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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-KSB/A
                                 Amendment No. 1

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 For the fiscal year ended May 31, 2007

[ ] TRANSITION  REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the transition period from _____ to _____

                           Commission File No. 0-18105
                           ---------------------------

                                VASOMEDICAL, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                              11-2871434
      (State or other jurisdiction of                 (IRS Employer
       incorporation or organization)               Identification No.)

    180 Linden Avenue, Westbury, New York                11590
  (Address of Principal Executive Offices)             (Zip Code)

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

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

              Securities registered under Section 12(g) of the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

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

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

Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
Yes [ X ] No [ ]

Indicate by a check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation  S-B is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB.
[ ]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer.
Large Accelerated Filer [ ]  Accelerated Filer  [ ] Non-Accelerated Filer [ X ]

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

The aggregate  market value of the voting and  non-voting  common equity held by
non-affiliates of the registrant based on the closing sale price of $0.115 as of
September 21, 2007, was approximately $7,303,902. Shares of common stock held by
each  officer  and  director  and by  each  person  who  owns  5% or more of the
outstanding  common stock have been  excluded in that such persons may be deemed
to be affiliates.  The  determination of affiliates  status is not necessarily a
conclusive determination for other purposes.

At September 21, 2007, the number of shares  outstanding of the issuer's  common
stock was 93,618,004.
<PAGE>
                       DOCUMENTS INCORPORATED BY REFERENCE

None


                                EXPLANATORY NOTE

     Vasomedical,  Inc.  (the  "Company,"  "we,"  "us," or "our") is filing this
Amendment  No. 1 on Form  10-KSB/A  to our Report on Form  10-KSB for the fiscal
year ended May 31, 2007 (the "Report") for the purpose of including  information
that was to be  incorporated  by reference from our definitive  proxy  statement
pursuant to Regulation 14A of the  Securities  Exchange Act of 1934, as amended,
(the "Exchange  Act"). We will not file our proxy  statement  within 120 days of
our fiscal year ended May 31, 2007, and are,  therefore,  amending and restating
in their entirety Items 9, 10, 11, 12 and 14 of Part III of the Report.

     Except as  described  above,  no other  amendments  are being  made to this
Report.  This Form 10-KSB/A does not reflect events  occurring  after the August
27, 2007 filing of our Report or modify or update the  disclosure  contained  in
the Report in any way other than as required to reflect the amendments discussed
above and reflected below.

     This amendment should be read in conjunction with our Annual Report for the
year ended May 31, 2007 filed on Form 10-KSB on August 27, 2007.

<PAGE>






                             INDEX TO FORM 10-KSB/A

<TABLE>
<CAPTION>
                                                                                                              Page
                                                                                                              ----

                                    PART III


<S>           <C>                                                                                              <C>
Item 9.       Directors and Executive Officers of the Registrant................................................1
Item 10.      Executive Compensation............................................................................4
Item 11.      Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...8
Item 12.      Certain Relationships and Related Transactions...................................................10
Item 14.      Principal Accountant Fees and Services...........................................................10
</TABLE>
<PAGE>
                                    PART III

ITEM 9  -  DIRECTORS,   EXECUTIVE  OFFICERS,   PROMOTERS  AND  CONTROL  PERSONS;
           COMPLIANCE WITH SECTIONI 16(a) OF THE EXCHANGE ACT

Directors of the Registrant

         As of September 21, 2007, the members of our Board of Directors are:
<TABLE>
<CAPTION>
                                                                                                 Director
        Name of Director               Age                Principal Occupation                    Since
---------------------------------     -------     --------------------------------------    -----------------
<S>                                     <C>       <C>                                       <C>
Abraham E. Cohen (4)                    71        Chairman of the Board and Director        June 1993
Derek Enlander (2)                      59        Director                                  July 2007
John C.K. Hui, PhD (3)                  61        President, Chief  Executive  Officer,     February 1995
                                                  Chief Technology Officer and
                                                  Director
Jun Ma (2)                              44        Director                                  June 2007
Behnam Movaseghi                        54        Director                                  July 2007
Photios T. Paulson (1)(2)               68        Director                                  April 2000
Simon Srybnik (3)                       91        Director                                  June 2007
Martin Zeiger (1)(2)(3)                 70        Director                                  October 2001
    -----------------
<FN>
(1) Member of the Audit Committee
(2) Member of Compensation Committee
(3) Member of the Corporate Governance Committee
(4) Ex-officio member of all committees
</FN>
</TABLE>
     The  following is a brief account of the business  experience  for at least
the past five years of our directors:

     Abraham E. Cohen has been our  Chairman of the Board since June 1994 and is
presently an independent consultant. He retired in 1992 as Senior Vice President
of Merck & Co.,  Inc., a position he was elected to in 1985.  From 1979 to 1989,
Mr. Cohen was also President of Merck Sharp & Dohme International, a division of
Merck & Co.,  Inc. Mr. Cohen is a director of the  following  public  companies:
Akzo Nobel Nv., Chugai Pharmaceutical Co., Ltd.,  Neurobiological  Technologies,
Inc. and Teva Pharmaceutical Industries, Ltd.

     Derek Enlander M.D. has been a director since July 2007. He is an attending
physician at the Mount Sinai Medical Center New York, and a clinical  instructor
at the Mount  Sinai  Medical  School.  He is in  private  practice  in  Internal
Medicine in Manhattan. He is the author of six books on medicine and over twenty
research papers.  He has invented a new drug to treat immune  dysfunction and is
the President of Computer Medica Inc where he invented a Medical History card to
store a patient's  medical files including  x-rays,  MRIs, etc. on a credit card
size computer readable card.

     John C.K. Hui, PhD has been our President and Chief Executive Officer since
April  2007 and our Chief  Technology  Officer  and a director  and Senior  Vice
President  since February  1995. Dr. Hui has been an Assistant  Professor in the
Department  of Surgery and Division of  Cardiology  at the State  University  of
Stony  Brook,  New York since 1978.  He has also been a scientist in the medical
department of Brookhaven National Laboratories. Dr. Hui was CEO and president of
and a principal  stockholder in Vasogenics,  Inc. at the time of its acquisition
by us in January 1995.

                                       1
<PAGE>
     Jun Ma,  PhD,  has been a  director  since  June 2007 and is  presently  an
independent  consultant.   Dr.  Jun  Ma  has  been  an  associate  professor  in
engineering  at New York  Institute  of  Technology  since 1997 and an assistant
professor from 1993 to 1997.  Currently he also provides  consulting services to
companies such as Kerns Manufacturing Corp. and Living Data Technology Corp.

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

     Photios T.  Paulson has been a director  since April 2000 and has served as
our Chief  Executive  Officer from October 2002 through June 2003 and from March
to October 2004. Mr. Paulson has been an advisor to the health care industry and
was Vice President of bioMerieux  N.A. Inc. from 1995 to 2002.  Between 1992 and
1995, Mr. Paulson was Chairman of bioMerieux  Vitek Inc.  Between 1987 and 1990,
he was Senior  Advisor,  Health Care Industry,  for Prudential  Securities.  Mr.
Paulson  previously  held senior  positions  with Becton  Dickinson  and Company
through 1987.  Mr.  Paulson is a director of  bioMerieux  N.A. Inc. and Silliker
Group Inc.

     Simon Srybnik has been a director  since June 2007,  and is Chairman of the
Board of Kerns  Manufacturing  Corp. and Living Data Technology Corp. A lifetime
entrepreneur  and  industrialist,  Mr.  Srybnik has  founded  and  managed  many
companies  in various  industries  including  machinery  and process  equipment,
aerospace and defense,  biology and  healthcare.  Mr. Srybnik is also a director
and Chairman of the Board of Life Sciences, Inc.

     Martin Zeiger has been a director  since October 2001. He is an independent
consultant to the pharmaceutical  industry. Mr. Zeiger was Senior Vice President
of Strategic Business  Development for Barr  Laboratories,  a drug manufacturer,
from 1999 through August 2003.  From 1987 through 1999, Mr. Zeiger was Executive
Vice  President  and  General  Counsel  for Rugby  Laboratories.  In 1993 Marion
Merrill Dow acquired  Rugby  Laboratories.  Mr.  Zeiger was a Vice  President of
Marion  Merrill Dow, Inc. and its successor  Hoechst Marion  Roussell,  Inc. Mr.
Zeiger is a founding  director of the Larry King  Cardiac  Foundation  and was a
member of the Heritage Board of Directors of the American  Heart  Association in
New York.

Committees of the Board of Directors

Audit Committee and Audit Committee Financial Expert

     The Board  has a  standing  Audit  Committee.  The Board has  affirmatively
determined  that each director who serves on the Audit Committee is independent,
as the term is defined by applicable  Securities and Exchange Commission ("SEC")
rules.  The Audit  Committee  is  currently  comprised of Photios T. Paulson and
Martin  Zeiger.  During the fiscal year ended May 31,  2007 the Audit  Committee
consisted  of  Forrest R.  Whittaker  (until his  resignation  from the  board),
Anthony Viscusi (until his resignation from the board),  Photios T. Paulson, and
Martin Zeiger. The members of the Audit Committee have substantial experience in
assessing the performance of companies, gained as members of the Company's Board
of Directors and Audit Committee, as well as by serving in various capacities in
other  companies  or  governmental  agencies.  As a  result,  they  each have an
understanding of financial statements. However, none of them keep current on all
aspects of generally accepted accounting principles.  Accordingly,  the Board of
Directors does not consider any of them to be a Financial expert as that term is

                                       2
<PAGE>

defined in applicable regulations. Nevertheless, the Board of Directors believes
that they have competently  performed the functions  required of them as members
of the Audit Committee.

     The Audit Committee regularly meets with our independent  registered public
accounting firm outside the presence of management.

Compensation Committee

     Our Compensation Committee annually establishes, subject to the approval of
the Board of Directors and any applicable  employment  agreements,  the salaries
which  will be paid to our  executive  officers  during  the  coming  year,  and
administers  our  stock-based  benefit  plans.  The  Compensation  Committee  is
currently  comprised of Martin  Zeiger,  Photios T.  Paulson,  Jun Ma, and Derek
Enlander.  During the fiscal year ended May 31, 2007, the Compensation Committee
consisted of Photios T. Paulson, Alexander Bearn and David Blumenthal.  Upon the
resignation  of Messrs.  Bearn and  Blumenthal,  Mr. Zeiger was appointed to the
Compensation Committee.  Each member of the Compensation Committee is a director
who is not employed by us or any of our affiliates.

Corporate Governance Committee

     The Board of Directors has  established a Corporate  Governance  Committee,
which is  currently  comprised of John C.K.  Hui,  Chairman,  Simon  Syrbnik and
Martin  Zeiger.  During  the  fiscal  year  ended May 31,  2007,  the  Corporate
Governance  Committee  consisted  of Kenneth W. Rind,  John C.K.  Hiu and Martin
Zeiger. The Corporate  Governance  Committee monitors  developments in corporate
governance   principles  and  other  corporate   governance  matters  and  makes
recommendations  to the Board of Directors  regarding the adoption of additional
corporate governance principles.

Compliance  with  Section  16(a)  of  The  Securities  Exchange  Act  of  1934 -
Beneficial Ownership Reporting Compliance

     Section 16(a) of the  Securities  Exchange Act of 1934 requires  directors,
executive  officers and persons who beneficially own more than 10% of our common
stock  (collectively,  "Reporting Persons") to file initial reports of ownership
and reports of changes in ownership of our common stock with the  Securities and
Exchange  Commission.  Reporting  Persons  are  required by SEC  regulations  to
furnish us with copies of all Section 16(a) reports they file. To our knowledge,
based  solely on our review of the copies of such  reports  received  or written
representations  from  certain  Reporting  Persons  that no other  reports  were
required,  we believe that during  fiscal 2007,  all  Reporting  Persons  timely
complied with all applicable filing requirements.

Corporate Governance - Code of Ethics

     We have  adopted a Corporate  Code of Business  Ethics  (the  "Code")  that
applies to all employees,  including our principal executive officer,  principal
financial officer,  and directors of the Company. The Code is broad in scope and
is intended to foster honest and ethical conduct,  including  accurate financial
reporting,  compliance with laws and the like. If any substantive amendments are
made to the Code or if there is any  grant of  waiver,  including  any  implicit
waiver,  from a provision  of the Code to our Chief  Executive  Officer or Chief
Financial Officer,  we will disclose the nature of such amendment or waiver in a
report on Form 8-K.

                                       3
<PAGE>
ITEM 10 - EXECUTIVE COMPENSATION

Executive Officers of the Registrant
<TABLE>
<CAPTION>
        Name of Officer           Age         Position held with the Company
----------------------------     ----      ------------------------------------
<S>                               <C>      <C>
John C.K. Hui, PhD                61       President, Chief Executive Officer,
                                           Chief Technology Officer and Director
Tricia Efstathiou                 36       Chief Financial Officer
</TABLE>
     The following table sets forth the annual and long-term compensation of our
Chief Executive Officer and each of our most highly  compensated  officers other
than the Chief Executive  Officer who were serving as executive  officers at the
end of the last completed fiscal year, and certain former executive  officers as
required  under SEC rules  (collectively,  the "Named  Executive  Officers") for
services rendered for the fiscal years ended May 31, 2007 and 2006.
<TABLE>
<CAPTION>
                           Summary Compensation Table
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
                                                                                               Nonqualified
                                                                                  Non-Equity     Deferred
   Name and Principal                                                             Incentive    Compensation   All Other
        Position                                           Stock     Option          Plan        Earnings    Compensation   Total
                           Year  Salary ($)   Bonus     Awards ($)   Awards      Compensation      ($)         ($) (1)       ($)
                                     (2)      ($)                     ($) (3)        ($)

-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
<S>                        <C>    <C>          <C>          <C>       <C>             <C>           <C>        <C>         <C>
John C. K. Hui (4)         2007   $162,600       --         --           --           --            --         $26,247     $188,847
President and CEO          2006   $159,510       --         --        $ 84,048        --            --         $20,466     $264,024
Senior VP, CTO
 (CEO)
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
Thomas Glover (5)          2007   $238,333       --         --           --           --            --         $20,766     $259,099
President and CEO          2006   $260,000       --         --        $118,000        --            --         $14,574     $392,574
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
 Tricia Efstathiou (6)     2007   $ 86,667       --         --        $ 18,000        --            --        $ 12,084     $116,751
CFO                        2006      --          --         --           --           --            --           --           --
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
Thomas W. Fry (7)          2007   $ 69,253       --         --           --           --            --         $ 1,249    $  70,502
CFO                        2006   $159,510       --         --        $106,499        --            --          $2,313     $268,322
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
<FN>

     (1)  Represents premiums paid on medical, dental, life and disability group
          benefit  plans,  as well as amounts  matched in the  Company's  401(k)
          Plan.
     (2)  Includes  amounts  deferred in FY2006 under the Deferred  Compensation
          Plan for Mr.  Glover,  Dr. Hui and Mr.  Fry of  $26,667,  $20,000  and
          $13,333,  respectively.  Includes amounts paid in FY2007 to Thomas Fry
          under the Deferred  Compensation Plan for the incentive portion of the
          program of  $12,500,  as well as  vacation  time paid of  $8,304.  Ms.
          Efstathiou's   compensation   reflects  the  portion   received  after
          appointment to Chief  Financial  Officer in FY2007.  Includes  $13,390
          deferred by Dr. Hui voluntarily in FY2007.
     (3)  Option  awards are valued at the fair market value times the number of
          shares (which represent the fair market value of the underlying common
          stock at the time of the respective grants).
     (4)  Dr. Hui was appointed  President and Chief Executive  Officer on April
          30, 2007.
     (5)  Mr. Glover was President and Chief  Executive  Officer from October 4,
          2004 to April 30, 2007.
     (6)  Ms.  Efstathiou was appointed Chief Financial Officer on September 20,
          2006.
     (7)  Mr.  Fry  was  Chief  Financial  Officer  from  September  8,  2003 to
          September 20, 2006.
</FN>
</TABLE>
                                       4
<PAGE>
Outstanding Equity Awards at Last Fiscal Year End

     The following table provides  information  concerning  outstanding options,
unvested stock and equity incentive plan awards for our named executive officers
during the fiscal year ended May 31, 2007.
<TABLE>
<CAPTION>
----------------- --------------------------------------------------------------------- --------------------------------------------
                                             Option Awards                                               Stock Awards
----------------- --------------------------------------------------------------------- --------------------------------------------
                                                                                                                Equity
                                                                                                                Incentive
                                                                                                                Plan        Equity
                                                                                                                Awards:    Incentive
                                                                                                                Number       Plan
                                                                                                                 of         Awards:
                                                                                                      Market    Unearned   Market or
                                                                                                      Value      Shares,    Payout
                                                    Equity                                             of       Units      Value of
                                                   Incentive                                          Shares     or        Unearned
                    Number of      Number of     Plan Awards:                            Number of     or       Other       Shares,
                   Securities      Securities      Number of                             Shares or    Units     Rights    Units or
                   Underlying      Underlying     Underlying                             Units of    of Stock    That        Other
                   Unexercised    Unexercised     Unexercised   Option       Option     Stock That   That Have   Have       Rights
                    Options -      Options -       Unearned     Exercise   Expiration    Have Not      Not        Not      That Have
      Name         Exercisable   Unexercisable      Options       Price       Date        Vested      Vested    Vested    Not Vested
----------------- -------------- --------------- -------------- ---------- ------------ ------------ ---------- ---------- ---------
<S>               <C>                <C>             <C>        <C>        <C>                 <C>          <C>        <C>       <C>
John C.K.          375,000              --              --      $1.91      03/11/2008          --           --         --         --
Hui, PhD            70,000              --              --      $0.88      01/04/2009          --           --         --         --
                    50,000              --              --      $3.96      07/11/2011          --           --         --         --
                    50,000              --              --      $1.11      07/12/2014          --           --         --         --
                    29,558              --              --      $0.57      06/22/2015          --           --         --         --
                    40,000              --              --      $0.58      09/20/2015          --           --         --         --
                   200,000              --              --      $0.22      04/03/2016          --           --         --         --

----------------- -------------- --------------- -------------- ---------- ------------ ------------ ---------- ---------- ---------
Tricia              15,000              --              --      $4.28      06/23/2010          --           --         --         --
Efstathiou          30,000              --              --      $3.96      07/10/2011          --           --         --         --
                    30,000              --              --      $0.91      03/27/2013          --           --         --         --
                    20,000              --              --      $1.11      07/12/2014          --           --         --         --
                    15,333              --              --      $0.57      06/22/2015          --           --         --         --
                    15,000              --              --      $0.58      09/20/2015          --           --         --         --
                   200,000           133,333         133,333    $0.09      11/01/2016          --           --         --         --

----------------- -------------- --------------- -------------- ---------- ------------ ------------ ---------- ---------- ---------
</TABLE>
Equity Compensation Plan Information

     We maintain  various  stock plans under which  options  vest and shares are
awarded  at the  discretion  of  our  Board  of  Directors  or its  Compensation
Committee.  The  purchase  price of the  shares  under the plans and the  shares
subject to each  option  granted is not less than the fair  market  value on the
date of the  grant.  The term of each  option  is  generally  five  years and is
determined  at  the  time  of  the  grant  by  our  board  of  directors  or the
compensation committee. The participants in these plans are officers, directors,
employees, and consultants of the Company and its subsidiaries and affiliates.


                                       5
<PAGE>
     The following information is provided about our current stock option plans:

     1995 Stock Option Plan

     In May 1995, our  stockholders  approved the 1995 Stock Option Plan for our
officers and employees, for which the Company reserved an aggregate of 1,500,000
shares of common stock. In December 1997, our Board of Directors  terminated the
1995 Stock Option Plan with respect to new option grants. At May 31, 2007, there
were no options outstanding under the 1995 Option Plan.

     Outside Director Stock Option Plan

     In May 1995,  our  stockholders  approved an Outside  Director Stock Option
Plan for our  non-employee  directors,  for which we  reserved an  aggregate  of
300,000  shares of common  stock.  On June 1,  1997,  1996 and 1995,  options to
purchase an aggregate of 39,550  shares,  31,675  shares,  and 77,418  shares of
common stock,  respectively,  at $1.77, $2.21, and $.78 per share, respectively,
were  granted to outside  directors.  In December  1997,  our Board of Directors
terminated  the Outside  Director  Stock  Option Plan with respect to new option
grants.  At May 31, 2007,  there were no options  outstanding  under the Outside
Director Stock Option Plan.

     1997 Stock Option Plan

     In December 1997, our stockholders approved the 1997 Stock Option Plan (the
"1997 Plan") for our officers, directors,  employees, and consultants, for which
we have reserved,  as amended, an aggregate of 2,800,000 shares of common stock.
The 1997 Plan provides that it will be  administered by a committee of our Board
of Directors  and that the committee  will have full  authority to determine the
identity of the  recipients  of the options and the number of shares  subject to
each option.  Options granted under the 1997 Plan may be either  incentive stock
options or  non-qualified  stock options.  The option price shall be 100% of the
fair market  value of the common  stock on the date of the grant (or in the case
of incentive stock options granted to any individual  principal  stockholder who
owns stock possessing more than 10% of the total combined voting power of all of
our voting stock, 110% of such fair market value). The term of any option may be
fixed by the  committee  but in no event shall exceed ten years from the date of
grant.  Options are  exercisable  upon  payment in full of the  exercise  price,
either in cash or in common  stock  valued at fair  market  value on the date of
exercise of the option. The term for which options may be granted under the 1997
Plan expired August 6, 2007. At May 31, 2007, 3,141,168 options had been granted
(including  options  previously  granted but subsequently  cancelled),  of which
1,351,835 are outstanding under the 1997 Plan.

     1999 Stock Option Plan

     In July 1999, our Board of Directors  authorized the 1999 Stock Option Plan
(the "1999 Plan") for our officers,  directors,  employees, and consultants, for
which we have reserved,  as amended,  an aggregate of 5,000,000 shares of common
stock. The 1999 Plan provides that it will be administered by a committee of our
Board of Directors and that the committee  will have full authority to determine
the identity of the  recipients of the options and the number of shares  subject
to each  option.  Options  granted  under the 1999 Plan may be either  incentive
stock options or non-qualified stock options.  The option price shall be 100% of
the fair  market  value of the common  stock on the date of the grant (or in the
case of incentive stock options granted to any individual principal  stockholder
who owns stock  possessing  more than 10% of the total combined  voting power of
all of our voting stock, 110% of such fair market value). The term of any option
may be fixed by the  committee  but in no event shall  exceed ten years from the
date of grant.  Options are  exercisable  upon  payment in full of the  exercise
price, either in cash or in common stock valued at fair market value on the date
of exercise of the option. The term for which options may be granted under the

                                       6
<PAGE>

1999 Plan  expires July 12, 2009.  At May 31, 2007,  9,151,932  options had been
granted,  (including options previously granted but subsequently cancelled),  of
which 3,922,970 are outstanding under the 1999 Plan.

     2004 Stock Option and Stock Issuance Plan

     In October 2004, our stockholders  approved the 2004 Stock Option and Stock
Issuance  Plan (the "2004 Stock Plan") for our officers,  directors,  employees,
and  consultants  [and other  independent  advisors],  for which we  reserved an
aggregate  of  2,500,000  shares  of  common  stock.  The  2004  Stock  Plan  is
administered by a committee of our Board of Directors,  which has full authority
to  determine  the identity of the  recipients  of the options and the number of
shares subject to each option.  The 2004 Stock Plan is divided into two separate
equity programs:  an option grant program and a stock issuance program.  Options
granted  under the 2004 Stock Plan shall be  non-qualified  or  incentive  stock
options and the  exercise  price is the fair market value of the common stock on
the date of grant except that for  incentive  stock  options it shall be 110% of
the fair market value if the  participant  owns 10% or more of our common stock.
Under the stock issuance program, the purchase price per share shall be fixed by
the Board of  Directors  or  committee  but cannot be less than the fair  market
value of the common  stock on the issuance  date.  Payment for the shares may be
made in cash or check payable to us, or for past services rendered to us and all
shares of common  stock  issued  thereunder  shall  vest  upon  issuance  unless
otherwise  directed by the board or committee.  The number of shares issuable is
also subject to  adjustments  upon the occurrence of certain  events,  including
stock  dividends,  stock  splits,  mergers,   consolidations,   reorganizations,
recapitalizations,  or other  capital  adjustments.  At May 31, 2007,  2,318,045
shares had been granted  (including  options previously granted but subsequently
cancelled),  of which options to purchase 1,317,533 shares are outstanding under
the 2004 Stock Plan.

     401(k) Plan

     In April 1997,  we adopted  the  Vasomedical,  Inc.  401(k) Plan to provide
retirement  benefits for our  employees.  As allowed under Section 401(k) of the
Internal  Revenue Code,  the plan provides  tax-deferred  salary  deductions for
eligible  employees.  Employees are eligible to  participate in the next quarter
enrollment   period   after   employment.   Participants   may  make   voluntary
contributions  to the plan up to 100% of their  compensation  subject  to 401(k)
maximum   limitations.   In  fiscal  year  2007  and  2006,   the  Company  made
discretionary contributions of approximately $15,000 and $27,000,  respectively,
to match a percentage of employee contributions.

Deferred Compensation Program

     In April 2006,  the  Company  approved a program to defer  compensation  of
certain  senior  executives  of the company and provided  incentives to them for
these  deferrals.  The Company agreed to repay monies  deferred from zero to six
months at 1.5 times the amount  deferred;  for deferrals of six months to twelve
months,  the  repaid  amount  shall be two times the  amount  deferred;  and for
deferrals in excess of twelve  months,  the amount shall be 2.5 times the amount
deferred.  As of May 31, 2007 there was no deferred  compensation  or incentives
due to any senior executive under this program. In addition, payment of Board of
Directors meeting fees were deferred until a later date.

Employment Agreements

     As of May 31, 2007 the Company does not have any employment agreements.

                                       7
<PAGE>
Director's Compensation

     Directors receive a fee of $1,500 for each Board of Directors and Committee
meetings  attended  and  $2,500  for  each  Audit  Committee  meeting  attended.
Non-employee directors also received during fiscal 2007:

     o    A grant of a  non-qualified  stock option to purchase  150,000  shares
          which vest over two years  provided the  director  remains a member of
          the board.

     The following table provides the  compensation  earned by our  non-employee
directors for the year ended May 31, 2007:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
                                                  Director Compensation
--------------------------------------------------------------------------------------------------------------------------
                         Fees                                                 Nonqualified
                        Earned or                             Non-equity        Deferred
                        Paid in      Stock       Option     Incentive Plan    Compensation       All Other
                         Cash       Awards       Awards      Compensation       Earnings       Compensation       Total
         Name             ($)         ($)         ($)             ($)              ($)              ($)            ($)
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
<S>                     <C>           <C>          <C>             <C>             <C>              <C>          <C>
Abraham E. Cohen        $ 6,000       --           $13,500         --              --               --           $19,500
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Alexander G. Bearn      $--           --           $ --            --              --               --           $--
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
David Blumenthal        $--           --           $ --            --              --               --           $--
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Photios T. Paulson      $15,000       --           $13,500         --              --               --           $28,500
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Kenneth W. Rind         $ 3,000       --           $13,500         --              --               --           $16,500
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Forrest R. Whittaker    $--           --           $ --            --              --               --           $--
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Martin Zeiger           $15,000       --           $13,500         --              --               --           $28,500
----------------------- ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
</TABLE>
Limitation on Liability of Officers and Directors

     We have entered into  indemnification  agreements  with each of our current
officers and directors pursuant to which we have agreed,  among other things, to
indemnify  these  officers  and  directors  to the fullest  extent  permitted by
Delaware law.

Compensation Committee Interlocks and Insider Participation

     During  fiscal 2007,  our  Compensation  Committee  consisted of Photios T.
Paulson ,  Alexander  Bearn,  and David  Blumenthal  until the  resignations  of
Messrs.  Bearn and  Blumenthal  at which time Martin Zeiger was appointed to the
committee.  None of these  persons were our officers or employees  during fiscal
2007  or,  except  as  otherwise  disclosed,   had  any  relationship  requiring
disclosure in this Proxy Statement.


ITEM 11 - SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL  OWNERS AND MANAGEMENT
          AND RELATED STOCKHOLDER MATTERS

     The following  table sets forth the  beneficial  ownership of shares of our
Common  Stock  as of  September  21,  2007 of (i)  each  person  known  by us to
beneficially  own 5% or more of the shares of  outstanding  common stock,  based
solely on filings with the Securities and Exchange Commission,  (ii) each of our
executive  officers and directors,  and (iii) all of our executive  officers and
directors as a group. Except as otherwise indicated, all shares are beneficially
owned, and investment and voting power is held by the persons named as owners.

                                       8
<PAGE>
<TABLE>
<CAPTION>
                                                                 Common Stock                % of
                                                                 Beneficially               Common
              Name of Beneficial Owner                            Owned (1)               Stock (2)
------------------------------------------------------        -----------------        -----------------
<S>                                                              <C>                        <C>
Abraham E. Cohen ** .................................             1,410,254                  1.5%
Tricia Efstathiou ** ................................               274,496                  *
Derek Enlander **....................................               150,000                  *
John C. K. Hui, PhD (3) ** ..........................             1,603,880                  1.7%
Jun Ma **............................................               150,000                  *
Benham Movaseghi **..................................               150,000                  *
Photios T. Paulson **................................               586,000                  *
Simon Srybnik (4) (5) **.............................            32,855,126                 34%
Louis Srybnik (4) (5)................................            32,705,126                 33%
Martin Zeiger **.....................................               265,000                  *

** Directors and executive officers as a group
  (8 persons)..............................                      37,444,756                37.09%
<FN>

*  Less than 1% of the Company's Common Stock
</FN>
</TABLE>
1.   No  officer  or  director  owns more than one  percent  of the  issued  and
     outstanding  Common  Stock  of  the  Company  unless  otherwise  indicated.
     Includes  beneficial  ownership of the following numbers of shares that may
     be  acquired  within 60 days of  September  21,  2007  pursuant to warrants
     awarded under the securities  purchase agreement with Kern's  Manufacturing
     Corp. and stock options awarded under our stock option plans:
<TABLE>
<S>                      <C>                 <C>                               <C>
Abraham E. Cohen         620,000             Behnam Movaseghi                    150,000
Tricia Efstathiou        258,667             Photios T. Paulson                  545,000
Derek Enlander           150,000             Simon Srybnik                     4,435,714
John C. K. Hui, PhD      814,558             Martin Zeiger                       215,000
Jun Ma                   150,000             Directors and executive
                                             officers as a group               7,338,939
</TABLE>

2.   Applicable percentages are based on 93,618,004 common shares outstanding on
     September 21, 2007, adjusted as required by rules promulgated by the SEC.
3.   Includes  789,322  shares  that are held in a trust for the  benefit of Dr.
     Hui's child. Dr. Hui and his wife are the trustees of this trust.
4.   Simon Srybnik and his brother Louis Srybnik are the sole  directors and the
     Chairman of the Board and President,  respectively  of Kerns  Manufacturing
     Corp. the record holder of 25,714,286 shares (of which 4,285,714 shares are
     not issuable until a restricted  warrant is  exercised).  They are the sole
     shareholders  of Kerns,  each  holding  50% of the  shares.  The  reporting
     persons,  accordingly,   share  voting  and  dispositive  powers  over  the
     21,428,572  shares held by Kerns and share  dispositive  power  over.  As a
     result,  may be deemed to be the  co-beneficial  owners of an  aggregate of
     25,714,286  shares.  Mr. Srybnik also holds sole dispositive power over the
     150,000 shares underlying the option he was granted upon being appointed to
     the Board of Directors.
5.   Simon  Srybnik and his brother  Louis  Srybnik are the sole  directors  and
     officers of Living Data Technology  Corporation.  They also each own 35% of
     the outstanding shares of Living Data. The reporting persons,  accordingly,
     share  voting  and  dispositive  powers  over the  6,990,840  shares of the
     Company  owned by Living Data  Technology  Corp.  and, as a result,  may be
     deemed to be the co-beneficial owners thereof.

                                       9
<PAGE>
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     On June 21, 2007 we entered into a Securities Purchase Agreement with Kerns
Manufacturing Corp.  ("Kerns").  Concurrently with our entry into the Securities
Purchase Agreement, we also entered into a Distribution Agreement and a Supplier
Agreement  with  Living  Data  Technology  Corporation,  an  affiliate  of Kerns
("Living Data").

     We sold to Kerns pursuant to the Securities Purchase Agreement,  21,428,572
shares of our common stock at $.07 per share for an aggregate of  $1,500,000  as
well a five-year warrant to purchase  4,285,714 shares of our common stock at an
initial exercise price of $.08 per share (the "Warrant"). We also have an option
to sell an  additional  $1 million of our common stock to Kerns.  The  agreement
further  provided  for  the  appointment  to  our  Board  of  Directors  of  two
representatives of Kerns. In furtherance thereof, Mr. Simon Srybnik, Chairman of
both Kerns and Living Data,  and Mr. Jun Ma have been  appointed  members of our
Board of Directors.  Pursuant to the Distribution  Agreement, we have become the
exclusive  distributor  in  the  United  States  of  the  AngioNew  ECP  systems
manufactured by Living Data. As additional  consideration for such agreement, we
agreed to issue an  additional  6,990,840  shares of our common  stock to Living
Data. Pursuant to the Supplier Agreement,  Living Data now will be the exclusive
supplier to us of the ECP therapy  systems that we market  under the  registered
trademark  EECP(R).  The Distribution  Agreement and the Supplier Agreement each
have an initial term extending through May 31, 2012.

ITEM 14 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

     MILLER  ELLIN  &  COMPANY,  LLP  are  our  independent   registered  public
accounting  firm  and  performed  the  audits  of  our  consolidated   financial
statements  for fiscal years 2007 and 2006.  The following  table sets forth all
fees for the fiscal years ended May 31, 2007 and May 31, 2006:
<TABLE>
<CAPTION>
                                               2007             2006
                                               ----             ----
           <S>                               <C>              <C>
           Audit Fees (1)                    $201,000         $264,000
           Tax Fees (2)                       $13,000          $51,000
</TABLE>

(1)  Audit Fees includes fees for professional  services  provided in connection
     with the audits of our  financial  statements,  the review of our quarterly
     financial statements,  consents,  and audit services provided in connection
     with other  statutory or regulatory  filings.  Fees related to the audit of
     the 401(k) plan were $12,175 for calendar  year 2005 and were  performed by
     Eichen and Dimeglio,  CPAS, PC. All such services were  pre-approved by the
     Audit Committee.

(2)  Tax fees  principally  include fees for tax return  preparation and for tax
     advice  planning  fees.  All such services were  pre-approved  by the Audit
     Committee.

     The Audit Committee has sole authority to appoint,  determine  funding for,
retain, and  oversee  our  independent  auditors  and to  pre-approve  all audit
services and permissible  non-audit services.  The Audit Committee has delegated
to  the  chairman  of  the  Audit   Committee  the   authority  to   pre-approve
audit-related  and non-audit  services not  prohibited by law to be performed by
our independent  registered public accounting firm and associated fees, provided
that he reports any pre-approval of audit-related or non-audit  related services
and fees to the full Audit Committee at its next regular meeting.

     MILLER  ELLIN &  COMPANY,  LLP did  not  render  any  services  related  to
financial  information systems design and implementation during fiscal year 2007
and 2006.

                                       10
<PAGE>
                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, we have duly caused this report to be signed on its behalf
by the  undersigned,  thereunto  duly  authorized  on the 27th day of September,
2007.

                              VASOMEDICAL, INC.

                              By: /s/ John C.K. Hui
                              ----------------------------------------
                              John C.K. Hui
                              President, Chief Executive Officer,
                              Chief Technology Officer and Director
                              (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on September  27, 2007,  by the  following  persons in the
capacities indicated:


/s/ John C.K. Hui                          President, Chief Executive Officer,
------------------------------------       Chief Technology Officer and Director
John C.K. Hui                              (Principal Executive Officer)

 /s/ Abraham E. Cohen                      Chairman of the Board
------------------------------------
Abraham E. Cohen

/s/ Tricia Efstathiou                      Chief Financial Officer
------------------------------------       (Principal Financial Officer)
Tricia Efstathiou

/s/Derek Enlander                          Director
------------------------------------
Derek Enlander

/s/Jun Ma                                  Director
------------------------------------
Jun Ma

/s/Behnam Movaseghi                        Director
------------------------------------
Behnam Movaseghi

/s/Photios T. Paulson                      Director
------------------------------------
Photios T. Paulson

/s/Simon Srybnik                           Director
------------------------------------
Simon Srybnik

/s/Martin Zeiger                           Director
------------------------------------
Martin Zeiger