UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, DC 20549

 FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the fiscal year ended
 December 31, 2024

 TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission File No. 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 No.)

 137 Commercial Street, Plainview, New York

 11803

 (Address of Principal Executive Offices)

 (Zip Code)

 Registrant's telephone
number, including area code: (516) 997-4600

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

 Title of each class

 Trading Symbol

 Name of each exchange on which registered

 N/A

 N/A

 N/A

 Securities registered under Section 12(g) of the
Act:

 Common Stock, $.001 par value

 (Title of Class)

 Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

 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 past 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, a 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 has filed a report on
and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements.

 Indicate by check mark whether any of those error corrections are restatements
that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during
the relevant recovery period pursuant to §240.10D-1(b).

 Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of
common stock held by non-affiliates was approximately $ 29.2 million based on the closing sales price of the common stock as quoted on
the OTC QX on June 30, 2024.

 At March 24, 2025, the number
of shares outstanding of the issuer's common stock was 175,696,311.

 DOCUMENTS INCORPORATED BY REFERENCE

 None.

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 VASO CORPORATION

 INDEX TO FORM 10-K

 Page

 ITEM 1 – BUSINESS

 ITEM 1A - RISK FACTORS

 ITEM 1C – CYBERSECURITY

 ITEM 2 – PROPERTIES

 ITEM 3 – LEGAL PROCEEDINGS

 ITEM 4 – MINE SAFETY DISCLOSURES

 ITEM 5 – MARKET FOR REGISTRANT'S
 COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 ITEM 6 – [RESERVED]

 ITEM 7 – MANAGEMENT'S DISCUSSION AND
 ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 ITEM 9A - CONTROLS AND PROCEDURES

 ITEM 9B - OTHER INFORMATION

 ITEM 9C - DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 ITEM 10 – DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 ITEM 11 - EXECUTIVE COMPENSATION

 ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES

 ITEM 15 – EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

 SIGNATURES

 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 CONSOLIDATED BALANCE SHEETS

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 F-8 – F-31

 EXHIBITS

 Exhibit 31
 Certifications Pursuant to Securities Exchange Act Rule 13A-14(A)/15D-14(A)

 Exhibit 32
 Certifications Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

 i

 ITEM 1 – BUSINESS

 The information contained
in this report contains forward-looking statements (as such term is defined in the Securities Exchange Act of 1934 and the regulations
thereunder). These forward-looking statements may include projections of, or guidance on, the Company's future financial performance,
expected levels of future revenue and expenses, anticipated growth strategies, and anticipated trends in the Company's business
or financial results. When used in this report, words such as "anticipates", "continue", "believes",
"could", "estimates", "expects", "may", "plans", "potential",
"future", "intends", the negative of these terms and similar expressions identify forward-looking statements.
Any forward-looking statement made by the Company in this document is based only on the Company's current expectations, estimates
and projections about future events and financial trends affecting the financial condition of its business based on information currently
available to the Company and speaks only as of the date when made. Forward-looking statements are not historical facts or guarantees of
future performance. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes
in circumstances that are difficult to predict and many of which are outside of the Company's control, and actual results may differ
materially from this forward-looking information and therefore, should not be unduly relied upon. Among the factors that could cause actual
results to differ materially are the following: the effect of business and economic conditions, including the possibility of a downturn
or disruptions in the U.S. economy; the impact of US tariff policies; the effect of the dramatic changes taking place in IT and healthcare;
continuation of the GEHC agreement; the impact of competitive technology and products and their pricing; medical insurance reimbursement
policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in product development programs; the actions
of regulatory authorities and third-party payers in the United States and overseas; and the risk factors reported from time to time in
the Company's SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events
or developments.

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

 General Overview

 Vaso Corporation (the "Company")
principally operates in three distinct business segments in the healthcare equipment 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. ("VasoTechnology"),
 primarily focuses on healthcare IT and managed network technology services;

 sales service segment, operating through a wholly-owned subsidiary Vaso Diagnostics, Inc.
 d/b/a VasoHealthcare, primarily focuses on the sale of healthcare capital equipment for GE
 HealthCare Technologies, Inc. ("GEHC") into the health 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.

 The Company's website is www.vasocorporation.com.

 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"). VasoTechnology 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 healthcare software solutions including diagnostic 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 175+ facility partners).

 Managed network security services.

 VasoTechnology uses a combination
of proprietary technology, methodology and best-in-class 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 with GEHC to further the sale
of certain medical capital equipment in certain domestic market segments. Its current offerings consist of:

 GEHC diagnostic imaging equipment and ultrasound systems.

 GEHC service agreements for the above equipment.

 GEHC training services for use of the above equipment.

 GEHC and third-party financial services for the above equipment.

 VasoHealthcare has built a
team of over 80 highly experienced sales professionals who utilize proprietary sales management and analytic tools to manage the complete
sales process and to increase market penetration.

 VasoMedical

 The proprietary medical equipment
business under VasoMedical dates back to 1995 when the Company began the proprietary Enhanced External Counterpulsation (EECP)
technology in the United States, and has since diversified to include other medical hardware and software. Vasomedical Global was formed
in 2011 to combine and coordinate the various international operations including design, development, manufacturing, and sales of medical
devices and software, while domestic activities are conducted under Vasomedical Solutions. VasoMedical's proprietary devices and
software primarily consist of cardiovascular diagnostic and therapeutic applications, including:

 Biox
 series Holter monitors and ambulatory blood pressure recorders.

 ARCS
 series analysis, reporting and communication software for ECG and blood pressure signals, including cloud-based software suite
and algorithm in the form of a SaaS (software as a service) subscription.

 MobiCare
 multi-parameter wireless vital-sign monitoring system.

 EECP
 therapy systems for non-invasive, outpatient treatment of ischemic heart disease.

 This segment uses its extensive
in-house knowledge and intellectual property for cardiovascular devices and software coupled with its engineering resources to cost-effectively
create and market its proprietary technology. It sells and services its products to customers in the U.S. and China directly and sells
and/or services its products in the international market mainly through independent distributors.

 Historical Background

 Vaso Corporation was incorporated
in Delaware in July 1987. For most of its history, the Company primarily was a single-product company designing, manufacturing, marketing
and servicing its proprietary Enhanced External Counterpulsation, or EECP,
therapy systems, mainly for the treatment of angina. In 2010, it began to diversify its business operations. The Company changed its name
to Vaso Corporation in 2016 to more accurately reflect the diversified nature of its business and continues to use the original name VasoMedical
for its proprietary medical device subsidiary.

 In May 2010, the Company
launched its Professional Sales Service business through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, which
was appointed by GEHC as its exclusive representative for the sale of select GEHC diagnostic imaging equipment, and expanded in 2023
to include ultrasound systems, to specific market segments in the 48 contiguous states of the United States and the District of Columbia.
The original agreement with GEHC ("GEHC Agreement") was for three years ending June 30, 2013; it has been extended several
times with the current extension through December 31, 2026, subject to earlier termination under certain conditions.

 In June 2014, the
Company began its IT segment business by entering into a Value Added Reseller Agreement ("VAR Agreement") with GEHC to become
a national value added reseller of then GEHC Digital's software solutions such as Picture Archiving and Communication System ("PACS"),
Radiology Information System ("RIS"), and related services, including implementation, training, management and support. This
business focuses primarily on customer segments currently served by VasoHealthcare. A new wholly owned subsidiary, VasoHealthcare IT
Corp. ("VHC IT"), was formed to conduct the Company's healthcare IT business. In 2021, the VAR Agreement was terminated
and the Company partnered with other vendors providing similar products.

 In May 2015, the Company further
expanded its IT business segment by acquiring all of the assets of NetWolves, LLC and its affiliates, including the membership interests
in NetWolves Network Services, LLC (collectively, "NetWolves"), pursuant to an asset purchase agreement. NetWolves designs
and delivers efficient and cost-effective multi-network and multi-technology solutions as a managed network provider, as well as provides
a complete single-source solution that includes design, network redundancy, application device management, real-time network monitoring,
reporting and support systems as a comprehensive solution.

 The Company's proprietary
equipment business also has been significantly expanded from the original EECP -only operations. In September 2011, the
Company acquired FGE, a British Virgin Islands company, which owned or controlled two Chinese operating companies - Life Enhancement
Technology Ltd. ("LET") and Biox Instruments Co. Ltd. ("Biox") - to expand its technical and manufacturing capabilities
and to enhance its distribution network, technology, and product portfolio. Biox was a variable interest entity ("VIE") controlled
by FGE through certain contracts and an option to acquire all the shares of Biox by FGE's wholly owned subsidiary Gentone, and
in March 2019 Gentone exercised its option to acquire all of the shares of Biox. In August 2014, the Company through Gentone acquired
all of the outstanding shares of Genwell Instruments Co. Ltd. ("Genwell"), which was formed in 2010 to develop the MobiCare
wireless multi-parameter patient monitoring system and holds intellectual property rights for this system. As a result, the Company has
expanded its equipment products portfolio to include Biox series ambulatory patient monitoring systems, ARCS
series cloud-based software suite and algorithm for ECG and blood pressure monitoring and analysis, and the MobiCare
patient monitoring device.

 In April 2014, the
 Company entered into a cooperation agreement with Chongqing PSK-Health Sci-Tech Development Co., Ltd. ("PSK") of
 Chongqing, China, the leading manufacturer of external counter pulsation, or ECP, therapy systems in China, to form a joint venture
 company, VSK Medical Limited ("VSK"), a Cayman Islands company, for the global marketing, sale and advancement of ECP
 therapy technology. The Company owned 49.9% of VSK, which commenced operations in January 2015. In March 2018, the Company
 terminated the cooperation agreement with PSK and sold its shares in VSK to PSK. On May 20, 2020, the Company closed on the sale of
 51% of the capital stock of its wholly-owned subsidiary EECP Global Corporation ("EECP Global") to PSK. EECP Global was
 formed in September 2019 to hold all the assets and liabilities of its EECP business. Concurrently with the closing of the
 transaction, the Company signed Management Service Agreement with EECP Global to provide management service for the business and
 operation of EECP Global in the United States. The agreement provides an initial term of three years starting April 1, 2020, the
 effective date of the sale, which is automatically renewable for additional one-year terms. The agreement's current term ends
 April 1, 2025 and will be automatically renewed for another year. Pursuant to the agreement, EECP Global reimburses the Company all direct expenses and pays a monthly management fee
 during the term of the agreement.

 Termination of Achari Business
Combination Agreement

 As previously disclosed, 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"), and Achari Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Achari ("Merger
Sub"). The Business Combination Agreement provided, among other things, that on the terms and subject to the conditions set forth
therein, Merger Sub would merge with and into the Company (the "Merger"), with the Company surviving as a wholly owned subsidiary
of Achari. On September 17, 2024, Vaso provided to Achari a notice of termination of the Business Combination Agreement. Business combination
transaction costs presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) include investment banking and
other advisory and legal costs incurred in connection with the Business Combination Agreement, as well as the write-off of $508,000 in
transaction costs capitalized in prior quarters of 2024.

 Management

 The
Company currently bases its headquarters in Plainview, Long Island, NY pursuant to a lease which expires in September 2028. The Company's
executive officers include its President and Chief Executive Officer ("CEO"), Chief Operating Officer
("COO"), and Chief Financial Officer ("CFO").

 The management of the Company's IT segment is led by the President
of VasoTechnology and NetWolves, which is based in Tampa, FL. Our VasoHealthcare IT business is organized as a part of VasoTechnology
and is based in Nashville, TN. VasoHealthcare IT works with our VasoHealthcare diagnostic imaging equipment sales team to generate leads
and potential clients for the software solutions products and works with NetWolves sales and technical teams for comprehensive IT product
and service offerings.

 In
the professional sales services segment, we sell GEHC diagnostic imaging products and ultrasound systems to our assigned accounts in
the 48 contiguous states of the United States and the District of Columbia through a nationwide team of approximately 70 sales employees
led by several regional managers and an executive team who report to the President of VasoHealthcare. The operation is also supported
by in-house administrative, analytic, technical and other support staff, as well as applicable GEHC employees.

 The equipment segment is
under the direct supervision of the CEO of the Company. Regulatory, technical, sales and marketing efforts in the domestic market are
led by a Vice President Operations at VasoMedical, and the managers of our China subsidiaries, based in Wuxi, China, are in charge of
the development and production of all our proprietary products and marketing and sales in China and the international markets. We sell
our Biox series and other products in China through a group of sales managers as well as through distributors covering
various regions of China and other international geographies.

 Competition

 In the U.S. diagnostic imaging
market where we sell GEHC products, our main competitors are other diagnostic imaging equipment manufacturers such as Siemens, Philips,
Canon, and Hologic, etc. as well as their channel partners and distributors. Key competitive factors in the market include price, quality,
finance availability, delivery speed, service and support, innovation, distribution network, breadth of product and service offerings
and brand name recognition. GEHC is a leading competitor in this market.

 In the IT segment, our primary
competitors in the healthcare IT VAR business are software solution providers such as Agfa Healthcare, McKesson, Philips, Carestream
Health, etc. Key competitive factors are brand recognition, quality, radiology workflow solutions, scalability and service and support
capability. In the managed network services business our primary competition includes, but is not limited to, organizations who have
a presence in most of the major markets for the following products and services: network services, managed services, security services
and healthcare applications. Several of those competitors, many of which are our vendors, are: Verizon, AT&T, CenturyLink, IBM and
Cisco Resellers, Siemens, Epic, small regional IT integrators and large company internal IT departments.

 In the ambulatory monitoring
system business, there are numerous competitors of various size and strength. The Biox product line is among the few
from China with CE Mark certification for Europe, CFDA approval for China, US FDA clearances as well as Brazilian Agencia Nacional de
Vigilancia Sanitaria (ANVISA) approval, which are among the most important qualifications to market and sell the products around the
world.

 Regulations on Medical Devices

 As a medical device manufacturer
and marketer, we are subject to extensive regulation by numerous government regulatory agencies, including the US FDA and similar foreign
agencies. We are required to comply with applicable laws, regulations and standards governing the development, preclinical and clinical
testing, manufacturing, quality testing, labeling, promotion, import, export, and distribution of our medical devices.

 Compliance with Regulations in the United
States

 The Company has received
 appropriate US FDA premarket notification (510(k)) clearance for all its products marketed and sold in the United States, including
 EECP therapy systems and Biox ambulatory monitoring systems including ARCS analysis
 and report software. We seek US FDA clearance or approval for new products prior to their introduction to the US market.

 We are subject to other US
FDA regulations that apply prior to and after a product is commercially released. We also are subject to periodic and random inspections
by the US FDA for compliance with the current Good Manufacturing Practice, or cGMP, requirements and Quality System Regulation. The US
FDA also enforces post-marketing controls that include the requirement to submit medical device reports to the agency when a manufacturer
becomes aware of information suggesting that any adverse events are related to its marketed products. The FDA relies on medical device
reports to identify product problems and utilizes these reports to determine, among other things, whether it should exercise its enforcement
powers. The FDA also may require post-market surveillance studies for specified devices.

 We are subject to the Federal
Food, Drug, and Cosmetic Act's, or FDCA's, general controls, including establishment registration, device listing and labeling
requirements.

 The sales and advertising
of our products is subject to regulation by the Federal Trade Commission, or FTC. The FTC Act prohibits unfair or deceptive acts or practices
in or affecting commerce. Violations of the FTC Act, such as failure to have substantiation for product claims, would subject us to a
variety of enforcement actions, including compulsory process, cease and desist orders and injunctions, which can require, among other
things, limits on advertising, corrective advertising, consumer redress and restitution, as well as substantial fines or other penalties.

 As a medical device sales
channel partner and product reseller to healthcare facilities, we are subject to various federal, state and local laws targeting fraud
and abuse in the healthcare industry, including anti-kickback and false claims laws.

 Foreign Regulation

 In most countries where we
seek to export our medical devices, a local regulatory clearance must be obtained. The regulatory review process varies from country to
country and can be complex, costly, uncertain and time-consuming. Our medical devices are all manufactured in accordance with ISO 13485
(Medical device – Quality management systems – Requirement for regulatory purpose), an internationally agreed standard that
sets out the requirements for a quality management system specific to the medical devices industry. All our current medical devices have
obtained necessary clearances or approvals prior to their release in the appropriate jurisdictions, including CE marking certification
for European Union countries, China FDA (CFDA) approval for mainland China, Korean FDA (KFDA) approval for South Korea, Ag ncia
Nacional de Vigil ncia Sanit ria (ANVISA) approval for Brazil, Taiwan FDA (TFDA) for Taiwan, and the Saudi SFDA (MDMA) for
the Kingdom of Saudi Arabia.

 We are also subject to audits
by organizations authorized by foreign countries to determine compliance with laws, regulations and standards that apply to the commercialization
of our products in those markets. Examples include auditing by a European Union Notified Body organization (authorized by a member state's
Competent Authority) to determine conformity with the Medical Device Directives (MDD) and by an organization authorized by the Brazilian
government to determine conformity with the ANVISA requirement.

 Patient Privacy

 Federal and state laws protect
the confidentiality of certain patient health information, including patient records, and restrict the use and disclosure of that protected
information. The U.S. Department of Health and Human Services (HHS) published patient privacy rules under the Health Insurance Portability
and Accountability Act of 1996 (HIPAA privacy rule) and the regulation was finalized in October 2002. Currently, the HIPAA privacy rule
affects us only indirectly in that patient data that we access, collect and analyze may include protected health information. Additionally,
we have signed some Business Associate Agreements with Covered Entities that contractually bind us to protect private health information,
consistent with the HIPAA privacy rules requirements. We do not expect the costs and impact of the HIPAA privacy rule to be material to
our business.

 Regulations in the IT Business

 As a reseller of telecommunication
services and network solutions provider, our products and services are subject to federal, state and local regulations. These regulations
govern, in part, our rates and the way we conduct our business, including the requirement to offer telecommunications services pursuant
to nondiscriminatory rates, terms, and conditions, the obligation to safeguard the confidentiality of customer proprietary network information, as
well as the obligation to maintain specialized records and file reports with the Federal Communications Commission and state regulatory
authorities. While we believe we are in compliance with laws and regulations in jurisdictions where we do business, we continue to monitor
and assess our compliance.

 The Federal Communications
Commission ("FCC") exercises jurisdiction over services and regulates interstate and international communications in all 50
states, the District of Columbia and U.S territories. As an independent U.S. government agency overseen by Congress, the FCC is the United
States' primary authority for communications laws, regulation and technological innovation.

 We maintain Certificates
of Public Convenience and Necessity in all 50 states, which enable us to provide services within each state. We are therefore subject
to regulation from the Public Utility Commissions in each state.

 Intellectual Property

 In addition to other methods
of protecting our proprietary technology, know-how and show-how as well as trade secrets, we pursue a policy of seeking patent protection,
both in the US and abroad, for our proprietary technologies including those in Biox and MobiCare products.
Moreover, trademarks have been registered for the names "Vaso", "Vasomedical", "VasoGlobal", "VasoSolutions",
"VasoHealthcare", "EECP", "Biox", "ARCS" and "MobiCare".

 Through our China-based subsidiaries,
we own thirty-five invention and utility patents in China that expire at various times through 2041, as well as twenty-two
software copyright certificates in China related to proprietary technologies in physiological data acquisition, analysis and reporting.
We also maintain five registered trademarks in China for our products.

 Through our NetWolves subsidiary
we hold the trademarks "NetWolves", "SRM", and "Wolfpac".

 There can be no assurance
that our patents will not be violated or that any issued patents will provide protection that has commercial significance. As with any
patented technology, litigation could be necessary to protect our patent position. Such litigation can be costly and time-consuming, and
there can be no assurance that we will be successful.

 Employees

 As of December 31, 2024, we
employed 298 full-time persons, of which 14 are employed through our headquarters and VasoMedical facility in Plainview, New York; 102
through VasoHealthcare; 16 through VasoHealthcare IT; 102 through our NetWolves operations; and 64 in our China operations. None of our
employees are represented by a labor union. We believe that our employee relations are good.

 The Company also retains several
part-time employees and consultants from time to time for various purposes.

 Manufacturing

 The Company conducts manufacturing
activities for its ambulatory monitoring devices and other medical devices in its Biox facilities in China, and maintains certain manufacturing
capability in the Plainview, NY location to satisfy certain domestic and international needs for the EECP systems per
the management agreement with EECP Global.

 All manufacturing operations
are conducted under the cGMP requirements, as set forth in the FDA Quality System Regulation, as well as ISO 13485 (Medical device –
Quality management systems – Requirement for regulatory purpose), an internationally agreed standard that sets out the requirements
for a quality management system specific to the medical devices industry. We are also certified to conform to full quality assurance system
requirements of the EU Medical Device Directive (MDD 93/42/EEC Annex II) and can apply CE marking to all of our current Biox product models.
Lastly, we are certified to comply with the requirements of the Brazilian Ag ncia Nacional de Vigil ncia Sanit ria
(ANVISA). All these regulations and standards subject us to inspections to verify compliance and require us to maintain documentation
and controls for the manufacturing and quality activities.

 We believe our manufacturing
capacity and warehouse facility are adequate to meet the current and immediately foreseeable future demand for the production of our medical
devices. We believe our suppliers of the other medical devices we distribute or represent are capable of meeting our demand for the foreseeable
future.

 ITEM 1A - RISK FACTORS

 An investment in our securities involves certain risks, including,
among others, the risks described below. You should carefully consider
the risks and uncertainties described below, together with the information included elsewhere in this Report on Form 10K. The risks and
uncertainties described below are those we have identified as material but are not the only risks and uncertainties facing us. Our business
is also subject to general risks and uncertainties that affect many other companies, such as market conditions, geopolitical events, changes
in laws or accounting rules, fluctuation in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or
other disruptions of economic or business conditions, including the possibility of a downturn in the U.S. economy. Additional risks and
uncertainties not currently known to us or that we currently believe are immaterial also may impair our business, including our results
of operations, liquidity and financial position.

 Financial Risks

 Achieving profitable
operations is dependent on several factors.

 Our ability to sustain profitability
is dependent on many factors, primarily being continued operation under the GEHC Agreement, as well as attaining and maintaining profitability
in our IT and equipment segments, as well as the success of our other strategic initiatives.

 Risks Related to Our Business

 We currently derive a
significant amount of our revenue and operating income from the GEHC Agreement.

 On
May 19, 2010, we signed a sales representation agreement with GEHC. Under the GEHC Agreement, we have been appointed GEHC's exclusive
representative for certain GEHC diagnostic imaging products to specific market segments in the 48 contiguous states of the United States
and the District of Columbia. The GEHC Agreement had an initial term of three years commencing July 1, 2010 and has subsequently been
extended in 2012, 2014, 2017 and 2021, with the current term through December 31, 2026, subject to GEHC's right to terminate earlier
without cause under certain conditions.

 A significant amount of our
revenue and operating income arise from activities under this agreement. Moreover, our performance and growth in the professional sales
service segment depends partially on the territories, customer accounts and product modalities assigned to us by GEHC, as well as factors
beyond our control such as product pricing, availability and delivery schedule, and thus relies on our ability to demonstrate our added
value as a channel partner, and on maintaining a positive relationship with GEHC. There is no assurance that the agreement will not be
terminated prior to its expiration pursuant to its termination provisions or will be extended beyond the current expiration date. Should
GEHC terminate or fail to extend the agreement, it would have a material adverse effect on our financial condition and results of operations.

 We face competition from
other companies and technologies.

 In all segments of our business,
we compete with other companies that market technologies, products and services in the global marketplace. We do not know whether these
companies, or other potential competitors, may succeed in developing technologies, products or services that are more efficient or effective
than those offered by us, rendering our technology and existing products obsolete or non-competitive. Potential new competitors may also
have substantially greater financial, manufacturing and marketing resources than those possessed by us. In addition, other technologies
or products may be developed that have an entirely different approach or means of accomplishing the intended purpose of our products.
Accordingly, the life cycles of our products are difficult to estimate. To compete successfully, we must keep pace with technological
advancements, respond to evolving consumer requirements and achieve market acceptance.

 Data security incidents
or disruptions in our information technology systems could damage our business.

 We
are increasingly dependent on information systems and infrastructure to operate our business. Our ability to effectively manage
our business depends on the security, reliability and adequacy of our information systems. We review and enhance our computer systems
as well as provide training to our employees in an attempt to prevent unauthorized and unlawful intrusions. Despite our implementation
of firewalls, switchgear and other network security measures, our servers, databases and other systems may be vulnerable to various
cyber and other security threats, including those caused by computer hackers, physical or electronic break-ins, sabotage, computer
viruses, malware, worms, and similar disruptions from unauthorized access and tampering with our computer systems, including through
social engineering such as phishing attacks, coordinated denial-of-service attacks and similar incidents. The occurrence of some of these
risks may be increased due to the work-from-home arrangements that we have implemented for many of our employees. Significant disruptions
in our information technology systems or other data security incidents could adversely affect our business operations and reputation.

 We depend on management
and other key personnel.

 We are dependent on a limited
number of key management and technical personnel. The loss of one or more of our key employees may harm our business if we are unable
to identify other individuals to provide us with similar services. We do not maintain "key person" insurance on any of our
employees. In addition, our success depends upon our ability to attract and retain additional highly qualified management, sales, IT,
manufacturing and research and development personnel in our various operations. The competition for IT personnel is intense.

 We may not continue to
receive necessary clearances or approvals from the US FDA or foreign authorities for our medical devices, which could hinder our ability
to market and sell certain products in the relevant markets.

 If we modify our medical devices
and the modifications significantly affect safety or effectiveness, or if we make a change to the intended use, we will be required to
submit a new premarket notification (510(k)) or premarket approval (PMA) application to the FDA. We would not be able to market the modified
device in the U.S. until the FDA issues a clearance for the 510(k).

 If we offer new products that
require 510(k) clearance or a PMA, we will not be able to commercially distribute those products in the U.S. until we receive such clearance
or approval. Regulatory agency approval or clearance for a product may not be received or may entail limitations on the device's
indications for use that could limit the potential market for the product. Delays in receipt of, or failure to obtain or maintain, regulatory
clearances and approvals, could delay or prevent our ability to market or distribute our products. Such delays could have a material adverse
effect on our equipment business.

 There are similar medical
device regulations or requirements in China, Europe, and other foreign markets where we sell our products. Failure to comply with these
regulations and requirements could have a material adverse effect on our equipment business.

 If we are unable to comply
with applicable governmental regulation s, we may not be able to continue certain of our operations.

 We are subject to extensive
regulation across our business lines.

 As a reseller of telecommunication
services and network solutions provider, our products and services are subject to federal, state and local regulations. These regulations
govern, in part, our rates and the way we conduct our business, including the requirement to offer telecommunications services pursuant
to nondiscriminatory rates, terms, and conditions, the obligation to safeguard the confidentiality of customer proprietary network information, as
well as the obligation to maintain specialized records and file reports with the Federal Communications Commission and state regulatory
authorities. While we believe we are in compliance with laws and regulations in jurisdictions where we do business, we must continue to
monitor and assess our compliance.

 We also must comply with current
Good Manufacturing Practice requirements as set forth in the Quality System Regulation to receive US FDA approval to market new products
and to continue to market current products. Most states also have similar regulatory and enforcement authority for medical devices.

 Our operations in China are
also subject to the laws and regulations of the People's Republic of China with which we must be in compliance in order to conduct
these operations.

 We are subject to various
federal, state and local laws targeting fraud and abuse in the healthcare industry, including anti-kickback and false claims laws.

 We cannot predict the nature
of any future laws, regulations, interpretations, or applications, nor can we predict what effect additional governmental regulations
or administrative orders, either domestically or internationally, when and if promulgated, would have on our business in the future. We
may be slow to adapt, or we may never adapt to changes in existing requirements or adoption of new requirements or policies. We may incur
significant costs to comply with laws and regulations in the future and compliance with laws or regulations may create an unsustainable
burden on our business.

 We have foreign operations
and are subject to the associated risks of doing business in foreign countries.

 The Company continues to have
operations in China. Operating internationally involves additional risks relating to such things as currency exchange rates, different
legal and regulatory environments, political, economic risks relating to the stability or predictability of foreign governments, differences
in the manner in which different cultures do business, difficulties in staffing and managing foreign operations, differences in financial
reporting, operating difficulties, current uncertainties surrounding US tariff policy and other factors. The occurrence of any of these
risks, if severe enough, could have an adverse effect on the consolidated financial position, results of operations and cash flows of
the Company.

 Commercial law is still developing
in China and there are limited legal precedents to follow in commercial transactions. There are many tax jurisdictions each of which may
have changing tax laws. Applicable taxes include value added taxes ("VAT"), enterprise income tax ("EIT"), and
social (payroll) taxes. Regulations are often unclear. Tax declarations (reports) are subject to review and taxing authorities may impose
fines, penalties and interest. These facts create risks for our operations in China.

 We depend on several suppliers
for the supply of certain products.

 As a GEHC channel partner,
our sales of GEHC products could be negatively impacted by interruptions or delays to equipment installations, production and quality
issues, and any customer concerns related to GEHC. Delivery of GEHC equipment may be negatively impacted due to the current supply chain
issues especially as it impacts availability of computer chips. With respect to our proprietary medical products we now manufacture our
own products primarily through our China based facilities. However, we do depend on certain independent suppliers for parts, components
and certain finished goods.

 We may not have adequate
intellectual property protection.

 Our patents and proprietary
technology may not be able to prevent competition by others. The validity and breadth of claims in technology patents involve complex
legal and factual questions. Future patent applications may not be issued, the scope of any patent protection may not exclude competitors
and our patents may not provide competitive advantages to us. Our patents may be found to be invalid and other companies may claim rights
in or ownership of the patents and other proprietary rights held or licensed by us. Also, our existing patents may not cover products
that we develop in the future. Moreover, when our patents expire, the inventions will enter the public domain. There can be no assurance
that our patents will not be violated or that any issued patents will provide protection that has commercial significance. Litigation
may be necessary to protect our patent position. Such litigation may be costly and time-consuming, and there can be no assurance that
we will be successful in such litigation.

 The loss or violation
of certain of our patents and trademarks could have a material adverse effect upon our business.

 Since patent applications
in the United States are maintained in secrecy until such patent applications are issued, our current product development may infringe
patents that may be issued to others. If our products were found to infringe patents held by competitors, we may have to modify our products
to avoid infringement, and it is possible that our modified products would not be commercially successful.

 Risks Related to Our Industries

 Our growth could suffer
if the markets into which we sell products decline, do not grow as anticipated or experience cyclicality.

 Our
growth depends in part on the growth of the IT and healthcare markets which we serve. In our professional sales services segment, our
quarterly sales and profits depend significantly on the volume and timing of delivery of the underlying equipment of the orders we booked,
and the delivery of such products is difficult to forecast since it is largely dependent on GEHC. Product demand is dependent upon the
customer's capital spending budget as well as government funding policies, and matters of public policy as well as product cycles
and economic downturns that can affect the spending decisions of these entities. These factors could adversely affect our growth, financial
position, and results of operations.

 Technological change
is difficult to predict and to manage.

 We face the challenges that
are typically faced by companies in the IT and medical device fields. Our products and services may require substantial development efforts
and compliance with governmental clearance or approval requirements. We may encounter unforeseen technological or scientific problems
that force abandonment or substantial change in the development of a specific product or process.

 We are subject to product
liability claims and product recalls that may not be covered by insurance.

 The nature of our manufacturing
operations exposes us to risks of product liability claims and product recalls. Medical devices as complex as ours frequently experience
errors or failures, especially when first introduced or when new versions are released.

 We currently maintain product
liability insurance at $6,000,000 per occurrence and in the aggregate. Our product liability insurance may not be adequate. In the future,
insurance coverage may not be available on commercially reasonable terms, or at all. In addition, product liability claims or product
recalls could damage our reputation even if we have adequate insurance coverage.

 Risks Related to our Securities

 Our common stock is subject
to price volatility.

 The market price of our common
stock historically has been and may continue to be highly volatile. Our stock price could be subject to wide fluctuations in response
to various factors beyond our control, including, but not limited to:

 actual or anticipated fluctuations in our operating results;

 overall market fluctuations and domestic and worldwide economic conditions;

 medical reimbursement policies;

 announcements of technological innovations, new products or pricing by our competitors;

 the timing of patent and regulatory approvals;

 the timing and extent of technological advancements;

 the sales of our common stock by affiliates or other shareholders with large holdings; and

 other factors described in the "Risk Factors" and elsewhere in this Report.

 Our future operating results
may fall below the expectations of securities industry analysts or investors. Any such shortfall could result in a significant decline
in the market price of our common stock. In addition, the stock market has experienced significant price and volume fluctuations that
have affected the market price of stocks generally, including our stock, and that often have been unrelated to the operating performance
of such companies. These broad market fluctuations may directly influence the market price of our common stock.

 We do not intend to pay
dividends in the foreseeable future.

 We currently do not intend
to pay any cash dividends on our common stock in the foreseeable future.

 Anti-takeover Risk Factor

 The Articles of Incorporation of the Company presently contain certain
provisions, such as staggered Board of Directors terms and the ability to issue blank check preferred stock, the lack of stockholder pre-emptive
rights, and super majority voting requirements for transactions with substantial shareholders, which may be deemed to be "anti-takeover"
in nature in that such provisions may deter, discourage or make more difficult the assumption of control of the Company by another company
or person through a tender offer, merger, proxy contest or similar transaction or series of transactions. The overall effects of the "anti-takeover"
provisions may be to discourage, make costlier or more difficult, or prevent a future takeover offer, even if shareholders may desire
the Company to pursue the takeover offer. These provisions may also increase the possibility that a future bidder for control of the Company
will be required to act through arms-length negotiation with the Company's Board of Directors.

 Additional Information

 We are subject to the reporting
requirements under the Securities Exchange Act of 1934 and are required to file reports and information with the Securities and Exchange
Commission (SEC), including reports on the following forms: annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K, and amendments to those reports files or furnished pursuant to Section 13(a) or 15(d) of the Securities Act of 1934.

 ITEM 1C – CYBERSECURITY

 Our Board is actively engaged
in the oversight of the Company's cybersecurity, information security, data protection, and technology programs ("cybersecurity")
. The Audit Committee of the Board serves as the principal agent of the Board in fulfilling its oversight and review of the Company's
policies and procedures with respect to cybersecurity risk assessment and risk management. The President of VasoTechnology leads the Company's
cybersecurity risk assessment and risk management program and leads the team from our IT business in designing and implementing our cybersecurity
program.

 The President of VasoTechnology
and the executive team in our IT business periodically assesses industry best practices, frameworks, and standards so that our practice
is up to date for the effective prevention, detection, mitigation, and remediation of cybersecurity incidents. Our cybersecurity risk
management program includes the deployment of tools and activities designed to monitor, detect, prevent and analyze current and emerging
cybersecurity threats, and plans and strategies to address threats and incidents. Program highlights include:

 Employing a multi-layer strategy of defense designed to ensure the safety, security, and responsible use
of information and data.

 Monitoring of all IT assets, resources, and data 24-hours per day, 7-days per week, 365-days per year
by security operations center (SOC).

 Performing annual testing of the Company's incident
response plan and cybersecurity posture.

 Incorporating external expertise to manage the SOC, perform
penetration tests, cyber-attack simulation exercises, and log management to review anomalies indicating a possible breach.

 Maintaining a business continuity program and cyber insurance.

 Performing periodic employee simulated phishing campaigns.

 Conducting annual cybersecurity and insider threat training
for all employees.

 The President of VasoTechnology
is responsible for informing the Audit Committee and the Board of Directors, the CEO and other members of the senior management team on
cybersecurity risks on a regular basis, including evolving cybersecurity threats, cybersecurity incidents, cybersecurity technologies
and solutions deployed, major cybersecurity risk areas, and policies and procedures to address those risks and cybersecurity incidents,
as well as assessments of our cybersecurity program. The President of VasoTechnology also informs the CEO and other members of our senior
management team on a more informal basis of all aspects related to cybersecurity risks and incidents. This ensures that the highest levels
of management are kept abreast of the cybersecurity posture and potential risks facing us. Any significant cybersecurity matters and strategic
risk management decisions related thereto are escalated to the Board of Directors, ensuring that they have comprehensive oversight and
can provide guidance on significant cybersecurity issues.

 In 2024, the Company achieved
its primary cybersecurity risk management objective of no material cybersecurity incidents.

 As of the date of this report,
the Company is not aware of any material risks from cybersecurity threats, including those resulting from previous cybersecurity incidents,
that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations,
or financial condition. For more information about the cybersecurity risks we face, see the risk factors entitled "Data security
incidents or disruptions in our information technology systems could damage our business" in Item 1A "Risk Factors"
of this Form 10-K.

 ITEM 2 – PROPERTIES

 The Company houses its headquarters
and domestic medical device operations at an 8,700 square foot facility located at 137 Commercial Street, Plainview, New York 11803, under
a lease with a term that expires on September 30, 2028 and with a base annual rental of approximately $83,000. The Company's NetWolves
unit leases a 16,200 square foot facility in Tampa, Florida, under a lease expiring in June 2027 with an annual rental of approximately
$222,000. VHC-IT rents a flexible space, 1,500 square foot facility in Nashville, Tennessee on a month-to-month basis with an annual cost
of approximately $37,000. We believe that our current facilities are adequate for foreseeable current and future needs.

 We lease our office, engineering
and production facilities in China. Specifically, we lease approximately 14,700 square feet of space in Wuxi, China under leases expiring
in August 2026, September 2026, and December 2026 at an aggregate annual cost of approximately $73,000. Such leases are renewable upon
expiration. We also lease office space of approximately 1,700 square feet to host our software R&D team in Tianjin, China under a
lease expiring in February 2026 at an annual coat of approximately $22,000.

 ITEM 3 – LEGAL PROCEEDINGS

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

 ITEM 4 – MINE SAFETY
DISCLOSURES

 Not applicable.

 ITEM
5 – MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

 Our common stock currently
trades on the OTC Market (OTCQX) under the symbol VASO. The number of record holders of common stock as of March 25, 2025, was approximately
900, which does not include approximately 8,500 beneficial owners of shares held in the name of brokers or other nominees. The table below
sets forth the range of high and low trade prices of the common stock for the fiscal periods specified.

2024

2023

 High

 Low

 High

 Low

 First quarter

 $
 0.33

 $
 0.27

 $
 0.29

 $
 0.17

 Second quarter

 $
 0.31

 $
 0.21

 $
 0.26

 $
 0.21

 Third quarter

 $
 0.30

 $
 0.18

 $
 0.34

 $
 0.24

 Fourth quarter

 $
 0.19

 $
 0.12

 $
 0.35

 $
 0.20

 The
last bid price of the Company's common stock on March 25, 2025 was $0.13 per share. Over-the-counter market quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

 Dividend Policy

 We have never paid any cash
dividends on our common stock and currently do not intend to pay cash dividends in the foreseeable future.

 ITEM 6 – [RESERVED]

 ITEM 7– MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 This Management's
Discussion and Analysis of Financial Condition and Results of Operations contains forward looking statements. See "Forward Looking
Statements" and "Risk Factors" in Item 1 (Business) to review certain conditions that we believe could cause results
to differ materially from those contemplated by the forward-looking statements.

 The following discussion
should be read in conjunction with the financial statements and notes thereto included in this Annual Report on Form 10-K.

 General Overview

 Our Business Segments

 Vaso Corporation (formerly
Vasomedical, Inc.) ("Vaso" or the "Company") was incorporated in Delaware in July 1987. We principally operate
in three distinct business segments in the healthcare equipment 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 GE HealthCare (GEHC) into the health 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 offering includes:

 Managed healthcare software solutions including diagnostic 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 175+ facility partners).

 Managed network security services.

 VasoTechnology uses a combination
of proprietary technology, methodology and best-in-class 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 with GEHC, which at the time
was the healthcare business division of the General Electric Company ("GE"), to further the sale of certain medical capital
equipment in certain domestic market segments. Its current offering consists of:

 GEHC diagnostic imaging 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 for the above equipment.

 VasoHealthcare has built a
team of over 80 highly experienced sales professionals who utilize highly focused sales management and analytic tools to manage the complete
sales process and to increase market penetration.

 VasoMedical

 The proprietary medical equipment
business under VasoMedical traces back to 1995 when the Company began the proprietary Enhanced External Counterpulsation (EECP)
technology in the United States and has since diversified to include other medical hardware and software. Vasomedical Global was formed
in 2011 to combine and coordinate the various international operations including design, development, manufacturing, and sales of medical
devices and software, while domestic activities are conducted under Vasomedical Solutions. These devices and software primarily consist
of cardiovascular diagnostic and therapeutic applications, including:

 Biox
 series Holter monitors and ambulatory blood pressure recorders.

 ARCS series analysis, reporting and communication software for ECG and blood pressure
signals, including cloud-based software and algorithm subscription in the form of a SaaS (software as a service) subscription.

 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
in-house knowledge and intellectual property for cardiovascular devices and software coupled with its engineering resources to cost effectively
create and market its proprietary technology. It sells and services its products to customers in the U.S. and China directly and sells
and/or services its products in the international market mainly through independent distributors.

 Strategic Plan and Objectives

 Our short- and long-term plans
for the growth of the Company and to increase stockholder value are as follows:

 Continue to effectively control operating costs in the current inflationary environment.

 Continue to expand our product and service offerings as well as market penetration in all of our business
segments.

 Maintain and improve business performance in our professional sales service segment by increasing market
penetration of the GEHC product portfolio we represent, and possibly building new teams to represent other vendors.

 Maintain and grow our equipment business by increasing efficiency and continue to transform the operation
and explore new revenue models.

 Continue to seek accretive partnership opportunities.

 Explore options in capital markets for our stock.

 Results of Operations – For the Years
Ended December 31, 2024 and 2023

 Total revenues increased by
$5,743,000, or 7.1%, to $86,767,000 in the year ended December 31, 2024, from $81,024,000 in the year ended December 31, 2023. We reported
net income of $951,000 and $4,805,000 for the years ended December 31, 2024 and 2023, respectively, a decrease of $3,854,000. The decrease
in net income was primarily due to higher operating expenses in 2024, partially offset by higher gross profit. Our net income was $0.01
per basic and diluted common share for the year ended December 31, 2024, and $0.03 per basic and diluted common share, for the year ended
December 31, 2023.

 Revenues

 Revenue in the IT segment
was $42,954,000 for the year ended December 31, 2024 as compared to $40,371,000 for the prior year, an increase of $2,583,000, or 6.4%,
of which $2,684,000 was attributable to an increase in managed network services revenue offset by a decrease of $101,000 in healthcare
IT revenues.

 Commission revenues in the
professional sales service segment increased by $3,515,000, or 9.3%, to $41,335,000 in the year ended December 31, 2024, as compared to
$37,820,000 in the year ended December 31, 2023. The increase was primarily due to a higher blended commission rate for equipment delivered
in 2024 as well as a higher volume of GEHC equipment delivered in 2024, particularly from the ultrasound program started in 2023. As discussed
in Note B to the financial statements, the Company defers recognition of commission revenue until the underlying equipment is delivered.
As of December 31, 2024, the Company recorded on its consolidated balance sheet deferred commission revenue of $34,893,000 for this segment
(of which $17,821,000 was long-term), an increase of $2,699,000, or 8.4%, compared to $32,194,000 of deferred commission revenue at December
31, 2023 (of which $16,314,000 was long-term). The increase in deferred revenue was due principally to booked orders exceeding equipment
deliveries in 2024.

 Revenue in our equipment segment
decreased 12.5% to $2,478,000 for the year ended December 31, 2024 from $2,833,000 for the year ended December 31, 2023, as a result of
a $236,000, or 58.9%, decrease in our US operations due to lower ARCS -cloud software-as-a-service revenues, and lower
equipment sales in our China operations due to lower deliveries and the negative effect of foreign exchange rate fluctuations in 2024.

 Gross Profit

 The Company recorded gross
profit of $52,050,000, or 60.0% of revenue, for the year ended December 31, 2024, compared to $50,593,000, or 62.4% of revenue, for the
year ended December 31, 2023. The increase of $1,457,000, or 2.9%, was due to a $1,875,000 increase in the professional sales service
segment due to higher revenue; a $54,000 decrease in the IT segment due to lower gross margin; and a $364,000 decrease in the equipment
segment, as a result of lower revenues and lower gross margin.

 IT segment gross profit decreased
slightly by $54,000 to $17,605,000, or 41.0% of segment revenues, for the year ended December 31, 2024, as compared to $17,659,000, or
43.7% of segment revenues in the prior year, a decrease of $54,000. This decrease was due to $267,000 lower gross profit from the healthcare
IT business resulting from lower revenue and lower gross margin, partially offset by $213,000 higher gross profit from the managed network
service business resulting from higher revenue but lower gross margin.

segment gross profit was $32,674,000, or 79.0% of the segment revenues, for the year ended December 31, 2024, an increase of $1,875,000,
or 6.1%, from segment gross profit of $30,799,000, or 81.4% of the segment revenue, for the year ended December 31, 2023. The increase
in gross profit was due primarily to the increase in the segment revenue as a result of both a higher blended commission rate in 2024
and higher equipment delivery volume. Cost of commissions increased by $1,640,000, or 23.4%, to $8,661,000 for the year ended December
31, 2024, as compared to cost of commissions of $7,021,000 in 2023. The increase was due primarily to the increase in the segment revenue
in 2024 as well as the higher commission rate of the ultrasound program. Cost of commissions reflects commission expense associated with
recognized commission revenues. Commission expense associated with deferred revenue is recorded as deferred commission expense until the
related commission revenue is earned.

 Equipment segment gross profit
decreased by $364,000, or 17.0%, to $1,771,000, or 71.5% of equipment segment revenues, for the year ended December 31, 2024, compared
to $2,135,000, or 75.4% of equipment segment revenues, for the year ended December 31, 2023, due to lower segment revenue and lower gross
profit margin. Equipment segment gross profits are dependent on a number of factors including the mix of products sold, their respective
models and average selling prices, the ongoing costs of training, maintenance and servicing, as well as certain fixed period costs, including
facilities, payroll and insurance.

 Operating Income

 Operating income was $285,000
for the year ended December 31, 2024 compared to operating income of $4,195,000 for the year ended December 31, 2023, a decrease of $3,910,000,
or 93%. The decrease was primarily attributable to a $1,416,000 increase in corporate expenses associated with the proposed Achari business
combination and a $1,294,000 increase in operating loss in the IT segment year over year, from a loss of $466,000 for the year ended
December 31, 2023 to a loss of $1,760,000 for the year ended December 31, 2024, due primarily to higher selling, general and administrative
(SG&A) costs. Operating income in the professional sales service segment decreased by $367,000 from $7,195,000 for the year ended
December 31, 2023 to $6,828,000 for the year ended December 31, 2024, due mainly to higher operating expenses relating to the ultrasound
sales program, partially offset by higher gross profit. Operating loss in the equipment segment increased by $833,000, from a loss of
$451,000 in the prior year to a loss of $1,254,000 for the year ended December 31, 2024, resulting mainly from lower gross profit and higher
SG&A costs.

 Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were $48,984,000, or 56.5% of revenues, and $45,078,000, or 55.6% of
revenues, respectively, reflecting an increase of $3,906,000 or 8.7%. The increase in SG&A expenditures in the year ended December
31, 2024 resulted primarily from a $2,242,000 increase in the professional sales service segment attributable mainly to higher sales personnel-related
and travel costs, a $1,121,000 increase in the IT segment due to higher personnel and travel costs, and a $352,000 increase in the equipment segment due to higher allowance
for credit loss on related party receivables.

 Research and development (R&D)
expenses of $851,000, or 1% of revenues, for the year ended December 31, 2024 increased by $96,000, or 13%, from $755,000, or 1% of revenues,
for the year ended December 31, 2023. The increase was primarily attributable to higher software development costs in our China operations
in 2024.

 Adjusted EBITDA

 We define Adjusted EBITDA
(earnings before interest, taxes, depreciation and amortization), which is a non-GAAP financial measure, as net (loss) income, plus net
interest expense (income), 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 GAAP and should not be considered a substitute for operating income, which we consider to be the most directly
comparable 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 GAAP. Other companies may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

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

 2024

 2023

 $

 $
 4,805

 Interest expense (income), net

 (1,154
)

 (858
)

 Income tax expense

 Depreciation and amortization

 Share-based compensation

 Adjusted EBITDA

 $
 1,001

 $
 5,094

 Adjusted EBITDA
 decreased by $4,093,000, to $1,001,000 in the year ended December 31, 2024, from $5,094,000 in the year ended December 31, 2023. The
 decrease was primarily attributable to lower net income, lower depreciation and amortization and higher net interest income as
 compared to the prior year. Net income decreased primarily due to higher operating expenses and higher income tax expense in 2024,
 partially offset by higher revenue and gross profit.

 Other Income (Expense), Net

 Other income (expense), net
for the years ended December 31, 2024 and 2023, was $992,000 and $710,000, respectively, an increase of $282,000. The increase was due
primarily to $236,000 higher interest and other income arising from higher money market and US Treasury bill balances during 2024.

 Income Tax Expense

 During the year ended December
31, 2024, we recorded income tax expense of $326,000, as compared to income tax expense of $100,000 in the year ended December 31, 2023.
The Company utilized $5,878,000 and $5,857,000 in net operating loss carryforwards for the years ended December 31, 2024 and 2023, respectively.
The increase in income tax expense in 2024 arose primarily from higher state income tax. The Company had net operating loss carryforwards
of approximately $19,000,000 at December 31, 2024.

 Liquidity and Capital Resources

 Cash and Cash Flow – For the year
ended December 31, 2024

 We have financed our operations
and investment activities from working capital. At December 31, 2024, we had cash and cash equivalents of $26,371,000 and working capital
of $16,935,000. At March 24, 2025 the Company's cash and cash equivalents were approximately $32.4 million.

 Cash provided by operating
activities was $3,281,000 during the year ended December 31, 2024, which consisted of net income after non-cash adjustments of $3,478,000
and changes in operating assets and liabilities of $(197,000). The changes in the account balances primarily reflect increases in deferred
revenue of $2,694,000 and accounts payable of $1,511,000, and increases in accrued commissions and accrued liabilities totaling $1,753,000;
partially offsetting these changes were increases in accounts and other receivables of $5,065,000, inventories of $574,000, other assets
of $524,000 and prepaid expense and other current assets of $475,000.

 Cash provided by investing
activities during the year ended December 31, 2024 was $11,730,000, consisting of $13,756,000 in redemptions of short term investments,
offset by $1,453,000 in purchases of equipment and software and $573,000 in working capital loans to Achari.

 Cash used in financing activities
during the year ended December 31, 2024 was $89,000, consisting of $81,000 in payments of notes and finance leases and $8,000 in shares
withheld for payment of payroll taxes.

 Liquidity

 The Company expects to generate
sufficient cash flow from operations to satisfy its obligations at least for the next twelve months. On
December 30, 2022, the Company executed a $3.0 million revolving credit agreement with a lending institution. Advances under the agreement
bear interest at Wall Street Journal Prime Rate and are secured by substantially all of the assets of the Company. The agreement expired
August 31, 2023 and has undergone subsequent renewals through July 31, 2025. The agreement includes certain financial covenants, and the
Company was in compliance with such covenants at December 31, 2024, at which time no amounts had been drawn.

 Off-Balance
Sheet Arrangements

 We do not participate in transactions
that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance
or special purpose entities (SPES), which would have been established for the purpose of facilitating off-balance sheet arrangements or
other contractually narrow or limited purposes. As of December 31, 2024, we are not involved in any unconsolidated SPES or other off-balance
sheet arrangements.

 Effects of Inflation

 We believe that inflation
and changing prices over the past two years have not had a significant impact on our revenue or on our results of operations.

 Critical Accounting Policies and Estimates

 Note B of the Notes to Consolidated
Financial Statements includes a summary of our significant accounting policies and methods used in the preparation of our financial statements.
In preparing these financial statements, we have made our best estimates and judgments of certain amounts included in the financial statements,
giving due consideration to materiality. The application of these accounting policies involves the exercise of judgment and use of assumptions
as to future uncertainties and, as a result, actual results could differ from these estimates. Our critical accounting policies and estimates
are as follows:

 Allowance for Commission Adjustments

 In our professional sale service
segment, we bill a portion of commissions on the orders we booked in advance of delivery of the underlying equipment. Such amounts are
classified in our consolidated balance sheets in accounts receivable and deferred revenue, net of estimated commission adjustments. Similarly,
commissions payable to our sales force related to such billings are recorded as deferred commission expense, net of the impact of the
estimated commission adjustments, when the associated deferred revenue is recorded. The commission adjustments are based on estimates
of future order cancellations, which is calculated based on historical cancellation rates over multiple prior years and applicable credit
policies. Such cancellation rates are subject to the uncertainty that future activity cancels at higher or lower rates than the past orders
on which the rate was calculated, or that credit policies may change. The Company, based on its current year analysis, did not deem a
change in rate necessary as of December 31, 2024. Application of the rates only affects the aforementioned balance sheet accounts, there
is no impact to the statement of operations.

 Valuation Allowance for Deferred
Tax Assets

 Deferred income taxes are
recognized for temporary differences between financial statement and income tax bases of assets and liabilities and loss carry forwards
for which income tax benefits are expected to be realized in future years. A valuation allowance is established, when necessary, to reduce
deferred tax assets to the amount expected to be realized. In estimating future tax consequences, we generally consider all expected future
events other than an enactment of changes in the tax laws or rates. Deferred tax assets are continually evaluated for realizability. To
the extent our judgment regarding the realization of the deferred tax assets changes, an adjustment to the allowance is recorded, with
an offsetting increase or decrease, as appropriate, in income tax expense. Such adjustments are recorded in the period in which our estimate
as to the realizability of the assets changed that it is "more likely than not" that all of the deferred tax assets will be
realized. The "more likely than not" standard is subjective and is based upon our estimate of a greater than 50% probability
that the deferred tax asset will be realized.

 The
primary underlying uncertainty in evaluating the realizability of our deferred tax assets, which are primarily net operating losses, is
the need to accurately project taxable income. The Company generated net operating losses in the years ended December 31, 2017, 2018 and
2019. From 2020 to 2022, this trend reversed and the Company generated increasingly higher taxable income, primarily as a result of the
professional sales services segment's growth in orders, revenue, and operating results. As a result of this trend, which we expect
to continue, and the extension, through December 31, 2026, of the GEHC Agreement which underlies the performance of the professional sales
segment, the Company reviewed positive and negative evidence, including improved historical operating results and the likelihood of such
results continuing, and also reviewed its expected taxable income for future periods based on the positive trend in operating results
and the extension of the GEHC Agreement to the end of 2026, and concluded that it is more likely than not that approximately $5.4 million
of tax benefits related to net operating loss carryforwards will be utilized in the future tax years of 2023 to 2026 and, therefore, reduced
its valuation allowance during the year ended December 31, 2022 in accordance with ASC 740. As of December 31, 2024, the Company continues
to project sufficient future taxable income requiring no related change to its valuation allowance. In addition, the Company expects to
continue providing a valuation allowance on the remaining future tax benefits until it can sustain a level of profitability that demonstrates
its ability to utilize the remaining assets, or other significant positive evidence arises that suggests its ability to utilize the remaining
assets.

 Goodwill and Intangible Assets

 Goodwill represents the excess
of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the ASC Topic
350, "Intangibles: Goodwill and Other". Goodwill acquired in a purchase business combination and determined to have an indefinite
useful life is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability
of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not
result in an impairment. The impairment test is based on the estimated fair value of the underlying businesses and performed in the fourth
quarter of each year.

 We perform either a quantitative
or qualitative assessment to assess if the fair value of the respective reporting unit exceeds its carrying value. The qualitative goodwill
impairment assessment requires evaluating factors to determine whether it is more likely than not that the fair value of a reporting unit
is less than its carrying amount. As part of our goodwill qualitative assessment process for our two applicable reporting units, when
utilized, we evaluate various factors that are specific to the reporting unit as well as industry and macroeconomic factors in order to
determine whether it is reasonably likely to have a material impact on the fair value of our reporting units. Examples of the factors
that are considered include the results of the most recent impairment test, current forecasts, and changes in the strategic outlook or
organizational structure of the reporting units. The financial forecasts of the reporting units are compared to the forecasts used in
the prior year analysis to determine if management expectations for the business have changed.

 When performing the quantitative
assessment to calculate the fair value of a reporting unit, we consider both comparative market multiples as well as estimated discounted
cash flows for the reporting unit. The significant estimates and assumptions include, but are not limited to, revenue growth rates, operating
margins, and future economic and market conditions. The discount rates are based upon industry weighted average cost of capital ranges.
As a supplement, we conduct additional sensitivity analysis to assess the risk for potential impairment based upon changes in the key
assumptions such as the discount rate, expected long-term growth rate, and cash flow projections. Based upon the completion of our annual
test as of December 31, 2024, we determined that there was no impairment of goodwill and that the applicable reporting units' estimated
fair values were substantially in excess of their carrying amounts.

 Intangible assets consist
of the value of customer contracts and relationships, patent and technology costs, and software. The cost of significant customer-related
intangibles is amortized in proportion to estimated total related revenue; cost of other intangible assets is generally amortized on a
straight-line basis over the asset's estimated economic life, which range from five to ten years. The Company capitalizes internal-use
software costs incurred during the application development stage. Costs related to preliminary project activities and post implementation
activities are expensed as incurred. We evaluate whether events or circumstances have occurred that warrant a revision to the remaining
useful lives of intangible assets. In cases where a revision is deemed appropriate, the remaining carrying amounts of the intangible assets
are amortized over the revised remaining useful life.

 Recently Issued Accounting Pronouncements

 Note B of the Notes to Consolidated
Financial Statements includes a description of the Company's evaluation of recently issued accounting pronouncements.

 ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

 The consolidated financial
statements listed in the accompanying Index to Consolidated Financial Statements are filed as part of this report.

 ITEM 9A - CONTROLS AND PROCEDURES

 Report on 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 December 31, 2024 and have concluded that
the Company's disclosure controls and procedures were effective.

 Management's Report on Internal Control
over Financial Reporting

 Management is responsible
for establishing and maintaining adequate internal control over financial reporting for the Company as defined in Rule 13a-15(f) and 15d-15(f)
of the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
Internal control involves maintaining records that accurately represent our business transactions, providing reasonable assurance that
receipts and expenditures of company assets are made in accordance with management authorization, and providing reasonable assurance that
unauthorized acquisition, use or disposition of company assets that could have a material effect on our financial statements would be
detected or prevented on a timely basis.

 Because of its inherent limitations,
internal control over our financial statements is not intended to provide absolute guarantee that a misstatement can be detected or prevented
in the statements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial
statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to risk that
controls may become inadequate because of changes in condition, or that the degree of compliance with the policies or procedures may deteriorate.

 Management conducted an evaluation
of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO framework), as required by Rule 13a-15(c) or 15d-15(c) under the Exchange Act. A material weakness is a deficiency,
or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material
misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

 Based on this evaluation and
those criteria, the Company's CEO and CFO concluded that the Company's internal control over financial reporting were effective
as of December 31, 2024.

 This report does not include
an attestation report of the Company's Independent Registered Public Accounting Firm regarding internal control over financial reporting.
Management's report was not subject to attestation by the Company's Independent Registered Public Accounting Firm pursuant
to temporary rules of the Securities and Exchange Commission that permit the Company to provide only Management's report in this
Annual Report.

 Changes in Internal Control
over Financial Reporting

 For the quarter ended December
31, 2024 there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.

 ITEM 9B – OTHER
INFORMATION

 None.

 ITEM 9C – DISCLOSURE
REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not applicable.

 ITEM 10 – DIRECTORS,
EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

 Directors of the Registrant

 As of March 24, 2025, the members of our Board
of Directors are:

 Name of Director

 Age

 Principal Occupation

 Director Since

 Joshua Markowitz (2)

 Chairman of the Board and Director

 June, 2015

 Edgar Rios (1)

 Vice Chairman of the Board and Director

 February, 2011

 Jun Ma

 President, Chief Executive Officer and Director

 June, 2007

 Jane Moen

 President, Vasohealthcare and Director

 March, 2020

 Leon Dembo

 April, 2023

 David Lieberman

 February, 2011

 Behnam Movaseghi (1) (2)

 July, 2007

 (1)
 Member of the Audit Committee

 (2)
 Member of the Compensation Committee

 The following is a brief account
of the business experience for at least the past five years of our directors:

 Joshua Markowitz has
been a director since June 2015 and was appointed Chairman of the Board of the Company in August 2016. Mr. Markowitz has been a practicing
attorney in the State of New Jersey for in excess of 30 years. He is currently a senior partner in the New Jersey law firm of Markowitz
O'Donnell, LLP. Mr. Markowitz was the brother-in-law of Mr. Simon Srybnik (deceased), the former Chairman and director of the Company.

 David Lieberman has
been a director of the Company since February 2011 and the Vice Chairman of the Board from February 2011 to December 2024. Mr. Lieberman
has been a practicing attorney in the State of New York for more than 45 years, specializing in corporation and securities law. He is
currently of counsel to the law firm of Ortoli Rosenstadt, LLP, which performs certain legal services for the Company and its subsidiaries.
Mr. Lieberman is a former Chairman of the Board of Herley Industries, Inc., which was sold in March 2011.

 Jun Ma, PhD, has been
a director since June 2007 and was appointed President and Chief Executive Officer of the Company on October 16, 2008. Dr.
Ma has held various positions in academia and business, and prior to becoming President and CEO of the Company, had provided technology
and business consulting services to several domestic and international companies in aerospace, automotive, biomedical, medical
device, and other industries, including Kerns Manufacturing Corp. and Living Data Technology Corp., both of which are stockholders of
our Company. Dr. Ma received his PhD degree in mechanical engineering from Columbia University, MS degree in biomedical engineering from
Shanghai University, and BS degree in precision machinery and instrumentation from University of Science and Technology of China.

 Jane Moen has been
a director since March 2020 and an executive officer of the Company since November 2022. Ms. Moen has been President of the Company's
wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare since June 2018 following a remarkable career track record at VasoHealthcare,
starting as an Account Manager at the inception of VasoHealthcare in April 2010 and being promoted to Regional Manager in January 2012,
Director of Product Business Lines in July 2012 and Vice President of Sales in April 2016. Jane Moen has been in the medical sales industry
for over 17 years, having had prior experience with Ledford Medical Sales, Vital Signs, Inc., Pfizer Inc. and Ecolab, Inc.

 Leon
Dembo has been in the private practice of law for the last 43 years and has been the managing partner of Dembo, Brown &
Burns LLP (and its predecessor firm, Dembo & Saldutti LLP), specializing in real estate
transactions and commercial litigation, since 1991.

 Behnam Movaseghi, CPA,
has been a director since July 2007. Mr. Movaseghi has been treasurer of Kerns Manufacturing Corporation since 2000, and controller from
1990 to 2000. For approximately ten years prior thereto Mr. Movaseghi was a tax and financial consultant. Mr. Movaseghi is a Certified
Public Accountant.

 Edgar G. Rios has been
a director of the Company since February 2011 and served as Vice Chairman of the Board since January 2025. Mr. Rios was a co-founder,
Executive Vice President, General Counsel and Director of AmeriChoice Corporation from its inception in 1989 through its acquisition by
UnitedHealthcare in 2002 and continued as a senior executive with United Healthcare through 2007. Prior to co-founding AmeriChoice, Mr.
Rios was a senior executive with a number of businesses that provided technology services and non-technology products to government purchasers.
Mr. Rios also serves as a member of the Board of Trustees of Meharry Medical School and the Brookings Institution in Washington DC;
and as a director of the Los Padres Foundation in Virginia. Mr. Rios holds a J.D. from Columbia University Law School and an A.B. from
Princeton University.

 Committees of the Board of Directors

 Audit Committee and Audit Committee Financial Expert

 The Board has a standing
Audit Committee. The Board has affirmatively determined that each director who serves on the Audit Committee is independent, as the term
is defined by applicable Securities and Exchange Commission ("SEC") rules. During the year ended December 31, 2024, the Audit
Committee consisted of Edgar Rios, committee chair, and Behnam Movaseghi. The members of the Audit Committee have substantial experience
in assessing the performance of companies, gained as members of the Company's Board of Directors and Audit Committee, as well as
by serving in various capacities in other companies or governmental agencies. As a result, they each have an understanding of financial
statements. The Board believes that Behnam Movaseghi meets the qualifications to be deemed to be the "financial expert" on
this committee.

 The Audit Committee regularly
meets with our independent registered public accounting firm without the presence of management.

 The Audit Committee operates
under a charter approved by the Board of Directors. The Audit Committee charter is available on our website.

 Compensation Committee

 Our Compensation Committee
annually establishes, subject to the approval of the Board of Directors and any applicable employment agreements, the compensation that
will be paid to our executive officers during the coming year, and administers our stock-based benefit plans. During the year ended
December 31, 2024, the Compensation Committee consisted of Joshua Markowitz, committee chair, and Behnam Movaseghi. Neither of these persons
has been officers or employees of the Company at the time of his position on the committee, or, except as otherwise disclosed, had any
relationship requiring disclosure herein.

 The Compensation Committee
operates under a charter approved by the Board of Directors. The Compensation Committee charter is available on our website.

 Nominating Committee

 The Company does not have
a standing nominating committee. The entire Board of Directors serves as the Company's nominating committee. The following members
of the Board are not independent under the standards applicable to service on the nominating committee: Jun Ma, Jane Moen and David Lieberman.

 MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES

 During the year ended December 31, 2024 there
were:

 8 meetings of the Board of Directors

 4 meetings of the Audit Committee

 2 meetings of the Compensation Committee

 Delinquent Section 16(a) Reports

 Section 16(a) of the Exchange
Act requires directors, executive officers and persons who beneficially own more than 10% of our common stock (collectively, "Reporting
Persons") to file initial reports of ownership and reports of changes in ownership of our common stock with the SEC. Reporting Persons
are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. To our knowledge, based solely on our
review of the copies of such reports received or written representations from certain Reporting Persons that no other reports were required,
we believe that during the year ended December 31, 2024 all Reporting Persons timely complied with all applicable filing requirements.

 Corporate Governance - Code of Ethics

 We have adopted a Corporate
Code of Business Ethics (the "Code") that applies to all employees, including our principal executive officer, principal financial
officer, and directors of the Company. A copy of the Code can be found on our website, www.vasocorporation.com. The Code is broad in scope
and is intended to foster honest and ethical conduct, including accurate financial reporting, compliance with laws and the like. If any
substantive amendments are made to the Code or if there is any grant of waiver, including any implicit waiver, from a provision of the
Code to our Chief Executive Officer or Chief Financial Officer, we will disclose the nature of such amendment or waiver in a Current Report
on Form 8-K. Our Code includes an Insider Trading Policy and procedures governing the purchase, sale, and/or other dispositions
of the Company's securities by directors, officers, employees, and the Company itself, that the Company believes are reasonably
designed to promote compliance with insider trading laws, rules, and regulations. In addition, it is the Company's policy to comply
with applicable securities and state laws, including insider trading laws, when engaging in transactions in the Company's securities.
A copy of the Company's Insider Trading Policy is filed as Exhibit 19 to this Annual Report.

 Executive Officers of the Registrant

 As of March 24, 2025 our executive officers are:

 Name of Officer

 Age

 Position held with the Company

 Jun Ma, PhD

 President, Chief Executive Officer

 Jane Moen

 President of VasoHealthcare, Chief Operating Officer

 Peter C. Castle

 President of VasoTechnology

 Jonathan P. Newton

 Chief Financial Officer, Treasurer and Secretary

 Peter Castle was a
director from August 2010 to December 2019 and served as Chief Operating Officer of the Company after the NetWolves acquisition from June
2015 until January 2025. Prior to the acquisition, Mr. Castle was the President and Chief Executive Officer of NetWolves Network Services,
LLC, where he has been employed since 1998. At NetWolves, Mr. Castle also held the position of Chief Financial Officer from 2001 until
October 2009, Vice President of Finance since January 2000, Controller from August 1998 until December 1999 and Treasurer and Secretary
from August 1999.

 Jonathan P. Newton
served as Chief Financial Officer of the Company from September 1, 2010 to September 8, 2011, Vice President of Finance and Treasurer
until December 10, 2019, Co-Chief Financial Officer and Treasurer until January 2025, and is currently Chief Financial Officer, Treasurer
and Secretary. From June 2006 to August 2010, Mr. Newton was Director of Budgets and Financial Analysis for Curtiss-Wright
Flow Control. Prior to his position at Curtiss-Wright Flow Control, Mr. Newton was Vasomedical's Director of Budgets
and Analysis from August 2001 to June 2006. Prior positions included Controller of North American Telecommunications Corp., Accounting
Manager for Luitpold Pharmaceuticals, positions of increasing responsibility within the internal audit function of the Northrop Grumman
Corporation and approximately three and one half years as an accountant for Deloitte Haskins & Sells, during which time Mr. Newton
became a Certified Public Accountant. Mr. Newton holds a B.S. in Accounting from SUNY at Albany, and a B.S. in Mechanical Engineering
from Hofstra University.

 ITEM 11 - EXECUTIVE COMPENSATION

 The following table sets forth
the annual and long-term compensation of our Chief Executive Officer and each of our most highly compensated officers who were serving
as executive officers at the end of the last completed fiscal year for services rendered for the years ended December 31, 2024 and 2023.

 Summary Compensation Table

 Name and Principal Position

 Year

 Salary ($)

 Bonus ($)

 Stock

Awards ($)

 Option

Awards ($)

 Non-Equity

Incentive
 Plan

Compensation

($)

 Nonqualified

Deferred

Compensation

Earnings ($)

 All Other

Compensation($) (1)(2)(3)

 Total ($)

 Jun Ma, PhD

 2024

 500,000

 200,000

 56,635

 756,635

 Chief Executive Officer

 2023

 500,000

 230,000

 191,610

 921,610

 Jane Moen

 2024

 350,000

 300,000

 61,379

 711,379

 President of Vasohealthcare, Chief Operating Officer

 2023

 350,000

 330,000

 49,438

 729,438

 Peter C. Castle

 2024

 350,000

 -

 12,000

 362,000

 President of VasoTechnology

 2023

 350,000

 80,000

 12,000

 442,000

 (1)
 Jun Ma received $48,000 in lodging and car allowance, $6,100 in 401(k) matching contributions, and $2,535
in Company-paid life insurance in 2024; and $137,218 in tax gross-up on vested stock, $48,000 in lodging and car allowance, $3,857 in
401(k) matching contributions, and $2,535 in Company-paid life insurance in 2023.

 (2)
 Jane Moen received $50,726 in tax gross-up on vested stock, $6,053 in Company-provided vehicle benefit,
and $4,600 in 401(k) matching contributions in 2024; and $38,502 in tax gross-up on vested stock, $8,686 in Company-provided vehicle benefit,
and $2,250 in 401(k) matching contributions in 2023.

 (3)
 Peter Castle received $12,000 in car allowance in 2024 and 2023, respectively.

 Pay versus Performance

 In accordance with rules adopted
by the Securities and Exchange Commission pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing
the following disclosure regarding executive compensation for our principal executive officer ("PEO") and Non-PEO named executive
officers ("NEOs") and Company performance for the years listed below. The Compensation Committee did not consider the pay
versus performance disclosure below in making its pay decisions for any of the years shown.

 Year

 Summary Compensation Table Total for PEO (1)

 Compensation Actually Paid to PEO (1)(2)(3)

 Average Summary Compensation Table Total for Non-PEO
 NEOs (1)

 Average Compensation Actually Paid to Non-PEO NEOs
 (1)(2)(4)

 Value of Initial Fixed $100 Investment Based on TSR
 (5)

 Net Income

 2024

 $
 756,635

 $
 756,635

 $
 536,690

 $
 536,690

 $

 $
 1,301,000

 2023

 $
 921,610

 $
 971,610

 $
 585,719

 $
 606,719

 $

 $
 4,805,000

 2022

 $
 805,323

 $
 975,323

 $
 466,632

 $
 493,632

 $

 $
 11,294,000

 (1)
 The PEO for all years was Jun Ma. The non-PEO NEOs for all years were Jane Moen and Peter Castle.

 (2)
 The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K and do not
reflect compensation actually earned, realized, or received by the Company's NEOs. These amounts reflect the Summary Compensation
Table Total with certain adjustments as described in footnotes 3 and 4 below. Equity values are calculated in accordance with FASB ASC
Topic 718.

 (3)
 To calculate the amounts of Compensation Actually Paid to the PEO in each of 2024, 2023 and 2022, the following adjustments were made
to the PEO's Summary Compensation Table Total for each respective year:

 a.
 Year 2024:

 i.
 None

 b.
 Year 2023:

 i.
 We added $50,000, reflecting, as of the applicable vesting date, the change in the fair value during 2023 of equity-based awards granted
to the PEO before 2023 that vested during 2023.

 c.
 Year 2022:

 i.
 We added $120,000, reflecting the change in the fair value during 2022 of equity-based awards granted to the PEO before 2022 that
were outstanding and unvested as of the end of 2022; and

 ii.
 we added $50,000, reflecting, as of the applicable vesting date, the change in the fair value during 2022 of equity-based awards granted
to the PEO before 2022 that vested during 2022.

 (4)
 To calculate the amounts of Compensation Actually Paid, on average, to our non-PEO NEOs in each of 2024, 2023 and 2022, the following
adjustments were made to the Average Summary Compensation Table Total for Non-PEO NEOs for each respective year:

 a.
 Year 2024:

 i.
 None

 b.
 Year 2023:

 i.
 We added $14,000, reflecting the change in the fair value during 2023 of equity-based awards granted to the non-PEO NEOs before 2023
that were outstanding and unvested as of the end of 2023; and

 ii.
 we added $7,000, reflecting, as of the applicable vesting date, the change in the fair value during 2023 of equity-based awards granted
to the non-PEO NEOs before 2023 that vested during 2023.

 c.
 Year 2022:

 i.
 We added $24,000, reflecting the change in the fair value during 2022 of equity-based awards granted to the non-PEO NEOs before 2022
that were outstanding and unvested as of the end of 2022; and

 ii.
 we added $3,000, reflecting, as of the applicable vesting date, the change in the fair value during 2022 of equity-based awards granted
to the non-PEO NEOs before 2022 that vested during 2022.

 (5)
 The values disclosed in this TSR column represent the measurement period value of an investment of $100 in our common stock as of
December 31, 2021, and then valued again on each of December 31, 2022, December 31, 2023 and December 31, 2024. Historical stock performance
is not necessarily indicative of future stock performance.

 Outstanding Equity Awards at Last Fiscal Year End

 Equity awards, including stock
options, are not granted in anticipation of the release of material non-public information, and the release of material non-public information
is not timed on the basis of option or other equity grant dates. There were no outstanding equity awards at December 31, 2024.

 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 for severance payments in the event of the termination of his employment in the
following circumstances: (i) if his employment is terminated by the Company without "Cause" or by Dr. Ma for "Good
Reason", he is entitled to receive continued salary for 24 months and a bonus payment in the amount he would have otherwise
received had employment not terminated; provided that if the remaining term of the agreement is less than 24 months, the duration of
the continued salary shall instead be the greater of 12 months or the remaining term of the agreement. In addition, any unvested
options or shares will immediately vest; (ii) If his employment is terminated due to death or disability, his beneficiary will
receive 12 months of his salary; and (iii) if a "Change in Control" occurs, and his employment is terminated within 2
years thereafter by the Company without cause or by Dr. Ma for good reason, he is entitled to receive a lump sum payment equal to
2.5 times the sum of (a) his salary plus (b) the average of the annual bonuses paid to Dr. Ma in the three-year period immediately
prior to termination.

 Under
Section 280G of the Internal Revenue Code, if a severance payment made in connection with a change of control to a "disqualified
individual", which includes Dr. Ma, exceeds 3 times that person's average annualized compensation for the five preceding tax
years ("parachute payment") the paying corporation is denied any deduction for employee compensation on any excess parachute
payments, and the recipient is subject to a nondeductible 20% excise tax on such excess parachute payment (in addition to income taxes).
To provide a means to avoid this disadvantageous tax treatment the employment agreements contain a "cut back" provision that
applies if the severance payment would exceed the 280G limits; in that event, the Corporation will compute the after-tax net amount the
employee would receive after paying all taxes (including the excise tax) on the severance payment provided for by the Employment Agreement
(the "Original Severance Amount"). If the Original Severance Amount is less than or equal to the net amount the employee would
receive if the severance payment was reduced to the highest amount at which no excise tax would be imposed, then the employee will receive
the reduced amount so that the excise tax is avoided.

 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. 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 and 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 for severance payments in the event of the termination of her employment in the following circumstances:
(i) if her employment is terminated by the Company without "Cause" or by Ms. Moen for "Good Reason", she is entitled
to $20,000 per month for 24 months and a pro-rated bonus payment in the amount she would have otherwise received had employment not terminated.
In addition, any unvested options or shares will immediately vest; (ii) if her employment is terminated due to death or disability, her
beneficiary will receive 6 months of her salary.

 For
purposes of the Employment Agreements, "Cause" means the employee's conviction of or pleading guilty or no contest
to, a felony or crime of moral turpitude, willful refusal to perform his or her duties that results in material economic harm to the
Company or breach of the confidentiality and non-solicitation/non-compete clauses of his or her Employment Agreement; and "Good
Reason" means, in each case without the employee's consent, a reduction in salary, a failure to pay when due salary, bonus
or vested stock, or the failure of a successor to assume in writing the obligations of the Agreements. In addition, under the Employment
Agreements, a change of control occurs when one of the following events takes place: (i) any person or group acting in concert acquires
more than 50% of the total fair market value or voting power of the Company's stock, excluding any acquisition of stock from the
company, an affiliate, an employee benefit plan or broad-based employee benefit plan sponsored by the Company; a majority of the members
of the Board is replaced during any 30 month period (excluding directors whose nomination was endorsed by a majority of the members of
the Board, excluding any new director who became a director as a result of a contested election; a merger, consolidation, reorganization
or similar transaction unless the owners of the Company's securities immediately prior to the transaction continue to own 70% of
the post-transaction entity in substantially the same proportions or in a transaction in which no person acquires more than 30% of the
voting power of the Company's outstanding securities; or a complete liquidation, dissolution, sale or other disposition of substantially
all of the assets of the Company except to a subsidiary or an affiliate.

 401(k) Plan

 The Company maintains a defined
contribution plan to provide retirement benefits for its employees - the Vaso Corporation 401(k) Plan adopted in April 1997. As allowed
under Section 401(k) of the Internal Revenue Code, the plan provides tax-deferred salary deductions for eligible employees. Employees
are eligible to participate in the next quarter enrollment period after employment under the Vaso Corporation Plan. Participants may make
voluntary contributions to the plan up to 80% of their compensation under the Vaso Corporation Plan. In the years ended December 31, 2024
and 2023 the Company made discretionary contributions of approximately $345,000 and $234,000, respectively, to match a percentage of employee
contributions.

 Director's Compensation

 Each of the non-employee directors
receives an annual fee of $50,000 as well as a fee of $2,500 for each Board of Directors and Committee meeting attended, except for the
Chairman who receives a flat fee of $180,000 per annum. Committee chairs receive an additional annual fee of $5,000. 150,000 shares of restricted common stock, vesting immediately, was
granted to Leon Dembo for joining the Board of Directors.

 Fees Earned or Paid in Cash

 Stock

Awards (1)

 Option Awards

 Non-equity Incentive Plan Compensation

 Nonqualified Deferred Compensation Earnings

 All Other Compensation (2)

 Total

 Name

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 ($)

 Leon Dembo

 70,000

 19,500

 -

 -

 -

 6,500

 96,000

 David Lieberman

 70,000

 -

 -

 -

 -

 25,624

 95,624

 Joshua Markowitz

 180,000

 -

 -

 -

 -

 -

 180,000

 Behnam Movaseghi

 85,000

 -

 -

 -

 -

 -

 85,000

 Edgar Rios

 85,000

 -

 -

 -

 -

 -

 85,000

 (1)
 Represents grant date fair value of restricted stock award.

 (2)
 Represents tax gross-up for Mr. Dembo and health benefit premiums for Mr. Lieberman.

 ITEM 12 - SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The following table sets forth
the beneficial ownership of shares of our common stock as of March 25, 2025 of (i) each person known by us to beneficially own 5% or more
of the shares of outstanding common stock, based solely on filings with the SEC, (ii) each of our executive officers and directors, and
(iii) all of our executive officers and directors as a group. Except as otherwise indicated, all shares are beneficially owned, and investment
and voting power is held by the persons named as owners. To our knowledge, except under community property laws or as otherwise noted,
the persons and entities named in the table have sole voting and sole investment power over their shares of our common stock. Unless otherwise
indicated, each beneficial owner listed below maintains a mailing address of c/o Vaso Corporation, 137 Commercial Street, Plainview, New
York 11803.

 Name of Beneficial Owner

 Common Stock Beneficially
 Owned (1)

 % of
 Common
 Stock (2)

 Joshua Markowitz ** (3)

 56,088,318

 31.92
 %

 Jun Ma, PhD **

 10,498,146

 5.98
 %

 Peter Castle **

 3,125,000

 1.78
 %

 Edgar Rios **

 1,625,000

 *

 Jane Moen **

 1,605,087

 *

 David Lieberman **

 1,599,200

 *

 Jonathan Newton **

 1,275,000

 *

 Michael J. Beecher **

 1,240,400

 *

 Behnam Movaseghi **

 1,189,404

 *

 Leon Dembo **

 150,000

 *

 ** Directors and executive officers as a group (10 persons)

 78,395,555

 44.62
 %

 *
 Less than 1% of the Company's common stock

 (1)
 No officer or director owns more than one percent of the issued and outstanding common stock of the Company
unless otherwise indicated.

 (2)
 Applicable percentages are based on 175,696,311 shares of common stock outstanding as of March 25, 2025,
adjusted as required by rules promulgated by the SEC.

 (3)
 Joshua Markowitz is the record holder of 350,000 shares of our common stock. Additionally, 55,738,318
shares are held in trust funds of which Mr. Markowitz is the sole trustee.

 Equity Compensation Plan Information

 The
Company previously issued equity compensation under the Vasomedical, Inc. 2010 Stock Plan (the "2010 Plan") and the Vasomedical,
Inc. 2013 Stock Plan (the "2013 Plan"). The 2010 Plan and the 2013 Plan have expired, and no additional shares may be issued
under those plans. The Company currently maintains the Vasomedical 2016 Stock Plan (the "2016 Plan"), which will expire in
2026, and the Vaso Corporation 2019 Stock Plan (the "2019 Plan"). The Company may issue stock grants under the 2016
Plan and the 2019 Plan at the discretion of our Board of Directors or its Compensation Committee. The value of stock issued under these
plans is not less than the fair market value on the date of the grant. The participants in these plans are officers, directors, employees,
and consultants of the Company and its subsidiaries and affiliates.

 Plan category

 (a)
 Number of securities
 to be issued upon
 exercise of
 outstanding options,
 warrants and rights

 (b)
 Weighted-
 average exercise
 price of
 outstanding
 options, warrants
 and rights

 (c)
 Number of securities
 remaining available for
 future issuance under
 equity compensation plans
 (excluding securities
 reflected in column (a))

 Equity Compensation plans approved by security holders

 -

 $
 0.00

 -

 Equity Compensation plans not approved by security holders (1)

 796,666

 $
 0.00

 8,881,361

 Total

 796,666

 8,881,361

 (1)
 Includes 16,666 shares of restricted common stock granted, but unvested, under the
2013 Plan, and 780,000 shares of restricted common stock granted, but unvested, under the 2016 Plan. 531,361 shares and 8,350,000 shares
remain available for future grants under the 2016 Plan and 2019 Plan, respectively.

 See Note O to the Consolidated Financial Statements
for description of the material features of our current stock plans not approved by stockholders.

 ITEM 13 - CERTAIN RELATIONSHIPS
AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 Director Independence

 We have adopted the NASDAQ
Stock Market's standards for determining the independence of directors.

 The Board of Directors
has assessed the independence of each non-employee director under the independence standards of the NASDAQ Stock Market, and has
affirmatively determined that a majority of our directors are independent under the independence standards generally applicable to
directors: Mr. Rios, Mr. Markowitz, Mr. Dembo and Mr. Movaseghi. In addition, each member of the Audit Committee and Compensation
Committee have also been determined to be independent under the independence standards applicable to service on those committees.
The Company does not have a standing nominating committee. The entire Board of Directors serves as the Company's nominating
committee. The following members of the Board are not independent under the standards applicable to service on the nominating
committee: Jun Ma, Jane Moen and David Lieberman.

 We expect each director to
attend every meeting of the Board and the committees on which he serves as well as the annual meeting. In the year ended December 31,
2024, all directors attended at least 75% of the meetings of the Board and the committees on which they served.

 Related Party Transactions

 There were no transactions
in which the Company or any of its subsidiaries was a participant, the amount involved exceeded the lesser of (i) $120,000 or (ii) 1%
of the Company's average total assets as of the end of its prior 2 fiscal years, and any Director, Director nominee, executive officer,
or any of their immediate family members had a direct or indirect material interest reportable under applicable SEC rules, nor are there
any such transactions currently proposed.

 ITEM 14 - PRINCIPAL ACCOUNTING FEES AND SERVICES

 UHY LLP, as our independent
registered public accounting firm, performed the audits of our consolidated financial statements for the years ended December 31, 2024
and 2023. The following table sets forth all fees for such periods:

 2024

 2023

 Audit fees (1)

 $
 377,095

 $
 291,400

 Audit-related fees

 -

 -

 Tax fees

 -

 -

 All other fees

 -

 -

 Total

 $
 377,095

 $
 291,400

 (1)
 Includes $114,000 and $31,400 in 2024 and 2023, respectively, for review of SEC filings associated with the Achari business
 combination.

 The Audit Committee has adopted
a policy that requires advance approval of all audit, audit-related, tax services, and other services performed by the Company's
independent auditor. Accordingly, the Audit Committee must approve the permitted service before the independent auditor is engaged to
perform it. In accordance with such policies, the Audit Committee approved 100% of the services relative to the above fees.

 ITEM 15 – EXHIBITS AND
FINANCIAL STATEMENT SCHEDULES

 Financial Statements and Financial Statement Schedules

 (1)
 See Index to Consolidated Financial Statements on page F-1 at beginning of attached financial statements.

 (a)
 Exhibits

 (3)(i)

 (a)

 Restated Certificate of Incorporation (2)

 (b)

 Certificate of Designations of Preferences and Rights of Series E Convertible Preferred Stock (3)

 (c)

 Certificate of Amendment to Certificate of Incorporation (7)

 (3)(ii)

 By-Laws (1)

 (4)

 (a)

 Specimen Certificate for Common Stock (1)

 (10)

 (a)

 Redacted Sales Representative Agreement between GE Healthcare Division of General Electric Company and Vaso Diagnostics, Inc. d/b/a VasoHealthcare, a subsidiary of Vasomedical, Inc. dated as of May 19, 2010 (4).

 (b)

 Employment Agreement entered into as of March 21, 2011 between Vasomedical, Inc. and Jun Ma, as amended. (6)

 (c)

 Amendment to Sales Representative Agreement between GE Healthcare Division of General Electric Company and Vaso Diagnostics, Inc. d/b/a VasoHealthcare, a subsidiary of Vasomedical, Inc. dated as of June 20, 2012 (5)

 (d)

 2013 Stock Plan (8)

 (e)

 2016 Stock Plan (9)

 (f)

 2019 Stock Plan (10)

 (g)

 Redacted Employment Agreement entered into as of October 1, 2022 between Vaso Corporation and Jane Moen

 (19)

 (a)

 Insider Trading Policy

 (21)

 Subsidiaries of the Registrant

 Name

 State of Incorporation

 Percentage Owned by Company

 Vaso Diagnostics, Inc.

 New York

 100%

 VasoMedical, Inc.

 Delaware

 100%

 Vasomedical Global Corp.

 New York

 100%

 Vasomedical Solutions, Inc.

 New York

 100%

 VasoHealthcare IT Corp.

 Delaware

 100%

 VasoTechnology, Inc.

 Delaware

 100%

 NetWolves Network Services LLC

 Florida

 100%

 EECP Global Corporation

 New York

 49%

 Fast Growth Enterprises Limited

 British Virgin Islands

 100%

 (31)

 Certification Reports pursuant to Securities Exchange Act Rule
13a - 14

 (32)

 Certification Reports pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

 101.INS

 101.SCH

 101.CAL

 101.DEF

 101.LAB

 101.PRE

 (1)
 Incorporated by reference to Registration Statement on Form S-18, No. 33-24095.

 (2)
 Incorporated by reference to Registration Statement on Form S-1, No. 33-46377 (effective 7/12/94).

 (3)
 Incorporated by reference to Report on Form 8-K dated June 21, 2010.

 (4)
 Incorporated by reference to Report on Form 8-K/A dated May 19, 2010 and filed November 9, 2010.

 (5)
 Incorporated by reference to Report on Form 8-K dated June 20, 2012.

 (6)
 Incorporated by reference to Report on Form 8-K dated March 21, 2011.

 (7)
 Incorporated by reference to Report on Form 10-Q for the quarter ended September 30, 2016.

 (8)
 Incorporated by reference to Report on Form 10-Q for the quarter ended September 30, 2013.

 (9)
 Incorporated by reference to Report on Form 10-Q for the quarter ended June 30, 2016.

 (10)
 Incorporated by reference to Report on Form 10-K for the year ended December 31, 2019.

 SIGNATURES

 Pursuant to the requirements
of Section 13 or 15(d) of the Securities Exchange Act of 1934, we have duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized on the 31 st day of March 2025.

 VASO CORPORATION

 By:

 /s/ Jun Ma

 Jun Ma

 President, Chief Executive Officer,

 and Director (Principal Executive Officer)

 Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below on March 31, 2025, by the following persons in the capacities indicated:

 /s/ Jun Ma

 President, Chief Executive Officer

 Jun Ma

 and Director (Principal Executive Officer)

 /s/ Jonathan Newton

 Chief Financial Officer (Principal Financial and Accounting Officer)

 Jonathan Newton

 /s/ Joshua Markowitz

 Director (Chairman of the Board)

 Joshua Markowitz

 /s/ Edgar Rios

 Director (Vice Chairman of the Board)

 Edgar Rios

 /s/ Jane Moen

 Jane Moen

 /s/ David Lieberman

 David Lieberman

 /s/ Behnam Movaseghi

 Behnam Movaseghi

 /s/ Leon Dembo

 Leon Dembo

 INDEX TO CONSOLIDATED

 For the years ended December 31, 2024 and
2023

 Page

 Report of Independent Registered Public Accounting Firm (PCAOB ID: 1195)

 Financial Statements

 Consolidated Balance Sheets as of December 31, 2024 and 2023

 Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2024 and 2023

 Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2024 and 2023

 Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023

 Notes to Consolidated Financial Statements

 F-8 – F-31

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 To the Stockholders
and Board of Directors of

 Opinion
on the Financial Statements

 We have
audited the accompanying consolidated balance sheets of Vaso Corporation and Subsidiaries (the "Company") as of December 31,
2024 and 2023, and the related consolidated statements of operations and comprehensive income, changes in stockholders' equity and
cash flows for the years then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the
financial statements referred to above present fairly, in all material respect, the financial position of the Company as of December 31,
2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.

 Basis
for Opinion

 These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding
of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess
the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating
the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit Matters

 The critical audit matters communicated below
are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to
the audit committee and that (1) relates to an account or disclosure that is material to the financial statements and (2) involved
especially challenging, subjective, or complex judgments. The communication of the critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a
separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

 F- 2

 To the Stockholders
and Board of Directors of

 Page Two

 Critical
Audit Matter - Revenue recognized from sales commission with General Electric Healthcare (GEHC)

 As discussed in Notes A and B to the financial
statements, the Company, through its wholly owned subsidiary VasoHealthcare (VHC), was appointed the exclusive representative for the
sale of GEHC's diagnostics imaging equipment to specific market segments and recognized sales commission revenue when the underlying
equipment and services have been delivered or completed by GEHC. VHC has total sales commission revenue of approximately $41.3 million
for the year ended December 31, 2024, which is concentrated solely with GEHC.

 We identified the testing of sales commission revenue
generated from GEHC as a critical audit matter. Specifically, the sales commission revenue, along with the associated deferred revenue,
accounts receivable and commissions payable for VHC, is calculated through complicated formulas including order data from various files
obtained from GEHC monthly and is stored in a spreadsheet file based on the master agreement and various subsequent amendments between
GEHC and the Company. The audit of the spreadsheet file was challenging and complex as it requires significant efforts from auditors due
to the volume of data, size of the file, and complexity of formulas within the spreadsheet file.

 How
the Critical Audit Matter Was Addressed in the Audit

 During the audit, we obtained an understanding
of the design and implementation of the internal control over the revenue recognition process and over the spreadsheet file. For selected
orders based on our judgment, we tested the Company's master file for completeness, traced the source data to the various files
that are further directly confirmed with GEHC on sales orders, delivery and payments received, tested the formulas for its accuracy and
reasonableness and agreed the commission rates to the agreements between GEHC and further confirmed with GEHC as to which sales region
achieved the target order volume. Furthermore, for a selection of orders, we verified the delivery date and customer order value to the
source documents.

 Critical Audit Matter – Valuation
of Goodwill

 As discussed in Note B to the financial statements,
the Company evaluates goodwill for impairment at the reporting unit level at least annually, or more frequently if events or changes in
circumstances indicate that the carrying value of the asset may not be recoverable. The goodwill balance as of December 31, 2024 was $15.6
million. The Company considers potential impairment by comparing the fair value of a reporting unit to its carrying value. Fair value
is estimated by management using both comparable market multiples and estimated discounted cash flow models. No impairment charge was
recorded for the year ended December 31, 2024.

 We identified goodwill impairment as a critical audit
matter because of the significant judgments made by management to estimate the fair value of the reporting units. This required a high
degree of auditor judgment and an increased extent of effort, including our need to involve valuation specialists, when performing audit
procedures to evaluate the reasonableness of inputs into the quantitative models driven by management's estimates and assumptions.
Significant management estimates include forecasted revenue growth rates, forecasted gross profit, operating expenses and discount rates.

 How the Critical Audit Matter Was Addressed
in the Audit

 Our audit procedures performed to evaluate the reasonableness of management's
estimates and assumptions included assessing the methodologies used by the Company and testing the significant assumptions used in the
quantitative models. We compared current and prior year forecasts prepared by management to historical revenue and gross profit to evaluate
the reasonableness of the assumptions and to evaluate management's ability to accurately forecast future revenues and gross profit.
We evaluated historical trends in assessing the reasonableness of growth rate assumptions and performed sensitivity analyses of significant
assumptions to evaluate the changes in the fair value of the reporting units that would result from changes in these assumptions. We performed
procedures to verify the mathematical accuracy of the calculations used by management. We involved our valuation specialists to assist
us in identifying the significant assumptions underlying the models, assessing the rationale and supporting documents related to these
assumptions, and determining the appropriateness and reasonableness of the methodologies employed. Furthermore, we assessed the appropriateness
of the disclosures in the financial statements.

 /s/ UHY LLP

 We have served as the Company's auditor
since 2022.

 Sterling Heights, Michigan

 March 31, 2025

 F- 3

 CONSOLIDATED
BALANCE SHEETS

 (in thousands, except
share and per share data)

2024

2023

 ASSETS

 CURRENT ASSETS

 Cash and cash equivalents

 $
 26,271

 $
 11,342

 Short-term investments

 -

 13,979

 Accounts and other receivables, net of an allowance for credit losses and commission adjustments of $ 10,708 at December 31, 2024 and $ 9,708 at December 31, 2023

 16,999

 12,377

 Receivables due from related parties

 Inventories, net

 1,470

 Deferred commission expense

 3,659

 3,285

 Prepaid expenses and other current assets

 2,402

 1,717

 Total current assets

 51,185

 45,099

 Property and equipment, net of accumulated depreciation of $ 10,712 at December 31, 2024 and $ 10,358 at December 31, 2023

 1,544

 1,174

 Operating lease right of use assets

 2,345

 1,949

 Goodwill

 15,551

 15,588

 Intangibles, net

 1,615

 1,406

 Other assets, net

 5,358

 4,902

 Investment in EECP Global

 Deferred tax assets, net

 4,904

 4,956

 Total assets

 $
 82,938

 $
 75,757

 LIABILITIES AND STOCKHOLDERS' EQUITY

 CURRENT LIABILITIES

 Accounts payable

 $
 4,179

 $
 2,670

 Accrued commissions

 3,256

 2,411

 Accrued expenses and other liabilities

 8,251

 7,365

 Finance lease liabilities - current

 Operating lease liabilities - current

 1,067

 Sales tax payable

 Income taxes payable

 -

 Deferred revenue - current portion

 17,072

 15,883

 Notes payable - current portion

 Due to related party

 Total current liabilities

 34,720

 30,040

 LONG-TERM LIABILITIES

 Notes payable, net of current portion

 -

 Finance lease liabilities, net of current portion

 -

 Operating lease liabilities, net of current portion

 1,278

 1,020

 Deferred revenue, net of current portion

 17,822

 16,317

 Other long-term liabilities

 1,416

 1,506

 Total long-term liabilities

 20,516

 18,874

 COMMITMENTS AND CONTINGENCIES (NOTE Q)

 STOCKHOLDERS' EQUITY

 Preferred stock, $.01 par value; 1,000,000 shares authorized; nil shares issued and outstanding at December 31, 2024 and December 31, 2023

 -

 -

 Common stock, $.001 par value; 250,000,000 shares authorized; 175,696,311 and 185,627,383 shares issued at December 31, 2024 and 2023, respectively; 175,696,311 and 175,319,296 shares outstanding at December 31, 2024 and 2023, respectively

 Additional paid-in capital

 62,049

 63,993

 Accumulated deficit

 ( 34,081
)

 ( 35,032
)

 Accumulated other comprehensive loss

 ( 442
)

 ( 304
)

 Treasury stock, at cost, 0 and 10,308,087 shares at December 31, 2024 and December 31, 2023, respectively

 -

 ( 2,000
)

 Total stockholders' equity

 27,702

 26,843

 Total liabilities and stockholders' equity

 $
 82,938

 $
 75,757

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

 F- 4

 CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 (in thousands, except per share data)

 2024

 2023

 Revenues

 Managed IT systems and services

 $
 42,954

 $
 40,371

 Professional sales services

 Equipment sales and services

 2,478

 2,833

 Total revenues

 Cost of revenues

 Cost of managed IT systems and services

 25,349

 22,712

 Cost of professional sales services

 8,661

 7,021

 Cost of equipment sales and services

 Total cost of revenues

 34,717

 30,431

 Gross profit

 52,050

 50,593

 Operating expenses

 Selling, general and administrative

 48,984

 45,078

 Research and development

 Business combination transaction costs

 1,930

 Total operating expenses

 51,765

 46,398

 Operating income

 4,195

 Other (expense) income

 Interest and financing costs

 ( 4
)

 ( 50
)

 Interest and other income, net

 1,000

 Loss on disposal of fixed assets

 ( 4
)

 ( 4
)

 Total other income, net

 Income before income taxes

 1,277

 4,905

 Income tax expense

 ( 326
)

 ( 100
)

 4,805

 Other comprehensive income

 Foreign currency translation loss

 ( 138
)

 ( 71
)

 Comprehensive income

 $

 $
 4,734

 Income per common share

 - basic and diluted

 $
 0.01

 $
 0.03

 Weighted average common shares outstanding

 - basic

 175,395

 174,441

 - diluted

 175,594

 175,541

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

 F- 5

 CONSOLIDATED
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

 Other

 Total

 Common Stock

 Treasury Stock

 Additional

 Comprehensive

 Stockholders'

 Shares

 Amount

 Shares

 Amount

 Paid-in-Capital

 Deficit

 Loss

 Equity

 Balance at January 1, 2023

 185,436

 $

 ( 10,308
)

 $
 ( 2,000
)

 $
 63,952

 $
 ( 39,837
)

 $
 ( 233
)

 $
 22,067

 Share-based compensation

 -

 -

 -

 -

 Shares withheld for employee tax liability

 -

 -

 -

 -

 ( 6
)

 -

 -

 ( 6
)

 Foreign currency translation loss

 -

 -

 -

 -

 -

 -

 ( 71
)

 ( 71
)

 -

 -

 -

 -

 -

 4,805

 -

 4,805

 Balance at December 31, 2023

 185,627

 $

 ( 10,308
)

 $
 ( 2,000
)

 $
 63,993

 $
 ( 35,032
)

 $
 ( 304
)

 $
 26,843

 Balance at January 1, 2024

 185,627

 $

 ( 10,308
)

 $
 ( 2,000
)

 $
 63,993

 $
 ( 35,032
)

 $
 ( 304
)

 $
 26,843

 Retirement of treasury shares

 ( 10,308
)

 $
 ( 10
)

 10,308

 2,000

 $
 ( 1,990
)

 $
 -

 $
 -

 $
 -

 Share-based compensation

 -

 -

 -

 -

 -

 Shares withheld for employee tax liability

 -

 -

 -

 -

 ( 8
)

 -

 -

 ( 8
)

 Foreign currency translation loss

 -

 -

 -

 -

 -

 -

 ( 138
)

 ( 138
)

 -

 -

 -

 -

 -

 -

 Balance at December 31, 2024

 175,696

 $

 -

 $
 -

 $
 62,049

 $
 ( 34,081
)

 $
 ( 442
)

 $
 27,702

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

 F- 6

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 2024

 2023

 Cash flows from operating activities

 $

 $
 4,805

 Adjustments to reconcile net income to net cash provided by operating
 activities

 Depreciation and amortization

 Deferred income taxes

 Loss from investment in EECP Global

 Provision for credit losses and commission adjustments

 Write-off of Achari loan

 -

 Share-based compensation

 Changes in operating assets and liabilities:

 Accounts and other receivables

 ( 5,065
)

 2,062

 Due from related parties

 ( 365
)

 ( 498
)

 Inventories

 ( 22
)

 Deferred commission expense

 ( 373
)

 ( 36
)

 Prepaid expenses and other current assets

 ( 474
)

 ( 1,271
)

 Other assets, net

 ( 524
)

 ( 213
)

 Accounts payable

 1,511

 Accrued commissions

 ( 1,068
)

 Accrued expenses and other liabilities

 ( 1,549
)

 Sales tax payable

 ( 105
)

 Income taxes payable

 -

 Deferred revenue

 2,694

 1,397

 Due to related party

 -

 ( 10
)

 Other long-term liabilities

 ( 89
)

 Net cash provided by operating activities

 3,281

 5,296

 Cash flows from investing activities

 Purchases of equipment and software

 ( 1,453
)

 ( 731
)

 Loan to Achari

 ( 573
)

 -

 Purchases of short-term investments

 -

 ( 24,473
)

 Redemption of short-term investments

 13,756

 19,547

 Net cash provided by (used in) investing activities

 11,730

 ( 5,657
)

 Cash flows from financing activities

 Payroll taxes paid by withholding shares

 ( 8
)

 ( 6
)

 Repayment of notes payable and finance lease obligations

 ( 81
)

 ( 128
)

 Net cash used in financing activities

 ( 89
)

 ( 134
)

 Effect of exchange rate differences on cash and cash equivalents

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

 14,929

 ( 479
)

 Cash and cash equivalents - beginning of year

 11,342

 11,821

 Cash and cash equivalents - end of year

 $
 26,271

 $
 11,342

 SUPPLEMENTAL DISCLOSURE OF CASH INFORMATION

 Interest paid

 $

 $

 Income taxes paid

 $

 $

 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

 Initial recognition of operating lease right of use asset and liability

 $
 1,389

 $
 1,174

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

 F- 7

 NOTES

 NOTE A – DESCRIPTION OF BUSINESS

 Vaso Corporation was incorporated
in Delaware in July 1987. For most of its history, the Company was a single-product company designing, manufacturing, marketing and servicing
its proprietary Enhanced External Counterpulsation, or EECP,
therapy systems, mainly for the treatment of angina. In 2010 it began to diversify its business operations. The Company changed its name
to Vaso Corporation in 2016 to more accurately reflect the diversified nature of its business mixture, and continues to use the original
name VasoMedical for its proprietary medical device subsidiary. 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
("the "Company") principally operates in three distinct business segments in the healthcare equipment 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.
 ("VasoTechnology") 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 Technologies, Inc.
 ("GEHC") into the health 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"). VasoTechnology currently consists of a managed network and security service
division, NetWolves, and a healthcare IT application VAR (value added reseller) division, VasoHealthcare IT.

 In June 2014, the Company
began its IT segment business by executing the Value Added Reseller Agreement ("VAR Agreement") with GEHC to become a national
value added reseller of GEHC Digital's software solutions such as Picture Archiving and Communication System ("PACS"),
Radiology Information System ("RIS"), and related services, including implementation, training, management and support. This
business focuses primarily on customer segments currently served by VasoHealthcare on behalf of GEHC. A new wholly owned subsidiary, VasoHealthcare
IT Corp. ("VHC IT"), was formed to conduct the healthcare IT business. The VAR Agreement with GEHC was terminated in 2021.

 In May 2015, the Company further
expanded its IT segment business by acquiring NetWolves. NetWolves designs and delivers multi-network and multi-technology solutions as
a managed network provider, and provides a complete single-source solution that includes design, network redundancy, application device
management, real-time network monitoring, reporting and support systems as a comprehensive solution.

 VasoHealthcare

 In May 2010, the Company launched
its Professional Sales Service business through a wholly-owned subsidiary Vaso Diagnostics, Inc. d/b/a VasoHealthcare, which was appointed
by GEHC as its exclusive representative for the sale of select GEHC diagnostic imaging equipment to specific market segments in the 48
contiguous states of the United States and the District of Columbia. The original agreement ("GEHC Agreement") has been extended
several times and currently expires December 31, 2026, subject to earlier termination under certain conditions. The scope of the agreement
was expanded in 2023 to include ultrasound systems.

 F- 8

 VasoMedical

 The proprietary medical equipment
business under VasoMedical traces back to 1995 when the Company began the proprietary Enhanced External Counterpulsation (EECP)
technology in the United States and has since diversified to include other medical hardware and software. Vasomedical Global was formed
in 2011 to combine and coordinate the various international operations including design, development, manufacturing, and sales of medical
devices and software, while domestic activities are conducted under Vasomedical Solutions.

 Over the last 10+ years the
Company's Equipment business has been significantly expanded from the original EECP -only operations. In September
2011, the Company acquired Fast Growth Enterprises Limited ("FGE"), a British Virgin Islands company, which owned or controlled
two Chinese operating companies - Life Enhancement Technology Ltd. ("LET") and Biox Instruments Co. Ltd. ("Biox")
- to expand its technical and manufacturing capabilities and to enhance its distribution network, technology, and product portfolio.
Biox was a variable interest entity ("VIE") controlled by FGE through certain contracts and an option to acquire all the
shares of Biox by FGE's wholly owned subsidiary Gentone. In March 2019 Gentone exercised its option to acquire all of the shares
of Biox. In August 2014, the Company, through Gentone, acquired all of the outstanding shares of Genwell Instruments Co. Ltd. ("Genwell"),
which was formed in China in 2010 to develop the MobiCare wireless multi-parameter patient monitoring system and holds
intellectual property rights for this system. As a result, the Company has expanded its equipment products portfolio to include Biox
series ambulatory patient monitoring systems, ARCS series cloud-based software and algorithm for ECG and blood pressure
monitoring and analysis, and the MobiCare patient monitoring device.

 In April 2014, the Company
entered into a cooperation agreement with Chongqing PSK-Health Sci-Tech Development Co., Ltd. ("PSK") of Chongqing, China,
the leading manufacturer of external counter pulsation, or ECP, therapy systems in China, to form a joint venture company, VSK Medical
Limited ("VSK"), a Cayman Islands company, for the global marketing, sale and advancement of ECP therapy technology. The Company
owned 49.9 % of VSK, which commenced operations in January 2015. In March 2018, the Company terminated the cooperation agreement with PSK
and sold its shares in VSK to PSK. On May 20, 2020, the Company closed on the sale of 51 % of the capital stock of its wholly-owned subsidiary
EECP Global Corporation ("EECP Global") to PSK. EECP Global was formed in September 2019 to hold all the assets and liabilities
of its EECP business. Concurrently with the closing of the transaction, the Company signed a Management Service Agreement with EECP Global
to provide management service for the business and operation of EECP Global in the United States. The agreement provides an initial term
of three years starting April 1, 2020, the effective date of the sale, which is automatically renewable for additional one-year terms.
Pursuant to the agreement, EECP Global reimburses the Company all direct expenses and pays a monthly management fee during the term of
the agreement.

 Termination of Achari Business
Combination Agreement

 As previously disclosed,
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"), and Achari Merger Sub, Inc., a
Delaware corporation and a wholly owned subsidiary of Achari. On September 17, 2024, Vaso provided to Achari a notice of termination
of the Business Combination Agreement. Business combination transaction costs presented in the Consolidated Statements of Operations
and Comprehensive Income include investment banking and other advisory and legal costs incurred associated with the Business
Combination Agreement, as well as the write-off of $ 508,000 in transaction costs capitalized in 2024.

 F- 9

 NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 A summary of the significant
accounting policies consistently applied in the preparation of the consolidated financial statements are as follows:

 Principles of Consolidation

 The consolidated financial
statements include the accounts of Vaso Corporation, its wholly-owned subsidiaries, and the accounts of the companies over which we exercise
control. Significant intercompany balances and transactions have been eliminated.

 Use of Estimates

 The preparation of consolidated
financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP")
requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying
notes. Significant estimates and assumptions relate to estimates of commission adjustments due to order cancellations, collectability
of accounts receivable, the realizability of deferred tax assets, stock-based compensation, values and lives assigned to acquired intangible
assets, fair value of reporting units in connection with goodwill impairment test, the adequacy of inventory reserves, variable consideration,
and allocation of contract transaction price to performance obligations. Actual results could differ from those estimates.

 Revenue Recognition

 In May 2014, the FASB issued
ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Under the standard, revenue is recognized when a customer obtains control
of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or
services. ASU 2014-09 replaced most existing revenue recognition guidance in U.S. GAAP. The new standard introduces a five-step process
to be followed in determining the amount and timing of revenue recognition. It also provides guidance on accounting for costs incurred
to obtain or fulfill contracts with customers, and establishes disclosure requirements which are more extensive than those required under
prior U.S. GAAP. Generally, we recognize revenue under Topic 606 for each of our performance obligations either over time (generally,
the transfer of a service) or at a point in time (generally, the transfer of a good) as follows:

 VasoTechnology

 Revenue relating to
recurring managed network and voice services provided by NetWolves, for which the customer has unlimited access to such services throughout
the contract term, are thus recognized as provided on a monthly basis ("over time"). Non-recurring charges related to the
provision of such services are recognized in the period provided ("point in time"). In the IT VAR business, software system
installations are recognized upon verification of installation and expiration of an acceptance period ("point in time"). Monthly
post-implementation customer support – a stand-ready obligation of the Company to provide maintenance services if and when needed
- provided under such installations, as well as software solutions offered under a monthly Software as a Service ("SaaS")
fee basis, for which the customer has unlimited access to such services throughout the contract term, are thus recognized monthly over
the contract term ("over time").

 F- 10

 VasoHealthcare

 Commission revenue
is recognized when the underlying equipment has been delivered by GEHC and accepted at the customer site in accordance with the terms
of the specific sales agreement ("point in time").

 VasoMedical

 In the United States,
we recognized revenue from the sale of our medical equipment in the period in which we deliver the product to the customer ("point
in time"). Revenue from the sale of our medical equipment to international markets is recognized upon shipment of the product to
a common carrier, as are supplies, accessories and spare parts delivered in both domestic and international markets ("point in time").
Revenue from the provision of ARCS under a monthly SaaS fee basis, for which the customer has unlimited access to such
services throughout the contract term, are thus recognized monthly over the contract term ("over time"). The Company also
recognizes revenue from the maintenance of its medical products either on a time and material as-billed basis ("point in time")
or through the sale of a service contract, where revenue is recognized ratably over the contract term ("over time").

 Disaggregation of Revenue

 The following tables present revenues disaggregated
by our business operations and timing of revenue recognition:

 Year Ended December 31, 2024

 Year Ended December 31, 2023

 sales
 service

 sales
 service

 IT segment

 Total

 IT segment

 Total

 Network services

 $
 38,357

 $
 -

 $
 -

 $
 38,357

 $
 35,673

 $
 -

 $
 -

 $
 35,673

 Software sales and support

 4,597

 -

 -

 4,597

 4,698

 -

 -

 4,698

 Commissions

 -

 -

 -

 -

 Medical equipment sales

 -

 -

 2,355

 2,355

 -

 -

 2,708

 2,708

 Medical equipment service

 -

 -

 -

 -

 $
 42,954

 $

 $
 2,478

 $

 $
 40,371

 $

 $
 2,833

 $

 Year Ended December 31, 2024

 Year Ended December 31, 2023

 sales
 service

 sales
 service

 IT segment

 Total

 IT segment

 Total

 Revenue recognized over time

 $
 36,737

 $
 -

 $

 $
 37,119

 $
 37,223

 $
 -

 $

 $
 37,823

 Revenue recognized at a point in time

 6,217

 2,096

 49,648

 3,148

 2,233

 43,201

 $
 42,954

 $

 $
 2,478

 $

 $
 40,371

 $

 $
 2,833

 $

 F- 11

 Transaction Price Allocated
to Remaining Performance Obligations

 As of December 31, 2024, the
aggregate amount of transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) for executed
contracts approximates $ 104 million, of which we expect to recognize revenue as follows:

 Fiscal years of revenue recognition

 2025

 2026

 2027

 Thereafter

 Unfulfilled performance obligations

 $
 45,844

 $
 20,068

 $
 6,652

 $
 31,619

 As of December 31, 2023, the
aggregate amount of transaction price allocated to performance obligations that were unsatisfied (or partially unsatisfied) for executed
contracts approximated $ 95 million.

 Contract Balances

 Contract receivables include
trade receivables, net and long-term receivables (recorded in Other assets in the consolidated balance sheets). Contract liabilities arise
in our IT, VasoHealthcare, and VasoMedical businesses. In our VHC IT business, payment arrangements with clients typically include an
initial payment due upon contract signing and milestone-based payments based upon product delivery and go-live, as well as post go-live
monthly payments for subscription and support fees. Customer payments received, or receivables recorded, in advance of go-live and customer
acceptance, where applicable, are deferred as contract liabilities. Such amounts aggregated approximately $ 178,000 and $ 419,000 at December
31, 2024 and 2023, respectively, and are included in accrued expenses and other liabilities in our consolidated balance sheets.

 In our VasoHealthcare business,
we bill a portion of commissions on the orders we booked in advance of delivery of the underlying equipment. Such amounts aggregated approximately
$ 34,893,000 and $ 32,194,000 at December 31, 2024 and 2023, respectively, and are classified in our consolidated balance sheets into current
or long-term deferred revenue net of estimated commission adjustments. In addition, we record a contract liability for amounts expected
to be credited back to GEHC due to customer order reductions. Such amounts aggregated approximately $ 935,000 and $ 971,000 at December
31, 2024 and 2023, respectively, and are included in accrued expenses and other liabilities in our 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
$ 4,000 and $ 6,000 at December 31, 2024 and 2023, respectively, and are classified in our consolidated balance sheets as either current
or long-term deferred revenue.

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

 2024

 2023

 Contract receivables - January 1

 13,398

 15,306

 Contract receivables - December 31

 18,260

 13,398

 Increase (decrease)

 4,862

 ( 1,908
)

 Contract liabilities - January 1

 33,589

 33,861

 Contract liabilities - December 31

 36,007

 33,589

 Increase (decrease)

 2,418

 ( 272
)

 The increase in contract receivables
and liabilities in 2024 is due primarily to higher orders in our VasoHealthcare business. During the years ended December 31, 2024 and
2023, we recognized approximately $ 8.7 million and $ 9.2 million, respectively, of revenues that were included in our contract liability
balance at the beginning of such periods.

 F- 12

 Costs to Obtain or Fulfill
a Contract

 Topic 606 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 $ 2,808,000 and $ 2,561,000 of amortization related to
these sales commission assets in "Cost of professional sales services" in 2024 and 2023, respectively, and approximately $ 54,000
and $ 75,000 of amortization in "Selling, general and administrative" expense in 2024 and 2023, respectively, in our consolidated
statements of operations and comprehensive income.

 At December 31, 2024 and 2023,
our consolidated balance sheets include approximately $ 7,698,000 and $ 7,106,000, respectively, in capitalized sales commissions - primarily
in our professional sales services segment - to be expensed in future periods, of which $ 3,659,000 and $ 3,285,000, respectively, is recorded
in deferred commission expense and $ 4,039,000 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 recognized changes in
revenue associated with revisions to variable consideration for previously completed performance obligations were minimal for the years
ended December 31, 2024 and 2023.

 The Company also records commission
adjustments to contract liabilities in its professional sales service segment based on estimates of future order cancellations. Such cancellations
also result in adjustments to the related capitalized cost to obtain or fulfill a contract.

 Shipping and Handling Costs

 All shipping and handling
expenses are charged to cost of sales. Amounts billed to customers related to shipping and handling costs are included as a component
of sales.

 Research and Development

 Research and development costs
attributable to development are expensed as incurred.

 F- 13

 Share-Based Compensation

 The Company complies with
ASC Topic 718, "Compensation – Stock Compensation" ("ASC 718"), which requires all companies to recognize
the cost of services received in exchange for equity instruments to be recognized in the financial statements based on their grant date
fair values. The Company applies an estimated forfeiture rate to the grant date fair value to determine the annual compensation cost of
share-based payment arrangements with employees. The forfeiture rate is estimated based primarily on job title and prior forfeiture experience.
The Company did not grant any awards to non-employees during the years ended December 31, 2024 and 2023.

 During the year ended December
31, 2024, the Company granted 150,000 restricted shares of common stock valued at $ 19,500 to a director. The shares vested immediately.
The total fair value of shares vested during the year ended December 31, 2024 was $ 26,000 for directors and officers and $ 34,000 for employees.
The weighted average grant date fair value of shares granted during the year ended December 31, 2024 was $ 0.13 per share, based on the
closing price as of the grant date.

 During the year ended December
31, 2023, the Company granted 225,000 restricted shares of common stock valued at $ 50,000 to employees. The shares vest over five years
from the grant date. The total fair value of shares vested during the year ended December 31, 2023 was $ 27,000 for officers and $ 24,000
for employees. The weighted average grant date fair value of shares granted during the year ended December 31, 2023 was $ 0.22 per share,
based on the closing price as of the grant date.

 The Company did not grant
any stock options during the years ended December 31, 2024 or 2023, nor were any options exercised during such periods. No options were
outstanding at December 31, 2024 or 2023.

 Share-based compensation expense
recognized for the years ended December 31, 2024 and 2023 was $ 54,000 and $ 48,000, respectively, and is recorded in selling, general,
and administrative and research and development expense in the consolidated statements of operations and comprehensive income. Unrecognized
expense related to existing share-based compensation and arrangements is approximately $ 79,000 at December 31, 2024 and will be recognized
over a weighted-average period of approximately 34 months.

 Cash and Cash Equivalents

 Cash and cash equivalents
represent cash and short-term, highly liquid investments either in certificates of deposit, U.S. 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.

 Short-term investments

 The Company's short-term investments
consist of six-month U.S. Treasury bills and bank deposits with yields based on underlying debt and equity securities. The Company had
no short-term investments at December 31, 2024. The U.S. Treasury bills are classified as held-to-maturity and are carried at amortized
cost of approximately $ 13,555,000, including approximately $ 216,000 in accrued interest, at December 31, 2023. Their fair value at December
31, 2023 was approximately $ 13,559,000 and the unrecognized holding gain is $ 4,000 for the year ended December 31, 2023. The bank deposits
were carried at fair value of approximately $424,000 at December 31, 2023 and were classified as available-for-sale. Realized gains or losses
on the bank deposits are included in net income.

 Financial Instruments

 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.

 F- 14

 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 December 31, 2024 and 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 December 31, 2024 and 2023:

 Quoted Prices

 in Active

 Markets for

 Identical Assets

 Significant
 Other
 Observable

 Inputs

 Significant

 Unobservable

 Inputs

 Balance

 as of

 (Level 1)

 (Level 2)

 (Level 3)

 2024

 Assets

 Cash equivalents invested in money market funds and treasury bills

 $
 24,859

 $
 -

 $
 -

 $
 24,859

 Quoted Prices
 in Active
 Markets for
 Identical Assets

 Significant
 Other
 Observable
 Inputs

 Significant
 Unobservable
 Inputs

 Balance
 as of

 (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)

 $
 10,946

 $
 -

 $
 -

 $
 10,946

 F- 15

 Accounts Receivable, net

 The Company's
accounts receivable are due from customers to whom we sell our products and services, distributors engaged in the distribution of
our products and from GEHC. Credit is extended based on evaluation of a customer's financial condition and, generally,
collateral is not required. Accounts receivable are generally due 30 to 90 days from shipment and services provided and are stated
at amounts due from customers net of allowances for credit losses, returns, term discounts and other allowances. Accounts that are
outstanding longer than the contractual payment terms are considered past due. Estimates are used in determining the allowance for
credit losses based on the Company's historical collections experience, current trends and future economic conditions, credit policy and a percentage of its
accounts receivable by aging category. In determining these percentages, the Company reviews historical write-offs of its
receivables. The Company also looks at the credit quality of its customer base as well as changes in its credit policies. The
Company continuously monitors collections and payments from our customers, and writes off receivables when all efforts at collection
have been exhausted. While credit losses have historically been within expectations and the provisions established, the Company
cannot guarantee that it will continue to experience the same credit loss rates that it has in the past.

 The changes in the Company's
allowance for doubtful accounts and commission adjustments are as follows:

 2024

 2023

 Beginning Balance

 $
 9,708

 $
 6,947

 Provision for losses on accounts receivable

 Direct write-offs, net of recoveries

 ( 204
)

 ( 60
)

 Commission adjustments

 2,755

 Ending Balance

 $
 10,708

 $
 9,708

 Concentrations of Credit Risk

 We market our equipment and
IT software solutions principally to hospitals, diagnostic imaging centers and physician private practices. We perform credit evaluations
of our customers' financial condition and, as a result, believe that our receivable credit risk exposure is limited. For the years
ended December 31, 2024 and 2023, no customer in our equipment or IT segment accounted for 10% or more of revenues or accounts receivable.
In our professional sales service segment, 100 % of our revenues and accounts receivable are with GEHC; however, we believe this risk is
acceptable based on GEHC's financial position and our long history of doing business with GEHC.

 The Company maintains cash
balances in certain U.S. financial institutions which exceed the Federal Depository Insurance Corporation ("FDIC") coverage
of $ 250,000 by approximately $ 9,001,000. The Company has not experienced any losses on these accounts and believes it is not subject
to any significant credit risk on these accounts. In addition, the FDIC does not insure the Company's foreign bank balances, which
aggregated approximately $ 592,000 and $ 467,000 at December 31, 2024 and 2023, respectively.

 Inventories

 The Company values inventories
in the equipment segment at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis. The
Company regularly reviews inventory quantities on hand, particularly raw materials and components, and records a provision for excess
and slow moving inventory based primarily on existing and anticipated design and engineering changes to its products as well as forecasts
of future product demand.

 In our IT Segment, we purchase
computer hardware and software for specific customer requirements and value such inventories using the specific identification method.

 F- 16

 Property and Equipment

 Property and equipment, including
assets under finance leases, are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized and
minor replacements, maintenance and repairs are charged to expense as incurred. Upon retirement or disposal of assets, the cost and related
accumulated depreciation are removed from the consolidated balance sheets. Depreciation is expensed over the estimated useful lives of
the assets, which range from two to eight years, on a straight-line basis. Accelerated methods of depreciation are used for tax purposes.
We amortize leasehold improvements over the useful life of the related leasehold improvement or the life of the related lease, whichever
is less.

 Impairment of Long-lived Assets

 The Company reviews the recoverability
of all long-lived assets, including the related useful lives, whenever events or changes in circumstances indicate that the carrying amount
of a long-lived asset might not be recoverable. If required, the Company compares the estimated fair value determined by either the undiscounted
future net cash flows or appraised value to the related asset's carrying value to determine whether there has been an impairment.
If an asset is considered impaired, the asset is written down to fair value, which is based either on discounted cash flows or appraised
values in the period the impairment becomes known. No assets were determined to be impaired as of December 31, 2024 and 2023.

 Goodwill and Intangible Assets

 Goodwill represents the excess
of cost over the fair value of net assets of businesses acquired. The Company accounts for goodwill under the guidance of the ASC Topic
350, "Intangibles: Goodwill and Other". Goodwill acquired in a purchase business combination and determined to have an indefinite
useful life is not amortized, but instead tested for impairment, at least annually, in accordance with this guidance. The recoverability
of goodwill is subject to an annual impairment test or whenever an event occurs or circumstances change that would more likely than not
result in an impairment. The impairment test is based on the estimated fair value of the underlying businesses and performed in the fourth
quarter of each year.

 We perform either a quantitative
or qualitative assessment to assess if the fair value of the respective reporting unit exceeds its carrying value. The qualitative goodwill
impairment assessment requires evaluating factors to determine whether it is more likely than not that the fair value of a reporting unit
is less than its carrying amount. As part of our goodwill qualitative assessment process for our two applicable reporting units, when
utilized, we evaluate various factors that are specific to the reporting unit as well as industry and macroeconomic factors in order to
determine whether it is reasonably likely to have a material impact on the fair value of our reporting units. Examples of the factors
that are considered include the results of the most recent impairment test, current forecasts, and changes in the strategic outlook or
organizational structure of the reporting units. The financial forecasts of the reporting units are compared to the forecasts used in
the prior year analysis to determine if management expectations for the business have changed.

 When performing the quantitative
assessment to calculate the fair value of a reporting unit, we consider both comparative market multiples as well as estimated discounted
cash flows for the reporting unit. The significant estimates and assumptions include, but are not limited to, revenue growth rates, operating
margins, and future economic and market conditions. The discount rates are based upon industry weighted average cost of capital ranges.
As a supplement, we conduct additional sensitivity analysis to assess the risk for potential impairment based upon changes in the key
assumptions such as the discount rate, expected long-term growth rate, and cash flow projections. Based upon the completion of our annual
test as of December 31, 2024 and 2023, we determined that there was no impairment of goodwill and that the applicable reporting units'
estimated fair values were substantially in excess of their carrying amounts.

 F- 17

 I ntangible
assets consist of the value of customer contracts and relationships, patent and technology costs, and software. The cost of significant
customer-related intangibles is amortized in proportion to estimated total related revenue; cost of other intangible assets is generally
amortized on a straight-line basis over the asset's estimated economic life, which range from five to ten years. T he
Company capitalizes internal use software development costs incurred during the application development stage. Costs related to preliminary
project activities, training, data conversion, and post implementation activities are expensed as incurred. The Company capitalized $ 570,000
and $ 253,000 in software development costs for the years ended December 31, 2024 and 2023, respectively. No intangible assets were determined
to be impaired as of December 31, 2024 and 2023.

 Deferred Revenue

 Amounts billable under the
agreement with GEHC in advance of delivery of the underlying equipment are recorded initially as deferred revenue, and commission revenue
is subsequently recognized as customer acceptance of such equipment is reported to us by GEHC. Similarly, commissions payable to our sales
force related to such billings are recorded as deferred commission expense when the associated deferred revenue is recorded. Commission
expense is recognized when the corresponding commission revenue is recognized.

 In our equipment segment,
we record revenue on extended service contracts ratably over the term of the related service contracts.

 Income Taxes

 Deferred income taxes are
recognized for temporary differences between financial statement and income tax bases of assets and liabilities and loss carry-forwards
for which income tax benefits are expected to be realized in future years. A valuation allowance is established, when necessary, to reduce
deferred tax assets to the amount expected to be realized. In estimating future tax consequences, we generally consider all expected future
events other than an enactment of changes in the tax laws or rates. Deferred tax assets are continually evaluated for the expected realization.
To the extent our judgment regarding the realization of the deferred tax assets changes, an adjustment to the allowance is recorded, with
an offsetting increase or decrease, as appropriate, in income tax expense. Such adjustments are recorded in the period in which our estimate
as to the realization of the assets changed that it is "more likely than not" that all of the deferred tax assets will be
realized. The "realization" standard is subjective and is based upon our estimate of a greater than 50 % probability that the
deferred tax asset can be realized.

 The Company also
complies with the provisions of ASC Topic 740, "Income Taxes", which prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a
tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by the
relevant taxing authority based on the technical merits. The tax benefit recognized is measured as the largest amount of benefit
that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority.
Derecognition of a tax benefit previously recognized results in the Company recording a tax liability that reduces ending retained
earnings. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as
of December 31, 2024 and 2023. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income
tax expense. No amounts were accrued for the payment of interest and penalties at December 31, 2024 and 2023. Generally, the Company
is no longer subject to income tax examinations by major domestic taxing authorities for years before 2020. Under the China tax
regulatory framework, there is no statute of limitations on examination of tax filings by tax authorities. However, we understand
that the general practice of the China tax regulatory authority is to audit going back no more
than five years. Management is currently unaware of any issues under review that could result in
significant payments, accruals or material deviations from its position.

 Foreign Currency Translation Gain (Loss) and
Comprehensive Income

 When the Company
operates in a foreign jurisdiction that has a functional currency other than the U.S. dollar, the value of foreign denominated
assets and liabilities are translated into US dollars using published exchange rates in effect at the consolidated balance sheet
date. Equity accounts are translated at historical rates except for the changes in accumulated deficit during the year as
the result of the income statement translation process. Revenues and expenses and cash flows are translated using a weighted average
exchange rate for the period. Resulting translation adjustments are recorded as a component of accumulated other
comprehensive income (loss) on the accompanying consolidated balance sheets. For the years ended December 31, 2024 and
2023, other comprehensive income includes losses of $ 138,000 and $ 71,000, respectively, which were entirely from foreign currency
translation loss.

 F- 18

 Net Income Per Common Share

 Basic income per common share
was computed based on the weighted average number of common shares outstanding, including vested restricted shares, without inclusion
of potentially dilutive common stock. Diluted earnings per common share is based on the weighted average number of common and potential
dilutive common shares outstanding.

 Diluted
earnings per share were computed based on the weighted average number of common shares outstanding, including vested restricted shares,
plus all potentially dilutive common shares. A reconciliation of basic to diluted shares used in the earnings per share calculation
is as follows:

 2024

 2023

 Basic weighted average shares outstanding

 175,395

 174,441

 Dilutive effect of unvested restricted shares

 1,100

 Diluted weighted average shares outstanding

 175,594

 175,541

 No common stock equivalents
were excluded from the computation of diluted earnings per share for the years ended December 31, 2024 and 2023.

 Reclassifications

 Certain
SG&A costs in 2023 were reclassified to business combination transaction costs within the Consolidated Statements of Operations and
Comprehensive Income to conform with the current year presentation.

 Recently Adopted Accounting Standards

 The Company adopted ASU 2023-07,
Segment Reporting (Topic 280), Improvement to Reportable Segment Disclosures as of December 31, 2024. This ASU, which requires retrospective
application, is effective for annual reporting periods beginning with the year ended December 31, 2024, and interim periods beginning
with the three months ending March 31, 2025. It requires additional disclosure of significant reportable segment expenses that are regularly
provided to the chief operating decision-maker ("CODM") and included within the Company's measure of segment profit or loss.
Such additional disclosures are included within Note C of the Consolidated Financial Statements.

 Recently Issued Accounting Standards To Be Adopted

 The Company continually assesses
any new accounting pronouncements to determine their applicability to the Company. Where it is determined that a new accounting pronouncement
affects the Company's financial reporting, the Company undertakes a study to determine the consequence of the change to its financial
statements and assures that there are proper controls in place to ascertain that the Company's consolidated financial statements
properly reflect the change. New pronouncements assessed by the Company recently are discussed below:

 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 2024, the
FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation
of Income Statement Expenses, which requires disclosure of disaggregated information about certain income statement line items in the
notes to the financial statements. The ASU is effective for annual reporting periods beginning with the year ending December 31, 2027.
Early adoption is permitted. The Company is currently evaluating the impact of adopting this standard on its Consolidated Financial Statements.

 NOTE C – SEGMENT REPORTING

 The Company operates its
business in three segments – the IT segment, the professional sales service segment, and the equipment segment. The IT segment
includes the operations of NetWolves and VasoHealthcare IT Corp. The professional sales service segment operates through the
VasoHealthcare subsidiary and is currently engaged solely in the fulfillment of the Company's responsibilities under our
agreement with GEHC. The equipment segment is engaged in designing, manufacturing, marketing and supporting of proprietary medical
devices and software, as well as managing the domestic business of EECP per a management service agreement with EECP
Global.

 F- 19

 Vaso

 NOTES

 For

 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 (earnings before interest, taxes, depreciation and amortization – defined
as net (loss) income, plus net interest expense (income), tax expense, depreciation and amortization, and non-cash expenses for share-based
compensation). Administrative functions such as finance and human resources 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:

 2024

 2023

 Revenues from external customers

 IT

 $
 42,954

 $
 40,371

 2,478

 2,833

 Total revenues

 $

 $

 Gross Profit

 IT

 $
 17,605

 $
 17,659

 32,674

 30,799

 1,771

 2,135

 Total gross profit

 $
 52,050

 $
 50,593

 Significant segment expenses

 Selling, general & administrative

 IT

 $
 19,296

 $
 18,035

 25,846

 23,604

 2,273

 1,921

 1,569

 1,518

 Total selling, general and administrative

 $
 48,984

 $
 45,078

 Other segment items

 IT

 $

 $

 1,930

 Total other segment items

 $
 2,781

 $
 1,320

 Operating income (loss)

 IT

 $
 ( 1,760
)

 $
 ( 466
)

 6,828

 7,195

 ( 1,284
)

 ( 451
)

 ( 3,499
)

 ( 2,083
)

 Total operating income

 $

 $
 4,195

 Depreciation and amortization

 IT

 $

 $

 -

 -

 Total depreciation and amortization

 $

 $

 Capital expenditures

 IT

 $

 $

 -

 -

 Total capital expenditures

 $
 1,452

 $

 F- 20

 Vaso

 NOTES

 For

 2024

 2023

 Identifiable Assets

 IT

 $
 23,798

 $
 22,425

 23,846

 18,955

 6,639

 7,114

 28,655

 27,263

 Total
 assets

 $
 82,938

 $
 75,757

 Other
segment items include research and development costs and business combination transaction costs. For the years ended December 31, 2024
and 2023, GEHC accounted for 48 % and 47 % of revenue, respectively. Also, GEHC accounted for $ 13.1 million, or 77 %, and $ 9.3 million,
or 75 %, of accounts and other receivables at December 31, 2024 and 2023, respectively. The equity method investment in EECP Global of $ 436,000 and $ 683,000 at December 31, 2024 and 2023, respectively,
is held in the equipment segment.

 Our
revenues were derived from the following geographic areas:

 2024

 2023

 Domestic (United States)

 $
 84,699

 $
 78,843

 Non-domestic (foreign)

 2,068

 2,181

 $

 $

 NOTE D –
ACCOUNTS AND OTHER RECEIVABLES

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

 2024

 2023

 Trade receivables

 $
 27,707

 $
 22,085

 Allowance for credit losses and commission adjustments

 ( 10,708
)

 ( 9,708
)

 Accounts and other receivables, net

 $
 16,999

 $
 12,377

 Trade
receivables include amounts due for shipped products and services rendered. Amounts currently due 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 estimated future changes in sales order amounts that may reduce the amount the Company will ultimately
receive under the GEHC Agreement.

 F- 21

 Vaso

 NOTES

 For

 NOTE E –
INVENTORIES

 Inventories,
net of reserves, consisted of the following:

 2024

 2023

 Raw materials

 $

 $

 Work in process

 Finished goods

 $

 $
 1,470

 At
December 31, 2024 and 2023, the Company maintained reserves for slow moving inventories of $ 170,000 and $ 164,000, respectively.

 NOTE
F – PROPERTY AND EQUIPMENT

 Property
and equipment is summarized as follows:

 (in

 31,

 2024

 31,

 2023

 Office, laboratory and other
 equipment

 $
 2,589

 $
 2,084

 Equipment furnished for customer use

 8,452

 8,233

 Right of use assets - finance leases

 1,116

 1,116

 Furniture and fixtures

 12,256

 11,532

 Less: accumulated
 depreciation and amortization

 ( 10,712
)

 ( 10,358
)

 Property and equipment,
 net

 $
 1,544

 $
 1,174

amortization of right of use ("ROU") assets under finance leases aggregated approximately $ 1,015,000 and $ 951,000 at December
31, 2024 and 2023, respectively. Depreciation expense amounted to approximately $ 463,000 and $ 635,000 for the years ended December 31,
2024 and 2023, respectively. Amortization of ROU assets under finance leases is included in depreciation expense.

 NOTE
G – GOODWILL AND OTHER INTANGIBLES

 Goodwill
of $ 14,375,000 is attributable to the NetWolves reporting unit within the IT segment. The remaining $ 1,176,000 of goodwill is attributable
to the FGE reporting unit within the Equipment segment. The changes in the carrying amount of goodwill are as follows:

 (in

 31,

 2024

 31,

 2023

 Beginning of period

 $
 15,588

 $
 15,614

 currency translation adjustment

 ( 37
)

 ( 26
)

 End of period

 $
 15,551

 $
 15,588

 F- 22

 Vaso

 NOTES

 For

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

 (in

 31,

 2024

 31,

 2023

 Customer-related

 Costs

 $
 5,831

 $
 5,831

 amortization

 ( 4,987
)

 ( 4,790
)

 1,041

 Patents and Technology

 Costs

 1,894

 1,894

 amortization

 ( 1,894
)

 ( 1,894
)

 -

 -

 Software

 Costs

 3,188

 2,618

 amortization

 ( 2,417
)

 ( 2,253
)

 $
 1,615

 $
 1,406

 The
Company owns, through our Chinese subsidiaries, thirty-five invention and utility patents that expire at various times through 2041,
as well as twenty-two software copyright certificates in China related to proprietary technologies in physiological data acquisition, analysis
and reporting. Costs incurred for submitting the applications to the United States Patent and Trademark Office or other foreign authorities
for these patents have been capitalized. Patent and technology costs are being amortized using the straight-line method over 10 -year
and 8 -year lives, respectively. The Company begins amortizing patent costs once a filing receipt is received stating the patent serial
number and filing date from the Patent Office or other foreign authority. 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 approximately $ 361,000 for both the years ended December 31, 2024 and 2023. Amortization of intangibles for the next
five years is:

 Years
 ending December 31,

 (in

 2025

 2026

 2027

 2028

 2029

 $
 1,368

 F- 23

 Vaso

 NOTES

 For

 NOTE
H – OTHER ASSETS

 Other
assets consist of the following:

 2024

 2023

 Deferred commission expense - noncurrent

 $
 4,039

 $
 3,821

 Trade receivables - noncurrent

 1,261

 1,021

 Other, net of allowance for loss on loan receivable of $ 412 at December 31, 2024 and 2023

 $
 5,358

 $
 4,902

 NOTE
I – DEFERRED REVENUE

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

 (in

 Year
 ended December 31,

 2024

 2023

 Deferred revenue at beginning of
 period

 $
 32,200

 $
 30,803

 Net additions:

 Deferred extended service
 contracts

 ( 2
)

 Deferred commission
 revenues

 16,125

 15,064

 Recognized as revenue:

 Deferred extended service
 contracts

 ( 3
)

 ( 4
)

 Deferred
 commission revenues

 ( 13,426
)

 ( 13,665
)

 Deferred revenue at end of period

 34,894

 32,200

 Less:
 current portion

 17,072

 15,883

 Long-term deferred revenue
 at end of period

 $
 17,822

 $
 16,317

 NOTE J –
ACCRUED EXPENSES AND OTHER LIABILITIES

 Accrued
expenses and other liabilities consist of the following:

 (in

 31,
 2024

 31,
 2023

 Accrued compensation

 $
 3,141

 $
 2,482

 Accrued expenses - other

 2,933

 2,142

 Order reduction liability

 Other liabilities

 1,242

 1,770

 $
 8,251

 $
 7,365

 NOTE
K – NOTES PAYABLE AND REVOLVING CREDIT AGREEMENT

 Notes
payable consists of the following:

 (in

 31,
 2024

 31,
 2023

 Notes payable

 Less:
 current portion

 ( 6
)

 ( 9
)

 $
 -

 $

 Notes
payable consists of a vehicle loan. The note is secured by the vehicle, bears interest at 1.9 % per annum and matures in August 2025.

 F- 24

 Vaso

 NOTES

 For

 On
December 30, 2022, the Company executed a $ 3.0 million revolving credit agreement with a lending institution. Advances under the agreement
bear interest at Wall Street Journal Prime Rate and are secured by substantially all of the assets of the Company. The agreement expired
August 31, 2023 and has undergone subsequent renewals through July 31, 2025. The agreement includes certain financial covenants, and
the Company was in compliance with such covenants at December 31, 2024, at which time no amounts had been drawn.

 NOTE
L – LEASES

 The
Company enters into finance leases, typically with terms of 3 to 5 years, to acquire equipment for its data center. The Company
enters into operating leases for its facilities in New York, Florida, and China, as well as for vehicles and equipment provided to
certain employees in the professional sales services segment. The operating lease terms range from 2 to 4 years. The Company
excluded the renewal option on its applicable facility leases from the calculation of its ROU assets and lease liabilities. The
Company made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or
less and elected the following practical expedients upon adoption of ASC 842 "Leases":

 whether expired or existing contracts contain leases under
the new definition of a lease;

 lease classification for expired or existing leases; and

 whether previously capitalized initial direct costs would
qualify for capitalization under Topic 842.

 Finance
and operating lease liabilities consist of the following:

 (in

 31,
 2024

 31,
 2023

 Lease liabilities - current

 Finance
 leases

 $

 $

 Operating
 leases

 1,067

 $
 1,091

 $
 1,000

 Lease liabilities - net of current portion

 Finance leases

 $
 -

 $

 Operating
 leases

 1,278

 1,020

 $
 1,278

 $
 1,045

 F- 25

 Vaso

 NOTES

 For

 A
reconciliation of undiscounted cash flows to finance and operating lease liabilities recognized in the consolidated balance sheet at
December 31, 2024 is set forth below:

 Years ending December 31,

 Finance leases

 Operating leases

 Total

 2025

 1,113

 1,138

 2026

 -

 2027

 -

 2028

 -

 Undiscounted lease payments

 2,595

 2,620

 Amount representing interest

 ( 1
)

 ( 250
)

 ( 251
)

 Discounted lease liabilities

 2,345

 2,369

 Additional
disclosures of lease data are set forth below:

 (in

 Year
 ended December 31,

 2024

 2023

 Lease costs:

 Finance lease costs:

 Amortization of right-of-use assets

 $

 $

 Interest on lease liabilities

 Operating lease costs

 1,192

 1,011

 Short-term lease costs

 Total lease cost

 $
 1,358

 $
 1,193

 Other information:

 Cash paid for amounts included in the measurement of lease liabilities:

 Operating cash flows from finance leases

 $

 $

 Operating cash flows from operating leases

 1,192

 1,011

 Financing cash flows
 from finance leases

 $
 1,347

 $
 1,274

 2024

 2023

 Weighted-average remaining lease term - finance leases (months)

 Weighted-average remaining lease term - operating leases (months)

 Weighted-average discount rate - finance leases

 16.4
 %

 16.4
 %

 Weighted-average discount rate - operating leases

 8.2
 %

 8.4
 %

 The
Company used the rate implicit in the lease, where known, or its incremental borrowing rate as the rate used to discount the future lease
payments.

 NOTE
M – EQUITY IN THE EECP BUSINESS

 On
May 20, 2020, the Company closed on the sale of 51 % of the capital stock of its then wholly-owned subsidiary EECP Global Corporation
("EECP Global") to Chongqing PSK-Health Sci-Tech Development Co. Ltd, a China-based company, for $ 1,150,000. EECP Global
was formed in September 2019 to hold all the assets and liabilities of its EECP business. Concurrently with the closing of the transaction,
the Company signed a Management Service Agreement with EECP Global to provide management service for the business and operation of EECP
Global in the United States. The agreement provides an initial term of three years starting April 1, 2020, the effective date of the
sale, which is automatically renewable for additional one-year terms. Pursuant to the agreement, EECP Global reimburses the Company all
direct expenses and pays a monthly management fee during the term of the agreement.

 F- 26

 Vaso

 NOTES

 For

 The
Company uses the equity method to account for its interest in EECP Global, as it has the ability to exercise significant influence
over the entity, and reports its share of EECP Global operations in Other Income (Expense) on its consolidated statements of
operations and comprehensive income. For the years ended December 31, 2024 and 2023, the Company's share of EECP
Global's loss was approximately $ 247,000 and $ 206,000, respectively. At December 31, 2024 and 2023, the Company recorded
Receivables due from related parties, net of allowance for credit loss of $ 350,000 at December 31, 2024, of approximately $ 916,000
and $ 901,000, respectively, on its consolidated balance sheets for amounts due from EECP Global for fees and cost reimbursements,
net of receivables collected on its behalf due to EECP Global.

 NOTE
N – STOCKHOLDERS' EQUITY

 Chinese
subsidiaries dividends and statutory reserves

 The
payment of dividends by entities organized in China is subject to limitations. In particular, regulations in China currently permit
payment of dividends only out of accumulated profits as determined in accordance with People's Republic of China
("PRC") accounting standards and regulations. Based on PRC accounting standards, our Chinese subsidiaries are also
required to set aside at least 10 % of after-tax profit each year to their general reserves until the accumulative amount of such
reserves reaches 50 % of the registered capital. As of December 31, 2024 and 2023, statutory reserves aggregating approximately
$ 35,000 were recorded in the Company's consolidated balance sheets. These reserves are not distributable as cash dividends. In
addition, our PRC subsidiaries are required to allocate a portion of their after-tax profit to their staff welfare and bonus fund at
the discretion of their respective boards of directors. Moreover, if any of our PRC subsidiaries incurs debt on its own behalf in
the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.
Distribution of dividends from the Chinese operating companies to foreign shareholders is also subject to a withholding
tax.

 NOTE O - STOCK ISSUANCE PLANS

 2016
Stock Issuance Plan

 On
June 15, 2016, the Board approved the 2016 Stock Plan (the "2016 Plan") for officers, directors, and senior employees of the
Corporation or any subsidiary of the Corporation. The stock issuable under the 2016 Plan shall be shares of the Company's authorized
but unissued or reacquired common stock. The maximum number of shares of common stock that may be issued under the 2016 Plan is
 7,500,000 shares.

 The
2016 Plan consists of a Stock Issuance Program, under which eligible persons may, at the discretion of the Board, be issued shares of
common stock directly, as a bonus for services rendered or to be rendered to the Corporation or any subsidiary of the Corporation.

 During
the year ended December 31, 2024, no shares of common stock were granted under the 2016 Plan and 34,652 shares were withheld for withholding
taxes applicable to shares vested in 2024.

 2019
Stock Issuance Plan

 In
May 2019, the Board approved the 2019 Stock Plan (the "2019 Plan") for officers, directors, and senior employees of the Corporation
or any subsidiary of the Corporation. The stock issuable under the 2019 Plan shall be shares of the Company's authorized but unissued
or reacquired common stock. The maximum number of shares of common stock that may be issued under the 2019 Plan is 15,000,000 shares.

 The
2019 Plan consists of a Stock Issuance Program, under which eligible persons may, at the discretion of the Board, be issued shares of
common stock directly, as a bonus for services rendered or to be rendered to the Corporation or any subsidiary of the Corporation.

 F- 27

 Vaso

 NOTES

 For

 During
the year ended December 31, 2024, 150,000 shares were granted under the 2019 Plan.

 The
following table summarizes non-vested restricted shares under all plans for the year ended December 31, 2024:

 Shares Available for Future Issuance

 Unvested shares

 Weighted Average Grant Date Fair Value

 Balance at December 31, 2022

 9,955,580

 2,650,000

 $
 0.06

 Authorized

 -

 -

 $
 -

 Granted

 ( 225,000
)

 225,000

 $
 0.22

 Vested

 -

 ( 1,491,418
)

 $
 0.03

 Forfeited

 25,249

 ( 25,249
)

 $
 0.11

 Expired

 ( 759,120
)

 -

 $
 -

 Balance at December 31, 2023

 8,996,709

 1,358,333

 $
 0.11

 Authorized

 -

 -

 $
 -

 Granted

 ( 150,000
)

 150,000

 $
 0.13

 Vested

 -

 ( 677,015
)

 $
 0.08

 Forfeited

 34,652

 ( 34,652
)

 $
 0.11

 Expired

 -

 -

 $
 -

 Balance at December 31, 2024

 8,881,361

 796,666

 $
 0.13

 The Company has a total of
 64,625,662 remaining authorized but unissued shares of common stock after reserves for all stock plans are taken into account.

 NOTE P -
INCOME TAXES

 The
following is a geographical breakdown of income before the provision for income taxes:

 (in

 Year
 ended December 31,

 2024

 2023

 Domestic

 $
 1,691

 $
 5,085

 ( 414
)

 ( 180
)

 Income
 before provision for income taxes

 $
 1,277

 $
 4,905

 The
provision for income taxes consisted of the following:

 2024

 2023

 Current provision

 Federal

 $
 -

 $
 -

 State

 -

 ( 1
)

 Total current provision

 Deferred provision

 Federal

 State

 -

 -

 Total deferred provision

 Total income tax provision

 $

 $

 Effective income tax rate

 25.53
 %

 2.04
 %

 F- 28

 Vaso

 NOTES

 For

 The
income tax expense of $326,000 for the year ended December 31, 2024 was due to $ 275,000 in state income taxes and a $ 51,000 reduction
in deferred tax assets. The income tax expense of $100,000 for the year ended December 31, 2023 was due to $ 50,000 in state income taxes
and a $ 51,000 reduction in deferred tax assets, offset by a $ 1,000 foreign tax benefit.

 The
following is a reconciliation of the effective income tax rate to the federal statutory rate:

 For the year ended

 2024

 2023

 %

 %

 Federal statutory rate

 21.00

 21.00

 State income taxes

 29.22

 6.19

 Change in valuation allowance relating to operations

 ( 49.81
)

 ( 17.96
)

 Foreign tax rate differential

 6.65

 ( 2.71
)

 R&D credit

 9.13

 1.87

 Nondeductible expenses

 8.74

 0.71

 Other

 0.60

 ( 7.06
)

 25.53

 2.04

 The
effective tax rate increased mainly due to higher state income taxes in 2024.

 As of December 31, 2024, the
recorded deferred tax assets were $11,300,000, reflecting a decrease of $ 247,000 during the year ended December 31, 2024, which was offset
by a valuation allowance of $ 3,027,000, reflecting a decrease of $ 636,000.

 The
components of our deferred tax assets and liabilities are summarized as follows:

 (in

 2024

 2023

 Deferred Tax Assets:

 Net operating loss carryforwards

 $
 5,104

 $
 6,796

 Amortization

 Stock-based compensation

 Allowance for doubtful accounts

 Reserve for slow moving inventory

 Tax credits

 Expense accruals

 1,254

 Capitalized R&D

 Deferred revenue

 3,759

 2,819

 Total gross deferred taxes

 11,300

 11,547

 Valuation allowance

 ( 3,027
)

 ( 3,663
)

 Net deferred tax assets

 8,273

 7,884

 Deferred Tax Liabilities:

 Deferred commissions

 ( 883
)

 ( 701
)

 Goodwill

 ( 2,480
)

 ( 2,220
)

 Depreciation

 ( 6
)

 ( 7
)

 Total deferred tax liabilities

 ( 3,369
)

 ( 2,928
)

 Total deferred tax assets

 4,904

 4,956

 Recorded as:

 Non-current deferred tax assets

 4,904

 4,956

 Non-current deferred tax liabilities

 -

 -

 Total deferred tax assets

 $
 4,904

 $
 4,956

 F- 29

 Vaso

 NOTES

 For

 The
activity in the valuation allowance is set forth below:

 (in

 2024

 2023

 Valuation allowance,
 January 1,

 $
 3,663

 $
 4,543

 Change
 in valuation allowance

 ( 636
)

 ( 880
)

 Valuation allowance, December
 31,

 $
 3,027

 $
 3,663

 At
December 31, 2024, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $ 12 million
 expiring at various dates from 2028 through 2037 and approximately $ 7 million with no expiration date.

 Under
current tax law, the utilization of tax attributes will be restricted if an ownership change, as defined, were to occur. Section 382
of the Internal Revenue Code provides, in general, that if an "ownership change" occurs with respect to a corporation with
net operating and other loss carryforwards, such carryforwards will be available to offset taxable income in each taxable year after
the ownership change only up to the "Section 382 Limitation" for each year (generally, the product of the fair market value
of the corporation's stock at the time of the ownership change, with certain adjustments, and a specified long-term tax-exempt
bond rate at such time). The Company's ability to use its loss carryforwards will be limited in the event of an ownership change.

 NOTE
Q - COMMITMENTS AND CONTINGENCIES

 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 and ultrasound 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. The Company met all the contractual conditions in 2024.

 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.

 F- 30

 Vaso

 NOTES

 For

 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.

 Licensing
and Support Service Agreement

 In
November 2024, NetWolves extended the licensing and support service agreement of its billing system for an additional four years, to
expire December 2028. The agreement provides for monthly recurring charges based on a percentage of billed revenues using these
services, which charges aggregated approximately $ 352,000 and $ 337,000 for the years ended December 31, 2024 and 2023,
respectively.

 Litigation

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

operations

 During
the years ended December 31, 2024 and 2023, the Company had and continues to have operations in China. Operating transactions in China
are denominated in the Chinese currency called RMB or CNY, which is not freely convertible into foreign currencies. Operating internationally
involves additional risks relating to such things as currency exchange rates, different legal and regulatory environments, political,
economic risks relating to the stability or predictability of foreign governments, differences in the manner in which different cultures
do business, difficulties in staffing and managing foreign operations, differences in financial reporting, operating difficulties, and
other factors.

 Commercial
law is still developing in China and there are limited legal precedents to follow in commercial transactions. There are many tax
jurisdictions, each of which may have changing tax laws. Applicable taxes include value added taxes ("VAT"), Enterprise
Income Tax, and social (payroll) taxes. Foreign tax regulations are often unclear. Tax declarations (reports) are subject to review
and taxing authorities may impose fines, penalties and interest. These facts create risks in China.

 NOTE R -
401(k) PLANS

 The
Company maintains a defined contribution plan to provide retirement benefits for its employees - the Vaso Corporation 401(k) Plan adopted
in April 1997. As allowed under Section 401(k) of the Internal Revenue Code, the plan provides tax-deferred salary deductions for eligible
employees. Employees are eligible to participate in the next quarter enrollment period after employment and participants may make voluntary
contributions to the plan up to 80 % of their compensation, subject to applicable IRS annual limitations. The Company doubled its employer
match percentage in 2023 and made discretionary contributions of approximately $ 345,000 and $ 234,000 in the years ended December 31,
2024 and 2023, respectively.

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