<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 MARCH 31, 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:

<TABLE>
<S>                                             <C>
Common stock, Class A, $0.0001 par value        5,828,604 shares outstanding on May 11, 2007
Common stock, Class B, $0.0001 par value        4,500,000 shares outstanding on May 11, 2007
</TABLE>

Transitional Small Business Disclosure Format    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 March 31, 2007 and December 31, 2006            3
Condensed Statements of Operations for the Three-month Periods
  Ended March 31, 2007 and 2006                                                4
Condensed Statements of Cash Flows for the Three-Month Periods
  Ended March 31, 2007 and 2006                                                5
Notes to the Condensed Financial Statements                                    6

ITEM 2 - Management's Discussion and Analysis                                 10

ITEM 3 - Controls and Procedures                                              17

PART II. OTHER INFORMATION

ITEM 6 - Exhibits                                                             17

Signatures                                                                    18

      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), and our logo are
trademarks of the Company. Osteon(R), RepiDerm(R) and PENtoCORE(R) are
registered trademarks of BioChemics, Inc. This Quarterly Report also contains
trademarks and trade names of other parties.




                                        2




<PAGE>
<TABLE>

                                        VASO ACTIVE PHARMACEUTICALS, INC.
                                            CONDENSED BALANCE SHEETS


                                                                                 MARCH 31,         DECEMBER 31,
                                                                                    2007               2006
                                                                                ------------       ------------
                                                                                (UNAUDITED)
                                                     ASSETS
<S>                                                                             <C>                <C>
CURRENT ASSETS:
Cash and cash equivalents                                                       $      4,197       $      8,627
Restricted cash                                                                       73,342            136,319
Accounts receivable                                                                    8,724             30,446
Inventory                                                                             51,735             93,608
Debt issuance costs                                                                   17,178             68,713
Prepaid expenses                                                                      28,246             26,650
                                                                                ------------       ------------

         TOTAL CURRENT ASSETS                                                        183,422            364,363


Property and equipment - net                                                          35,042             38,794
                                                                                ------------       ------------
                                                                                $    218,464       $    403,157
                                                                                ============       ============

                                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Accounts payable                                                                $    591,832       $    637,427
Accrued compensation                                                                 160,423            149,543
Other accrued expenses                                                                72,825             73,510
Obligations under capital leases - short-term portion                                  2,516              2,510
Senior secured convertible notes, net of discount                                  2,472,376          2,389,503
Notes payable                                                                        870,000            870,000
Due to parent company                                                              1,332,800            941,621
Deferred revenue                                                                      14,000             14,000
                                                                                ------------       ------------
         TOTAL CURRENT LIABILITIES                                                 5,516,772          5,078,114
                                                                                ------------       ------------

LONG-TERM LIABILITIES:
Obligations under capital leases - long-term portion                                   8,486              9,111
                                                                                ------------       ------------

Commitments and contingencies (Note 1)
                                                                                ------------       ------------
                                                                                   5,525,258          5,087,225
                                                                                ------------       ------------
STOCKHOLDERS' DEFICIENCY:
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, 10,328,604 at March 31, 2007 and
December 31, 2006                                                                      1,033              1,033
Additional paid-in capital                                                         8,904,138          8,858,178
Deferred compensation                                                                (49,310)           (64,411)
Accumulated deficit                                                              (14,162,655)       (13,478,868)
                                                                                ------------       ------------

         TOTAL STOCKHOLDERS' DEFICIENCY                                           (5,306,794)        (4,684,068)
                                                                                ------------       ------------
                                                                                $    218,464       $    403,157
                                                                                ============       ============


                           See notes to the unaudited condensed financial statements.

                                                        3




<PAGE>

                                    VASO ACTIVE PHARMACEUTICALS, INC.
                              UNAUDITED CONDENSED STATEMENTS OF OPERATIONS


                                                                     THREE-MONTH PERIOD ENDED MARCH 31,
                                                                     ----------------------------------
                                                                          2007                2006
                                                                     --------------      --------------
Net revenues                                                         $      13,273       $       5,543
Cost of revenues                                                             6,570              16,380
                                                                     --------------      --------------
         GROSS PROFIT                                                        6,703             (10,837)

Costs and expenses:
    Marketing, advertising and promotion                                    66,048              33,096
    Selling, general and administrative                                    412,354             525,221
    Research and development                                                   150                  --
    Stock based compensation                                                15,101              15,101
                                                                     --------------      --------------
    Loss from operations                                                  (486,950)           (584,255)

Interest income (expense), net                                            (196,837)           (194,385)
                                                                     --------------      --------------

NET LOSS                                                             $    (683,787)      $    (778,640)
                                                                     ==============      ==============

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

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


              Selling, general and administrative (2)                $      45,960              45,960
                                                                     ==============      ==============


                       See notes to the unaudited condensed financial statements.

                                                    4




<PAGE>

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


                                                                     THREE MONTH PERIOD ENDED MARCH 31,
                                                                     ----------------------------------
                                                                          2007                2006
                                                                     --------------      --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                             $    (683,787)      $    (778,640)
Adjustments to reconcile net loss to net cash used in
  operating activities:
    Depreciation and amortization                                            3,752               3,752
    Stock-based compensation (Note 2)                                       61,061              61,059
    Amortization of discount and offering costs
      associated with convertible debt                                     134,408             134,406
    Increase (decrease) in cash from change in:
         Accounts receivable                                                21,722                (103)
         Inventory                                                          41,873            (189,749)
         Prepaid expenses                                                   (1,596)             49,855
         Accounts payable                                                  (45,595)             79,452
         Accrued compensation                                               10,880               8,655
         Other accrued expenses                                               (685)            (65,100)
                                                                     --------------      --------------
             Net cash used in operating activities                        (457,967)           (696,413)
                                                                     --------------      --------------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Decreases to restricted cash                                            62,977              62,879
                                                                     --------------      --------------
             Net cash used in investing activities                          62,977              62,879
                                                                     --------------      --------------

CASH FLOWS FROM FINANCING ACTIVITIES:

Accrued legal settlement                                                        --             (15,000)
Repayment of capital lease obligations                                        (619)               (585)
    Increase in amount due to parent company                               391,179             183,853
                                                                     --------------      --------------
             Net cash provided by financing activities                     390,560             168,268
                                                                     --------------      --------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                        (4,430)           (465,266)

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

CASH AND CASH EQUIVALENTS, END OF PERIOD                             $       4,197       $     242,374
                                                                     ==============      ==============

SUPPLEMENTAL DISCLOSURES:

    Interest paid                                                          196,837             197,595
                                                                     ==============      ==============
Supplemental Disclosure of Non-Cash Activity

    Accrued legal settlement converted to notes payable              $          --             870,000
                                                                     ==============      ==============


                       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 months ended
March 31, 2007 may not be indica tive 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.


                                       6




<PAGE>

      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 March 31, 2007 and $33,000 at December 31,
2006.

      DUE TO PARENT - The Company reimburses 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 March 31, 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.

      Revenue is not recognized unless collectability is reasonably assured. The
Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of customers to make required payments. If a
customer's financial condition were to deteriorate and result in an impairment
of their ability to make payments, additional allowances may be required.

      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).

      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 March 31, 2007 and 2006, the Company
recorded stock compensation expense of $45,960 and $45,960 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.

                                       7




<PAGE>

      For the three-month periods ended March 31, 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 antidilutive.

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/A
for the fiscal year ended December 31, 2006. This Quarterly Report on Form
10-QSB, including the following discussion, contains 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.

      The single most pressing factor that could cause actual results to differ
materially and adversely is our lack of working capital and our need to raise
additional capital to repay Senior Secured Convertible Notes in the amount of
$2,500,000 that came due May 1, 2007 and remain unpaid

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

      o     an inability to arrange debt or equity financing;
      o     our ability to finance our business;
      o     the impact of new technologies on our products and our competition;
      o     adverse changes in laws or rules or regulations of governmental
            agencies;
      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;
      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     the ability of management to execute plans and motivate personnel in
            the execution of those plans;
      o     adverse publicity related to our products or the company itself;
      o     adverse claims relating to our intellectual property;
      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;

                                       8




<PAGE>

      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/A 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 is also focused on pre-clinical testing and research on
a patented vaso active lipid encapsulated ("VALE") technology.

      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
entered into agreements to settle (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. In October 2005,
the court granted preliminary approval to each of the litigation settlements,
following which joint notices of the settlements and claim forms were sent to
appropriate stockholders. 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.

                                       9




<PAGE>

      During 2006 the Company commenced wholesale distribution under purchase
order to chain drug and grocery stores. At May 11, 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.

      CRITICAL ACCOUNTING POLICIES

      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).

                                       10




<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 March 31, 2007 and 2006, the Company
recorded stock compensation expense of $45,960 and $45,960 respectively in
accordance with SFAS 123(R).

THREE MONTHS ENDED MARCH 31, 2007 AND MARCH 31,2006

      NET REVENUES - Net revenues for the three-month period ended March 31,
2007 increased $7,730 to $13,273 from $5,543, or 139%, from the comparable
period in 2006. Although the dollar value of shipments in each of these quarters
were not significant in relation to the scale of our operations, the significant
increase in percentage terms is the result of shipments in the first quarter of
2007 to chain drug and grocery stores. We did not ship to chain drug and grocery
stores for the comparable period in 2006. Our ability to properly support a
significantly larger distribution network has been negatively affected due to
working capital constraints. All of our revenues during each of the periods were
generated from the sale of our three OTC products.

      COST OF SALES - In general, our cost of sales is proportionately variable
to our net revenues. However, we maintain certain fixed manufacturing costs.
Cost of sales decreased $9,810 to $6,570 from $16,380 in the comparable period
in 2006. This decrease in cost of sales was attributable mostly to inventory
write-downs during three months ended March 31, 2006 that did not occur for the
three months ended March 31, 2007. At our current low volume of sales we do not
believe any meaningful comparison can be made in costs of sales for the periods
presented.

      MARKETING, ADVERTISING AND PROMOTION - Marketing, advertising and
promotion expenses increased $32,952, or approximately 100%, to $66,048 for the
three-month period ended March 31, 2007 from $33,096 in the comparable period in
2006. This increase was primarily attributable to increased expenses charged to
our product sampling campaign which was undertaken to support our products now
being carried in chain drug and grocery stores for the three months ended March
31, 2007 over the comparable period in the prior year.

      SELLING, GENERAL AND ADMINISTRATIVE - Selling, general and administrative
expenses decreased by $112,867 to $412,354 during the three months ended March
31, 2007 as compared to $525,221 in the comparable period in 2006. The decrease
is mostly due to decreases in legal and professional fees.

      Selling, general and administrative expenses for the three months ended
March 31, 2007 primarily consist of salaries, wages and related personnel costs,
professional fees such as legal, audit and business advisory services typical of
a publicly held corporation, commercial liability and directors and officers
insurance costs and general overhead such as facility costs.

      RESEARCH AND DEVELOPMENT - Research and development expenses increased
$150 to $150 for the three months ended March 31, 2007 over the comparable
period in 2006. We suspended substantially all research and development
activities in January 2006 due to a lack of working capital. The $150 is a
miscellaneous charge incurred in connection with sample testing during the three
months ended March 31, 2007..

      STOCK-BASED COMPENSATION -

      During the three months ended March 31, 2007, the Company recorded stock
compensation expense of $15,101 for consultants in accordance with SFAS 123(R).

      INTEREST EXPENSE - Interest expense increased $2,452 to $196,837 during
the three months ended March 31, 2007 as compared to $194,385 in the comparable
period in 2006. Substantially all of the interest charges were incurred in
connection with our Senior Secured Convertible Notes issued in August 2005.

                                       11




<PAGE>

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).

      THE NOTES. The Notes have 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.

      Under the Purchase Agreement, the Company is required to reserve for
issuance a total of 8,522,727 shares of Class A Common Stock, in connection with
the possible conversion of Notes (including the additional Notes) and the
possible exercise of the Warrants (including the additional Warrants).

      At March 31, 2007, we had unrestricted cash of approximately $4,200 and a
working capital deficit of approximately $5,100,000, excluding approximately
$237,000 of accounts payable related to legal fees that we intend to contest.

      We are engaged in presentations and discussions with potential investors
in an attempt to obtain financing in order to provide important funds to the
Company. Without these funds, we will be unable to pay approximately $2.5
million due to holders of the Notes issued in 2005 that came due May 1, 2007.

      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 and
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). In addition, 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. No notices of default or potential actions have been delivered to the
Company by Iroquois or any holder of Notes at this time.

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<PAGE>

      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.

      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.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

      The following table sets forth our contractual obligations and commitments
for the next five years, as of March 31, 2007.

<TABLE>
                                                         LESS THAN       1 - 3        3 - 5        5 - 7
         DESCRIPTION                        TOTAL          1 YEAR        YEARS        YEARS        YEARS
------------------------------------     ----------      ----------     -------      -------      -------
<S>                                      <C>             <C>            <C>          <C>          <C>
Long-term debt                           $3,370,000      $3,370,000     $    --      $    --      $    --

Capital leases                               11,002           2,516       5,300        3,186           --

Operating leases                                 --              --          --           --           --

Unconditional purchase obligations               --              --          --           --           --

Employment agreements                     2,205,000         315,000     630,000      630,000      630,000

Total contractual obligations             5,586,002       3,687,516     635,300      633,186      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.

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 three 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.

                                       13




<PAGE>

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 Sections 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 there under.

      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.


                           PART II - OTHER INFORMATION

ITEM 6 (a). EXHIBITS

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

3(i)        Amended and Restated Certificate of Incorporation. (1)
3(ii)       Amended and Restated Bylaws. (1)
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.
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)         Previously filed as an exhibit to our registration statement on
            Form SB-2/A filed on September 12, 2003.


                                       14




<PAGE>

                                   SIGNATURES

      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 May 15, 2007.

                                    VASO ACTIVE PHARMACEUTICALS, INC.

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


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