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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, 2008

[ ]  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 $0.08 as of
September 24, 2008, was approximately $4,924,255. 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 24, 2008, the number of shares outstanding of the issuer's common
stock was 93,868,004.

<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, 2008 (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, 2008, 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
29, 2008 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, 2008 filed on Form 10-KSB on August 29, 2008.

<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....................................................9
Item 14.      Principal Accountant Fees and Services...........................................................11
</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 24, 2008, 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)                    72        Chairman of the Board and Director        June 1993
Derek Enlander (2)                      60        Director                                  July 2007
Joseph Giacalone (1)                    44        Director                                  December 2007
John C.K. Hui, PhD (3)                  62        President,  Chief  Executive  Officer,    February 1995
                                                  Chief Technology Officer and
                                                  Director
Jun Ma (2)                              45        Director                                  June 2007
Behnam Movaseghi                        55        Director                                  July 2007
Photios T. Paulson (1)(2)               69        Director                                  April 2000
Simon Srybnik (3)                       92        Director                                  June 2007
Martin Zeiger (1)(2)(3)                 71        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.

     Joseph A. Giacalone,  a certified  public  accountant,  has been a director
since  December 2007 and is Chairman of our Audit  Committee.  He is Director of
Finance and  Accounting  of Griffon  Corporation  since  December  2007.  He was
Director of Finance and Accounting of P & F Industries, Inc. from August 2004 to
October 2007. He was employed by  Vasomedical,,  Inc. from February 1993 through
August  2003,  serving as Chief  Financial  Officer  from January 2000 to August
2003.  From  1983 to 1993,  Mr.  Giacalone  was  employed  by the  international
accounting firm of Grant Thornton LLP.

     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.

                                       1
<PAGE>
     John C.K. Hui, PhD has been our President and Chief Executive Officer since
April 2007 and Chief Technology  Officer,  as well as, a director since February
1995. From February 1995 until April 2007, he was a Senior Vice  President.  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.

     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
several  companies,   including  Kerns   Manufacturing  Corp.  and  Living  Data
Technology Corp.

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

     Photios T.  Paulson has been a director  since April 2000 and 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  which held four meetings  during
the fiscal year ended May 31, 2008 ("fiscal 2008").  The Board has affirmatively
determined  that each director who serves on the Audit Committee is independent,
as the term is defined by applicable  Securities and Exchange Commission ("SEC")
rules.  During fiscal 2008 the Audit Committee consisted of Joseph A. Giacalone,
who has served as the committee  chair since his  appointment  in December 2007,
Photios T. Paulson,  who served as the committee  chair during fiscal 2008 until
Mr.  Giacalone's  appointment  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

                                       2
<PAGE>
agencies.  However, Mr. Giacalone keeps current on generally accepted accounting
principles and is considered to be a financial expert as that term is defined in
applicable  regulations.  As a  result,  they  each  have  an  understanding  of
financial statements.

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

Compensation Committee

     Our Compensation Committee annually establishes,  when required, 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,
as well as administers our stock-based  benefit plans. There were no meetings of
this  committee  held in fiscal  2008.  During  fiscal  2008,  the  Compensation
Committee  consisted of Martin Zeiger,  who serves as the committee chair, Derek
Enlander, Jun Ma and Photios T. Paulson. None of these persons were our officers
or  employees  during  fiscal 2008 or,  except as otherwise  disclosed,  had any
relationship requiring disclosure in this Proxy Statement.

Corporate Governance Committee

     The Board of Directors has  established a Corporate  Governance  Committee.
There were no meetings of this  committee  held in fiscal  2008.  During  fiscal
2008, the Corporate  Governance Committee consisted of John C.K. Hui, who serves
as committee chair,  Simon Syrbnik 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 Exchange Act requires  directors,  executive  officers
and  persons  who   beneficially   own  more  than  10%  of  our  common   stock
(collectively,  "Reporting  Persons") to file initial  reports of ownership  and
reports of  changes in  ownership  of our common  stock with the SEC.  Reporting
Persons are required by SEC regulations to furnish us with copies of all Section
16(a)  reports they file.  To our  knowledge,  based solely on our review of the
copies  of  such  reports  received  or  written  representations  from  certain
Reporting  Persons that no other reports were  required,  we believe that during
fiscal 2008, 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
Current 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                      62        President, Chief Executive Officer,
                                                  Chief Technology Officer and Director
Tricia Efstathiou                       37        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  2008 and year ended May 31,  2007  ("fiscal
2007").
<TABLE>
<CAPTION>
                           Summary Compensation Table
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
                                                                                 Non-Equity   Nonqualified
   Name and Principal                                                            Incentive      Deferred
        Position                                            Stock     Option        Plan      Compensation   All Other
                           Year  Salary ($)   Bonus        Awards     Awards    Compensation    Earnings    Compensation   Total
                                     (2)      ($)            ($)      ($) (3)        ($)           ($)        ($) (1)       ($)
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
<S>                        <C>    <C>            <C>        <C>          <C>          <C>           <C>        <C>        <C>
John C. K. Hui (4)         2008   $187,485       --         --           --           --            --         $21,088    $208,573
President and CEO          2007   $162,600       --         --           --           --            --         $26,247    $188,847
Senior VP, CTO
 (CEO)
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
Thomas Glover (5)          2008      --          --         --           --           --            --           --          --
President and CEO          2007   $238,333       --         --           --           --            --         $20,766    $259,099
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
 Tricia Efstathiou (6)     2008   $132,600       --         --           --           --            --         $19,854    $152,454
CFO                        2007   $ 86,667       --         --        $ 18,000        --            --         $12,084    $116,751
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
Thomas W. Fry (7)          2008      --          --         --           --           --            --           --         --
CFO                        2007   $ 69,253       --         --           --           --            --          $1,249   $  70,502
-------------------------- ----- ------------ --------- ------------ ----------- ------------- ------------- ------------ ----------
<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 paid in fiscal 2007 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  fiscal  2007.   Includes  $13,390  deferred  by  Dr.  Hui
          voluntarily in fiscal 2007.
     (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 fiscal 2008:
<TABLE>
<CAPTION>
----------------- --------------------------------------------------------------------- --------------------------------------------
                                             Option Awards                                               Stock Awards
----------------- --------------------------------------------------------------------- --------------------------------------------
                                                                                                                          Equity
                                                                                                                         Incentive
                                                                                                              Equity       Plan
                                                                                                            Incentive     Awards:
                                                                                                              Plan       Market or
                                                                                                             Awards:      Payout
                                                 Equity                                           Market    Number of    Value of
                                                Incentive                                        Value of   Unearned     Unearned
                    Number of      Number of   Plan Awards:                         Number of     Shares     Shares,      Shares,
                   Securities      Securities    Number of                           Shares or   or Units   Units or     Units or
                   Underlying      Underlying   Underlying                           Units of    of Stock    Other        Other
                   Unexercised    Unexercised  Unexercised  Option    Option        Stock That    That       Rights       Rights
                    Options -      Options -     Unearned  Exercise Expiration       Have Not    Have Not   That Have   That Have
      Name         Exercisable   Unexercisable    Options   Price      Date          Vested       Vested    Not 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          --           --         --          --
                      133,333      66,667       66,667      $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.

     The following information is provided about our current stock option plans:

     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

                                       5
<PAGE>
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, 2008, 3,141,168 options had been granted
(including  options  previously  granted but subsequently  cancelled),  of which
512,668 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
1999 Plan  expires July 12, 2009.  At May 31, 2008,  9,151,932  options had been
granted,  (including options previously granted but subsequently cancelled),  of
which 3,266,470 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,  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,  2008,  2,918,045  shares had been  granted  (including
options  previously  granted but  subsequently  cancelled),  of which options to
purchase 1,681,072 shares are outstanding under the 2004 Stock Plan.

                                       6
<PAGE>
     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  years  2008  and  2007,  the  Company  made
discretionary  contributions of approximately $9,000 and $15,000,  respectively,
to match a percentage of employee contributions.

Employment Agreements

     As of May 31, 2008, the Company does not have any employment agreements.

Director's Compensation

     Non-employee Directors received a fee of $1,500 for each Board of Directors
and  Committee  meetings  attended and $2,500 for each Audit  Committee  meeting
attended,  payable at each director's option in cash or common stock.  Beginning
for fiscal 2008,  Directors will also receive annually,  $15,000 of common stock
valued at the fair  market  value of the  common  stock on the date of grant for
serving as a board member  during the fiscal year.  New  non-employee  directors
also received one of the following during fiscal 2008:

     o A grant of a non-qualified  stock option to purchase 150,000 shares which
     vested immediately. or
     o A grant of 150,000 shares of common stock.

     The following table provides the  compensation  earned by our  non-employee
directors for fiscal 2008:
<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              ($)       ($) (1)       ($)             ($)              ($)              ($)            ($)
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
<S>                      <C>         <C>          <C>              <C>               <C>             <C>          <C>
Abraham E. Cohen         $ 4,500     $16,500           --          --                --              --           $21,000
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Derek Enlander           $ 4,500     $15,000      $14,475          --                --              --           $33,975
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Joseph Giacalone         $ 8,000     $24,000           --          --                --              --           $32,000
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Jun Ma                   $ 6,000     $15,000      $14,475          --                --              --           $35,475
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Behnam Movaseghi         $ 4,500     $15,000      $14,475          --                --              --           $33,975
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Photios T. Paulson       $16,000     $15,000           --          --                --              --           $31,000
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Simon Srybnik            $ 6,000     $15,000      $14,475          --                --              --           $35,475
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
Martin Zeiger            $16,000     $15,000           --          --                --              --           $31,000
------------------------ ----------- --------- ------------- ---------------- ---------------- ---------------- ------------
<FN>
     (1)  Stock  awards for fiscal 2008 Board of  Directors'  compensation  were
          earned and approved, but not issued in fiscal 2008.
</FN>
</TABLE>
                                       7
<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 2008, our Compensation  Committee consisted of Martin Zeiger,
who  serves as the  committee  chair,  Derek  Enlander,  Jun Ma and  Photios  T.
Paulson. None of these persons were our officers or employees during fiscal 2008
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  24,  2008 of (i)  each  person  known  by us to
beneficially  own 5% or more of the shares of  outstanding  common stock,  based
solely  on  filings  with the  SEC,  (ii)  each of our  executive  officers  and
directors,  and (iii) all of our  executive  officers and  directors as a group.
Except as otherwise indicated, all shares are beneficially owned, and investment
and voting power is held by the persons named as owners.
<TABLE>
<CAPTION>
                                                                        Common Stock                % of
                                                                        Beneficially               Common
                      Name of Beneficial Owner                            Owned (1)               Stock (2)
        ------------------------------------------------------        -----------------        -----------------
        <S>                                                               <C>                          <C>
        Abraham E. Cohen ** .................................             1,785,254                    1.9%
        Tricia Efstathiou ** ................................               341,162                    *
        Derek Enlander **....................................               400,000                    *
        Joseph Giacalone **..................................               400,000                    *
        John C. K. Hui, PhD (3) ** ..........................             1,228,880                    1.3%
        Jun Ma **............................................               400,000                    *
        Benham Movaseghi **..................................               400,000                    *
        Photios T. Paulson **................................               870,000                    *
        Simon Srybnik (4) (5) **.............................            33,105,126                   33.68%
        Louis Srybnik (4) (5)................................            32,705,126                   33.27%
        Martin Zeiger **.....................................               565,000                    *
        <FN>
        ** Directors and executive officers as a group
        (10 persons)..............................                       39,495,422                   39.11%

         *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.
</FN>
</TABLE>
                                       8
<PAGE>


     Includes  beneficial  ownership of the following numbers of shares that may
     be acquired  within 60 days of  September  24,  2008  pursuant to a warrant
     awarded under the Securities  Purchase  Agreement with Kerns  Manufacturing
     Corp. ("Kerns") and stock options awarded under our stock option plans:
<TABLE>
        <S>                   <C>         <C>                      <C>
        Abraham E. Cohen      670,000     Behnam Movaseghi           150,000
        Tricia Efstathiou     325,333     Photios T. Paulson         595,000
        Derek Enlander        150,000     Simon Srybnik            4,435,714
        John C. K. Hui, PhD   439,558     Martin Zeiger              265,000
        Jun Ma                150,000     Directors and
                                          executive officers       7,180,605
                                          as a group
</TABLE>
2.   Applicable  percentages  are based on  93,868,004  shares  of common  stock
     outstanding   on  September  24,  2008,   adjusted  as  required  by  rules
     promulgated by the SEC, which does not include stock awards to the Board of
     Directors  for fiscal 2008  compensation  earned that were approved but not
     issued as of September  24, 2008.  The  beneficially  owned shares  include
     stock awards to the Board of Directors  for fiscal 2008  compensation  that
     were approved and earned but not issued by September 24, 2008.
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,  which is 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 the
     4,285,714 shares underlying the restricted  warrant.  As a result, they 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,  as well as 250,000  shares of common stock awarded to
     the Board of  Directors  for  fiscal  2008  compensation  earned  that were
     approved but not issued as of September 24, 2008.
5.   Simon  Srybnik and his brother  Louis  Srybnik are the sole  directors  and
     officers of Living Data Technology  Corporation  ("Living Data"). 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 our common stock owned by Living Data and, as a result,
     may be deemed to be the co-beneficial owners thereof.

ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

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

     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").  The agreement further
provided for the appointment to our Board of Directors of two representatives of
Kerns. In furtherance thereof, Jun Ma and Simon Srybnik,  Chairman of both Kerns
and Living Data, 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

                                       9
<PAGE>
6,990,840  shares of our common stock to Living  Data.  Pursuant to the Supplier
Agreement,  Living Data now is 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.

     Pursuant to a Registration Rights Agreement, we granted to Kerns and Living
Data, subject to certain restrictions,  "piggyback registration rights" covering
the shares  sold to Kerns as well as the shares  issuable  upon  exercise of the
Warrant and the shares issued to Living Data.

     On July 10,  2007,  the  Board of  Directors  appointed  Behnam  Movaseghi,
Treasurer and Chief Financial Officer of Kerns Manufacturing Corporation, to our
Board of Directors.

     As  affiliates  of Living  Data and Kerns,  Mr. Ma, Mr.  Movaseghi  and Mr.
Srybnik have each been directly involved in the transactions between Living Data
or Kerns,  on the one hand, and the Company,  on the other hand, with respect to
the Securities Purchase Agreement,  the Distribution  Agreement and the Supplier
Agreement,  as well as  providing  consulting  services to the  Company  with no
compensation.

     During fiscal 2008,  the Company  purchased  ECP therapy  systems under the
Supplier  Agreement for $120,000 from Living Data, which was paid in full by the
Company as of June 2008. In addition,  Living Data purchased $5,000 worth of ECP
therapy  system  components  from the Company,  which was paid in full by Living
Data as of June 2008.

     During  fiscal 2009,  Living Data assigned to the Company all of its rights
and interests under its Distributorship  Agreement with a corporation  organized
and existing under the laws of the People's  Republic of China that manufactures
Ambulatory Blood Pressure  Monitors,  Ambulatory ECG Recorders and Holter & ABPM
Combiner  Recorders,  for $20,000  payable to Living Data based on certain terms
and  conditions.  The  Company  has also  agreed to pay to Living Data 5% of the
selling price or 5% of the cost of all goods sold (whichever is higher),  and 5%
of the cost of all goods transferred but not sold under the Assignment Agreement
to Living Data based on sales of this  equipment.  The  Company  intends to sell
these  systems in the United  States and other  countries  subject to  obtaining
regulatory clearance.

     During  fiscal 2009,  Living Data assigned to the Company all of its rights
and interests under its Distributorship  Agreement with a corporation  organized
and existing under the laws of the People's  Republic of China that manufactures
Ultrasound  Scanners,  for $20,000 payable to Living Data based on certain terms
and  conditions.  The  Company  has also  agreed to pay to Living Data 5% of the
selling  price or 5% of the cost of all goods sold  (whichever is higher) and 5%
of the cost of all goods transferred but not sold under the Assignment Agreement
to Living Data based on sales of this  equipment.  The  Company  intends to sell
these  systems in the United  States and other  countries  subject to  obtaining
regulatory clearance.

     In July of 2008, the Company  agreed to purchase ECP therapy  systems under
its  Distributorship  Agreement  with Living Data for  $360,000  payable over 18
months.

     Further,  Kerns provides the Company, free of charge,  part-time use of one
of its Information Technology (IT) employees as well one of their IT consultants
to provide the Company with IT and database  support  services.  In addition,  a
clinical applications support specialist and a service engineer from Living Data
may be used by the  Company to provide  customers  with  clinical  training  and
technical service.

                                       10
<PAGE>
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 2008 and 2007.  The following  table sets forth all
fees for the fiscal years ended May 31, 2008 and 2007:
<TABLE>
<CAPTION>
                                             2008             2007
                                             ----             ----
                  <S>                       <C>              <C>
                  Audit Fees (1)            $159,000         $201,000
                  Tax Fees (2)               $55,000          $13,000
<FN>
(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 for the guidance from an
     independent  internal-control  consulting  firm  related to  conducting  an
     evaluation of the  effectiveness of the Company's  disclosure  controls and
     procedures were approximately  $33,000. 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.
</FN>
</TABLE>

     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 years 2008
and 2007.

                                       11
<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 29th day of September,
2008.

                                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  29, 2008,  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/Joseph Giacalone                   Director
------------------------------------
Joseph Giacalone

/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