operations have been adversely affected by its government’s lockdown policies, which have only recently been reversed. 

 

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, 2023 as filed with the SEC on April 1, 2024.

 

Results of Operations – For the Three Months Ended March 31, 2024 and 2023

 

Revenues

 

Total revenue for the three months ended March 31, 2024 and 2023 was $18,738,000 and $19,036,000, respectively, representing a decrease of $298,000, or 2% year-over-year. On a segment basis, revenue in the professional sales service segment increased $2,000, while revenue in the IT and equipment segments decreased $121,000 and $179,000, respectively.

 

Revenue in the IT segment for the three months ended March 31, 2024 was $10,153,000 compared to $10,274,000 for the three months ended March 31, 2023, a decrease of $121,000, or 1%, of which $94,000 resulted from lower NetWolves revenue, due primarily to decreased managed service sales, and $27,000 from lower healthcare IT revenue, due primarily to lower software support sales. Monthly recurring revenue in the IT segment accounted for $9,301,000 or 92% of the segment revenue in the first quarter of 2024, and $9,520,000 or 93% of the segment revenue for the same quarter last year (see Note C).

 

Commission revenues in the professional sales service segment were $8,127,000 in the first quarter of 2024, an increase of $2,000, or less than 1%, as compared to $8,125,000 in the same quarter of 2023. The increase in commission revenues was due primarily to new revenues from the ultrasound product offering beginning in 2nd quarter of 2023, largely offset by lower revenues from the diagnostic imaging products. Diagnostic imaging revenues decreased due to lower volume of underlying equipment delivered by GEHC during the period as well as a lower 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 GEHC prior to customer acceptance of the equipment are recorded as deferred revenue in the condensed consolidated balance sheet. As of March 31, 2024, $31,424,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $14,154,000 was long-term. At March 31, 2023, $31,543,000 in deferred commission revenue was recorded in the Company’s condensed consolidated balance sheet, of which $17,314,000 was long-term. The decrease in deferred revenue is principally due to lower value of new orders booked than orders delivered during the quarter.

 

Revenue in the equipment segment decreased by $179,000, or 28%, to $458,000 for the three-month period ended March 31, 2024 from $637,000 for the same period of the prior year, principally due to lower deliveries in our China operations resulting from impact of increased government scrutiny of healthcare purchasing practices.

 

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Vaso Corporation and Subsidiaries

 

Gross Profit

 

Gross profit for the three months ended March 31, 2024 and 2023 was $10,918,000, or 58% of revenue, and $11,562,000, or 61% of revenue, respectively, representing a decrease of $644,000, or 6% year-over-year. On a segment basis, gross profit in the IT, professional sales service, and equipment segments decreased $245,000, or 6%; $265,000, or 4%; and $134,000, or 28%, respectively.

 

IT segment gross profit for the three months ended March 31, 2024 was $4,195,000, or 41% of the segment revenue, compared to $4,440,000, or 43% of the segment revenue for the three months ended March 31, 2023. The year-over-year decrease of $245,000, or 6%, was primarily a result of both lower sales volume and lower margin product sales mix in the healthcare IT business.

 

Professional sales service segment gross profit was $6,378,000, or 79% of segment revenue, for the three months ended March 31, 2024 as compared to $6,643,000, or 82% of the segment revenue, for the three months ended March 31, 2023, reflecting a decrease of $265,000, or 4%. The decrease in absolute dollars was primarily due to higher cost of commissions combined with essentially flat revenues. Cost of commissions in the professional sales service segment of $1,749,000 and $1,482,000, for the three months ended March 31, 2024 and 2023, respectively, reflected commission expense associated with recognized commission revenues. Cost of commissions increased primarily due to a higher commission cost structure associated with ultrasound product 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 was $345,000, or 75% of segment revenues, for the first quarter of 2024 compared to $479,000, or 75% of segment revenues, for the same quarter of 2023. The $134,000, or 28%, decrease in gross profit was mainly the result of lower revenue in our China operations due to decreased delivery volume for the first quarter of 2024.

 

Operating (Loss) Income

 

Operating (loss) income for the three months ended March 31, 2024 and 2023 was ($1,468,000) and $262,000, respectively, representing a decrease of $1,730,000, due primarily to lower gross profit and higher selling, general, and administrative (“SG&A”) expenses. On a segment basis, the professional sales service segment recorded an operating loss of $7,000 in the first quarter of 2024, as compared to operating income of $839,000 for the same period of 2023; the IT segment recorded an operating loss of $420,000 in the first quarter of 2024 as compared to an operating loss of $109,000 in the same period of 2023; and the equipment segment recorded an operating loss of $294,000 in the first quarter of 2024 as compared to an operating loss of $25,000 in the same period of 2023.

 

Operating loss in the IT segment was $420,000 for the three-month period ended March 31, 2024, an increase in loss of $311,000 from an operating loss of $109,000 in the same period of 2023, due mainly to lower gross profit and higher SG&A costs. The professional sales service segment reported an operating loss of $7,000 in the three-month period ended March 31, 2024 as compared to operating income of $839,000 in the same period of 2023, a decrease in operating income of $846,000, due to lower gross profit and higher SG&A costs. The equipment segment reported an operating loss of $294,000 in the first quarter of 2024, compared to an operating loss of $25,000 in the first quarter 2023, an increase in loss of $269,000, due to lower gross profit and higher SG&A and research and development (“R&D”) costs.

 

SG&A costs for the three months ended March 31, 2024 and 2023 were $12,195,000 and $11,143,000, respectively, representing an increase of $1,052,000, or 9% year-over-year. On a segment basis, SG&A costs in the IT segment increased by $75,000 in the first quarter of 2024 from the same quarter of the prior year due to higher personnel costs partially offset by reduced third-party commissions; SG&A costs in the professional sales service segment increased $582,000 due mainly to higher personnel cost associated with the new ultrasound program and higher national sales meeting costs; and SG&A costs in the equipment segment increased $92,000 due mainly to higher personnel costs. Corporate costs not allocated to segments increased $303,000 to $746,000 in the three months ended March 31, 2024 from $443,000 for the same period in 2023, due mainly to higher costs for investment banking activities.

 

Research and development (“R&D”) expenses were $191,000, or 1% of revenues, for the first quarter of 2024, an increase of $34,000, or 22%, from $157,000, or 1% of revenues, for the first quarter of 2023. The increase is primarily attributable to higher product development expenses in the equipment segment.

 

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Vaso Corporation and Subsidiaries

 

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) income to Adjusted EBITDA is set forth below:

 

   (in thousands) 
   Three months ended March 31, 
   2024   2023 
         
Net (loss) income  $(1,173)  $306 
Interest expense (income), net   (299)   (111)
Income tax expense (benefit)   12    10 
Depreciation and amortization   185    273 
Share-based compensation   9    13 
Adjusted EBITDA  $(1,266)  $491 

 

Adjusted EBITDA decreased by $1,757,000, to ($1,266,000) in the quarter ended March 31, 2024 from $491,000 in the quarter ended March 31, 2023. The decrease was mainly attributable to the change from net income to net loss, as well as to higher interest income and lower depreciation and amortization.

 

Interest and Other Income (Expense)

 

Interest and other income (expense) for the three months ended March 31, 2024 was $307,000 as compared to $54,000 for the corresponding period of 2023. The increase in interest and other income (expense) was due primarily to higher interest income on money market balances and short-term investments, and by decreased loss on investment in EECP Global.

 

Income Tax Expense

 

For the three months ended March 31, 2024, we recorded income tax expense of $12,000 as compared to income tax expense of $10,000 for the corresponding period of 2023. The increase was due mainly to higher state income taxes.

 

Net (Loss) Income

 

Net (loss) income for the three months ended March 31, 2024 was ($1,173,000) as compared to $306,000 for the three months ended March 31, 2023, representing a decrease of $1,479,000. (Loss) income per share was ($0.00) and $0.00 in the three-month periods ended March 31, 2024 and 2023, respectively. The principal cause of the change from net income to net loss is the $846,000 decrease in operating income in the professional sales service segment, increased operating losses in the IT and equipment segments and increased investment banking expenditures, partially offset by the $228,000 increase in interest and other income, net.

 

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Vaso Corporation and Subsidiaries

 

Liquidity and Capital Resources

 

Cash and Cash Flow

 

We have financed our operations from working capital. At March 31, 2024, we had cash and cash equivalents of $19,536,000 and working capital of $11,673,000, compared to cash and cash equivalents of $11,342,000 and working capital of $15,059,000 at December 31, 2023.

 

Cash used by operating activities during the three months ended March 31, 2024 was $1,070,000, which consisted of net loss after adjustments to reconcile net loss to net cash of $923,000 and cash used by operating assets and liabilities of $147,000, compared to cash used by operating activities of $1,941,000 for the same period in 2023. The changes in the account balances primarily reflect decreases in accrued commissions and accrued expenses and other liabilities of $1,933,000 and $2,601,000, respectively, partially offset by a decrease in accounts and other receivables of $4,876,000.

 

Cash provided by investing activities during the three-month period ended March 31, 2024 was $9,144,000, consisting of $9,616,000 from redemption of short-term investments offset by $472,000 for the purchase of equipment and software.

 

Cash provided by financing activities during the three-month period ended March 31, 2024 was $121,000, consisting of $140,000 in proceeds from note payable offset by $19,000 in 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 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, 2024 and have concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2024.

 

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, 2024 that has materially affected, or is 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 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.
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 (Embedded within the Inline XBRL document and included in Exhibit)

 

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

 

Date: May 15, 2024

 

 

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2023-12-31 0000839087 vaso:ExtendedServiceContractsMember 2024-01-01 2024-03-31 0000839087 vaso:ExtendedServiceContractsMember 2023-01-01 2023-03-31 0000839087 vaso:CommissionRevenuesMember 2024-01-01 2024-03-31 0000839087 vaso:CommissionRevenuesMember 2023-01-01 2023-03-31 0000839087 vaso:EECPGlobalMember 2024-01-01 2024-03-31 0000839087 2019-05-10 2019-05-10 0000839087 2022-12-31 2022-12-31 xbrli:shares iso4217:USD iso4217:USD xbrli:shares xbrli:pure vaso:segments

Exhibit 31

 

CERTIFICATION PURSUANT TO RULE 13a/15d OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Jun Ma, certify that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

 

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

 

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

 

  /s/ Jun Ma
  Jun Ma
  President and Chief Executive Officer

 

Date: May 15, 2024

 

 

 

 

CERTIFICATION PURSUANT TO RULE 13a/15d OF THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

 

I, Michael J. Beecher, certify that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

 

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

 

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

 

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

 

Date: May 15, 2024

 

 

Exhibit 32

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Vaso Corporation and subsidiaries (the “Company”) on Form 10-Q for the period ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jun Ma, as President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

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

 

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

 

  /s/ Jun Ma
  Jun Ma
  President and Chief Executive Officer

 

Dated: May 15, 2024

 

 

 

 

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the quarterly report of Vaso Corporation and subsidiaries (the “Company”) on Form 10-Q for the period ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael J. Beecher, as Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

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

 

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

 

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

 

Dated: May 15, 2024

 

 

 

v3.24.1.1.u2
Document And Entity Information - shares
 3 Months Ended
Mar. 31, 2024
May 10, 2024
Document Information Line Items    
Entity Registrant Name VASO CORPORATION  
Document Type 10-Q  
Current Fiscal Year End Date --12-31  
Entity Common Stock, Shares Outstanding   175,319,296
Amendment Flag false  
Entity Central Index Key 0000839087  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Mar. 31, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q1  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 0-18105  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 11-2871434  
Entity Address, Address Line One 137 Commercial St  
Entity Address, Address Line Two Suite 200  
Entity Address, City or Town Plainview  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 11803  
City Area Code (516)  
Local Phone Number 997-4600  
Entity Interactive Data Current Yes  
Title of 12(b) Security None  
No Trading Symbol Flag true  
v3.24.1.1.u2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
CURRENT ASSETS    
Cash and cash equivalents $ 19,536 $ 11,342
Short-term investments 4,235 13,979
Accounts and other receivables, net of an allowance for credit losses and commission adjustments of $9,508 at March 31, 2024 and $9,708 at December 31, 2023 7,465 12,377
Inventories, net 1,566 1,470
Deferred commission expense 3,367 3,285
Prepaid expenses and other current assets 1,776 1,717
Total current assets 38,998 45,099
Property and equipment, net of accumulated depreciation of $10,456 at March 31, 2024 and $10,538 at December 31, 2023 1,302 1,174
Operating lease right of use assets 1,826 1,949
Goodwill 15,562 15,588
Intangibles, net 1,424 1,406
Other assets, net 4,724 4,902
Investment in EECP Global 652 683
Deferred tax assets, net 4,956 4,956
Total assets 69,444 75,757
CURRENT LIABILITIES    
Accounts payable 2,976 2,670
Accrued commissions 326 2,411
Accrued expenses and other liabilities 4,904 7,365
Finance lease liabilities - current 75 72
Operating lease liabilities - current 887 928
Sales tax payable 685 699
Deferred revenue - current portion 17,272 15,883
Notes payable - current portion 147 9
Total current liabilities 27,275 30,040
LONG-TERM LIABILITIES    
Notes payable, net of current portion 4 6
Finance lease liabilities, net of current portion 5 25
Operating lease liabilities, net of current portion 938 1,020
Deferred revenue, net of current portion 14,157 16,317
Other long-term liabilities 1,487 1,506
Total long-term liabilities 16,591 18,874
COMMITMENTS AND CONTINGENCIES (NOTE N)
STOCKHOLDERS’ EQUITY    
Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at March 31, 2024 and December 31, 2023
Common stock, $.001 par value; 250,000,000 shares authorized; 185,627,383 shares issued at March 31, 2024 and December 31, 2023; 175,319,296 shares outstanding at March 31, 2024 and December 31, 2023 186 186
Additional paid-in capital 64,002 63,993
Accumulated deficit (36,205) (35,032)
Accumulated other comprehensive loss (405) (304)
Treasury stock, at cost, 10,308,087 shares at March 31, 2024 and December 31, 2023 (2,000) (2,000)
Total stockholders’ equity 25,578 26,843
Total liabilities and stockholders' equity 69,444 75,757
Related Party    
CURRENT ASSETS    
Receivables due from related parties 1,053 929
CURRENT LIABILITIES    
Due to related party $ 3 $ 3
v3.24.1.1.u2
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Statement of Financial Position [Abstract]    
Accounts and other receivables, net of an allowance for credit losses and commission adjustments (in Dollars) $ 9,508 $ 9,708
Property and equipment, net of accumulated depreciation (in Dollars) $ 10,456 $ 10,538
Preferred stock, par value (in Dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in Dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized 250,000,000 250,000,000
Common Stock, shares Issued 185,627,383 185,627,383
Common Stock, shares Outstanding 175,319,296 175,319,296
Treasury stock at cost 10,308,087 10,308,087
v3.24.1.1.u2
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Revenues    
Total revenues $ 18,738 $ 19,036
Cost of revenues    
Total cost of revenues 7,820 7,474
Gross profit 10,918 11,562
Operating expenses    
Selling, general and administrative 12,195 11,143
Research and development 191 157
Total operating expenses 12,386 11,300
Operating (loss) income (1,468) 262
Other (expense) income    
Interest and financing costs (3) (28)
Interest and other income, net 311 83
Loss on disposal of fixed assets (1) (1)
Total other income, net 307 54
(Loss) income before income taxes (1,161) 316
Income tax expense (12) (10)
Net (loss) income (1,173) 306
Other comprehensive income    
Foreign currency translation (loss) income (101) 15
Comprehensive (loss) income $ (1,274) $ 321
(Loss) income per common share    
- basic (in Dollars per share) $ (0.01) $ 0
Weighted average common shares outstanding    
- basic (in Shares) 175,119 173,628
- diluted (in Shares) 175,119 175,201
Managed IT systems and services    
Revenues    
Total revenues $ 10,153 $ 10,274
Professional sales services    
Revenues    
Total revenues 8,127 8,125
Equipment sales and services    
Revenues    
Total revenues 458 637
Cost of managed IT systems and services    
Cost of revenues    
Total cost of revenues 5,958 5,834
Cost of professional sales services    
Cost of revenues    
Total cost of revenues 1,749 1,482
Cost of equipment sales and services    
Cost of revenues    
Total cost of revenues $ 113 $ 158
v3.24.1.1.u2
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (Parentheticals) - $ / shares
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Income Statement [Abstract]    
- diluted $ (0.01) $ 0.00
v3.24.1.1.u2
Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock
Treasury Stock
Additional Paid-in- Capital
Accumulated Deficit
Accumulated Other Comprehensive Loss
Total
Balance at Dec. 31, 2022 $ 185 $ (2,000) $ 63,952 $ (39,837) $ (233) $ 22,067
Balance (in Shares) at Dec. 31, 2022 185,436 (10,308)        
Share-based compensation 13 13
Foreign currency translation gain/loss 15 15
Net Income (loss) 306 306
Balance at Mar. 31, 2023 $ 185 $ (2,000) 63,965 (39,531) (218) 22,401
Balance (in Shares) at Mar. 31, 2023 185,436 (10,308)        
Balance at Dec. 31, 2023 $ 186 $ (2,000) 63,993 (35,032) (304) $ 26,843
Balance (in Shares) at Dec. 31, 2023 185,627 (10,308)       175,319,296
Share-based compensation 9 $ 9
Foreign currency translation gain/loss (101) (101)
Net Income (loss) (1,173) (1,173)
Balance at Mar. 31, 2024 $ 186 $ (2,000) $ 64,002 $ (36,205) $ (405) $ 25,578
Balance (in Shares) at Mar. 31, 2024 185,627 (10,308)       175,319,296
v3.24.1.1.u2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Cash flows from operating activities    
Net (loss) income $ (1,173) $ 306
Adjustments to reconcile net (loss) income to net cash used by operating activities    
Depreciation and amortization 185 273
Loss from investment in EECP Global 31 78
Provision for credit losses and commission adjustments 25 21
Share-based compensation 9 13
Changes in operating assets and liabilities:    
Accounts and other receivables 4,876 2,420
Inventories (111) (22)
Deferred commission expense (82) 237
Prepaid expenses and other current assets 59 (794)
Other assets, net 265 (596)
Accounts payable 307 (34)
Accrued commissions (1,933) (1,964)
Accrued expenses and other liabilities (2,601) (2,455)
Sales tax payable (12) (180)
Deferred revenue (772) 750
Due to related party (124) (196)
Other long-term liabilities (19) 202
Net cash used by operating activities (1,070) (1,941)
Cash flows from investing activities    
Purchases of equipment and software (472) (148)
Purchases of short-term investments   (5,070)
Redemption of short-term investments 9,616 5,070
Net cash provided by (used in) investing activities 9,144 (148)
Cash flows from financing activities    
Proceeds from note payable 140
Repayment of notes payable and finance lease obligations (19) (48)
Net cash provided by (used in) financing activities 121 (48)
Effect of exchange rate differences on cash and cash equivalents (1) (19)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,194 (2,156)
Cash and cash equivalents - beginning of period 11,342 11,821
Cash and cash equivalents - end of period 19,536 9,665
SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION    
Interest paid 2 6
Income taxes paid 23
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES    
Initial recognition of operating lease right of use asset and liability $ 115 $ 222
v3.24.1.1.u2
Organization and Plan of Operations
 3 Months Ended
Mar. 31, 2024
Organization and Plan of Operations [Abstract]  
ORGANIZATION AND PLAN OF OPERATIONS

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 GE HealthCare (“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.

 

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, NetWolves, and a healthcare IT application VAR (value added reseller) division, VasoHealthcare IT. 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 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 and ultrasound systems.

 

●GEHC service agreements for the above equipment.

 

●GEHC training services for use of the above equipment.

 

●GEHC and third-party financial services.

 

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.

 

Achari Business Combination Agreement

 

As previously announced, the Company entered into a business combination agreement (the “Business Combination Agreement”), dated as of December 6, 2023, with Achari Ventures Holdings Corp. I, a Delaware corporation (“Achari”) (NASDAQ: AVHI), and Achari Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Achari (“Merger Sub”). The Business Combination Agreement provides, among other things, that on the terms and subject to the conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving as a wholly owned subsidiary of Achari. Upon the closing of the Business Combination Agreement (the “Closing”), we anticipate that Achari will change its name to “Vaso Holdings Corp.” or an alternative name chosen by the Company and reasonably acceptable to Achari (“New Vaso”). The Merger and the other transactions contemplated by the Business Combination Agreement are hereinafter referred to collectively as the “Business Combination”.

 

Upon the Closing, New Vaso would have authorized shares of Class A common stock and Class B common stock. The Business Combination Agreement establishes a pro forma equity value of the Company at approximately $176 million, at $10.00 per share of Class A common stock. As such, we believe that the current Vaso stockholders would receive approximately 17.6 million shares of Class A common stock and the current Achari shareholders would maintain between 500 thousand and 750 thousand shares of Class A common stock depending on Achari’s unpaid expenses at the Closing and presuming the redemption of all outstanding public shares of Achari on or prior to the Closing. In addition, current Achari warrant holders would have outstanding warrants to purchase a minimum of 8.25 million shares of Class A common stock at an exercise price of $11.50 per share. No shares of Class B common stock are expected to be outstanding immediately after the Business Combination.

 

The Boards of Directors of Vaso and Achari have each approved the Business Combination, the consummation of which is subject to various customary closing conditions, including the filing and effectiveness of a Registration Statement on Form S-4 (as amended or supplemented, the “Registration Statement”) by Achari with the United States Securities and Exchange Commission (“SEC”), the filing of a proxy statement by Vaso with the SEC and clearance by the SEC, and the approval of a majority of shareholders of both Achari and Vaso of the proposed business combination (Vaso shareholders representing approximately 44% of Vaso’s outstanding shares have entered into support agreements committing them to vote in favor of the Business Combination). The Business Combination is expected to close in the second quarter of 2024.
v3.24.1.1.u2
Interim Statement Presentation
 3 Months Ended
Mar. 31, 2024
Interim Statement Presentation [Abstract]  
INTERIM STATEMENT PRESENTATION

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 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, 2023, as filed with the SEC on April 1, 2024.

 

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.

 

Correction of Prior Period Financial Statements

 

We record commission revenue for certain products in our professional sales service segment based on GEHC’s reporting and payment of such commissions to us. In late August 2023, GEHC informed the Company that its calculations for such products were partially inaccurate and had remitted excess commissions. The Company has taken immediate steps to implement additional internal control procedures whereby GEHC will provide additional information sufficient to assess the accuracy of such commission payments going forward. We assessed the materiality of this misstatement on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, (“ASC 250”) and concluded that the misstatements were not material to the prior annual or interim periods.

 

Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we have increased the accumulated deficit at January 1, 2023 by $808,000 to reflect $1,010,000 lower commission revenue and $202,000 lower commission expense, and corrected the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income, Cash Flows, and Changes in Stockholders’ Equity for the three months ended March 31, 2023, and the related notes to revise for those misstatements that impacted such periods.

 

The following are selected line items from the Company’s Condensed Consolidated Financial Statements illustrating the effect of these corrections:

 

   Consolidated Statement of Operations and Comprehensive Income 
   Three months ended March 31, 2023 
(in thousands, except per share data)  As Reported   Adjustment   As Revised 
Revenues            
Professional sales services  $8,310   $(185)  $8,125 
                
Cost of revenues               
Cost of professional sales services  $1,519   $(37)  $1,482 
                
Gross Profit - professional sales services segment  $6,791   $(148)  $6,643 
                
Operating income  $410   $(148)  $262 
                
Net income  $454   $(148)  $306 
                
Comprehensive income  $469   $(148)  $321 
                
Income per common share               
- basic  $0.00   $(0.00)  $0.00 
- diluted  $0.00   $(0.00)  $0.00 

 

   Consolidated Statement of Changes in Stockholders’ Equity 
   Accumulated Deficit   Total Stockholders’ Equity 
(in thousands)  As Reported   Adjustment   As Revised   As Reported   Adjustment   As Revised 
                         
Balance at January 1, 2023  $(39,029)  $(808)  $(39,837)  $22,875   $(808)  $22,067 
                               
Net income  $454   $(148)  $306   $454   $(148)  $306 
                               
Balance at March 31, 2023  $(38,575)  $(956)  $(39,531)  $23,357   $(956)  $22,401 

 

   Consolidated Statement of Cash Flows 
   Three months ended March 31, 2023 
(in thousands)  As Reported   Adjustment   As Revised 
Net income  $454   $(148)  $306 
Accounts and other receivables  $2,235   $185   $2,420 
Accrued commissions  $(1,927)  $(37)  $(1,964)

 

Recently Issued Accounting Standards To Be Adopted

 

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740), Improvement to Income Tax Disclosures, which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. The ASU is effective for annual reporting periods beginning with the year ending December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvement to Reportable Segment Disclosures. This ASU enhances disclosures required for reportable segments in both annual and interim consolidated financial statements. The ASU, which requires retrospective application, is effective for annual reporting periods beginning with the year ending December 31, 2024, and interim periods beginning with the three months ending March 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.
v3.24.1.1.u2
Revenue Recognition
 3 Months Ended
Mar. 31, 2024
Revenue Recognition [Abstract]  
REVENUE RECOGNITION

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, 2024   Three Months Ended March 31, 2023 
       Professional
sales
service		   Equipment           Professional
sales
service		   Equipment     
   IT segment   segment   segment   Total   IT segment   segment   segment   Total 
Network services  $8,944   $
         -
   $
     -
   $8,944   $9,038   $
      -
   $
   -
   $9,038 
Software sales and support   1,209    
-
    
-
    1,209    1,236    
-
    
-
    1,236 
Commissions   
-
    8,127    
-
    8,127    
-
    8,125    
-
    8,125 
Medical equipment sales   
-
    
-
    427    427    
-
    
-
    606    606 
Medical equipment service   
-
    
-
    31    31    
-
    
-
    31    31 
   $10,153   $8,127   $458   $18,738   $10,274   $8,125   $637   $19,036 

 

   Three Months Ended March 31, 2024   Three Months Ended March 31, 2023 
       Professional
sales
service		   Equipment           Professional
sales
service		   Equipment     
   IT segment   segment   segment   Total   IT segment   segment   segment   Total 
Revenue recognized over time  $9,301   $
-
   $81   $9,382   $9,520   $
-
   $110   $9,630 
Revenue recognized at a point in time   852    8,127    377    9,356    754    8,125    527    9,406 
   $10,153   $8,127   $458   $18,738   $10,274   $8,125   $637   $19,036 

 

Transaction Price Allocated to Remaining Performance Obligations

 

As of March 31, 2024, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $94 million, of which we expect to recognize revenue as follows:

 

   (in thousands) 
   Fiscal years of revenue recognition 
   2024   2025   2026   Thereafter 
Unfulfilled performance obligations  $36,974   $26,240   $8,744   $22,376 

 

Contract Balances

 

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 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 $202,000 and $419,000 at March 31, 2024 and December 31, 2023, respectively, and are included in accrued expenses and other liabilities in our condensed consolidated balance sheets.

 

In our VasoHealthcare business, we bill amounts for certain milestones in advance of customer acceptance of the underlying equipment. Such amounts aggregated approximately $31,424,000,000 and $32,194,000 at March 31, 2024 and December 31, 2023, 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 $923,000 and $971,000 at March 31, 2024 and December 31, 2023, 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 $5,000 and $6,000 at March 31, 2024 and December 31, 2023, respectively, and are classified in our condensed consolidated balance sheets as either current or long-term deferred revenue.

 

The following table summarizes the Company’s contract receivable and contract liability balances:

 

   (in thousands) 
   2024   2023 
Contract receivables - January 1   13,398    15,306 
Contract receivables - March 31   8,644    12,338 
Increase (decrease)   (4,754)   (2,968)
           
Contract liabilities - January 1   33,589    33,861 
Contract liabilities - March 31   32,554    34,046 
Increase (decrease)   (1,035)   185 

 

The decrease in contract receivables in the first quarters of 2024 and 2023 was due primarily to collections exceeding billings. During the three months ended March 31, 2024, we recognized approximately $2.5 million of revenues that were included in our contract liability balance at January 1, 2024.

 

Costs to Obtain or Fulfill a Contract

 

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which requires that incremental costs of obtaining a contract are recognized as an asset and amortized to expense in a pattern that matches the timing of the revenue recognition of the related contract.  We have determined the only significant incremental costs incurred to obtain contracts with customers within the scope of Topic 606 are certain sales commissions paid to associates.  In addition, the Company elected the practical expedient to recognize the incremental costs of obtaining a contract when incurred for contracts where the amortization period for the asset the Company would otherwise have recognized is one year or less. 

 

Under Topic 606, sales commissions applicable to service contracts exceeding one year have been capitalized and amortized ratably over the term of the contract.  In our VHC IT business, commissions allocable to multi-year subscription contracts or multi-year post-contract support performance obligations are amortized to expense ratably over the terms of the multi-year periods.  VHC IT commissions allocable to other elements are charged to expense at go-live or customer acceptance.  In our professional sales services segment, commissions paid to our sales force are deferred until the underlying equipment is accepted by the customer.  We recognized approximately $579,000 and $605,000 of amortization related to these sales commission assets in “Cost of professional sales services” in the three months ended March 31, 2024 and 2023, respectively, and approximately $21,000 and $26,000 of amortization in “Selling, general and administrative” expense in the three months ended March 31, 2024 and 2023, respectively, in our condensed consolidated statements of operations and comprehensive income (loss).

 

At March 31, 2024 and December 31, 2023, our consolidated balance sheets include approximately $6,853,000 and $7,106,000, respectively, in capitalized sales commissions - primarily in our professional sales services segment - to be expensed in future periods, of which $3,367,000 and $3,285,000, respectively, is recorded in deferred commission expense and $3,486,000 and $3,821,000, respectively, representing the long-term portion, is included in other assets.

 

Significant Judgments when Applying Topic 606

 

Contract transaction price is allocated to performance obligations using estimated stand-alone selling price. Judgment is required in estimating stand-alone selling price for each distinct performance obligation. We determine stand-alone selling price maximizing observable inputs such as stand-alone sales when they exist or substantive renewal price charged to clients. In instances where stand-alone selling price is not observable, we utilize an estimate of stand-alone selling price based on historical pricing and industry practices.

 

Certain revenue we record in our professional sales service segment contains an estimate for variable consideration.  Due to the tiered structure of our commission rate, which increases as annual targets are achieved, under Topic 606 we record revenue and deferred revenue at the rate we expect to be achieved by year end.  We base our estimate of variable consideration on historical results of previous years’ achievement under the GEHC agreement.  Such estimate is reviewed each quarter and adjusted as necessary.  In addition, the Company records commissions for arranging financing at an estimated rate which is subject to later revision based on certain factors. 

 

The Company also records commission adjustments to contract liabilities in its professional sales service segment based on estimates of future order cancellations.  
v3.24.1.1.u2
Segment Reporting and Concentrations
 3 Months Ended
Mar. 31, 2024
Segment Reporting and Concentrations [Abstract]  
SEGMENT REPORTING AND CONCENTRATIONS

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.

 

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, 
   2024   2023 
Revenues from external customers        
IT  $10,153   $10,274 
Professional sales service   8,127    8,125 
Equipment   458    637 
Total revenues  $18,738   $19,036 
           
Gross Profit          
IT  $4,195   $4,440 
Professional sales service   6,378    6,643 
Equipment   345    479 
Total gross profit  $10,918   $11,562 
           
Operating income (loss)          
IT  $(420)  $(109)
Professional sales service   (7)   839 
Equipment   (294)   (25)
Corporate   (747)   (443)
Total operating income (loss)  $(1,468)  $262 
           
Depreciation and amortization          
IT  $155   $246 
Professional sales service   22    20 
Equipment   8    7 
Corporate   
-
    
-
 
Total depreciation and amortization  $185   $273 
           
Capital expenditures          
IT  $246   $85 
Professional sales service   2    50 
Equipment   224    13 
Corporate   
-
    
-
 
Total cash capital expenditures  $472   $148 

 

   (in thousands) 
   March 31, 2024   December 31, 2023 
Identifiable Assets        
IT  $21,776   $22,425 
Professional sales service   13,988    18,955 
Equipment   7,005    7,114 
Corporate   26,675    27,263 
Total assets  $69,444   $75,757 

 

GEHC accounted for 43% of revenue for both of the three-month periods ended March 31, 2024 and 2023. GEHC also accounted for $4.5 million or 60%, and $9.3 million or 75%, of accounts and other receivables at March 31, 2024 and December 31, 2023, respectively. No other customer accounted for 10% or more of revenue.
v3.24.1.1.u2
Earnings (Loss) Per Common Share
 3 Months Ended
Mar. 31, 2024
Earnings (Loss) Per Common Share [Abstract]  
EARNINGS (LOSS) PER COMMON SHARE

NOTE E – EARNINGS (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 (loss) 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 March 31, 
   2024   2023 
Basic weighted average shares outstanding   175,119    173,628 
Dilutive effect of unvested restricted shares   
-
    1,573 
Diluted weighted average shares outstanding   175,119    175,201 

 

The following table represents common stock equivalents that were excluded from the computation of diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023, because the effect of their inclusion would be anti-dilutive.

 

   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Restricted common stock grants   894    
-
 
v3.24.1.1.u2
Short-Term Investments and Financial Instruments
 3 Months Ended
Mar. 31, 2024
Short-Term Investments and Financial Instruments [Abstract]  
SHORT-TERM INVESTMENTS AND FINANCIAL INSTRUMENTS

NOTE F – SHORT-TERM INVESTMENTS AND FINANCIAL INSTRUMENTS

 

The Company’s short-term investments consist of bank deposits with yields based on underlying debt and equity securities and six-month US Treasury bills.  The bank deposits are carried at fair value of approximately $0 and $424,000 at March 31, 2024 and December 31, 2023, respectively, and are classified as available-for-sale.  Realized gains or losses on the bank deposits are included in net income. The US Treasury bills are classified as held-to-maturity and are carried at amortized cost of approximately $4,235,000 and $13,555,000 at March 31, 2024 and December 31, 2023, respectively. Their fair value at March 31, 2024 and December 31, 2023 is approximately $4,234,000 and $13,559,000, respectively, and the unrecognized holding (loss) gain is ($1,000) and $4,000 for the three months ended March 31, 2024 and 2023, respectively. The Company does not expect a credit loss for its short-term investments.

 

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, short-term investments, accounts receivable, prepaids, accounts payable, accrued expenses and other current liabilities approximated their fair value as of March 31, 2024 and December 31, 2023, 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.

 

The following table presents information about the Company’s assets measured at fair value as of March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   Quoted Prices   Significant         
   in Active   Other   Significant   Balance 
   Markets for   Observable   Unobservable   as of 
   Identical Assets   Inputs   Inputs   March 31, 
   (Level 1)   (Level 2)   (Level 3)   2024 
Assets                
Cash equivalents invested in money market funds and treasury bills  $18,416   $
                -
   $
                -
   $18,416 

 

   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)   2023 
Assets                
Cash equivalents invested in money market funds and treasury bills  $10,522   $
                  -
   $
             -
   $10,522 
Bank deposits (included in short term investments)   424              424 
   $10,946   $
-
   $
-
   $10,946 
v3.24.1.1.u2
Accounts and Other Receivables, Net
 3 Months Ended
Mar. 31, 2024
Accounts and Other Receivables [Abstract]  
ACCOUNTS AND OTHER RECEIVABLES, NET

NOTE G – ACCOUNTS AND OTHER RECEIVABLES, NET

 

The following table presents information regarding the Company’s accounts and other receivables as of March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   March 31, 2024   December 31, 2023 
Trade receivables  $16,254   $22,085 
Unbilled receivables   719    
-
 
Allowance for credit losses and commission adjustments   (9,508)   (9,708)
Accounts and other receivables, net  $7,465   $12,377 

 

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 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.
v3.24.1.1.u2
Inventories, Net
 3 Months Ended
Mar. 31, 2024
Inventories, Net [Abstract]  
INVENTORIES, NET

NOTE H – INVENTORIES, NET

 

Inventories, net of reserves, consist of the following:

 

   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Raw materials  $761   $832 
Work in process   92    11 
Finished goods   713    627 
   $1,566   $1,470 

 

The Company maintained reserves for slow moving inventories of $164,000 at both March 31, 2024 and December 31, 2023.
v3.24.1.1.u2
Goodwill and Other Intangibles
 3 Months Ended
Mar. 31, 2024
Goodwill and Other Intangibles [Abstract]  
GOODWILL AND OTHER INTANGIBLES

NOTE I – GOODWILL AND OTHER INTANGIBLES

 

Goodwill of $14,375,000 is allocated to the IT segment. The remaining $1,187,000 of goodwill is attributable to the FGE reporting unit within the Equipment segment. The components of the change in goodwill are as follows:

 

   (in thousands) 
   Three months ended   Year ended 
   March 31,
2024		   December 31,
2023		 
Beginning of period  $15,588   $15,614 
Foreign currency translation adjustment   (26)   (26)
End of period  $15,562   $15,588 

 

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, 2024   December 31, 2023 
Customer-related        
Costs   $5,831   $5,831 
Accumulated amortization   (4,839)   (4,790)
    992    1,041 
           
Patents and Technology          
Costs   1,894    1,894 
Accumulated amortization   (1,894)   (1,894)
    
-
    
-
 
           
Software          
Costs   2,710    2,618 
Accumulated amortization   (2,278)   (2,253)
    432    365 
           
   $1,424   $1,406 

 

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 $74,000 and $90,000 for the three months ended March 31, 2024 and 2023, respectively.

 

Amortization of intangibles for the next five years is:

 

   (in thousands) 
Years ending December 31,    
Remainder of 2024   253 
2025   272 
2026   217 
2027   188 
2028   165 
2029   20 
   $1,115 
v3.24.1.1.u2
Other Assets, Net
 3 Months Ended
Mar. 31, 2024
Other Assets, Net [Abstract]  
OTHER ASSETS, NET

NOTE J – OTHER ASSETS, NET

 

Other assets, net consist of the following at March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Deferred commission expense - noncurrent  $3,485   $3,821 
Trade receivables - noncurrent   1,179    1,021 
Other, net of allowance for loss on loan receivable of $412 at March 31, 2024 and December 31, 2023   60    60 
   $4,724   $4,902 
v3.24.1.1.u2
Accrued Expenses and Other Liabilities
 3 Months Ended
Mar. 31, 2024
Accrued Expenses and Other Liabilities [Abstract]  
ACCRUED EXPENSES AND OTHER LIABILITIES

NOTE K – ACCRUED EXPENSES AND OTHER LIABILITIES

 

Accrued expenses and other liabilities consist of the following at March 31, 2024 and December 31, 2023:

 

   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Accrued compensation  $862   $2,482 
Accrued expenses - other   1,934    2,142 
Order reduction liability   923    971 
Other liabilities   1,185    1,770 
   $4,904   $7,365 
v3.24.1.1.u2
Deferred Revenue
 3 Months Ended
Mar. 31, 2024
Deferred Revenue [Abstract]  
DEFERRED REVENUE

NOTE L – DEFERRED REVENUE

 

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

 

   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Deferred revenue at beginning of period  $32,200   $30,803 
Net additions:          
Deferred extended service contracts   2    2 
Deferred commission revenues   1,950    4,016 
Recognized as revenue:          
Deferred extended service contracts   (4)   (1)
Deferred commission revenues   (2,719)   (3,267)
Deferred revenue at end of period   31,429    31,553 
Less: current portion   17,272    14,234 
Long-term deferred revenue at end of period  $14,157   $17,319 
v3.24.1.1.u2
Related-Party Transactions
 3 Months Ended
Mar. 31, 2024
Related-Party Transactions [Abstract]  
RELATED-PARTY TRANSACTIONS

NOTE M – 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 (Expense) Income on its condensed consolidated statements of operations. For the three months ended March 31, 2024 and 2023, the Company’s share of EECP Global’s loss was approximately $31,000 and $78,000, respectively, and included in Other (Expense) Income in its condensed consolidated statements of operations. At March 31, 2024 and December 31, 2023, the Company recorded a net receivable from related parties of approximately $1,029,000 and $901,000, respectively, 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.
v3.24.1.1.u2
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2024
Commitments and Contingencies [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE N – 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 extended the term of the original agreement, which began on July 1, 2010, through December 31, 2026, 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 products to specific market accounts in the 48 contiguous 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.

 

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.

 

On December 31, 2022, the Company executed an Employment Agreement with the President of its VasoHealthcare subsidiary, Ms. Jane Moen, to provide for a twenty-seven month initial term with extensions, unless earlier terminated by the Company, but in no event can it extend beyond December 31, 2026 or the earlier termination of the GEHC Agreement. The Employment Agreement provides for annual base compensation of $350,000. Ms. Moen shall be eligible to receive bonuses for each fiscal year during the employment term. The amount and the occasion for payment of such bonuses, if any, shall be based on employment status as well as achieving certain operating targets. Ms. Moen 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.
v3.24.1.1.u2
Accounting Policies, by Policy (Policies)
 3 Months Ended
Mar. 31, 2024
Interim Statement Presentation [Abstract]  
Basis of Presentation and Use of Estimates

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 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, 2023, as filed with the SEC on April 1, 2024.

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.
Correction of Prior Period Financial Statements

Correction of Prior Period Financial Statements

We record commission revenue for certain products in our professional sales service segment based on GEHC’s reporting and payment of such commissions to us. In late August 2023, GEHC informed the Company that its calculations for such products were partially inaccurate and had remitted excess commissions. The Company has taken immediate steps to implement additional internal control procedures whereby GEHC will provide additional information sufficient to assess the accuracy of such commission payments going forward. We assessed the materiality of this misstatement on prior periods’ financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Materiality, codified in Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections, (“ASC 250”) and concluded that the misstatements were not material to the prior annual or interim periods.

Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), we have increased the accumulated deficit at January 1, 2023 by $808,000 to reflect $1,010,000 lower commission revenue and $202,000 lower commission expense, and corrected the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income, Cash Flows, and Changes in Stockholders’ Equity for the three months ended March 31, 2023, and the related notes to revise for those misstatements that impacted such periods.

 

The following are selected line items from the Company’s Condensed Consolidated Financial Statements illustrating the effect of these corrections:

   Consolidated Statement of Operations and Comprehensive Income 
   Three months ended March 31, 2023 
(in thousands, except per share data)  As Reported   Adjustment   As Revised 
Revenues            
Professional sales services  $8,310   $(185)  $8,125 
                
Cost of revenues               
Cost of professional sales services  $1,519   $(37)  $1,482 
                
Gross Profit - professional sales services segment  $6,791   $(148)  $6,643 
                
Operating income  $410   $(148)  $262 
                
Net income  $454   $(148)  $306 
                
Comprehensive income  $469   $(148)  $321 
                
Income per common share               
- basic  $0.00   $(0.00)  $0.00 
- diluted  $0.00   $(0.00)  $0.00 
   Consolidated Statement of Changes in Stockholders’ Equity 
   Accumulated Deficit   Total Stockholders’ Equity 
(in thousands)  As Reported   Adjustment   As Revised   As Reported   Adjustment   As Revised 
                         
Balance at January 1, 2023  $(39,029)  $(808)  $(39,837)  $22,875   $(808)  $22,067 
                               
Net income  $454   $(148)  $306   $454   $(148)  $306 
                               
Balance at March 31, 2023  $(38,575)  $(956)  $(39,531)  $23,357   $(956)  $22,401 
   Consolidated Statement of Cash Flows 
   Three months ended March 31, 2023 
(in thousands)  As Reported   Adjustment   As Revised 
Net income  $454   $(148)  $306 
Accounts and other receivables  $2,235   $185   $2,420 
Accrued commissions  $(1,927)  $(37)  $(1,964)
Recently Issued Accounting Standards To Be Adopted

Recently Issued Accounting Standards To Be Adopted

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740), Improvement to Income Tax Disclosures, which requires enhanced income tax disclosures, including disaggregation of information in the rate reconciliation table and disaggregated information related to income taxes paid. The ASU is effective for annual reporting periods beginning with the year ending December 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.

 

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvement to Reportable Segment Disclosures. This ASU enhances disclosures required for reportable segments in both annual and interim consolidated financial statements. The ASU, which requires retrospective application, is effective for annual reporting periods beginning with the year ending December 31, 2024, and interim periods beginning with the three months ending March 31, 2025. Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.
v3.24.1.1.u2
Interim Statement Presentation (Tables)
 3 Months Ended
Mar. 31, 2024
Interim Statement Presentation [Abstract]  
Schedule of Consolidated Statement of Operations and Comprehensive Income The following are selected line items from the Company’s Condensed Consolidated Financial Statements illustrating the effect of these corrections:
   Consolidated Statement of Operations and Comprehensive Income 
   Three months ended March 31, 2023 
(in thousands, except per share data)  As Reported   Adjustment   As Revised 
Revenues            
Professional sales services  $8,310   $(185)  $8,125 
                
Cost of revenues               
Cost of professional sales services  $1,519   $(37)  $1,482 
                
Gross Profit - professional sales services segment  $6,791   $(148)  $6,643 
                
Operating income  $410   $(148)  $262 
                
Net income  $454   $(148)  $306 
                
Comprehensive income  $469   $(148)  $321 
                
Income per common share               
- basic  $0.00   $(0.00)  $0.00 
- diluted  $0.00   $(0.00)  $0.00 
Schedule of Consolidated Statement of Changes in Stockholders’ Equity
   Consolidated Statement of Changes in Stockholders’ Equity 
   Accumulated Deficit   Total Stockholders’ Equity 
(in thousands)  As Reported   Adjustment   As Revised   As Reported   Adjustment   As Revised 
                         
Balance at January 1, 2023  $(39,029)  $(808)  $(39,837)  $22,875   $(808)  $22,067 
                               
Net income  $454   $(148)  $306   $454   $(148)  $306 
                               
Balance at March 31, 2023  $(38,575)  $(956)  $(39,531)  $23,357   $(956)  $22,401 
Schedule of Consolidated Statement of Cash Flows
   Consolidated Statement of Cash Flows 
   Three months ended March 31, 2023 
(in thousands)  As Reported   Adjustment   As Revised 
Net income  $454   $(148)  $306 
Accounts and other receivables  $2,235   $185   $2,420 
Accrued commissions  $(1,927)  $(37)  $(1,964)
v3.24.1.1.u2
Revenue Recognition (Tables)
 3 Months Ended
Mar. 31, 2024
Revenue Recognition [Abstract]  
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition The following tables present revenues disaggregated by our business operations and timing of revenue recognition:
   (in thousands) 
   Three Months Ended March 31, 2024   Three Months Ended March 31, 2023 
       Professional
sales
service		   Equipment           Professional
sales
service		   Equipment     
   IT segment   segment   segment   Total   IT segment   segment   segment   Total 
Network services  $8,944   $
         -
   $
     -
   $8,944   $9,038   $
      -
   $
   -
   $9,038 
Software sales and support   1,209    
-
    
-
    1,209    1,236    
-
    
-
    1,236 
Commissions   
-
    8,127    
-
    8,127    
-
    8,125    
-
    8,125 
Medical equipment sales   
-
    
-
    427    427    
-
    
-
    606    606 
Medical equipment service   
-
    
-
    31    31    
-
    
-
    31    31 
   $10,153   $8,127   $458   $18,738   $10,274   $8,125   $637   $19,036 
   Three Months Ended March 31, 2024   Three Months Ended March 31, 2023 
       Professional
sales
service		   Equipment           Professional
sales
service		   Equipment     
   IT segment   segment   segment   Total   IT segment   segment   segment   Total 
Revenue recognized over time  $9,301   $
-
   $81   $9,382   $9,520   $
-
   $110   $9,630 
Revenue recognized at a point in time   852    8,127    377    9,356    754    8,125    527    9,406 
   $10,153   $8,127   $458   $18,738   $10,274   $8,125   $637   $19,036 
Schedule of Transaction Price Allocated to Remaining Performance Obligations As of March 31, 2024, the aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed contracts approximates $94 million, of which we expect to recognize revenue as follows:
   (in thousands) 
   Fiscal years of revenue recognition 
   2024   2025   2026   Thereafter 
Unfulfilled performance obligations  $36,974   $26,240   $8,744   $22,376 
Schedule of Contract Receivable and Contract Liability The following table summarizes the Company’s contract receivable and contract liability balances:
   (in thousands) 
   2024   2023 
Contract receivables - January 1   13,398    15,306 
Contract receivables - March 31   8,644    12,338 
Increase (decrease)   (4,754)   (2,968)
           
Contract liabilities - January 1   33,589    33,861 
Contract liabilities - March 31   32,554    34,046 
Increase (decrease)   (1,035)   185 
v3.24.1.1.u2
Segment Reporting and Concentrations (Tables)
 3 Months Ended
Mar. 31, 2024
Segment Reporting [Abstract]  
Schedule of Financial Information For Segments Summary financial information for the segments is set forth below:
   (in thousands)  
   Three months ended March 31, 
   2024   2023 
Revenues from external customers        
IT  $10,153   $10,274 
Professional sales service   8,127    8,125 
Equipment   458    637 
Total revenues  $18,738   $19,036 
           
Gross Profit          
IT  $4,195   $4,440 
Professional sales service   6,378    6,643 
Equipment   345    479 
Total gross profit  $10,918   $11,562 
           
Operating income (loss)          
IT  $(420)  $(109)
Professional sales service   (7)   839 
Equipment   (294)   (25)
Corporate   (747)   (443)
Total operating income (loss)  $(1,468)  $262 
           
Depreciation and amortization          
IT  $155   $246 
Professional sales service   22    20 
Equipment   8    7 
Corporate   
-
    
-
 
Total depreciation and amortization  $185   $273 
           
Capital expenditures          
IT  $246   $85 
Professional sales service   2    50 
Equipment   224    13 
Corporate   
-
    
-
 
Total cash capital expenditures  $472   $148 
   (in thousands) 
   March 31, 2024   December 31, 2023 
Identifiable Assets        
IT  $21,776   $22,425 
Professional sales service   13,988    18,955 
Equipment   7,005    7,114 
Corporate   26,675    27,263 
Total assets  $69,444   $75,757 
v3.24.1.1.u2
Earnings (Loss) Per Common Share (Tables)
 3 Months Ended
Mar. 31, 2024
Earnings (Loss) Per Common Share [Abstract]  
Schedule of Common Stock Equivalents that were Excluded from the Computation of Diluted Earnings (Loss) Per Share A reconciliation of basic to diluted shares used in the earnings per share calculation is as follows:
   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Basic weighted average shares outstanding   175,119    173,628 
Dilutive effect of unvested restricted shares   
-
    1,573 
Diluted weighted average shares outstanding   175,119    175,201 
Schedule of Common Stock Equivalents that were Excluded from the Computation of Diluted Earnings (Loss) Per Share The following table represents common stock equivalents that were excluded from the computation of diluted earnings (loss) per share for the three months ended March 31, 2024 and 2023, because the effect of their inclusion would be anti-dilutive.
   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Restricted common stock grants   894    
-
 
v3.24.1.1.u2
Short-Term Investments and Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2024
Short-Term Investments and Financial Instruments [Abstract]  
Schedule of Assets Measured at Fair Value The following table presents information about the Company’s assets measured at fair value as of March 31, 2024 and December 31, 2023:
   (in thousands) 
   Quoted Prices   Significant         
   in Active   Other   Significant   Balance 
   Markets for   Observable   Unobservable   as of 
   Identical Assets   Inputs   Inputs   March 31, 
   (Level 1)   (Level 2)   (Level 3)   2024 
Assets                
Cash equivalents invested in money market funds and treasury bills  $18,416   $
                -
   $
                -
   $18,416 
   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)   2023 
Assets                
Cash equivalents invested in money market funds and treasury bills  $10,522   $
                  -
   $
             -
   $10,522 
Bank deposits (included in short term investments)   424              424 
   $10,946   $
-
   $
-
   $10,946 
v3.24.1.1.u2
Accounts and Other Receivables, Net (Tables)
 3 Months Ended
Mar. 31, 2024
Accounts and Other Receivables [Abstract]  
Schedule of Accounts and Other Receivables The following table presents information regarding the Company’s accounts and other receivables as of March 31, 2024 and December 31, 2023:
   (in thousands) 
   March 31, 2024   December 31, 2023 
Trade receivables  $16,254   $22,085 
Unbilled receivables   719    
-
 
Allowance for credit losses and commission adjustments   (9,508)   (9,708)
Accounts and other receivables, net  $7,465   $12,377 
v3.24.1.1.u2
Inventories, Net (Tables)
 3 Months Ended
Mar. 31, 2024
Inventories, Net [Abstract]  
Schedule of Inventories, Net Inventories, net of reserves, consist of the following:
   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Raw materials  $761   $832 
Work in process   92    11 
Finished goods   713    627 
   $1,566   $1,470 
v3.24.1.1.u2
Goodwill and Other Intangibles (Tables)
 3 Months Ended
Mar. 31, 2024
Goodwill and Other Intangibles [Abstract]  
Schedule of Change in Goodwill The components of the change in goodwill are as follows:
   (in thousands) 
   Three months ended   Year ended 
   March 31,
2024		   December 31,
2023		 
Beginning of period  $15,588   $15,614 
Foreign currency translation adjustment   (26)   (26)
End of period  $15,562   $15,588 
Schedule of Other Intangible Assets 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, 2024   December 31, 2023 
Customer-related        
Costs   $5,831   $5,831 
Accumulated amortization   (4,839)   (4,790)
    992    1,041 
           
Patents and Technology          
Costs   1,894    1,894 
Accumulated amortization   (1,894)   (1,894)
    
-
    
-
 
           
Software          
Costs   2,710    2,618 
Accumulated amortization   (2,278)   (2,253)
    432    365 
           
   $1,424   $1,406 

 
Schedule of Amortization of Intangibles Amortization of intangibles for the next five years is:
   (in thousands) 
Years ending December 31,    
Remainder of 2024   253 
2025   272 
2026   217 
2027   188 
2028   165 
2029   20 
   $1,115 
v3.24.1.1.u2
Other Assets, Net (Tables)
 3 Months Ended
Mar. 31, 2024
Other Assets, Net [Abstract]  
Schedule of Other Assets, Net Other assets, net consist of the following at March 31, 2024 and December 31, 2023:
   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Deferred commission expense - noncurrent  $3,485   $3,821 
Trade receivables - noncurrent   1,179    1,021 
Other, net of allowance for loss on loan receivable of $412 at March 31, 2024 and December 31, 2023   60    60 
   $4,724   $4,902 
v3.24.1.1.u2
Accrued Expenses and Other Liabilities (Tables)
 3 Months Ended
Mar. 31, 2024
Accrued Expenses and Other Liabilities [Abstract]  
Schedule of Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consist of the following at March 31, 2024 and December 31, 2023:
   (in thousands) 
   March 31,
2024		   December 31,
2023		 
Accrued compensation  $862   $2,482 
Accrued expenses - other   1,934    2,142 
Order reduction liability   923    971 
Other liabilities   1,185    1,770 
   $4,904   $7,365 
v3.24.1.1.u2
Deferred Revenue (Tables)
 3 Months Ended
Mar. 31, 2024
Deferred Revenue [Abstract]  
Schedule of Deferred Revenues The changes in the Company’s deferred revenues are as follows:
   (in thousands) 
   Three months ended March 31, 
   2024   2023 
Deferred revenue at beginning of period  $32,200   $30,803 
Net additions:          
Deferred extended service contracts   2    2 
Deferred commission revenues   1,950    4,016 
Recognized as revenue:          
Deferred extended service contracts   (4)   (1)
Deferred commission revenues   (2,719)   (3,267)
Deferred revenue at end of period   31,429    31,553 
Less: current portion   17,272    14,234 
Long-term deferred revenue at end of period  $14,157   $17,319 
v3.24.1.1.u2
Organization and Plan of Operations (Details)
$ / shares in Units, shares in Thousands, $ in Millions
 3 Months Ended
Mar. 31, 2024
USD ($)
$ / shares
shares
Organization and Plan of Operations [Line items]  
Business combination value (in Dollars) | $ $ 176
Exercise price per share (in Dollars per share) | $ / shares $ 11.5
Business Combination [Member]  
Organization and Plan of Operations [Line items]  
Business combination outstanding percentage 44.00%
Vaso Stockholders [Member]  
Organization and Plan of Operations [Line items]  
Shares received 17,600
Minimum [Member] | Achari Shareholders [Member]  
Organization and Plan of Operations [Line items]  
Shares received 500
Maximum [Member] | Achari Shareholders [Member]  
Organization and Plan of Operations [Line items]  
Shares received 750
Class A Common Stock [Member]  
Organization and Plan of Operations [Line items]  
Pro forma equity value per share (in Dollars per share) | $ / shares $ 10
Outstanding warrants to purchase shares 8,250
v3.24.1.1.u2
Interim Statement Presentation (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Jan. 01, 2023
Interim Statement Presentation [Line Items]    
Lower commission revenue $ 1,010,000  
Lower commission expense $ 202,000  
Error Correction, Other [Member]    
Interim Statement Presentation [Line Items]    
Accumulated deficit   $ 808,000
v3.24.1.1.u2
Interim Statement Presentation (Details) - Schedule of Consolidated Statement of Operations and Comprehensive Income
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2023
USD ($)
$ / shares
As Reported [Member]  
Revenues  
Professional sales services $ 8,310
Cost of revenues  
Cost of professional sales services 1,519
Gross Profit - professional sales services segment 6,791
Operating income 410
Net income 454
Comprehensive income $ 469
Income per common share  
- basic (in Dollars per share) | $ / shares $ 0
- diluted (in Dollars per share) | $ / shares $ 0
Adjustment [Member]  
Revenues  
Professional sales services $ (185)
Cost of revenues  
Cost of professional sales services (37)
Gross Profit - professional sales services segment (148)
Operating income (148)
Net income (148)
Comprehensive income $ (148)
Income per common share  
- basic (in Dollars per share) | $ / shares $ 0
- diluted (in Dollars per share) | $ / shares $ 0
As Revised [Member]  
Revenues  
Professional sales services $ 8,125
Cost of revenues  
Cost of professional sales services 1,482
Gross Profit - professional sales services segment 6,643
Operating income 262
Net income 306
Comprehensive income $ 321
Income per common share  
- basic (in Dollars per share) | $ / shares $ 0
- diluted (in Dollars per share) | $ / shares $ 0
v3.24.1.1.u2
Interim Statement Presentation (Details) - Schedule of Consolidated Statement of Changes in Stockholders’ Equity
$ in Thousands
 3 Months Ended
Mar. 31, 2023
USD ($)
As Reported [Member]  
Schedule of Consolidated Statement of Changes in Stockholders’ Equity [Line Items]  
Balance $ 22,875
Net income 454
Balance 23,357
Adjustment [Member]  
Schedule of Consolidated Statement of Changes in Stockholders’ Equity [Line Items]  
Balance (808)
Net income (148)
Balance (956)
As Revised [Member]  
Schedule of Consolidated Statement of Changes in Stockholders’ Equity [Line Items]  
Balance 22,067
Net income 306
Balance 22,401
Accumulated Deficit [Member] | As Reported [Member]  
Schedule of Consolidated Statement of Changes in Stockholders’ Equity [Line Items]  
Balance (39,029)
Net income 454
Balance (38,575)
Accumulated Deficit [Member] | Adjustment [Member]  
Schedule of Consolidated Statement of Changes in Stockholders’ Equity [Line Items]  
Balance (808)
Net income (148)
Balance (956)
Accumulated Deficit [Member] | As Revised [Member]  
Schedule of Consolidated Statement of Changes in Stockholders’ Equity [Line Items]  
Balance (39,837)
Net income 306
Balance $ (39,531)
v3.24.1.1.u2
Interim Statement Presentation (Details) - Schedule of Consolidated Statement of Cash Flows
$ in Thousands
 3 Months Ended
Mar. 31, 2023
USD ($)
As Reported [Member]  
Schedule of Consolidated Statement of Cash Flows [Line Items]  
Net income $ 454
Accounts and other receivables 2,235
Accrued commissions (1,927)
Adjustment [Member]  
Schedule of Consolidated Statement of Cash Flows [Line Items]  
Net income (148)
Accounts and other receivables 185
Accrued commissions (37)
As Revised [Member]  
Schedule of Consolidated Statement of Cash Flows [Line Items]  
Net income 306
Accounts and other receivables 2,420
Accrued commissions $ (1,964)
v3.24.1.1.u2
Revenue Recognition (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2024
Mar. 31, 2023
Revenue Recognition [Abstract]        
Aggregate amount of transaction price     $ 94,000,000  
Deferred contract liabilities $ 202,000 $ 419,000 202,000  
Advance of customer acceptance of the underlying equipment 31,424,000,000 32,194,000 31,424,000,000  
Contract liability expected to be repaid 923,000 971,000 923,000  
Post-delivery services and varying duration service contracts 5,000 6,000 5,000  
Revenues included in contract liability     2,500,000  
Amortization related to these sales commission assets     579,000 $ 605,000
Amortization     21,000 $ 26,000
Capitalized sales commissions 6,853,000 7,106,000    
Deferred commission expense 3,367,000 3,285,000 3,367,000  
Long-term portion of other assets $ 3,486,000 $ 3,821,000 $ 3,486,000  
v3.24.1.1.u2
Revenue Recognition (Details) - Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue $ 18,738 $ 19,036
Network services [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 8,944 9,038
Software sales and support [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 1,209 1,236
Commissions [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 8,127 8,125
Medical equipment sales [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 427 606
Medical equipment service [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 31 31
IT Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 10,153 10,274
IT Segment [Member] | Network services [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 8,944 9,038
IT Segment [Member] | Software sales and support [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 1,209 1,236
IT Segment [Member] | Commissions [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
IT Segment [Member] | Medical equipment sales [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
IT Segment [Member] | Medical equipment service [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Professional Sales Service Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 8,127 8,125
Professional Sales Service Segment [Member] | Network services [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Professional Sales Service Segment [Member] | Software sales and support [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Professional Sales Service Segment [Member] | Commissions [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 8,127 8,125
Professional Sales Service Segment [Member] | Medical equipment sales [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Professional Sales Service Segment [Member] | Medical equipment service [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Equipment Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 458 637
Equipment Segment [Member] | Network services [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Equipment Segment [Member] | Software sales and support [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Equipment Segment [Member] | Commissions [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Equipment Segment [Member] | Medical equipment sales [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 427 606
Equipment Segment [Member] | Medical equipment service [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 31 31
Revenue recognized over time [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 9,382 9,630
Revenue recognized over time [Member] | IT Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 9,301 9,520
Revenue recognized over time [Member] | Professional Sales Service Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue
Revenue recognized over time [Member] | Equipment Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 81 110
Revenue recognized at a point in time [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 9,356 9,406
Revenue recognized at a point in time [Member] | IT Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 852 754
Revenue recognized at a point in time [Member] | Professional Sales Service Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue 8,127 8,125
Revenue recognized at a point in time [Member] | Equipment Segment [Member]    
Schedule of Revenues Disaggregated By Our Business Operations and Timing of Revenue Recognition [Line Items]    
Revenue $ 377 $ 527
v3.24.1.1.u2
Revenue Recognition (Details) - Schedule of Transaction Price Allocated to Remaining Performance Obligations - Unfulfilled performance obligations [Member]
$ in Thousands
Mar. 31, 2024
USD ($)
Schedule of Transaction Price Allocated to Remaining Performance Obligations [Line Items]  
2024 $ 36,974
2025 26,240
2026 8,744
Thereafter $ 22,376
v3.24.1.1.u2
Revenue Recognition (Details) - Schedule of Contract Receivable and Contract Liability - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Schedule Of Contract Receivable And Contract Liability Abstract    
Contract receivables, beginning balance $ 13,398 $ 15,306
Contract receivables, ending balance 8,644 12,338
Contract liabilities, beginning balance 33,589 33,861
Contract liabilities, ending balance 32,554 34,046
Increase (decrease) contract receivables (4,754) (2,968)
Increase (decrease) contract liabilities $ (1,035) $ 185
v3.24.1.1.u2
Segment Reporting and Concentrations (Details)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2024
USD ($)
segments
Mar. 31, 2023
Dec. 31, 2023
USD ($)
Segment Reporting and Concentrations [Line Items]      
Reportable segments (in segments) | segments 3    
Accounts and other receivables (in Dollars) $ 7,465   $ 12,377
GEHC [Member] | Accounts and Other Receivables [Member]      
Segment Reporting and Concentrations [Line Items]      
Accounts and other receivables (in Dollars) $ 4,500   $ 9,300
Customer Concentration Risk [Member] | GEHC [Member] | Revenue Benchmark [Member]      
Segment Reporting and Concentrations [Line Items]      
Revenue percentage 43.00% 43.00%  
Customer Concentration Risk [Member] | GEHC [Member] | Accounts and Other Receivables [Member]      
Segment Reporting and Concentrations [Line Items]      
Revenue percentage 60.00%   75.00%
Customer Concentration Risk [Member] | Other Customer [Member] | Revenue Benchmark [Member]      
Segment Reporting and Concentrations [Line Items]      
Revenue percentage 10.00%    
v3.24.1.1.u2
Segment Reporting and Concentrations (Details) - Schedule of Financial Information For Segments - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Revenues from external customers      
Total revenues $ 18,738 $ 19,036  
Gross Profit      
Total gross profit 10,918 11,562  
Operating income (loss)      
Total operating income (1,468) 262  
Depreciation and amortization      
Total depreciation and amortization 185 273  
Capital expenditures      
Total cash capital expenditures 472 148  
Identifiable Assets      
Total assets 69,444   $ 75,757
Equipment [Member]      
Revenues from external customers      
Total revenues 458 637  
Gross Profit      
Total gross profit 345 479  
Operating income (loss)      
Total operating income (294) (25)  
Depreciation and amortization      
Total depreciation and amortization 8 7  
Capital expenditures      
Total cash capital expenditures 224 13  
Identifiable Assets      
Total assets 7,005   7,114
IT [Member]      
Revenues from external customers      
Total revenues 10,153 10,274  
Gross Profit      
Total gross profit 4,195 4,440  
Operating income (loss)      
Total operating income (420) (109)  
Depreciation and amortization      
Total depreciation and amortization 155 246  
Capital expenditures      
Total cash capital expenditures 246 85  
Identifiable Assets      
Total assets 21,776   22,425
Professional sales service [Member]      
Revenues from external customers      
Total revenues 8,127 8,125  
Gross Profit      
Total gross profit 6,378 6,643  
Operating income (loss)      
Total operating income (7) 839  
Depreciation and amortization      
Total depreciation and amortization 22 20  
Capital expenditures      
Total cash capital expenditures 2 50  
Identifiable Assets      
Total assets 13,988   18,955
Corporate [Member]      
Operating income (loss)      
Total operating income (747) (443)  
Depreciation and amortization      
Total depreciation and amortization  
Capital expenditures      
Total cash capital expenditures  
Identifiable Assets      
Total assets $ 26,675   $ 27,263
v3.24.1.1.u2
Earnings (Loss) Per Common Share (Details) - Schedule of Reconciliation of Basic to Diluted Shares Used in the Earnings Per Share - shares
shares in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Schedule of Reconciliation of Basic to Diluted Shares Used in the Earnings Per Share [Abstract]    
Basic weighted average shares outstanding 175,119 173,628
Dilutive effect of unvested restricted shares 1,573
Diluted weighted average shares outstanding 175,119 175,201
v3.24.1.1.u2
Earnings (Loss) Per Common Share (Details) - Schedule of Common Stock Equivalents that were Excluded from the Computation of Diluted Earnings (Loss) Per Share - shares
shares in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Restricted common stock grants [Member]    
Schedule of Common Stock Equivalents that were Excluded from the Computation of Diluted Earnings (Loss) Per Share [Line Items]    
Restricted common stock grants 894
v3.24.1.1.u2
Short-Term Investments and Financial Instruments (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Short-Term Investments and Financial Instruments [Abstract]      
Bank deposits $ 0   $ 424,000
Held-to-maturity carried at amortized cost 4,235,000   13,555,000
Fair value of short term investment 4,234,000   $ 13,559,000
Unrecognized holding (loss) gain $ (1,000) $ 4,000  
v3.24.1.1.u2
Short-Term Investments and Financial Instruments (Details) - Schedule of Assets Measured at Fair Value - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Assets    
Assets   $ 10,946
Cash equivalents invested in money market funds and treasury bills [Member]    
Assets    
Assets $ 18,416  
Cash equivalents invested in money market funds [Member]    
Assets    
Assets   10,522
Bank deposits (included in short term investments) [Member]    
Assets    
Assets   424
Fair Value, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets    
Assets   10,946
Fair Value, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets    
Assets  
Fair Value, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Assets    
Assets  
Fair Value, Recurring [Member] | Cash equivalents invested in money market funds and treasury bills [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets    
Assets 18,416  
Fair Value, Recurring [Member] | Cash equivalents invested in money market funds and treasury bills [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets    
Assets  
Fair Value, Recurring [Member] | Cash equivalents invested in money market funds and treasury bills [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Assets    
Assets  
Fair Value, Recurring [Member] | Cash equivalents invested in money market funds [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets    
Assets   10,522
Fair Value, Recurring [Member] | Cash equivalents invested in money market funds [Member] | Significant Other Observable Inputs (Level 2) [Member]    
Assets    
Assets  
Fair Value, Recurring [Member] | Cash equivalents invested in money market funds [Member] | Significant Unobservable Inputs (Level 3) [Member]    
Assets    
Assets  
Fair Value, Recurring [Member] | Bank deposits (included in short term investments) [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]    
Assets    
Assets   $ 424
v3.24.1.1.u2
Accounts and Other Receivables, Net (Details) - Schedule of Accounts and Other Receivables - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Schedule of Accounts and Other Receivables [Abstract]    
Trade receivables $ 16,254 $ 22,085
Unbilled receivables 719
Allowance for credit losses and commission adjustments (9,508) (9,708)
Accounts and other receivables, net $ 7,465 $ 12,377
v3.24.1.1.u2
Inventories, Net (Details) - USD ($)
Mar. 31, 2024
Dec. 31, 2023
Inventories [Line Items]    
Reserve for slow moving inventories $ 164,000 $ 164,000
v3.24.1.1.u2
Inventories, Net (Details) - Schedule of Inventories, Net - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Schedule of Inventories, Net [Abstract]    
Raw materials $ 761 $ 832
Work in process 92 11
Finished goods 713 627
Total $ 1,566 $ 1,470
v3.24.1.1.u2
Goodwill and Other Intangibles (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Dec. 31, 2022
Goodwill and Other Intangibles [Line Items]        
Goodwill $ 15,562,000   $ 15,588,000 $ 15,614,000
Amortization Expense $ 74,000 $ 90,000    
Maximum [Member]        
Goodwill and Other Intangibles [Line Items]        
Estimated useful lives 10 years      
Minimum [Member]        
Goodwill and Other Intangibles [Line Items]        
Estimated useful lives 8 years      
FGE Reporting Unit [Member]        
Goodwill and Other Intangibles [Line Items]        
Goodwill $ 1,187,000      
IT Segment [Member]        
Goodwill and Other Intangibles [Line Items]        
Goodwill $ 14,375,000      
v3.24.1.1.u2
Goodwill and Other Intangibles (Details) - Schedule of Change in Goodwill - USD ($)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2024
Dec. 31, 2023
Schedule of Change in Goodwill [Abstract]    
Beginning of period $ 15,588 $ 15,614
Foreign currency translation adjustment (26) (26)
End of period $ 15,562 $ 15,588
v3.24.1.1.u2
Goodwill and Other Intangibles (Details) - Schedule of Other Intangible Assets - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Customer-related    
Intangible assets, net $ 1,424 $ 1,406
Customer-related [Member]    
Customer-related    
Costs 5,831 5,831
Accumulated amortization (4,839) (4,790)
Intangible assets, net 992 1,041
Patents and Technology [Member]    
Customer-related    
Costs 1,894 1,894
Accumulated amortization (1,894) (1,894)
Intangible assets, net
Software [Member]    
Customer-related    
Costs 2,710 2,618
Accumulated amortization (2,278) (2,253)
Intangible assets, net $ 432 $ 365
v3.24.1.1.u2
Goodwill and Other Intangibles (Details) - Schedule of Amortization of Intangibles
$ in Thousands
Mar. 31, 2024
USD ($)
Schedule of Amortization of Intangibles [Abstract]  
Remainder of 2024 $ 253
2025 272
2026 217
2027 188
2028 165
2029 20
Intangible assets, net $ 1,115
v3.24.1.1.u2
Other Assets, Net (Details) - Schedule of Other Assets, Net - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Schedule of Other Assets, Net [Abstract]    
Deferred commission expense - noncurrent $ 3,485 $ 3,821
Trade receivables - noncurrent 1,179 1,021
Other, net of allowance for loss on loan receivable of $412 at March 31, 2024 and December 31, 2023 60 60
Total other assets net $ 4,724 $ 4,902
v3.24.1.1.u2
Other Assets, Net (Details) - Schedule of Other Assets, Net (Parentheticals) - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Schedule of Other Assets, Net [Abstract]    
Other, net of allowance for loss on loan receivable $ 412 $ 412
v3.24.1.1.u2
Accrued Expenses and Other Liabilities (Details) - Schedule of Accrued Expenses and Other Liabilities - USD ($)
$ in Thousands
Mar. 31, 2024
Dec. 31, 2023
Schedule of Accrued Expenses and Other Liabilities [Abstract]    
Accrued compensation $ 862 $ 2,482
Accrued expenses - other 1,934 2,142
Order reduction liability 923 971
Other liabilities 1,185 1,770
Accrued expenses and other liabilities $ 4,904 $ 7,365
v3.24.1.1.u2
Deferred Revenue (Details) - Schedule of Deferred Revenues - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Schedule of Deferred Revenues [Line Items]      
Deferred revenue at beginning of period $ 32,200 $ 30,803  
Recognized as revenue:      
Deferred revenue at end of period 31,429 31,553  
Less: current portion 17,272 14,234 $ 15,883
Long-term deferred revenue at end of period 14,157 17,319 $ 16,317
Deferred extended service contracts [Member]      
Net additions:      
Net additions 2 2  
Recognized as revenue:      
Recognized as revenue (4) (1)  
Deferred commission revenues [Member]      
Net additions:      
Net additions 1,950 4,016  
Recognized as revenue:      
Recognized as revenue $ (2,719) $ (3,267)  
v3.24.1.1.u2
Related-Party Transactions (Details) - USD ($)
 3 Months Ended
Mar. 31, 2024
Mar. 31, 2023
Dec. 31, 2023
Related-Party Transactions [Line Items]      
EECP Global’s loss   $ 78,000  
Net receivable from related parties     $ 901,000
Related Party [Member]      
Related-Party Transactions [Line Items]      
Net receivable from related parties $ 1,029,000    
EECP Global [Member]      
Related-Party Transactions [Line Items]      
EECP Global’s loss $ 31,000    
v3.24.1.1.u2
Commitments and Contingencies (Details) - USD ($)
Dec. 31, 2022
May 10, 2019
Commitments and Contingencies [Line Items]    
Employment agreement for annual compensation $ 350,000 $ 500,000
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