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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                  FORM 10-K/A

[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 For the fiscal year ended May 31, 2002

[ ] 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.
                (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 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-K 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-K or any
amendment to this Form 10-K. [ X ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant as of August 12, 2002,  based on the average price on that date,
was  $116,980,000.  At August 12, 2002, the number of shares  outstanding of the
issuer's common stock was 57,559,120.


                      DOCUMENTS INCORPORATED BY REFERENCE

     Certain exhibits are incorporated  herein by reference as set forth in Item
13(a)3, Index to Exhibits, in Part IV.

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<PAGE>

                                    PART III

ITEM TEN - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The Company's  directors  and  executive  officers as of September 27, 2002
were as follows:
<TABLE>
<CAPTION>
Name                                    Age     Position Held With the Company
-------------------------------         ---     ------------------------------
<S>                                     <C>

Abraham E. Cohen (4)(6)                 66      Chairman of the Board
D. Michael Deignan (7)                  58      President, Chief Executive Officer and Director
John C.K. Hui, PhD (6)                  56      Senior Vice President, Chief Technology Officer and Director
Joseph A. Giacalone                     38      Chief Financial Officer
Alexander G. Bearn, MD (3)(7)           79      Director
David S. Blumenthal, MD (3)(7)          52      Director
Photios T. Paulson (1)(2)(3)(6)         63      Director
Kenneth W. Rind, PhD (1)(7)             67      Director
E. Donald Shapiro (1)(2)(3)(5)          79      Director
Anthony Viscusi (1)(2)(3)(5)            69      Director
Forrest R. Whittaker (2)(3)(6)          52      Director
Martin Zeiger (2)(5)                    65      Director
---------------------
<FN>
(1) Member of the Executive  Committee.  Our Executive Committee was established
to advise the Board of Directors and make recommendations on matters relating to
our business and operations.
(2) Member  of   the  Audit  Committee.  Our  Audit  Committee  is  involved  in
discussions  with  our  independent  public  accountants  with  respect  to  the
quarterly and year-end audited  financial  statements,  our internal  accounting
controls  and the  professional  services  furnished by our  independent  public
accountants. Our independent public accountants periodically meet alone with the
Audit Committee and have unrestricted access to the committee.
(3) Member of the Compensation Committee.  Our Compensation Committee recommends
executive  compensation and the granting of stock options to key employees.  See
"Compensation Committee Report on Executive Compensation."
(4) Ex-officio member of all committees
(5) Member of Class I, to serve until the 2002 annual meeting of stockholders
(6) Member of Class II, to serve until the 2003 annual meeting of stockholders
(7) Member of Class III, to serve until the 2004 annual meeting of stockholders
</FN>
</TABLE>

Principal Occupations of Directors

     Alexander G. Bearn,  MD has been a director  since November 1994. Dr. Bearn
is a  physician,  scientist  and  author  who has had  distinguished  careers in
academe and industry.  From 1997 through his  retirement in 2001,  Dr. Bearn was
the Executive  Officer of the American  Philosophical  Society.  Since 1966, Dr.
Bearn has also been an adjunct professor at Rockefeller University.  He has also
held positions as Chairman of the  Department of Medicine of Cornell  University
Medical  College and Senior Vice President of Medical and Scientific  Affairs at
Merck  International.  He  serves  on  several  boards,  including  the Board of
Trustees of Rockefeller  University,  the Macy  Foundation and the Howard Hughes
Medical Institute.

     David S. Blumenthal, MD has been a director since June 1994. Dr. Blumenthal
has been a practicing  cardiologist in the State of New York since 1981 and is a
Clinical Professor of Medicine at the Weill Cornell Medical College.

     Abraham  E.  Cohen has been  Chairman  of the Board  since  June 1994 and a
director since June 1993, and is presently an independent consultant. He retired
in 1992 as Senior Vice President of Merck & Co., Inc., a position he was elected
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

                                       1
<PAGE>

following public companies:  Akzo Nobel Nv., Axonyx Inc., Chugai  Pharmaceutical
Co.,  Ltd.,   Neurobiological   Technologies,   Inc.  and  Teva   Pharmaceutical
Industries, Ltd.

     D. Michael Deignan has been President, Chief Executive Officer and director
since his  employment  in January  2000.  Mr.  Deignan was  President and CEO of
Medical  Sterilization  Inc.  (now known as SSI  Surgical  Services,  Inc.) from
September 1995 to January 1999 and President and CEO of  Tonometrics,  Inc. from
January 1993 to March 1995.  Prior to 1993, Mr.  Deignan held various  executive
positions at C.R. Bard, G.D.  Searle and Baxter  Healthcare  International.  Mr.
Deignan is a director of SSI Surgical Services, Inc.

     John C.K. Hui,  PhD, the Company's  Chief  Technology  Officer,  has been a
director and Senior Vice  President  since  February  1995.  Dr. Hui has been an
Assistant  Professor in the  Department  of Surgery 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 president of and a
principal  stockholder in Vasogenics,  Inc. at the time of its acquisition by us
in January 1995.

     Photios T. Paulson has been a director  since April 2000. Mr. Paulson is an
advisor to the health care  industry and has been Vice  President of  bioMerieux
N.A.  since 1995.  Between 1990 and 1995, Mr. Paulson was Chairman of bioMerieux
N.A. 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 Inc.

     Kenneth W. Rind,  PhD has been a director since February 1995. Dr. Rind has
been Chairman of Oxford  Venture  Corporation,  an independent  venture  capital
company,  since  1981 and in 1998  was a  founding  General  Partner  of  Israel
Infinity Venture Capital Fund.  Previously,  he was responsible for acquisitions
and venture capital  investments at Xerox Development  Corporation and in charge
of technology  investment banking at Oppenheimer & Co., Inc. (now CIBC). He is a
director of several private companies.

     E. Donald Shapiro has been a director since June 1993, Vice Chairman of the
Company since  January 2000 and is presently  Dean Emeritus and Professor of The
New York Law School.  Mr. Shapiro is formerly the Joseph  Solomon  Distinguished
Professor  of Law and is a former Dean of The New York Law School,  as well as a
Supernumerary Fellow of St. Cross College at Oxford University,  England. He has
authored  numerous  books and articles in the field of medicine and law and is a
recipient  of honors and  awards  both in the United  States and  overseas.  Mr.
Shapiro  is a  director  of the  following  public  companies:  Loral  Space and
Communications, Inc., Kramont Realty Trust and Frequency Electronics, Inc.

     Anthony  Viscusi has been a director  since June 1994 and was our President
and Chief  Executive  Officer from June 1994 through his  retirement  in January
2000. Mr. Viscusi was Senior Vice President,  Worldwide  Marketing for the AgVet
division of Merck & Co., Inc. from 1987 to 1993. In 1961, Mr. Viscusi joined the
international  human  health  division  of Merck,  in which he spent most of his
career in various general management positions, after having taught at Columbia,
Wesleyan and Princeton universities.

     Forrest R. Whittaker has been a director  since April 2000.  Mr.  Whittaker
has been President of the Respiratory  Group of Tyco Healthcare since June 2000.
Prior thereto,  Mr. Whittaker was President and CEO of Paidos Health  Management
Services,  Inc.  between  1993 and  2000  and  President  of  Baxter  Healthcare
Corporation's V. Mueller Division from 1989 through 1993.

     Martin Zeiger has been a director  since October 2001.  Mr. Zeiger has been
Senior Vice President of Strategic Business Development for Barr Laboratories, a
drug  manufacturer,  since 1999.  From 1987 through  1999,  Mr.  Zeiger was Vice
President  and General  Counsel  for Rugby  Laboratories,  which was  ultimately
acquired by Hoechst in 1995.  Mr.  Zeiger is a member of the  Heritage  Board of
Directors of the American Heart  Association in New York and a founding director
of the Larry King Cardiac Foundation.

                                       2
<PAGE>

Compliance with Section 16(a) of the Securities Exchange Act

     Section  16(a)  of  the  Exchange  Act  requires  our  executive  officers,
directors and persons who own more than ten percent of a registered class of our
equity securities ("Reporting Persons") to file reports of ownership and changes
in ownership  on Forms 3, 4 and 5 with the  Securities  and Exchange  Commission
(the "SEC") and the  National  Association  of  Securities  Dealers,  Inc.  (the
"NASD").  These  Reporting  Persons are required by SEC regulation to furnish us
with  copies of all Forms 3, 4 and 5 they file with the SEC and the NASD.  Based
solely  upon our review of the copies of the forms it has  received,  we believe
that  all  Reporting  Persons  complied  on  a  timely  basis  with  all  filing
requirements applicable to them with respect to transactions during fiscal 2002.

ITEM ELEVEN - EXECUTIVE COMPENSATION

Summary Compensation 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  (the  "named  executive  officers")  for the
fiscal years ended May 31, 2002, 2001, and 2000.
<TABLE>
<CAPTION>
                                                                            Long Term  Compensation
                                                                    ---------------------------------------
                                     Annual Compensation                    Awards               Payouts
                                     ---------------------------------------------               -------
                                                       Other       Restricted  Shares Covered   Long Term
Name and                                               Annual            Stock  By Option     Incentive Plan   All Other
Principal Position      Year     Salary    Bonus    Compensation (1)     Awards  Grants          Payout      Compensation(3)
------------------      ----     ------    -----    ---------------      ------  ------          ------      ---------------
<S>                     <C>     <C>       <C>        <C>                     <C> <C>                  <C>       <C>
D. Michael Deignan (2)  2002    $240,000         -            -              -   200,000              -         $10,626
President & CEO         2001    $240,000  $125,000            -              -         -              -          $4,311
                        2000     $75,000         -            -              -   650,000              -          $1,126

John C.K. Hui           2002    $143,333         -            -              -    50,000              -         $14,503
Senior VP/CTO           2001    $140,000   $37,485            -              -         -              -         $11,815
                        2000    $140,000         -     $489,000              -         -              -         $10,344

Joseph A. Giacalone     2002    $134,287         -            -              -    50,000              -         $11,061
CFO/Secretary           2001    $127,355   $34,840            -              -         -              -         $10,107
                        2000    $113,596         -   $1,432,500              -    70,000              -         $10,367
<FN>
     (1) Represents the difference between the closing price of our common stock
     and the exercise price of the options on the date of exercise multiplied by
     the number of shares  acquired  upon  exercise.  The  calculation  does not
     reflect  the  effects  of any  income  taxes  that may be due on the  value
     realized.
     (2) The Board of Directors  appointed D. Michael  Deignan as President  and
     Chief Executive Officer in January 2000.
     (3) Represents premiums paid on medical,  dental, life and disability group
     benefit plans.
</FN>
</TABLE>

Option/SAR Grants in Last Fiscal Year

     The following  table sets forth the number of options  granted to our named
executive officers during the fiscal year ended May 31, 2002.
<TABLE>
<CAPTION>
                                                                                Potential Realizable
                                                                                Value at Assumed
                                                                                Annual Rates of Stock
                                                                                Price Appreciation
                                        Individual Grants                       for Option Term
                        ------------------------------------------------------------------------------
                        Total Number
                        of Securities   % of Total
                        Underlying      Options/SARs    Exercise
                        Options/SARs    to Employees    Price        Expiration
Name                    Granted (#)     in Fiscal Year  ($/share)       Date       5%         10%
----                    ------------    --------------  ---------    ----------    --         ---
<S>                     <C>                  <C>          <C>          <C>       <C>        <C>
D. Michael Deignan      200,000 (1)          18%          $3.96        7/10/11   $498,085   $1,262,244
John C.K. Hui            50,000 (1)           5%          $3.96        7/10/11   $124,521     $315,561
Joseph A. Giacalone      50,000 (1)           5%          $3.96        7/10/11   $124,521     $315,561
<FN>
     (1) Represents  ten-year,  non-qualified stock options under the 1999 Stock
     Option Plan that vest  equally over three years  commencing  July 11, 2002.
     Such vesting is contingent upon continued employment or service with us.
</FN>
</TABLE>
                                       3
<PAGE>


Aggregated Option/SAR Exercises in Last Fiscal Year and F/Y-End Option Values

     The following table sets forth  information for each of the named executive
officers with respect to the value of options or warrants  exercised  during the
fiscal  year ended May 31,  2002 and the value of  outstanding  and  unexercised
options or warrants held as of May 31, 2002,  based upon the market value of the
common  stock of $1.78 per share on that date.
<TABLE>
<CAPTION>
                                                                                 Value of  Unexercised
                                                       Number of Options at      In-the-Money  Options
                    Shares Acquired      Value           Fiscal Year End         at Fiscal Year End (2)
Name                on Exercise (#)    Realized (1)  Exercisable Unexercisable  Exercisable  Unexercisable
----                ---------------    ------------  ----------- -------------  ------------ -------------
<S>                          <C>           <C>         <C>         <C>          <C>             <C>

D. Michael Deignan           -             -           366,667     133,333      $140,313        $252,563
John C.K. Hui                -             -           611,667      33,333       $63,350        $      -
Joseph A. Giacalone          -             -           290,833      56,667       $86,417        $ 11,533
<FN>
(1)  Represents the difference between the closing price of the common stock and
     the exercise price of the options on the date of exercise multiplied by the
     number of shares acquired upon exercise.  The calculation  does not reflect
     the effects of any income taxes that may be due on the value realized.
(2)  Represents  the  difference  between the closing market price of the common
     stock at May 31, 2002 of $1.78 per share and the  exercise  price per share
     multiplied by the number of in-the-money options at May 31, 2002.
</FN>
</TABLE>

Employment Agreements

     We maintain employment  agreements with Mr. Deignan,  expiring November 30,
2003 (unless  automatically  renewed for  additional  one-year  periods  through
November  2005),  and with Dr. Hui,  expiring  January 31, 2005.  The employment
agreements  provide,  among other things, that in the event there is a change in
our  control,  as defined  therein,  or in any  person  directly  or  indirectly
controlling  us,  as  also  defined  therein,   the  employee  has  the  option,
exercisable  within six months of becoming aware of such event, to terminate his
employment  agreement.  Upon such  termination or upon any other  termination of
such  employment  in  breach of the  agreement,  the  employee  has the right to
receive as a lump-sum payment certain compensation  remaining to be paid for the
balance of the term of the agreement.

1995 Stock Option Plan

     In May 1995, our  stockholders  approved the 1995 Stock Option Plan for our
officers and employees,  for which we reserved an aggregate of 1,500,000  shares
of common stock.  In December 1997,  our Board of Directors  terminated the 1995
Stock Option Plan. At May 31, 2002,  972,000 options had been granted,  of which
581,000 are 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.  At May 31, 2002,  97,962
options are 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

                                       4
<PAGE>

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  expires  August 6,  2007.  At May 31,  2002,  2,650,832  options  had been
granted, of which 1,624,194 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 35,000,000 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
1999 Plan  expires July 12, 2009.  At May 31, 2002,  3,122,100  options had been
granted, of which 2,889,767 are outstanding under the 1999 Plan.

Shareholder Rights Plan

     In March 1995, our Board of Directors  approved a Shareholder  Rights Plan,
under which a dividend  distribution of one Right for each outstanding  share of
our common stock is authorized.  Each Right will entitle  stockholders of record
on May 9, 1995 to purchase  one-half  share of Common Stock at a 50% discount to
market price if a person or group acquires 20% or more of our outstanding stock.
At present,  we are not aware of any such person or group seeking to acquire 20%
or more of our outstanding common stock.

Director's Compensation

     It has been our policy to grant fees of $1,500 per meeting to each  outside
director who attends a regularly  scheduled  or special  meeting of its Board of
Directors.  Messrs.  Cohen, Shapiro and Viscusi do not receive per- meeting fees
but monthly fees of $2,500.  Fees for committee  meetings are $1,000 per meeting
if the meeting is held on a different day than the Board  Meeting.  In addition,
we  reimburse  out-of-state  directors  for their cost of travel and  lodging to
attend such meetings.

        Our compensation structure for outside directors, as revised in October
2001, provides for the issuance of:

--   a one-time grant of 50,000 non-qualified stock options to outside directors
     issued on the date of their initial  appointment  to our Board of Directors
     at the closing  price on the issue date and  vesting in three equal  annual
     increments  commencing on the first anniversary of the grant and contingent
     upon their continued service on our Board; and
--   an automatic annual grant of 15,000  non-qualified stock options to outside
     directors  issued on the date of our Annual Meeting of  Stockholders at the
     closing  price  on the  issue  date  and  vesting  in  three  equal  annual
     increments  commencing on the first anniversary of the grant and contingent
     upon their continued service on our Board.

                                       5
<PAGE>

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 2002, our Compensation  Committee consisted of Messrs. Bearn,
Blumenthal, Paulson, Shapiro, Viscusi, Whittaker and Cohen (ex-officio). None of
these  persons were our officers or employees  during  fiscal 2002 or, except as
otherwise  disclosed,  had any relationship  requiring  disclosure in this Proxy
Statement.

     In  accordance  with  rules  promulgated  by the  Securities  and  Exchange
Commission,  the information included under the caption "Compensation  Committee
Report  on  Executive  Compensation"  will  not be  deemed  to be filed or to be
proxy-soliciting  material or  incorporated  by reference in any prior or future
filings  by the  Company  under  the  Securities  Act of 1933 or the  Securities
Exchange Act.

            COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

     The compensation of our executive  officers is generally  determined by the
Compensation  Committee  of  our  Board  of  Directors,  subject  to  applicable
employment  agreements.  Each member of the Compensation Committee is a director
who is not our  employee or any of our  affiliates.  The  following  report with
respect to certain compensation paid or awarded to our executive officers during
fiscal  2002 is  furnished  by the  directors  who  comprised  the  Compensation
Committee during fiscal 2002.

General Policies

     Our compensation  programs are intended to enable us to attract,  motivate,
reward and retain the management talent required to achieve corporate objectives
and thereby increase  shareholder  value. It is our policy to provide incentives
to its senior management to achieve both short-term and long-term objectives and
to reward  exceptional  performance and  contributions to the development of our
business.  To  attain  these  objectives,  our  executive  compensation  program
includes a  competitive  base salary,  cash  incentive  bonuses and  stock-based
compensation.

     Stock options are granted to employees,  including our executive  officers,
by the  Compensation  Committee  under our 1999 Stock Option Plan. The Committee
believes that stock options  provide an incentive  that focuses the  executive's
attention on managing us from the  perspective  of an owner with an equity stake
in the business.  Options are awarded with an exercise price equal to the market
value of common stock on the date of grant, have a maximum term of ten years and
generally become  exercisable,  in whole or in part,  starting one year from the
date of grant.  Among our executive  officers,  the number of shares  subject to
options  granted to each  individual  generally  depends  upon the level of that
officer's  responsibility.  The  largest  grants are  awarded to the most senior
officers  who,  in the view of the  Compensation  Committee,  have the  greatest
potential  impact on our  profitability  and  growth.  Previous  grants of stock
options  are  reviewed  but are not  considered  the most  important  factor  in
determining the size of any executive's stock option award in a particular year.

     From time to time,  the  Compensation  Committee  intends  to  utilize  the
services  of   independent   consultants   to  perform   analyses  and  to  make
recommendations to the Committee relative to executive  compensation matters. No
compensation consultant has so far been retained.

Relationship of Compensation to Performance and  Compensation of Chief Executive
Officer

     The Compensation Committee annually establishes, subject to the approval of
the Board of Directors and any applicable  employment  agreements,  the salaries
that will be paid to our executive  officers  during the coming year. In setting
salaries,  the  Compensation  Committee  takes  into  account  several  factors,
including  competitive  compensation data, the extent to which an individual may
participate in the stock plans maintained by us, and qualitative factors bearing
on an  individual's  experience,  responsibilities,  management  and  leadership
abilities, and job performance.

                                       6
<PAGE>

     In November 2000, the Board of Directors  amended the employment  agreement
with D. Michael  Deignan,  President and CEO,  providing for automatic  one-year
term extensions  through November 2005, subject to termination by the Board upon
written notice 90 days prior to the annual  anniversary  date. In addition,  the
amended agreement  provided for annual  compensation of $240,000.  Mr. Deignan's
employment agreement provides,  among other things, that in the event there is a
change  in our  control,  as  defined  therein,  or in any  person  directly  or
indirectly  controlling us, as also defined therein, Mr. Deignan has the option,
exercisable  within six months of becoming aware of such event, to terminate his
employment agreement.  Upon such termination,  he has the right to receive, as a
lump-sum payment,  certain compensation  remaining to be paid for the balance of
the term of the agreement. In addition, in the event of a change in our control,
all stock options  previously  granted to Mr.  Deignan would become fully vested
and immediately exercisable.

        Our Compensation Committee:
Alexander G. Bearn   David S. Blumenthal           Abraham E. Cohen (ex-officio)
Photios T. Paulson   E. Donald Shapiro, Chairman   Anthony Viscusi
Forrest R. Whittaker

                               PERFORMANCE GRAPH

        The following graph sets forth the cumulative total return* to the
Company's stockholders during the five-year period ended May 31, 2002 as well as
an overall stock market index (NASDAQ Stock Market Index) and the Company's peer
group index (S&P Health Care Equipment):
<TABLE>
<CAPTION>

                       COMPARISON OF 5 YEAR TOTAL RETURN*
          AMONG VASOMEDICAL, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX
                   AND THE S & P HEALTH CARE EQUIPMENT INDEX

                                            Cumulative Total Return *
                                            -----------------------
                                5/31/97 5/31/98 5/31/99 5/31/00 5/31/01 5/31/02
                                ------------------------------------------------
<S>                             <C>      <C>     <C>     <C>     <C>     <C>
Vasomedical, Inc.               100.00   92.59   75.92   237.04  233.48  105.48
NASDAQ Stock Market (US)        100.00  126.81  179.03   245.44  152.33  117.16
S&P Health Care Equipment Index 100.00  130.98  162.28   181.02  178.28  193.71
<FN>
*    $100  invested  on  5/31/97  in stock or  index-including  reinvestment  of
     dividends. Fiscal year ending May 31.
</FN>
</TABLE>
                                       7
<PAGE>

ITEM TWELVE - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

     The following  information,  including stock  ownership,  is submitted with
respect  to  our  directors,  each  executive  officer  named  in  the  "Summary
Compensation  Table," for all executive  officers and directors as a group, and,
based solely on filings with the Securities and Exchange  Commission,  except as
otherwise  indicated,  for each  holder of more than five  percent of our common
stock as of September 27, 2002.
<TABLE>
<CAPTION>
                                                Common Stock                    % of Outstanding
Name of Beneficial Owner                        Beneficially Owned (1)(2)(3)         Shares
------------------------                        ----------------------------    ----------------
<S>                                                   <C>                          <C>

Alexander G. Bearn, MD (8)(9)(10)(16)(24)(29)            85,175 shs.                   *
180 Linden Avenue, Westbury, NY 11590

David S. Blumenthal, MD (5)(9)(10)(15)(24)(29)          123,078 shs.                   *
407 East 70th Street, New York, NY 10021

Abraham E. Cohen (5)(8)(9)(11)(12)(24)(29)              693,078 shs.                  1.20%
444 Madison Avenue, New York, NY 10022

D. Michael Deignan (22)(25)(27)                         393,085 shs.                   *
180 Linden Avenue, Westbury, NY 11590

Joseph A. Giacalone (7)(13)(19)(20)(26)(28)             482,028 shs.                   *
180 Linden Avenue, Westbury, NY 11590

John C. K. Hui, PhD (6)(13)(17)(28)                   1,400,989 shs.                  2.41%
180 Linden Avenue, Westbury, NY 11590

Photios T. Paulson (23)(24)(29)(31)                      41,667 shs.                   *
615 Franklin Turnpike, Ridgewood, NJ 07450

Kenneth W. Rind, PhD (5)(8)(9)(10)(24)(29)              388,078 shs.                   *
750 Lexington Avenue, New York, NY 10022

E. Donald Shapiro (24)(29)                              611,428 shs.                  1.06%
180 Linden Avenue, Westbury, NY 11590

Anthony Viscusi (4)(6)(14)(18)(21)(24)(29)            1,620,000 shs.                  2.78%
380 Lexington Avenue, Suite 1700, New York, NY 10168

Forrest R. Whittaker (23)(24)(29)(31)                    41,667 shs.                   *
4280 Hacienda Drive, Pleasanton, CA 94588

Martin Zeiger (30)                                       16,667 shs.                   *
2 Quaker Road, Pomona, NY 10970

Directors and executive officers
  as a group (12 persons)                             5,896,940 shs.                  9.78%
----------
<FN>
*       Less than 1% of the Company's Common Stock

(1)  No  officer  or  director  owns more than one  percent  of the  issued  and
     outstanding Common Stock of the Company unless otherwise indicated.
(2)  Ownership represents sole voting and investment power.

(3)  Includes  Common Stock  issuable  under stock options and warrants that are
     exercisable within 60 days.

                                       8
<PAGE>

(4)  Includes  warrants to purchase  250,000  shares of Common Stock at $.45 per
     share expiring in June 2003.
(5)  Includes currently  exercisable options to purchase 12,903 shares of Common
     Stock at $.775 per  share  expiring  in May 2005  granted  pursuant  to the
     Outside Director Stock Option Plan.
(6)  Includes  options to purchase 150,000 shares of Common Stock at $3.4375 per
     share expiring in May 2006.
(7)  Includes  options to purchase 105,000 shares of Common Stock at $3.4375 per
     share expiring in May 2006.
(8)  Includes currently  exercisable  options to purchase 4,525 shares of Common
     Stock at $2.21 per  share  expiring  in May 2006  granted  pursuant  to the
     Outside Director Stock Option Plan.
(9)  Includes currently  exercisable  options to purchase 5,650 shares of Common
     Stock at $1.77 per  share  expiring  in May 2007  granted  pursuant  to the
     Outside Director Stock Option Plan.
(10) Includes currently  exercisable options to purchase 10,000 shares of Common
     Stock at $.875 per share  expiring in January 2009 granted  pursuant to the
     1997 Stock Option Plan.
(11) Includes currently exercisable options to purchase 350,000 shares of Common
     Stock at $.875 per share  expiring in January 2004 granted  pursuant to the
     1997 Stock Option Plan.
(12) Includes currently  exercisable options to purchase 40,000 shares of Common
     Stock at $.875 per share  expiring in January 2009 granted  pursuant to the
     1997 Stock Option Plan.
(13) Includes currently  exercisable options to purchase 70,000 shares of Common
     Stock at $.875 per share  expiring in January 2009 granted  pursuant to the
     1997 Stock Option Plan.
(14) Includes currently exercisable options to purchase 140,000 shares of Common
     Stock at $.875 per share  expiring in January 2009 granted  pursuant to the
     1997 Stock Option Plan.
(15) Includes currently  exercisable options to purchase 18,525 shares of Common
     Stock at $1.90625 per share expiring in March 2008 granted  pursuant to the
     1997 Stock Option Plan.
(16) Includes currently  exercisable options to purchase 50,000 shares of Common
     Stock at $1.90625 per share expiring in March 2008 granted  pursuant to the
     1997 Stock Option Plan.
(17) Includes currently exercisable options to purchase 375,000 shares of Common
     Stock at $1.90625 per share expiring in March 2008 granted  pursuant to the
     1997 Stock Option Plan.
(18) Includes currently exercisable options to purchase 100,000 shares of Common
     Stock at $1.90625 per share expiring in March 2008 granted  pursuant to the
     1997 Stock Option Plan.
(19) Includes currently  exercisable options to purchase 52,500 shares of Common
     Stock at $1.90625 per share expiring in March 2008 granted  pursuant to the
     1997 Stock Option Plan.
(20) Includes currently  exercisable options to purchase 10,000 shares of Common
     Stock at $1.6875 per share  expiring in July 2009  granted  pursuant to the
     1999 Stock Option Plan.
(21) Includes currently exercisable options to purchase 100,000 shares of Common
     Stock at $1.6875 per share  expiring in July 2009  granted  pursuant to the
     1999 Stock Option Plan.
(22) Includes currently  exercisable options to purchase 50,000 shares of Common
     Stock at $5.15 per share  expiring  in March 2010  granted  pursuant to the
     1999 Stock Option Plan.
(23) Includes currently  exercisable options to purchase 15,000 shares of Common
     Stock at $3.94 per share  expiring  in April 2010  granted  pursuant to the
     1999 Stock Option Plan.
(24) Includes currently  exercisable options to purchase 10,000 shares of Common
     Stock at $3.88 per share  expiring in October 2010 granted  pursuant to the
     1999 Stock Option Plan.
(25) Includes currently exercisable options to purchase 250,000 shares of Common
     Stock at $1.22 per share  expiring in January 2010 granted  pursuant to the
     1999 Stock Option Plan.
(26) Includes currently  exercisable options to purchase 40,000 shares of Common
     Stock at $1.22 per share  expiring in January 2010 granted  pursuant to the
     1999 Stock Option Plan.
(27) Includes currently  exercisable options to purchase 66,667 shares of Common
     Stock at $3.96 per share expiring in July 2011 granted pursuant to the 1999
     Stock Option Plan.
(28) Includes currently  exercisable options to purchase 16,667 shares of Common
     Stock at $3.96 per share expiring in July 2011 granted pursuant to the 1999
     Stock Option Plan.
(29) Includes currently  exercisable  options to purchase 5,000 shares of Common
     Stock at $3.13 per share  expiring in October 2011 granted  pursuant to the
     1999 Stock Option Plan.
(30) Includes currently  exercisable options to purchase 16,667 shares of Common
     Stock at $3.13 per share  expiring in October 2011 granted  pursuant to the
     1999 Stock Option Plan.
(31) Includes currently  exercisable  options to purchase 6,667 shares of Common
     Stock at $3.13 per share  expiring in October 2011 granted  pursuant to the
     1999 Stock Option Plan.
</FN>
</TABLE>

ITEM THIRTEEN - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The Company has no transactions to report.

                                       9
<PAGE>


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized on the thirtieth day of September,
2002.

                           VASOMEDICAL, INC.

                           By: /s/ D. Michael Deignan
                           -----------------------------------------------
                           D. Michael Deignan
                           President, Chief Executive Officer and Director
                          (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed  below on  September  30, 2002 by the  following  persons in the
capacities indicated:

_______________________     Director
Alexander G. Bearn

/s/ David S. Blumenthal     Director
David S. Blumenthal

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

/s/ D. Michael Deignan      President, Chief Executive Officer and Director
D. Michael Deignan          (Principal Executive Officer)

/s/ Joseph A. Giacalone     Chief Financial Officer (Principal Financial and
Joseph A. Giacalone         Accounting Officer)


/s/ John C.K. Hui           Senior Vice President, Chief Technology Officer and
John C.K. Hui               Director

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

/s/ Kenneth W. Rind         Director
Kenneth W. Rind

/s/ E. Donald Shapiro       Director
E. Donald Shapiro

/s/ Anthony Viscusi         Director
Anthony Viscusi

/s/ Forrest R. Whittaker    Director
Forrest R. Whittaker

/s/ Martin Zeiger           Director
Martin Zeiger