Vaso Corporation (VASO)

[OBrien]

.0225 actually, yesterday

[OBrien]

Bought back most my shares at .022 that I sold in the .03s :)

[OBrien]

Don’t see anything other than a tweet from a guy with 10k followers...
I flipped some at .032-.038 after buying a bunch in the .01s

[OBrien]

Whoa, what’s going on here?

[eecpfan]

Here's a possible way shares were sold with no insider reporting requirement violation. (Did someone already suggest this?)
1. Joshua distributes some of Simon's estate shares to Simon's beneficiaries. Since its a "distribution" it doesn't have to be reported as a "sale."
2. The beneficiaries now own the shares. But the % each of them own is less than 5%, so none of them qualify as insiders.
3. Some/all of the beneficiary then sell their shares. But since none of them are insiders, none of them have to report his/her sale.
4. Only when next year's proxy materials/10K issue, will we know if and how many shares in Simon's estate, all of which Joshua controls as the executor, have been distributed. According to the 2018 10K, Simon's estate held 55,738.318 shares as of 3/31/19 -- 33.35% of the common.

Someone at the shareholder meeting asked a question about the disappearance of Louis's estate's shares on the 2018 materials -- whereas the 2017 materials listed his estate as owning 45,165.993 or 33.66% of the outstanding. There they were on the 2017 materials. Then on the 2018 materials, suddenly they were gone. No explanation given. What happened to them all? the shareholder asked. All of a sudden, it looked like everyone on the board was in motion all headed in different directions as though there was suddenly a bad stink in the room or something. I mean really, in my opinion, the spectacle was quite unique. After the longest pause, someone, a young guy (not a board member or even a executive, as far as I could tell) took the mike and answered that the shares listed under Simon and Louis' names in the 2017 materials had been "double-counted." Huh? But that was it. No further explanation. And no further questions from shareholders. And the meeting was over, just like that. Very odd, the whole thing.

[thesmalls]

My guess is the selling is coming crom recent buyers that bought in based on charts/momentum on the big surge and had ZERO idea what they were buying. Since there was no big technical sell-off which would have alerted them to immediately dump, they kept holding. Eventually they realized there was not going to be another surge and just started unloading. That being said, someone bought a lot of shares BEFORE the Q3 #s and could not have thought there would be any real positive volume to dump into based on historical movements. That buying was real. Just another strange chapter in this trainwreck.

[PithicusKong]

You could be right...but from my perspective I see quite a few shares purchased back in Jan, Feb, and March of this year in the .04c range....after that there was little opportunity to get out except at a loss....the spike to .033c would not have created much of a loss to claim against gains in other stocks, at least from within a 12 month time frame. Of course I am leaving out the obvious...that shares bought in previous years at higher prices are being used to create a loss for tax purposes at this time. The new year and a second good quarter should lead to a higher share price....we shall see. Just my perspective which is limited at best.

[thesmalls]

Doubt this would be tax loss selling. I think most long term losses wanting out would have gotten out on the spike to 4.

That 188K offer on the ASK is nefarious. Same block that was there constantly on the way down.

With the incredible spike on price/volume - mgmt is STILL out to lunch and nowhere to be seen/heard. This is and has remained the issue. ZERO confidence in the mgmt team/BOD with respect to how they view and treat shareholders.

Hopefully they didnt manage to f up the 4Q and show strong results on the 10K in March

[PithicusKong]

"creating"....obviously I did not review my post.

[PithicusKong]

Is tax loss selling cretin a new race to the bottom?

[thesmalls]

So - what shares were liquidated...? Or - where has the non ending volume of shares the last two years+ been coming from?

Thanks for the update from the SH meeting. Unfortunately - I gave up on them. Ever since Lieberman and Castle hijacked rhe meetings and accused every outside shareholder of being a daytrader they became pointless. They neutered Ma

[eecpfan]

You say you "don't know how" they liquidated. Someone asked that question at last Tuesday's shareholder meeting. It appeared at first that the question generated a lot of confusion. It was as if everyone on the board panel was suddenly trying to get up and head off in every direction. It was really quite unique. Then after a bit someone (I couldn't catch his name/title) took a mike -- it wasn't a board member, nor did it appear to be a member of senior management, Then whoever it was provided an answer of sorts.

The answer was that shares in Simon and Louis's respective estates were "double-counted" when reported in the 2017 Annual Report because they consisted of shares held by Kerns Corp and Living Data Corporation. The background to this involves each brother having been the owner of 50% of each corporation, the result being that each brother was the "beneficial owner" (as opposed to direct)of 1/2 of the total number of Vaso shares held by both corporations.

Here one must assume that sometime between 3/31/18 and 3/31/19 (the posting dates for the Item 12 "Security Ownership" disclosures) Simon/Simon's estate bought-out Louis' estate's interest in both Kerns and Living Data. But since Simon's shares and Louis' estate's shares were "double-counted" in the 17 Report, there was no change on the 2018 Report in the number of shares Simon's estate owned. While the listing of shares beneficially owned by Louis' estate according to the 2017 Report became zero in the 18 Report.

I seem to recall some of the shares Louis owned fell outside those he beneficially owned through Kerns and Living Data. In which case their liquidation would arguably have required an SEC disclosure/filing, which to my knowledge hasn't happened. The larger point is, management could have done a much better job explaining these changes in the Annuals under the Item 12 disclosures. It didn't. Skeptics call that obfuscation. And whether "double-counting" qualifies as an SEC violation, I don't know.

The "larger picture" part in your post is spot on. No question. In my opinion, they woke up to the cash flow/inflated costs problems about four quarters later than they should have. I remember when someone asked, about three annual meetings ago (the last one in NYC) if they had identified/quantified the Net Wolves market. The answer was No. Leaving people in the audience dumbfounded. The follow-up question to that would have been, "Then how could you possibly have determined if the price you paid for Net Wolves was the correct amount?" Then when someone asked management to identify the "reputable . . . investment banking firm" (as characterized in the 2015 Annual Report) who confirmed the fairness of the purchase price, management refused to do so. I mean, if you made a video of this, you could play it in every business school in the country as entertainment on April Fools Day. They wouldn't be able to stop laughing.

eecpfan

[thesmalls]

EECPFAN - I dont know how they liquidated without filing but as someone was trying to explain to me - it had to do with the way the trust/estate was probably set up and the distributions were made. As O'Brien pointed out - the estate is no longer listed as a majority owner which suggests the selling has been from the liquidation of the estate.

Whether or not they are or arent - bigger issue remains the company's complete refusal to address it. Heirs age over value or potential of the investment they inherited - fine. Makes sense they have to liquidate. But exec compensation has done nothing but increase at a ridiculous rate relative to bottom line results not to mention stock price. Again, not discussed by mgmt. They shot down shareholders in last CC they had that tried to discuss it. The cost cutting was critical but it ahould never have gotten to that point and they haven't committed to long term profitability.

Anyone attend the Chicago show VASO exhibited at last week?

[OBrien]

What I don’t understand is how the Estate holding 45M shares are no longer listed as a beneficiary owner.
If you compare beneficial owners in the two 10Ks 2017 and 2018 the Louis estate isn’t listed in the latest.

[eecpfan]

Smalls:

Re. my post, #1294, replying to yours, #1287. The issue was the presumed SEC filing requirement that Simon's estate, as an insider, must file an SEC form each time it sells Vaso shares. How could Simon's estate be selling, as you indicated it was, without the related SEC filings appearing afterwards, which to my knowledge (and I may be wrong) haven't been.

Looking back, it appears we've been over this ground. Your post, #1247, from last spring replying to mine from a few days earlier. My apologies.

Just to muddy the water a little more, your reply last spring speculated that there's a loophole in the law that allows shares belonging to Simon's estate to be sold without triggering an SEC reporting requirement on the grounds (you imply) that one of his heirs has "a beneficial interest" in the sold shares. I don't know the common or statutory law on that point per se. But I think your theory is incorrect. An estate that buys or sells Vaso stock becomes the sole owner or seller of the asset. The estate, therefore, must comply with reporting requirements respecting SEC and IRS.

It is possible that the estate has been making small distributions of stock to the heirs, and the heirs have in turn been selling those distributions piecemeal. If each distribution/sale has been less than 5%, than technically there has been no SEC reporting requirement violation. But such activity could also be deemed a sham -- "good in form, poor in substance" -- to cover-up the underlying fact that the estate is effectively liquidating its Vaso holdings, which makes it effectively a fraud. So I don't think it would wash with the SEC.

But I don't know for certain and you're right, the law here is murky. I'll try and ask a friend who specializes in trust/estate law. What a pain. Having to go deep into obscure estate/SEC law to do investment analysis.

eecpfan

[PithicusKong]

And so the cycle of minimum dollar trades returns....6 bucks this AM.

[OBrien]

I would like to understand this too as I don’t see how we shouldn’t be seeing some form 144s.
The estate of Louis Srybnik that was holding 45Mil shares is no longer listed as a 5% plus owner. How can that just go away?

[eecpfan]

Your statement that Simon's estate is selling. But doesn't Simon's estate qualify as an insider, owning more (a lot more) than 5% of the outstanding? (And doesn't its executor, Vaso's chairman, Joshuha Markowitz, likewise qualify as an insider, by virtue of his corporate position?)

If yes, then doesn't an SEC report have to be filed each time shares held by the estate are liquidated? (I forget the number of days the seller has following the transaction. 7? 10? Something like that. Used to be a key feature of the hostile tender scenario. But those days are long gone in my world.)

So -- absent any SEC related filings by the estate, how could there be selling of shares from the estate, as you seem to assume has been taking place?

(No need to explain the other parts of your post, which make good but depressing sense.)

Long-term Investor

[PithicusKong]

Someone shook the tree with 100 shares at .0260c and 25,100 shares fell down at .0240c. Fear is a powerful emotion.

[OBrien]

Trust needs to be restored but if they continue to hold down expenses VASO could be a real winner for sure.

[Stockbroken]

Congrats O'Brien. I returned as a small shareholder after the report (at about 0.02). Going forward this has a great potential.

[OBrien]

It seems the tides are turning. If VASO can continue the trend in Q4 we could see a big quarter.
Wouldn’t be hard for this to get back to the .10 range if they can stay profitable.
Q3 was the first ever Q we have seen the IT side operate at a profit so I’m somewhat optimistic. Therefore I haven’t flipped any shares yet.
Holding 3.2M shares after buying a bunch more around .015 so hope this is for real!

[thesmalls]

No problem. Unfortunately I am heavily invested and was very pro EECP. I watched them waste a ton of money on the Dempsey buyback and then squander money with M&A activity that was supoosed to be accretive and topped off with the Netwolves fiasco which looked like a very bad inside job so I am not exactly confident that they will turn it around.

However, if they DO successfuly integrate the software side with the hardware side and use Netwolves infrastructure to market the new company - then it could be a very profitable company. The bloat and reluctance to honestly deal with shareholders though makes me suspect at best.

[PithicusKong]

Thanks...appreciate your insights.

[thesmalls]

I dont think its a matter of keeping it down vs just wanting to liquidate. Heirs will naturally disagree on the value of such a speculative stock and they may not agree how/when so they just agree to liquidate holding and divvy up proceeds. Each of the brothers owned 35-40MM shares and there are 165MM outstanding so liquidating roughly 1/3 will keep a thinly stock down for a long time. Especially when mgmt is doing nothing to enhance shareholder value.

Now - MMs KNOWING there is a shittonne of stock to be sold on program selling may play games with PPS and small trades to try and get more shares cheaper/faster or it could be institutional investors playing same games hedging that the end of the selling is near. That would be a reasonable explanation.

[PithicusKong]

Is there a hidden reason why the estate would have an interest in keeping this stock down......I still have not heard a reasonable reason why there were so many $1.00, $2.00, $5.00, trades and so on, over the past year. What purpose do such trades serve? I have not owned any stock in the past number of years where insignificant trades ( value and volume ) happened so frequently.

[thesmalls]

Until the one Sybrnick estate is done selling - it is going to remain under selling pressure. Company should have made those SG&A cuts seceral years ago. They abandoned EECP and purchased the dead weight Netwolves which was supposed to be accretive. Burned through $15MM in cash with nothng but unprofitable revenues to show for it. Investors are NOT convinced the changes are real or selling is over. Would agree daytradera are in control.

[Golden Cross]

Radar $VASO for next week!

[PithicusKong]

Looking at the day's end....you have been proven correct. Thoughts on tomorrow...last day of the week.

[PithicusKong]

Yes...that would be welcome.

[OBrien]

I think it stays up. This was a pretty good Q.
Want to see the 10Q though ??

[PithicusKong]

I am still skeptical......this could end the day where it began....daytraders in control now.....might take a while before actual buy and holds get in.

[OBrien]

Would also be nice to see some insider buys. It’s been a while

[TrendTrade2016]

too bad about the weekly...whats in the closet?!!!

[OBrien]

Weee!

[OBrien]

Hard to get past the $2-$3Mil market cap for this stock.
Just did nearly $19Mil in sales and earned $562k for the Q.
Just need some consistency in the net income and this could be a ten bagger from these levels pretty easy.
I get it though, the company needs to prove itself that they can stay profitable. Q4 could be very interesting if the trend continues.

[PithicusKong]

It's early for the news to be digested.....and I doubt this stock is followed by many....would be good to see a rise into the .02's or higher, but I cannot see that happening as long as someone or some entity keeps selling paltry dollar amounts.

[OBrien]

Looks much better, surprised we haven’t gotten a little bounce with the company finally proving they can return to profitability.
I’ve picked up a lot more shares in the .01s over the last few months so hoping the improvements continue!

[PithicusKong]

I was just about to mention the release but you beat me to it.....sooooo, opinion? And will there be any effect on the stock price?

[OBrien]

The Company Returns to Profitability for the Quarter

PLAINVIEW, NY / ACCESSWIRE / November 14, 2019 / Vaso Corporation ("Vaso") (VASO) today reported its operating results for the three months ended September 30, 2019.

"The Company recorded an operating profit of $0.8 million for the third quarter of 2019 on revenue of $18.7 million, which remained virtually flat year-over-year. This operating result represented an improvement of over $1.0 million when compared to the operating loss of $0.2 million in the same quarter last year, and was the result of a higher gross profit margin as well as a significant reduction in selling, general and administrative ("SG&A") costs. Year to date, we have reduced SG&A expenses by $2.6 million or 8% year-over-year as a direct effect of the cost cutting measures we implemented in the last several quarters. We anticipate continued improvement in the operating results for the reminder of the year and in the coming quarters," stated Dr. Jun Ma, President and CEO of the Company.

"Our IT segment continues to be a main contributor of the Company's revenue, growing to $11.5 million during the quarter ended September 30, 2019, or 4% over the same quarter in the prior year. We look forward to continued growth in this segment, especially in the healthcare IT business where our expertise in managed network services combined with comprehensive healthcare IT solutions present unique value proposition to a broad base of healthcare provision clients to address their needs for bandwidth, applications, cloud storage and security," Dr. Ma commented.

Financial Results for Three Months Ended September 30, 2019

For the three months ended September 30, 2019, revenue decreased $61 thousand, or 0.3%, to $18.7 million from $18.8 million for the same period of 2018. Quarterly revenue in our IT segment increased $483 thousand or 4% year-over-year. Revenue in the professional sales service segment decreased $518 thousand, mainly due to lower equipment deliveries by our partner. We expect that deliveries of equipment will improve over the remainder of 2019. Revenue in the equipment segment decreased $26 thousand, or 3%, to $906 thousand year-over-year, due to lower sales of EECP® equipment.

Gross profit for the third quarter of 2019 increased 4% to $10.8 million, compared with a gross profit of $10.5 million for the third quarter of 2018. This increase is primarily the result of an increase in revenue in the IT segment where gross profit increased $632 thousand or 14% year-over-year. The IT segment had increased sales and higher gross margins in the network services as well as the healthcare IT VAR business. As the healthcare ITVAR business continues to improve, we anticipate further growth in this segment. Gross profit decreased in the professional sales service and equipment segments in the third quarter 2019 compared to the same period in 2018, by $193 thousand and $49 thousand, respectively, due to lower sales.

SG&A expenses for the third quarter of 2019 decreased 6% to $9.8 million compared to $10.5 million for the same quarter of 2018. The decrease is primarily attributable to decreases in personnel and other costs in the professional sales service and IT segments, resulting from the cost reduction program the Company initiated in the fourth quarter 2018. We anticipate these costs reduction initiatives will result in significant cost savings for the full year 2019.

Research and development costs decreased 15% to $196 thousand in the third quarter of 2019 compared to the same period in 2018, due to lower software development costs in the equipment segment.

Net income for the three months ended September 30, 2019 was $562 thousand, compared to a net loss of $377 thousand for the third quarter of 2018. The improvement of $939 thousand is primarily the result of the increase in revenue and gross profit in the IT segment and the decrease in SG&A costs for the quarter. We expect continued improvement in performance for the remainder of 2019, as we anticipate an increase in equipment deliveries in the professional sales service segment, continued growth in the IT segment, and improved operating results as an effect of our cost reduction initiatives.

Net cash used in operating activities was $2.1 million in the nine months ended September 30, 2019, compared to net cash used in operating activities of $1.5 million for the same period in 2018. Cash and cash equivalents at September 30, 2019 was $1.3 million, compared to $2.7 million at December 31, 2018.

Total deferred revenue remains substantial, at approximately $17.9 million as of September 30, 2019, which will be recognized in the future when the underlying equipment or services are delivered and accepted at the customer site. Our shareholders' equity decreased to $2.6 million as of September 30, 2019 from $5.6 million as of December 31, 2018. Shareholders' equity at September 30, 2019 increased as compared to shareholders' equity at June 30, 2019, as a result of the positive net income in the third quarter.

We have incurred net losses from operations for the years ended December 31, 2018 and 2017 and for the nine months ended September 30, 2019. We maintain lines of credit from a lending institution which will require further extensions after their current December 18, 2019 maturity date, as well as other notes payable that mature within twelve months from September 30, 2019. Our ability to continue operating as a going concern is dependent upon achieving profitability, extending the maturity date of our existing lines of credit and notes payable, or through additional debt or equity

[PithicusKong]

As much as I am not into regulation....I seriously think this stock should be investigated. C'mon now....who buys 300 shares for a cost of $5.10 and sells 200 Shares for proceeds of $ 2.60 This is not an individual who has to pay comm on trades. It's insane.
I have received my voting proxy but a trip to Tampa is out of the question. I will use the Internet of all things.

[PithicusKong]

I see..said the blind man as he picked up his hammer and saw.

[OBrien]

Estate of Simon Srybnik still remains. It’s the Estate of Louis Srybnik that was holding 45Mil shares that is no longer listed in the filings.

[PithicusKong]

I thought someone on this site had mentioned that the Estate of Srybnik has divested themselves of their position......The latest proxy request shows under "Name of Beneficial Owner" the "Estate of Srybnib" as holding 53,738,318 shares or 32.28%. Am I reading this incorrectly?

[PithicusKong]

I have never owned a stock that trades as screwed up as this one. It does not trade in any logical sense what so ever.....and, of course, there is the question if it will survive as a viable stock and company.

[PithicusKong]

Is this soon to be sub penny?

[PithicusKong]

Looks like there is another 200K offered at .019c.

[OBrien]

I’ve always said the future for VASO is in the I.T. side.
They can only grow so much as a reseller for GE.
Growth is there but can they deliver in these cost reductions?

[PithicusKong]

What do you think of the latest financials.....I see the drop but still a lot of revenue for a sub .02c company. Profit...well, that's another matter I suppose.

[OBrien]

More than likely. I noticed the estate was no longer listed as beneficial holders in the last 10K