<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

[X] Quarterly Report Pursuant To Section 13 or 15(d) Of The Securities Exchange
Act Of 1934.

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007

                                       OR

[ ] Transition Report Pursuant To Section 13 Or 15(d) Of The Securities Exchange
Act Of 1934.

For The Transition Period From __________ To __________

                        COMMISSION FILE NUMBER: 001-31925

                        VASO ACTIVE PHARMACEUTICALS, INC.
        (Exact name of small business issuer as specified in its charter)

                   DELAWARE                                 02-0670926
         (State or other jurisdiction                      (IRS Employer
       of incorporation or organization)                Identification No.)

         99 ROSEWOOD DRIVE, SUITE 260
                  DANVERS, MA                                  01923
   (Address of principal executive offices)                 (Zip code)

                    ISSUER'S TELEPHONE NUMBER: (978) 750-1991

         Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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 [X] No [ ]

         Indicate by check mark whether the registrant is a shell company (as
defined in rule 12b-2 of the exchange act) Yes [ ] No [X]

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:

Common stock, Class A, $0.0001 par value         5,828,613 shares outstanding on
                                                 August 14, 2007
Common stock, Class B, $0.0001 par value         4,500,000 shares outstanding on
                                                 August 14, 2007

Transitional Small Business Disclosure Format (Check one):    Yes [ ] No [X]



<PAGE>

                        VASO ACTIVE PHARMACEUTICALS, INC.

                              INDEX TO FORM 10-QSB


                                                                            Page
PART I.     FINANCIAL INFORMATION

ITEM 1 - Condensed Financial Statements (unaudited):

Condensed Balance Sheets as of June 30, 2007 and December 31, 2006           3
Condensed Statements of Operations for the Three and six-month
    Periods Ended June 30, 2007 and 2006                                     4
Condensed Statements of Cash Flows for the Six-Month
    Periods Ended June 30, 2007 and 2006                                     5
Notes to the Condensed Financial Statements                                  6

ITEM 2 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                 7

ITEM 3 - Controls and Procedures                                             14

PART II.    OTHER INFORMATION

ITEM 6 - Exhibits and Reports on Form 8-K                                    15

Signature                                                                    16

Unless the context requires otherwise, references in this Quarterly Report to
"Vaso Active," "the Company," "we," "our" and "us" refer to Vaso Active
Pharmaceuticals, Inc. Vaso Active, A-R Extreme(R), Termin8(R), RepiDerm(R), and
our logo are trademarks of the Company. Osteon(R) and PENtoCORE(R) are
registered trademarks of BioChemics, Inc. This Quarterly Report on Form 10-QSB
may contain trademarks and trade names of other parties.



                                       2


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<TABLE>
<S>     <C>
                        VASO ACTIVE PHARMACEUTICALS, INC.
                            CONDENSED BALANCE SHEETS


                                                             JUNE 30,      DECEMBER 31
                                                              2007             2006
                                                           ------------    ------------
                                                            (UNAUDITED)
                                     ASSETS
CURRENT ASSETS:
Cash and cash equivalents                                  $      6,000    $      8,627
Restricted cash                                                  11,683         136,319
Accounts receivable                                               3,444          30,446
Inventory                                                        45,297          93,608
Debt issuance costs                                                  --          68,713
Prepaid expenses                                                 26,356          26,650
                                                           ------------    ------------

         TOTAL CURRENT ASSETS                                    92,780         364,363


Property and equipment net                                       31,290          38,794
                                                           ------------    ------------
                                                           $    124,070    $    403,157
                                                           ============    ============

               LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES:
Accounts payable                                           $    571,757    $    637,427
Accrued compensation                                            196,427         149,543
Other accrued expenses                                          150,927          73,510
Obligations under capital leases - short-term portion             2,514           2,510
Senior secured convertible notes, net of discount             2,612,500       2,389,503
Notes payable                                                   870,000         870,000
Due to parent company                                         1,666,847         941,621
Deferred revenue                                                 14,000          14,000
                                                           ------------    ------------
         TOTAL CURRENT LIABILITIES                            6,084,972       5,078,114

LONG-TERM LIABILITIES:
Obligations under capital leases - long-term portion              7,859           9,111
                                                           ------------    ------------

                                                              6,092,831       5,087,225
                                                           ------------    ------------
Commitments and contingencies (Note 1)
STOCKHOLDERS' EQUITY:
Preferred stock - $0.0001 par value; authorized
   10,000,000 shares; issued and outstanding, none                   --              --
Common stock - $0.0001 par value; authorized
   60,000,000 shares; issued and outstanding, 10,328,613          1,033           1,033
Additional paid-in capital                                    8,950,098       8,858,178
Deferred compensation                                           (34,209)        (64,411)
Accumulated deficit                                         (14,885,683)    (13,478,868)
                                                           ------------    ------------

         TOTAL STOCKHOLDERS' DEFICIENCY                      (5,968,761)     (4,684,068)
                                                           ------------    ------------
                                                           $    124,070    $    403,157
                                                           ============    ============


           See notes to the unaudited condensed financial statements.


                                       3


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                                        VASO ACTIVE PHARMACEUTICALS, INC.
                                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

                                                  THREE-MONTH PERIOD ENDED JUNE 30,   SIX-MONTH PERIOD ENDED JUNE 30,
                                                        2007            2006              2007            2006
                                                    ------------    ------------       ------------    ------------
Net revenues                                        $     10,591    $     10,607       $     23,864    $     16,150
Cost of revenues                                          12,016          11,113             18,586          27,493
                                                    ------------    ------------       ------------    ------------
         GROSS PROFIT                                     (1,425)           (506)             5,278         (11,343)

Costs and expenses:
    Marketing, advertising and promotion                  49,366          30,393            115,414          63,489
    Selling, general and administrative (1)              359,969         568,589            772,323       1,093,810
    Research and development                                  --              --                150              --
    Stock based compensation                              15,101          15,101             30,202          30,202
                                                    ------------    ------------       ------------    ------------

         Loss from operations                           (425,861)       (614,589)          (912,811)     (1,198,844)
                                                    ------------    ------------       ------------    ------------

Other income (expense):

Interest income (expense), net                          (140,674)       (194,499)          (337,511)       (388,884)
Charge for default premium on senior
    secured convertible notes                           (112,500)             --           (112,500)             --
Debt restructuring (expense)                             (43,993)             --            (43,993)             --
                                                     ------------   ------------       -------------   ------------
                                                        (297,167)       (194,499)          (494,004)       (388,884)
                                                     ------------   ------------       -------------   ------------

NET LOSS                                            $   (723,028)   $   (809,088)      $ (1,406,815)   $ (1,587,728)
                                                    ============    ============       ============    ============

Net loss per share - basic and diluted (Note 2)     $      (0.07)   $      (0.08)      $      (0.14)   $      (0.15)

Weighted average shares outstanding - basic and
   diluted (Note 2)                                   10,328,613      10,328,613         10,328,613      10,328,613

       (1) Includes stock based compensation of:    $     45,960    $     45,960       $     91,920    $     91,920


                           See notes to the unaudited condensed financial statements.


                                                       4


<PAGE>

                        VASO ACTIVE PHARMACEUTICALS, INC.
                  UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

                                                      SIX-MONTH PERIOD ENDED JUNE 30,
                                                        --------------------------
                                                           2007            2006
                                                        -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                $(1,406,815)   $(1,587,728)

Adjustments to reconcile net loss to net cash
 used in operating activities:
   Depreciation and amortization                              7,504          7,504
   Stock-based compensation (Note 4)                        122,121        122,117
   Amortization of discount and offering costs
     associated with convertible debt                       179,211        268,814
   Inventory write-off                                           --         14,481
   Accrued debt restructuring expenses                       43,993             --
   Increase in senior secured convertible notes             112,500             --
   Increase (decrease) in cash from change in:
   Accounts receivable                                       27,002         (8,574)
      Inventory                                              48,311       (185,868)
      Prepaid expenses                                          294         51,659
      Accounts payable                                      (65,670)       344,953
      Accrued compensation                                   46,884         44,805
      Deferred revenue                                           --          1,216
      Other accrued expenses                                 33,424        (67,329)
                                                        -----------    -----------
           Net cash used in operating activities           (851,241)      (993,951)
                                                        -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Decrease in restricted cash                              124,636        123,720

                                                        -----------    -----------
           Net cash provided by investing activities        124,636        123,720
                                                        -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Accrued legal settlement                                      --        (15,000)
   Obligations under capital leases                          (1,248)        (1,177)
   Due to/from parent company                               725,226        213,349
                                                        -----------    -----------
           Net cash provided by financing activities        723,978        197,173
                                                        -----------    -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS         (2,627)      (673,058)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                8,627        707,640
                                                        -----------    -----------

CASH AND CASH EQUIVALENTS, END OF PERIOD                $     6,000    $    34,582
                                                        ===========    ===========

SUPPLEMENTAL DISCLOSURES:
   Interest paid                                        $   337,511    $   388,884
   Income taxes paid                                    $        --    $        --


           See notes to the unaudited condensed financial statements.



                                       5
</TABLE>


<PAGE>

                        VASO ACTIVE PHARMACEUTICALS, INC.

                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1. INTERIM FINANCIAL STATEMENTS

         The accompanying unaudited interim financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-QSB. Accordingly,
certain information and footnote disclosure required for complete financial
statements are not included herein. It is recommended that these financial
statements be read in conjunction with the financial statements and related
notes of Vaso Active Pharmaceuticals, Inc. (the "Company") as reported in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 2006. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of financial position,
results of operations, and cash flows at the dates and for the periods presented
have been included. The results of operations for the three and six months ended
June 30, 2007 may not be indicative of the results that may be expected for the
year ending December 31, 2007, or any other period.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         GOING CONCERN - These financial statements have been prepared on the
assumption that the Company will be able to realize its assets and discharge its
liabilities in the normal course of business. This assumption is presently in
question and contingent upon the Company's ability to raise additional funds.
Management is in the process of identifying various fund-raising strategies it
will pursue in 2007. These strategies may include an additional private
placement of the Company's equity securities. There are no assurances that
Management will successfully execute such strategies.

         ACCOUNTS RECEIVABLE - Accounts receivable consist primarily of trade
receivables from the sale of OTC pharmaceutical products. The allowance for
doubtful accounts is based on the Company's assessment of the collectability of
specific customer accounts and an assessment of economic risk as well as the
aging of the accounts receivable. The Company's policy is to write-off
uncollectible trade receivables after significant measures have failed to result
in their collection. An allowance for doubtful accounts is established to
represent the estimated uncollectible trade receivables. The allowance for
doubtful accounts was $33,000 at December 31, 2006. Accounts receivable were not
significant at June 30, 2007 and no reserve was recorded at June 30, 2007.

         DUE TO PARENT - The Company reimburses the cost of certain
administrative services provided by BioChemics as well as general overhead fees
pursuant to agreements between the Company and BioChemics. The due to parent
balance represents the net obligation from the Company to BioChemics at June 30,
2007 and December 31, 2006.

         REVENUE RECOGNITION - The Company recognizes revenue from product sales
in accordance with accounting principles generally accepted in the United States
of America, including the guidance in Staff Accounting Bulletin ("SAB") Bulletin
No. 104 "Revenue Recognition" and Statement of Financial Accounting Standards
("SFAS") No. 48, "Revenue Recognition When Right of Return Exists."
Specifically, revenue is recognized when there is persuasive evidence of an
arrangement, delivery has occurred, the price is fixed and determinable and
collectability is reasonably assured.

         In general, revenue is recognized when products are shipped to
customers. It is the Company's policy that all sales are final. As is common in
the consumer products industry, customers return products for a variety of
reasons including products damaged in transit, packaging changes, product
discontinuance and shipping errors. As sales are recorded, the Company accrues
an estimated amount for product returns as a reduction of revenue. These
estimates are based on historical experience and known specific events such as
product expiration dates.


         STOCK-BASED COMPENSATION

         In the first fiscal quarter of 2006 the Company adopted Statement of
Financial Accounting Standards No. 123(R) "Share-Based Payments" ("SFAS
123(R)"), which requires all share-based payments to employees, including stock
options and stock issued under certain employee stock purchase plans, to be
recognized in the Company's financial statements at their fair value. SFAS
123(R) requires the Company to estimate future forfeitures of stock-based
compensation. The Company uses the Black-Scholes option pricing model to
determine the fair value of options under SFAS 123(R) and has elected to use the
modified-prospective transition method, in which prior period financial
statements will not be restated but disclosure of the pro forma net loss
calculation will be included in the footnotes to the financial statements for
periods prior to fiscal 2006 and the adoption of SFAS 123(R).

                                       6


<PAGE>

         The Company has an employee stock incentive plan and a non-employee
director compensation plan, which are described more fully in Note 8 to the
Company's Annual Report on Form 10-KSBA for the period ended December 31, 2006.

         During the three months ended June 30, 2007 and 2006, the Company
recorded stock compensation expense of $45,960 and $45,960 respectively in
accordance with SFAS 123(R). During the six months ended June 30, 2007 and 2006,
the Company recorded stock compensation expense of $91,920 and $91,920
respectively in accordance with SFAS 123(R).

         NET LOSS PER SHARE - Basic net loss per share is computed by dividing
net loss by the weighted average number of common shares outstanding for the
period. Diluted net loss per share reflects, in addition to the weighted average
number of common shares, the potential dilution if stock options and warrants
outstanding were exercised and/or converted into common stock, unless the effect
of such equivalent shares was anti-dilutive.

         For the three-month and six-months periods ended June 30, 2007 and
2006, the effect of stock options and other potentially dilutive shares were
excluded from the calculation of diluted net loss per common share as their
inclusion would have been anti-dilutive.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

FORWARD-LOOKING INFORMATION

         This Quarterly Report on Form 10-QSB contains "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended (the "1934 Act"), that are based on management's exercise of
business judgment as well as assumptions made by, and information currently
available to management. When used in this document, the words "may," "will,"
anticipate," believe," estimate," intend," and words of similar import, are
intended to identify any forward-looking statements. You should not place undue
reliance on these forward-looking statements. These statements reflect our
current view of future events and are subject to certain risks and uncertainties
as noted below. Should one or more of these risks and uncertainties materialize,
or should underlying assumptions prove incorrect, our actual results could
differ materially from those anticipated in these forward-looking statements. We
undertake no obligation and do not intend to update, revise or otherwise
publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
any unanticipated events after the date hereof or to reflect the occurrence of
any unanticipated events. Although we believe that our expectations are based on
reasonable assumptions, we can give no assurance that our expectations will
materialize.

         Management's Discussion and Analysis should be read together with our
condensed financial statements and related notes included elsewhere in this
Quarterly Report on Form 10-QSB and the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 2006. This Quarterly Report on Form
10-QSB, including the following discussion, may contain trend analysis and other
forward-looking statements within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Any statements in this Quarterly
Report on Form 10-QSB that are not statements of historical facts are
forward-looking statements. These forward looking statements made herein are
based on our current expectations, involve a number of risks and uncertainties
and should not be considered as guarantees of future performance.

         Factors that could cause actual results to differ materially include
without limitation:


         o    an inability to arrange additional debt or equity financing;
         o    our ability to finance our business;
         o    the impact of new technologies;
         o    changes in laws or rules or regulations of governmental agencies;
         o    outcome in pending litigation matters;
         o    interruptions or cancellation of existing contracts;
         o    impact of competitive products and pricing;
         o    product demand and market acceptance and risks;
         o    the presence of competitors with greater financial resources;
         o    product development and commercialization risks;

                                       7


<PAGE>

         o    our ability to maintain our current pricing model and/or decrease
              our cost of sales;
         o    continued availability of supplies or materials used in
              manufacturing at the current prices;
         o    adverse regulatory developments in the United States;
         o    adverse publicity related to our products or the company itself;
         o    adverse claims relating to our intellectual property licensed from
              Biochemics;
         o    the adoption of new, or changes in, accounting principles;
         o    legal proceedings;
         o    the costs inherent with complying with new statutes and
              regulations applicable to public reporting companies, such as the
              Sarbanes-Oxley Act of 2002;
         o    other new lines of business that the Company may enter in the
              future; and
         o    our ability to repay our indebtedness, including repayment of the
              notes issued recently.

         These factors are not necessarily all of the important factors that
could cause actual results to differ materially from those expressed in the
forward-looking statements in this quarterly report. Other unknown or
unpredictable factors also could have material adverse effects on our future
results, including the factors described under the heading "Risk Factors" in the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
2006. The forward-looking statements in this quarterly report are made only as
of the date of this quarterly report, and we do not have any obligation to
publicly update any forward-looking statements to reflect subsequent events or
circumstances.

BUSINESS OVERVIEW

         Vaso Active is an early stage company, organized in January 2003, which
focuses on commercializing, marketing and selling over-the-counter
pharmaceutical products that we believe incorporate a proprietary PENtoCORE
technology. Vaso Active's focus on pre-clinical testing and research on a
patented vaso active lipid encapsulated ("VALE") technology has been has been
limited due to working capital constraints.

         We began our operations in January 2001, as a division of BioChemics, a
privately-owned pharmaceutical company engaged in the development of transdermal
and topical drug delivery systems. BioChemics is based in Danvers,
Massachusetts. BioChemics was founded in 1989 by John J. Masiz and was
incorporated in Delaware in 1991. BioChemics began developing the VALE
technology in 1989 and has subsequently been issued four U.S. patents in
connection with this technology. BioChemics has licensed the VALE patents and
the PENtoCORE technology to us.

         As an early stage company, we are subject to a number of risks typical
of early stage companies including, but not limited to, our need to obtain
additional financing and generate profitability and cash flows from operations.
As a company engaged in the pharmaceutical industry, we are subject to a number
of risks typical of pharmaceutical companies including, but not limited to, our
need to adhere to strict governmental regulations, our ability to withstand
intense competition from larger companies with greater financial resources and
our ability to defend our intellectual property, as licensed from BioChemics.

         Our general business strategy was adversely affected beginning in April
2004 by regulatory action taken against us and our former President, and by
private securities actions taken against us and our management. At the same
time, we suspended the marketing and sale of our products until we were
reasonably sure that our product marketing was consistent with the FDA's
requirements and policies. We also voluntarily delisted our common stock from
trading on NASDAQ. As a result of our voluntary delisting, the action taken by
the SEC against us, issues regarding the regulatory status of our products, and
the significant decline in the market value of our securities concurrent with
and subsequent to these matters, several shareholder actions were filed against
Vaso Active and its officers and directors. Since February 17, 2006 our Class A
common stock has been quoted on the Over the Counter Bulletin Board under the
symbol "VAPH.ob".

         In September 2005, the Company and certain of its officers and
directors settled (i) a consolidated securities class action lawsuit that
alleged that the Company and those individuals violated the federal securities
laws with respect to certain disclosures concerning the Company; and (ii)
derivative lawsuits based on the class action allegations. The parties to the
agreements obtained the court's final approval of the settlements on December
14, 2005. For further information, see Item 3, "Legal Proceedings." on form
10KSB/A filed on April 24, 2007.

         During 2006 the Company commenced wholesale distribution under purchase
order to chain drug and grocery stores. At August 10, 2007 products are being
distributed through eight drug and grocery chains totaling more than 1,000
retail stores plus 120 independent pharmacies. In addition our products have
recently become available for purchase on Amazon.com, AmericaRX.com,
HarmonDiscount.com, and AlleonPharmacy.net. Online sales have not been
significant to date.


                                       8


<PAGE>

CRITICAL ACCOUNTING ESTIMATES

         GOING CONCERN ASSUMPTION - The financial statements do not include any
adjustments relating to the recoverability and classification of assets or the
amounts and classification of liabilities that might be necessary should we be
unable to continue as a going concern. If the financial statements were prepared
on a liquidation basis, the carrying value of our assets and liabilities would
be adjusted to net realizable amounts. In addition, the classification of the
assets and liabilities would be adjusted to reflect the liquidation basis of
accounting.

         REVENUE RECOGNITION - We recognize revenue from product sales in
accordance with generally accepted accounting principles in the United States,
including the guidance in Staff Accounting Bulletin, or SAB, No. 104, "Revenue
Recognition," which supersedes SAB No. 101, "Revenue Recognition in Financial
Statements," and Statement of Financial Accounting Standards, or SFAS, No. 48,
"Revenue Recognition When Right of Return Exists."

         Revenue from product sales is recognized when there is persuasive
evidence of an arrangement, delivery has occurred, the price is fixed and
determinable, and collectability is reasonably assured. However, because our
products are sold with limited rights of return, revenue is recognized when the
price to the buyer is fixed, the buyer is obligated to pay us and the obligation
to pay is not contingent on resale of the product, the buyer has economic
substance apart from the us, we have no obligation to bring about the sale of
the product and the amount of returns can be reasonably estimated.

         We record allowances for product returns, rebates and discounts, and
report revenue net of such allowances. We must make judgments and estimates in
preparing the allowances that could require adjustments in the future. For
instance, our customers have the right to return any product that is held past
the labeled expiration date. We base our estimates on historic patterns of
returns and on the expiration dates of product currently being shipped, or as a
result of an actual event that may give rise to a significant return amount such
as the discontinuance of a product.

         We do not recognize revenue unless collectability is reasonably
assured. We maintain allowances for doubtful accounts for estimated losses
resulting from the inability of our customers to make required payments. If the
financial condition of our customers were to deteriorate and result in an
impairment of their ability to make payments, additional allowances may be
required.

         EXPENSE ALLOCATIONS / MANAGEMENT FEES - BioChemics provides us with
certain administrative, marketing and management services, as well as our
facilities and general corporate infrastructure. Our statement of operations
includes allocations of these costs that BioChemics and we considered to be
reasonable.

         INCOME TAXES - We account for income taxes and deferred tax assets and
liabilities in accordance with SFAS No. 109 "Accounting for Income Taxes."
Because we project future operating losses in the near term, we have provided a
full valuation allowance against the deferred tax assets created by these
losses.

         STOCK-BASED COMPENSATION - As part of our compensation programs offered
to our employees, we grant stock options. We grant stock options to employees
based on the fair value of the Class A common stock at the grant date.

         In the first fiscal quarter of 2006 the Company adopted Statement of
Financial Accounting Standards No. 123(R) "Share-Based Payments" ("SFAS
123(R)"), which requires all share-based payments to employees, including stock
options and stock issued under certain employee stock purchase plans, to be
recognized in the Company's financial statements at their fair value. SFAS
123(R) requires the Company to estimate future forfeitures of stock-based
compensation. The Company uses the Black-Scholes option pricing model to
determine the fair value of options under SFAS 123(R) and has elected to use the
modified-prospective transition method, in which prior period financial
statements will not be restated but disclosure of the pro forma net loss
calculation will be included in the footnotes to the financial statements for
periods prior to fiscal 2006 and the adoption of SFAS 123(R).

         The Company has an employee stock incentive plan and a non-employee
director compensation plan, which are described more fully in Note 8 to the
Company's Annual Report on Form 10-KSBA for the period ended December 31, 2006.

         During the three months ended June 30, 2007 and 2006, the Company
recorded stock compensation expense of $45,960 and $45,960 respectively in
accordance with SFAS 123(R). During the six months ended June 30, 2007 and 2006,
the Company recorded stock compensation expense of $91,920 and $91,920
respectively in accordance with SFAS 123(R).


                                       9


<PAGE>

THREE MONTHS ENDED JUNE 30, 2007 AND 2006

         NET REVENUES - Net revenues decreased $16 to $10,591 for the three
month period ended June 30, 2007 as compared to $10,607 in the prior comparable
period. In the three months ended June 30, 2007 and in the three months ended
June 30, 2006 we recognized revenue primarily from shipments to chain
supermarkets. For the three months ended June 30, 2007 sales primarily consisted
of re-orders as compared to initial orders in the prior comparable period.

         COST OF SALES - Cost of sales increased $903 to $12,016 during the
three month period ended June 30, 2007 from $11,113 in the comparable period in
2006. In general, our cost of sales is variable to our net revenues. However,
certain manufacturing events such as inventory adjustments may distort our cost
of sales, and therefore our gross profit, during any particular period.

         GROSS PROFIT - Gross profit as a percentage of net revenues for both
the three month period ended June 30, 2007 and June 30, 2006 are negative as a
direct result of the matters discussed under the Cost of Sales discussion above.
We do not believe that any comparison between periods is meaningful in our
current stage of development.

         MARKETING, ADVERTISING AND PROMOTION - Marketing, advertising and
promotion expenses increased by $18,973 to $49,366 for the three-month period
ended June 30, 2007 from $30,393 during the three-month period ended June 30,
2006. The increase is primarily related to additional print and television media
advertising incurred in support of our product launch into retail chain
supermarkets.

         SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and
administrative expenses decreased by $208,620 to $359,969 during the three-month
period ended June 30, 2007 as compared to $568,589 in the comparable period in
2006. The decrease resulted primarily from a decrease of approximately $169,000
in legal fees over the comparable period in 2006.

         During the three months ended June 30, 2007, other selling, general and
administrative expenses we incurred were $181,000 in salaries, wages and related
personnel costs; approximately $38,000 in legal fees; approximately $38,000 for
various insurance premiums typical of a public company; approximately $15,000
for board of director compensation, approximately $11,000 in management fees
from BioChemics, approximately $17,000 in registered accountant fees, and
approximately $11,000 in rent expense. The remaining selling, general and
administrative expenses pertained to our general operations.

         STOCK BASED COMPENSATION - We are required to record stock-based
compensation when we grant options to purchase our common stock to employees and
non-employees in accordance with SFAS 123R. The value of these options is
calculated using the Black-Scholes option-pricing model. Stock based
compensation for both the three-month periods ended June 30, 2007 and June 30,
2006 was $45,960 and $15,101 to employees and non-employees, respectively. Since
no grants were made to employees or non-employees during these periods, the
amount recorded was attributable to the normal amortization of fair value of
these awards into expense over the vesting period of the awards.

         INTEREST EXPENSE, net - Interest expense, net decreased by $53,825 to
$140,674 during the three months ended June 30, 2007 from $194,499 in the
comparable period in 2006. The decrease resulted from decreased interest charges
of approximately $89,600 in connection with debt issuance costs and warrant
costs being fully accreted on May 1, 2007. The prior comparable quarter in 2006
recorded three months of those charges. This decrease was partially offset by
increased interest charges of approximately $33,000 from May 2, 2007 to June 30,
2007 because the interest rate on the Senior Secured Convertible Notes increased
to 18% on May 2, 2007.


SIX MONTHS ENDED JUNE 30, 2007 AND 2006

         NET REVENUES - Net revenues increased $7,714 to $23,864 for the six
month period ended June 30, 2007 as compared to $16,150 in the prior comparable
period. In the six months ended June 30, 2007 we recognized revenue primarily
from re-order shipments to chain supermarkets. In the prior comparable period we
recognized revenue primarily from initial shipments to chain supermarkets and
from direct to consumer re-orders.

         COST OF SALES - Cost of Sales decreased $8,907 to $18,586 during the
six month period ended June 30, 2007 from $27,493 in the comparable prior
period. In general, our cost of sales is variable to our net revenues. This
decrease was due primarily to lower inventory write-offs and adjustments over
the prior comparable period.


                                       10


<PAGE>

         GROSS PROFIT - Gross profit as a percentage of net revenues was
approximately 22% for the six month period ended June 30, 2007 compared to
approximately (70%) for the prior comparable period. We do not believe that any
comparison between periods is meaningful in our current stage of development.

         MARKETING, ADVERTISING AND PROMOTION - Marketing, advertising and
promotion expenses increased $51,925 or approximately 82% for the six-month
period ended June 30, 2007 from $63,489 for the six-month period ended June 30,
2006. This increase is primarily related to increased print and television media
advertising incurred in support of our product launch into retail supermarket
chain stores.

         SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and
administrative expenses decreased by $321,487 to $772,323 during the six-month
period ended June 30, 2007 as compared to 1,093,810 in the comparable period in
2006. The decrease resulted primarily from a decrease of approximately $217,000
in legal fees plus savings in insurances and generally reduced expense budgets
due to working capital constraints.

         During the six-months ended June 30, 2007, other selling, general and
administrative expenses we incurred were $357,208 in salaries, wages and related
personnel costs; approximately $48,000 in legal fees; approximately $76,000 for
various insurance premiums typical of a public company; approximately $30,000
for board of director compensation, approximately $23,000 in management fees
from BioChemics, approximately $67,000 in registered accountant fees;
approximately $30,000 in rent expense. The remaining selling, general and
administrative expenses pertained to our general operations.

         RESEARCH AND DEVELOPMENT - Research and development expenses increased
by $150 to $150 for the six-month period ended June 30, 2007 as compared to $0
in the comparable prior period in 2006. Due to working capital constraints, we
suspended substantially all research and development activities at the end of
2005.


STOCK-BASED COMPENSATION -

         During the six months ended June 30, 2007 and 2006 the Company recorded
stock compensation expense of $91,920 and $30,202 for employees and consultants,
respectively, in accordance with SFAS 123(R).

         INTEREST EXPENSE, net - Interest expense, net decreased by $51,373 to
$337,511 during the six months ended June 30, 2007 from $388,884 in the
comparable period in 2006. The decrease results from decreased interest charges
of approximately $89,600 in connection with debt issuance costs and warrant
costs being fully accreted on May 1, 2007. The prior comparable period in 2006
recorded six months of those charges. This decrease was partially offset by
increased interest charges of approximately $33,000 from May 2, 2007 to June 30,
2007 because the interest rate on the Senior Secured Convertible Notes increased
to 18% on May 2, 2007.


LIQUIDITY AND CAPITAL RESOURCES

         The Company has incurred substantial operating losses and negative cash
flows from operations since inception. In 2004 and 2005, until the completion of
our private financing in August 2005, operations were financed primarily from
the proceeds of our December 2003 initial public offering and from the exercise
of warrants. Net of offering costs, we raised approximately $6.4 million and
$450,000, respectively, through these transactions. Prior to our receipt of
these proceeds, we relied on BioChemics, together with the proceeds from an
offering of convertible notes in early 2003, as the source of our working
capital. We have expended all of the funds raised from our initial public
offering.

         On August 16, 2005, under a Securities Purchase Agreement (the
"Purchase Agreement"), we issued a series of Senior Secured Convertible Notes
(the "Notes") due May 1, 2007 in the aggregate principal amount of $2,500,000.
The Company received approximately $1,700,000 in net cash proceeds from
financing after placement fees, legal expenses, other offering costs, and
funding of an escrow for future interest payments on the Notes. Placement fees,
legal expenses and other offering costs paid were approximately $360,000 and
approximately $440,000 was placed into escrow to fund substantially all of the
Company's interest payments on the Notes (assuming that the Notes continue to
accrue interest at the initial rate of 10% per annum).


                                       11


<PAGE>

         THE NOTES. The Notes had a term of 21 months, and the principal of the
Notes was due and payable in a single payment on May 1, 2007. Prior to May 1,
2007 the Notes bore interest at the six month LIBOR plus 6% with a floor of
10.0% and a ceiling of 12.0%. As noted below, the Company was not able to repay
the amounts outstanding under the Notes on May 1, 2007.

         The Notes are secured by all of the assets of the Company. The Notes
are convertible at any time into shares of the Company's Class A Common Stock at
a price of $0.70 per share (subject to adjustment under certain circumstances,
e.g., anti-dilution adjustments).

         THE WARRANTS. The investors also received five-year warrants
("Warrants"), which entitle the investors to purchase a total of 1,298,701
shares of the Company's Class A Common Stock at an exercise price of $0.77 per
share. The number of shares which may be purchased upon exercise of the Warrants
and the exercise price per share of the Warrants are subject to adjustment under
certain circumstances, e.g., anti-dilution adjustments.

         ADDITIONAL INVESTMENT RIGHTS (AIRS). In addition, the investors
received AIRs to purchase up to $1,875,000 in aggregate principal amount of
additional Notes at any time through May 1, 2007, which is the maturity date of
the notes, together with additional five-year Warrants to purchase a total of
974,026 shares of Class A Common Stock. Any additional Notes would be
convertible and any additional Warrants would be exercisable at the same
respective initial prices per share as the Notes and Warrants issued on August
16, 2005. The AIRs expired on May 1, 2007 without being exercised.

         Under the Purchase Agreement, the Company is required to reserve, and
has reserved, for the issuance of a total of 4,870,130 shares of Class A Common
Stock, in connection with the possible conversion of Notes (excluding the
additional Notes) and the possible exercise of the Warrants (excluding the
additional Warrants).

         At June 30, 2007, we had unrestricted cash of approximately $6,000 and
working capital deficit of approximately $5.84 million. This deficit includes
the senior secured convertible notes we sold in 2005 that matured on May 1,
2007. This deficit also includes approximately $1.67 million due to our parent,
and approximately $237,000 in legal fees payable to our initial public offering
counsel that we are contesting.

         We are actively pursuing alternative financing sources for important
funding to repay existing debt and to provide working capital, but we are
uncertain whether we will be successful in obtaining any such financing, or if
we obtain any such financing that it will be on favorable terms to the Company.

         On May 1, 2007, the Company failed to pay the principal amount
outstanding under the Notes. Under the terms of the Notes, this may be deemed to
be an Event of Default, which gives the holders of the Notes the right to
require the Company to repurchase the notes at 115% of the outstanding
principal, plus interest or, if greater, 115% of the value of the shares that
such holder could receive upon conversion of the Notes, based on a five day
trading average price, (the "Event Price"). The default rate of interest on any
unpaid amounts is 18%. In addition, Iroquois Master Fund, L.P. ("Iroquois"), as
collateral agent for the purchasers of the Notes, may assert its rights under
the Security Agreement, dated August 16, 2005, among the Company, Iroquois and
the purchasers of the Notes.

         The Company has been in discussions with representatives of Iroquois
regarding the terms of a possible restructuring of these obligations, but no
agreements have been reached. If the Company is unable to negotiate a
forbearance, extension or other arrangement, may be forced to seek relief from
its creditors in bankruptcy, or the holders of such notes might seek to
foreclose on the Company assets, liquidate the Company, or have it declared
insolvent.

         On May 18, 2007, the Company received written notice (the "Notice")
from Portside Growth and Opportunity Fund, ("Portside") that an Event of Default
had occurred under the Portside Note and that Portside had elected to require
the Company to redeem the Portside Note at the Event Price.

         On July 17, 2007 Portside entered into a Secondary Securities Purchase
Agreement (the "Agreement") with Frontier Holdings Company, Inc. ("Frontier")
whereby Portside sold to Frontier an interest in its Senior Secured Convertible
Note (the "Note") due May 1, 2007, representing $253,771.66 in principal amount
of the Note of $341,616.66. John Masiz, a key employee and stockholder of the
Company, holds a controlling interest in Frontier.


                                       12


<PAGE>

         Simultaneously with the execution of the Agreement, Portside entered
into an Amendment to Senior Secured Convertible Note (the "Amendment") with the
Company. Under the terms of the Amendment, in exchange for an extension fee in
the amount of $43,993.00, payable December 31, 2007, Portside has agreed to
extend the original maturity date of its remaining $87,845.00 in principal
amount of the Note. The amended maturity date is December 31, 2007. Upon the
amended maturity date, the Company agrees to pay Portside (i) $87,845.00
representing the principal amount of the Note outstanding, (ii) any accrued and
unpaid interest thereunder, and (iii) the extension fee in the amount of
$43,993.00. As part of the Amendment, Portside waives any Default or Event of
Default by the Company based on the failure by the Company to repay amounts due
under the Note any time prior to December 31, 2007 and rescinds the Notice of an
Event of Default previously disclosed in the Form 8-K dated May 18, 2007.
Portside also agreed to dismiss the lawsuit it had filed in the Supreme Court in
the State of New York. The Company also agreed that it would give Portside the
benefit of any higher extension fee that it may agree to pay to other holders of
the Company's Senior Secured Convertible Notes due May 1, 2007. The Company has
recorded debt restructuring expense in the amount of $43,993 for the six months
ended June 30, 2007 in connection with the Agreement.

         On June 1, 2007, the Company received written notice (the "Smithfield
Notice") from Smithfield Fiduciary, LLC ("Smithfield") that an Event of Default
had occurred under the Smithfield Note and that Smithfield had elected to
require the Company to redeem the Smithfield Note at the Event Price, as defined
in the Smithfield Note. The Event Price is equal to 115% of the outstanding
principal,plus accrued interest (or, if greater, 115% of the value of shares
that such holder could receive upon conversion of the Smithfield Note, based on
a five day trading average price). In addition, the default rate of interest on
any unpaid amounts is 18%. In connection with receipt of the Smithfield Notice,
the Company has recorded a charge for default premium on senior secured
convertible notes in the amount of $112,500 during the six months ended June 30,
2007.

         As of August 14, 2007 the Company has not received similar notices from
the other note holders. If the Company had received similar notices from all the
other remaining note holders, the Company would have recorded an additional
charge for default premium on senior secured convertible notes in the amount of
approximately $249,000 during the six months ended June 30, 2007.

         Working capital has been provided to the Company by Biochemics, under a
verbal agreement, in the form of cash advances and payments made on behalf of
the Company. We expect Biochemics to continue to provide working capital
although it is under no obligation to do so. There can be no assurance that
Biochemics can or will be willing or able to continue to provide working capital
to the Company.

         Our ability to continue our business activities, including increasing
our marketing support for our existing products, funding of the development of
our product candidates through BioChemics and the commercialization of these
product candidates, will depend upon, among other things, raising capital from
third parties or receiving net cash flows from sales of our products. If we
successfully generate cash through any of these methods, our priorities will be:
(i) to contribute to support our existing products; (ii) to bring our acne
product candidate to market; and (iii) to commence clinical trials for our
ibuprofen candidate.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

         The following table sets forth our contractual obligations and
commitments for the next five years, as of June 30, 2007.

<TABLE>
<S> <C>
                                                   LESS THAN      1-3          3-5          5-7
                                       TOTAL        1 YEAR       YEARS        YEARS        YEARS
                                     ----------   ----------   ----------   ----------   ----------
Long-term debt                       $       --   $       --   $       --   $       --   $       --
Capital lease obligations                11,002        3,024        7,978           --           --
Operating lease obligations                  --           --           --           --           --
Note maturities                       3,370,000    3,370,000
Unconditional purchase obligations           --           --           --           --           --
Employment agreements                 2,205,000      315,000      630,000      630,000      630,000

Total                                $5,586,002   $3,688,024   $  637,798   $  630,000   $  630,000
</TABLE>

         The written employment agreements with Mr. Masiz and Dr. Carter
terminate their initial terms on June 30, 2008, but are deemed automatically
extended for successive periods of two years under the terms of their respective
written agreements. This table is presented reflecting the effects of the deemed
automatic extensions and it reflects $315,000 beyond 2009. This amount,
$315,000, will be the annual ongoing obligation of the Company if the agreements
for Mr. Masiz and Dr. Carter do in fact extend under the present agreements.


                                       13


<PAGE>

OFF-BALANCE SHEET ARRANGEMENTS

         We have no material off-balance sheet financing such as a facility
lease or other long-term commitments. We have employment agreements with two key
employees. Please refer to "Contractual Obligations and Commitments" for a
summary of the employment agreement obligations.

OWNERSHIP STRUCTURE

         Through our parent company, Biochemics, John J. Masiz controls
approximately 70% of the combined voting power of all classes of stock of the
Company and approximately 44% of the combined equity interest of the Company.
Biochemics owns 100% of the Class B Common Stock of the Company.

ITEM 3.  CONTROLS AND PROCEDURES

         As of the end of the period covered by this quarterly report, our
Acting Chief Executive Officer and Chief Financial Officer (the "Certifying
Officer") conducted evaluations of our disclosure controls and procedures. As
defined under rules 13a-15(e) and 15d-15(e) of the 1934 Act, the term
"disclosure controls and procedures" means controls and other procedures of an
issuer that are designed to ensure that information required to be disclosed by
the issuer in the reports that it files or submits under the 1934 Act is
recorded, processed, summarized and reported, within the time periods specified
in the SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by an issuer in the reports that it files or submits
under the 1934 Act is accumulated and communicated to the issuer's management,
including the Certifying Officer, to allow timely decisions regarding required
disclosure. Based on this evaluation, the Certifying Officer has concluded that
our disclosure controls and procedures were effective to ensure that material
information is recorded, processed, summarized and reported by our management on
a timely basis in order to comply with our disclosure obligations under the 1934
Act, and the rules and regulations promulgated thereunder.

         Further, there were no changes in our internal control over financial
reporting during the quarter that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.


                                       14


<PAGE>

                           PART II - OTHER INFORMATION

ITEM 6 (A). EXHIBITS

EXHIBIT
NUMBER            DESCRIPTION OF EXHIBIT
------            ----------------------

31.1              Certification of Joseph Frattaroli, Acting Chief Executive
                  Officer and Chief Financial Officer, pursuant to Section 302
                  of the Sarbanes-Oxley Act of 2002.(1)

32.1              Certification of Joseph Frattaroli, Acting Chief Executive
                  Officer and Chief Financial Officer, pursuant to Section 906
                  of the Sarbanes-Oxley Act of 2002.(1)

(1) Filed herewith.



                                       15


<PAGE>

                                    SIGNATURE

         In accordance with Section 13 and 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on August 14, 2007

                                    VASO ACTIVE PHARMACEUTICALS, INC.

                                    By: /s/ Joseph Frattaroli
                                        ----------------------------------------
                                    Joseph Frattaroli
                                    President and Acting Chief Executive Officer
                                    Chief Financial Officer


                                       16