UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                   FORM 10-Q


[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities  Exchange
Act of 1934 For the quarterly period ended November 30, 2000

[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from _______________ to ______________

Commission File Number: 0-18105

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

          Delaware                                      11-2871434
--------------------------------------------------------------------------------
(State or other jurisdiction of             (IRS Employer Identification Number)
 incorporation or organization)

                   180 Linden Ave., Westbury, New York 11590
--------------------------------------------------------------------------------
                    (Address of principal executive offices)

Registrant's Telephone Number                          (516) 997-4600

Number of Shares Outstanding of Common Stock,
$.001 Par Value, at December 31, 2000                     56,407,042


     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the  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 [ ]
                                   ---     --
<PAGE>
                       Vasomedical, Inc. and Subsidiaries



                                     INDEX



PART I - FINANCIAL INFORMATION

     Item 1 - Financial Statements (unaudited)                           Page

              Consolidated Condensed Balance Sheets as of
                    November 30, 2000 and May 31, 2000                     3

              Consolidated Condensed Statements of Earnings for the
                    Six Months Ended November 30, 2000 and 1999            4

              Consolidated Condensed Statement of Changes in Stockholders'
                    Equity for the Period from June 1, 2000 to
                    November 30, 2000                                      5

              Consolidated Condensed Statements of Cash Flows for the
                    Six Months Ended November 30, 2000 and 1999            6


              Notes to Consolidated Condensed Financial Statements         7

     Item 2 - Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                    9

PART II - OTHER INFORMATION                                               11

                                       2
<PAGE>
                       Vasomedical, Inc. and Subsidiaries

                     CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>

                                                                    November 30,    May 31,
                                                                       2000          2000
                                                                       ----          ----
          ASSETS                                                    (unaudited)    (audited)
<S>                                                                  <C>          <C>
CURRENT ASSETS
     Cash and cash equivalents                                       $ 3,801,963  $ 3,058,367
     Accounts receivable, net of allowance for doubtful accounts of
           $502,000 at November 30, 2000 and $400,000 at May 31, 2000  7,227,330    4,832,810
     Inventories                                                       1,812,101      906,984
     Deferred income taxes                                             1,186,000      400,000
     Other current assets                                                643,923      479,267
                                                                     -----------  -----------
             Total current assets                                     14,671,317    9,677,428

PROPERTY AND EQUIPMENT, net                                            1,822,521      548,316
CAPITALIZED COST IN EXCESS OF FAIR VALUE OF NET ASSETS
      ACQUIRED, net of accumulated amortization of $1,243,065 and
      $1,136,517 at November 30, 2000 and May 31, 2000, respectively     248,633      355,181
OTHER ASSETS                                                              43,792        8,037
                                                                     -----------  -----------
                                                                     $16,786,263  $10,588,962
                                                                     ===========  ===========
      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
      Accounts payable and accrued expenses                          $ 2,281,926  $ 1,219,803
      Accrued warranty and customer support expenses                     368,000      258,000
      Accrued professional fees                                          168,000      276,000
      Accrued commissions                                                487,415      543,389
      Note Payable                                                     1,141,667            -
                                                                     -----------  -----------
             Total current liabilities                                 4,447,008    2,297,192

ACCRUED WARRANTY COSTS                                                   113,000      129,000
OTHER LONG-TERM LIABILITIES                                                    -       16,000
DEFERRED REVENUES                                                        233,514      203,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $.01 par value; 1,000,000 shares authorized;
      none issued and outstanding                                              -            -
     Common stock, $.001 par value; 110,000,000 shares authorized;
      56,407,042 and 55,921,330 shares at November 30, 2000 and
      May 31, 2000, respectively, issued and outstanding                  56,407       55,921
     Additional paid-in capital                                       41,892,568   40,939,158
     Accumulated deficit                                             (29,956,234) (33,051,309)
                                                                     -----------  -----------
             Total stockholders' equity                               11,992,741    7,943,770
                                                                     -----------  -----------
                                                                     $16,786,263  $10,588,962
                                                                     ===========  ===========
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>

                                       3
<PAGE>
                       Vasomedical, Inc. and Subsidiaries

                 CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
                                  (unaudited)
<TABLE>
<CAPTION>

                                         Six months ended         Three months ended
                                         ----------------         ------------------
                                            November 30,             November 30,
                                            ------------             ------------
                                        2000         1999          2000        1999
                                        ----         ----          ----        ----
<S>                                  <C>           <C>          <C>          <C>
Revenues
 Equipment sales                     $11,524,944   $5,669,175   $6,331,035   $2,778,995
 Equipment rentals and services          173,677      306,400      122,927      177,100
                                     -----------   ----------   ----------   ----------
                                      11,698,621    5,975,575    6,453,962    2,956,095
                                     -----------   ----------   ----------   ----------
Costs and expenses
 Cost of sales and services            2,960,496    1,369,287    1,648,540      757,017
 Selling, general and administrative   5,279,369    3,348,738    2,950,861    1,606,422
 Research and development                933,600      646,852      490,886      393,704
 Depreciation and amortization           226,230      250,708      109,249      129,101
 Provision for doubtful accounts         102,000            -       51,000            -
 Interest and financing costs              4,546        3,562        2,119        1,550
 Interest and other income - net        (116,695)     (41,447)     (65,449)     (21,425)
                                     -----------   ----------   ----------   ----------
                                       9,389,546    5,577,700    5,187,206    2,866,369
                                     -----------   ----------   ----------   ----------
 NET EARNINGS BEFORE
    INCOME TAXES                       2,309,075      397,875    1,266,756       89,726
  Deferred income tax benefit            786,000            -      428,000            -
                                     -----------   ----------   ----------   ----------
 NET EARNINGS                          3,095,075      397,875    1,694,756       89,726
  Preferred stock dividend requirement         -      (74,243)           -      (35,780)
                                     -----------   ----------   ----------   ----------
 EARNINGS APPLICABLE TO
  COMMON STOCK                        $3,095,075     $323,632   $1,694,756      $53,946
                                     ===========   ==========   ==========   ==========
Earnings per common
 share (basic and diluted)                  $.05         $.01         $.03         $.00
                                            ====         ====         ====         ====
Weighted average common shares
 outstanding
  Basic                               56,255,508   50,971,701   56,383,350   51,092,875
                                     ===========   ==========   ==========   ==========
  Diluted                             59,772,176   55,848,051   59,851,517   55,488,074
                                     ===========   ==========   ==========   ==========
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>

                                       4
<PAGE>
                       Vasomedical, Inc. and Subsidiaries

      CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                            Total
                                                           Additional       Accum-          stock
                                         Common Stock        paid-in        ulated         holders'
                                       Shares     Amount      capital       deficit         equity
                                     ---------    ------    -----------   ------------    ----------
<S>                                  <C>          <C>       <C>           <C>             <C>
Balance at June 1, 2000              55,921,330   $55,921   $40,939,158   $(33,051,309)   $7,943,770
Exercise of options and warrants        485,712       486       953,410                      953,896
Net earnings                                                                 3,095,075     3,095,075
                                     ----------   -------   -----------   ------------   -----------
Balance at November 30, 2000         56,407,042   $56,407   $41,892,568   $(29,956,234)  $11,992,741
                                     ==========   =======   ===========   ============   ===========

















<FN>
The accompanying notes are an integral part of this condensed statement.
</FN>
</TABLE>

                                       5
<PAGE>
                       Vasomedical, Inc. and Subsidiaries

                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                  (unaudited)
<TABLE>
<CAPTION>

                                                                      Six months ended
                                                                      ----------------
                                                                         November 30,
                                                                         ------------
                                                                     2000          1999
                                                                     ----          ----
<S>                                                                <C>          <C>
Cash flows from operating activities
 Net earnings                                                      $3,095,075   $  397,875
                                                                   ----------   ----------
 Adjustments to reconcile net earnings
 to net cash used in operating activities
  Depreciation and amortization                                       226,230      250,708
  Provision for bad debts                                             102,000            -
  Deferred income taxes                                              (786,000)           -
  Stock options granted for services                                        -       58,000
  Changes in operating assets and liabilities
   Accounts receivable                                             (2,496,520)  (1,019,050)
   Inventories                                                     (1,002,730)     166,164
   Other current assets                                              (164,655)      14,443
   Other assets                                                       (36,047)      22,076
   Accounts payable, accrued expenses and other current liabilities 1,008,150      (71,982)
   Other liabilities                                                   (1,486)     (18,000)
                                                                   ----------   ----------
                                                                   (3,151,058)    (597,641)
                                                                   ----------   ----------
  Net cash used in operating activities                               (55,983)    (199,766)
                                                                   ----------   ----------
Cash flows from investing activities
 Purchase of property and equipment                                (1,295,984)     (30,913)
                                                                   ----------   ----------
  Net cash used in investing activities                            (1,295,984)     (30,913)
                                                                   ----------   ----------
Cash flows from financing activities
 Proceeds from notes                                                1,141,667            -
 Proceeds from exercise of options and warrants                       953,896       51,250
                                                                   ----------   ----------
  Net cash provided by financing activities                         2,095,563       51,250
                                                                   ----------   ----------
  NET INCREASE/(DECREASE) IN
   CASH AND CASH EQUIVALENTS                                          743,596     (179,429)
Cash and cash equivalents - beginning of period                     3,058,367    1,678,175
                                                                   ----------   ----------
Cash and cash equivalents - end of period                          $3,801,963   $1,498,746
                                                                   ==========   ==========


Non-cash investing and financing activities were as follows:
Issuance of common stock in lieu of preferred dividends                     -      $50,962
Inventories transferred (from)/to property and equipment,
 attributable to operating leases - net                               $97,612        8,444




<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
                                     6
<PAGE>


                       Vasomedical, Inc. and Subsidiaries

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                               November 30, 2000
                                  (unaudited)

NOTE A - BASIS OF PRESENTATION
     The  consolidated  condensed  balance sheet as of November 30, 2000 and the
related consolidated  condensed statements of earnings for the six-month periods
ended  November  30,  2000 and 1999,  changes  in  stockholders'  equity for the
six-month  period  ended  November  30,  2000 and cash  flows for the  six-month
periods ended November 30, 2000 and 1999 have been prepared by Vasomedical, Inc.
and  Subsidiaries  (the "Company")  without audit. In the opinion of management,
all  adjustments  (which  include only normal,  recurring  accrual  adjustments)
necessary to present fairly the financial  position and results of operations as
of November 30, 2000 and for all periods presented have been made.
     Certain  information  and  footnote   disclosures,   normally  included  in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America, have been condensed or omitted.  These
financial statements should be read in conjunction with the financial statements
and notes thereto  included in the Annual Report on Form 10-K for the year ended
May 31, 2000.  Results of operations for the periods ended November 30, 2000 and
1999  are not  necessarily  indicative  of the  operating  results  expected  or
reported for the full year.

NOTE B - INVENTORIES
<TABLE>
<CAPTION>
                                                        November 30,     May 31,
                                                        ------------     -------
        Inventories consist of the following:              2000           2000
                                                           ----           ----
                <S>                                     <C>             <C>
                Raw materials                           $1,485,601      $545,924
                Finished goods                             326,500       361,060
                                                        ----------      --------
                                                        $1,812,101      $906,984
                                                        ==========      ========
</TABLE>

NOTE C - NOTE PAYABLE

     In November 2000, the Company  purchased its present  operating  facilities
and secured a note payable from a financial institution for $1,141,667. The note
bears  interest  at the Libor Rate plus 150 basis  points  (approximately  8% at
November  30,  2000) and is due in monthly  payments  of interest  only,  with a
balloon  payment due in May 2001.  The note is secured by the  building, and the
Company  maintains a restricted cash balance with the financial  institution for
the amount of the note  during its term.  The  Company  has  received  long-term
financing  commitments  under  two  programs  sponsored  by New  York  State  at
favorable fixed interest rates. The existing note will be refinanced under these
commitments by May 2001.

NOTE D - STOCKHOLDERS' EQUITY
     In the first half of fiscal  2001,  the Board of  Directors  granted  stock
options  under the 1999 Stock  Option Plan to employees to purchase an aggregate
of 528,000 shares of common stock at exercise prices ranging from $3.88 to $4.69
per share  (which  represented  the fair market value of the  underlying  common
stock at the time of the respective  grants).
     In the first half of fiscal 2001,  options and warrants to purchase 485,712
shares of common stock were exercised,  aggregating  $953,896 in proceeds to the
Company.

                                      7
<PAGE>
                       Vasomedical, Inc. and Subsidiaries

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
                               November 30, 2000
                                  (unaudited)

NOTE E - EARNINGS PER COMMON SHARE
     Basic earnings per share are based on the weighted average number of common
shares  outstanding  without  consideration of potential  common stock.  Diluted
earnings  per share are based on the  weighted  number of common  and  potential
common shares  outstanding.  The calculation  takes into account the shares that
may be issued upon the exercise of stock  options and  warrants,  reduced by the
shares that may be repurchased with the funds received from the exercise,  based
on the  average  price  during the  period,  and  convertible  preferred  stock,
assuming conversion at the beginning of the period.
     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share:
<TABLE>
<CAPTION>
                                     Six months ended November 30,  Three months ended November 30,
                                          2000           1999             2000           1999
                                          ----           ----             ----           ----
<S>                                    <C>           <C>               <C>          <C>
Numerator:
 Basic earnings                        $ 3,095,075   $   397,875        $1,694,756  $    89,726
  Preferred stock dividends                      -        74,243                 -       35,780
                                       -----------   -----------        ----------  -----------
 Diluted earnings                      $ 3,095,075   $   323,632        $1,694,756  $    53,946
                                       ===========   ===========        ==========  ===========
Denominator:
 Basic - weighted average shares        56,255,508    50,971,701        56,383,350   51,092,875
        Stock options                    2,391,063       621,009         2,308,485      388,907
        Warrants                         1,125,605     1,178,631         1,159,682    1,056,337
        Convertible preferred stock              -     3,076,710                 -    2,949,955
                                       -----------   -----------        ----------  -----------
 Diluted - weighted average shares      59,772,176    55,848,051        59,851,517   55,488,074
                                       ===========   ===========        ==========  ===========
</TABLE>

NOTE F - COMMITMENTS AND CONTINGENCIES
Litigation
----------
     In May 1996,  an action was  commenced in the Supreme Court of the State of
New York, Nassau County,  against the Company,  its directors and certain of its
officers  and  employees  for the alleged  breach of an  agreement  to appoint a
non-affiliated party as its exclusive  distributor of EECP(R) systems. In August
1999, a motion for summary judgment to dismiss the complaint in its entirety was
granted.  In November 2000, this dismissal was affirmed on appeal.
     In May 1998, an action was commenced in the New York Supreme Court, Suffolk
County,  against the Company and other parties. The action sought damages in the
sum of  $5,000,000  based  upon  alleged  injuries  resulting  from the  alleged
negligence of the  defendants in the use of the  Company's  product.  In October
2000, the court dismissed the plaintiff's complaint in its entirety.
     In February  1999,  an action was commenced in the  Massachusetts  Superior
Court, Essex County, against the Company. The action seeks damages in the sum of
$1,000,000  based  upon an  alleged  breach  of a sales  contract.  The  Company
believes  that the  complaint is frivolous  and without  merit and is vigorously
defending the claims.  This matter is in its preliminary stages, and the Company
is unable to establish the likelihood of an unfavorable outcome or the existence
or amount of any potential loss.

Agreement with VAMED
--------------------
     In connection with an acquisition in 1995, the Company assumed  commitments
under an  agreement,  expiring  November  2008,  with VAMED  Medical  Instrument
Company Ltd. ("VAMED"),  a Chinese company,  for the contract manufacture of its
current EECP(R) system, subject to certain performance standards, as defined. At
November 30, 2000, the Company had outstanding purchase commitments of $972,000.
The Company  believes  that VAMED will be able to meet the  Company's  needs for
EECP(R) systems.

                                       8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
--------------------------------------------------------------------------
OPERATIONS
----------

Results of Operations
---------------------
Six Months and Three Months Ended November 30, 2000 and 1999
------------------------------------------------------------
     The Company  generated  revenues from the sale and lease of EECP(R) systems
of $11,699,000 and $5,976,000 for the six-month  periods ended November 30, 2000
and 1999, respectively and $6,454,000 and $2,596,000 for the three-month periods
ended November 30, 2000 and 1999 respectively. The Company generated earnings of
$3,095,000 and $398,000,  respectively  (before  deducting  $74,000 in preferred
stock dividend requirements for the six months ended November 30, 1999), for the
six months  ended  November  30, 2000 and 1999 and  earnings of  $1,695,000  and
$90,000,  respectively  (before  deducting  $36,000 in preferred  stock dividend
requirements for the three months ended November 30, 1999), for the three months
ended November 30, 2000 and 1999.
     The number of cardiology  practices  and  hospitals  interested in becoming
providers of enhanced external  counterpulsation  (EECP) increased following the
announcement by the Health Care Financing Administration (HCFA) in February 1999
of its  decision  to  extend  Medicare  coverage  nationally  to  the  Company's
noninvasive,  outpatient  treatment  for coronary  artery  disease.  HCFA is the
federal  agency that  administers  the  Medicare  program for  approximately  38
million  beneficiaries.  In addition,  the results of the Company's multicenter,
prospective,  randomized, blinded, controlled clinical study of EECP (MUST-EECP)
were published in the June 1999 issue of the Journal of the American  College of
Cardiology.  Interest in EECP therapy has also been spurred by the  announcement
of the results of six-month and twelve-month post-treatment outcomes reported by
the  International  EECP  Patient  Registry and  presented  at major  scientific
meetings,  including  the  American  Heart  Association  (AHA) and the  American
College of Cardiology (ACC) annual meetings.
     Revenue  growth in the prior  fiscal  period  (fiscal  2000) was  initially
hindered because local Medicare contractors  established  inappropriate  payment
levels  that did not take into  account the full value of the  resources  health
care  providers must deploy to deliver EECP therapy.  Consequently,  in November
1999,  HCFA created a specific  code for external  counterpulsation  therapy and
established a nationally applicable allowable charge,  which became effective on
January  1,  2000.  The  allowable  charge  under the new code was based  upon a
preliminary determination of Relative Value Units (RVUs) assigned by HCFA to the
resources  needed for the  administration  of the therapy.  Certain patients may
require  additional  services,  such as evaluation and management,  which may be
billed  separately.  The  Company  estimates  the  standard  national  charge to
approximate  $130 per session of EECP therapy,  which may be adjusted by certain
geographic indices.  This would result in a standard charge of $4,550 for a full
course of therapy, which typically involves 35 one-hour outpatient sessions. The
assigned  code  will  allow  EECP  providers  to bill  Medicare  electronically,
substantially  reducing the process for receiving  reimbursement.  Moreover,  in
light of the new payment instructions, local Medicare contractors will no longer
have the responsibility of establishing reimbursement rates. Beginning August 1,
2000,  Medicare  coverage was extended to include EECP treatment  received on an
outpatient  basis  at  hospitals  and  outpatient  clinics  under  the  new  APC
(Ambulatory  Payment  Classification)  system. The national average payment rate
approximates $150 per session.  These events led to an increased demand for EECP
therapy and EECP(R)  equipment  and,  consequently,  to revenue  growth.  An 11%
increase in the  reimbursement  rate for EECP therapy has been  approved by HCFA
with  effect from  January 1, 2001. This raises the average  Medicare payment to
$143.85.
     Gross margins are dependent on a number of factors, particularly the mix of
EECP(R) units sold and rented during the period,  the ongoing costs of servicing
such units, and certain fixed period costs,  including  facilities,  payroll and
insurance.  Gross  margins  are  furthermore  affected  by the  location  of the
Company's  customers   (including  non-  domestic  business  or  distributorship
arrangements  which,  for discounted  equipment  purchase  prices,  co-invest in
establishing  a market  for  EECP(R)  equipment)  and the  amount  and nature of
training and other initial costs required to place the EECP(R) system in service
for customer use.  Consequently,  the gross margin  realized  during the current
period may not be indicative of future margins.
     Selling,  general and  administrative  (SG&A)  expenses  for the six months
ended November 30, 2000 and 1999 were $5,279,000 and  $3,349,000,  respectively,
and $2,951,000 and $1,606,000, respectively, for the three months ended November
30, 2000 and 1999.  The increases in SG&A expenses of $1,930,000  and $1,345,000
from the comparable  prior-year fiscal periods resulted primarily from increases
in  administration,  sales and  marketing  personnel,  as well as other  selling
expenses related to increased revenues.

                                       9
<PAGE>
     Research and  development  (R&D) expenses in the six and three months ended
November  30,  2000  increased  by  $287,000  and  $97,000  from the  comparable
prior-year  periods.  The increases relate primarily to continued product design
and  development  costs  (including  an increase in  personnel),  as well as the
initiation of the pivotal study in heart failure (which received FDA approval in
July 2000). The Company's newly developed EECP system,  Model TS-3, received FDA
510(k) clearance to market in December 2000.
     The  increase  in  interest  income is the  result of larger  average  cash
balances invested during the current period.

Liquidity and Capital Resources
-------------------------------
     The Company has financed its fiscal 2001 and 2000 operations primarily from
working capital and operating  results.  At November 30, 2000, the Company had a
cash balance of $3,802,000  and working  capital of  $10,224,000,  compared to a
cash balance of  $3,058,000  and working  capital of $7,380,000 at May 31, 2000.
The Company's operating activities used cash of $56,000 and $200,000 for the six
months ended November 30, 2000 and 1999, respectively.  Net cash used during the
six months  ended  November  30,  2000  consisted  primarily  of  earnings  from
operations,  increases  in  accounts  payable and  accrued  expenses,  offset by
increases in accounts  receivable,  other current  assets and  inventories.  The
increase  in  inventories,  particularly  raw  materials,  and the  increase  in
accounts  payable are  attributable to the purchase of components and assemblies
for the production of the new Model TS-3 system, which was recently  cleared for
marketing by the FDA.
     Investing activities used net cash of $1,296,000 and $31,000 during the six
months ended November 30, 2000 and 1999,  respectively.  The principal uses were
for the  purchase of  property  and  equipment,  including  the  purchase of the
Company's present operating facilities in mid-November 2000. The purchase price,
including  planned  improvements,  is estimated at  $1,400,000.  The Company has
secured  long-term  financing at favorable  interest rates through two financing
programs  sponsored by New York State, which are expected to close in early 2001
upon the completion of building renovations.  In the interim period, the Company
has secured bridge  financing with a financial  institution  for a period of six
months, for which $1,141,667 cash has been restricted as collateral.
     Financing activities provided cash of $2,096,000 and $51,000 during the six
months ended  November  30, 2000 and 1999,  respectively.  Financing  activities
during  fiscal  2001  and  2000  consisted  primarily  from  the  November  2000
transaction to finance the purchase of the Company's  operating  facilities,  as
well as $954,000 from the sale of common stock and receipt of cash proceeds upon
the exercise of Company common stock warrants by officers, directors,  employees
and consultants.
     Management believes that its working capital position at November 30, 2000,
along with the  ongoing  commercialization  of the EECP(R)  system and  possible
further  proceeds  from the  exercise  of  options  and  warrants,  will make it
possible  for the  Company to support  its  internal  overhead  expenses  and to
implement its business plans for at least the next twelve months.


     Except for historical  information  contained herein, the matters discussed
are forward-looking  statements that involve risks and uncertainties.  When used
in this report, words such as "anticipate",  "believe", "estimate", "expect" and
"intend"  and  similar  expressions,  as  they  relate  to  the  Company  or its
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of the  Company's  management,  as well as  assumptions
made by and information currently available to the Company's  management.  Among
the  factors  that  could  cause  actual  results to differ  materially  are the
following:  the effect of the dramatic  changes  taking place in the  healthcare
environment;  the  impact  of  competitive  procedures  and  products  and their
pricing;  unexpected  manufacturing  problems  in foreign  supplier  facilities;
unforeseen  difficulties  and delays in the conduct of clinical trials and other
product  development  programs;   the  actions  of  regulatory  authorities  and
third-party  payers in the United States and overseas;  uncertainties  about the
acceptance of a novel  therapeutic  modality by the medical  community;  and the
risk  factors  reported  from time to time in the  Company's  SEC  reports.  The
Company  undertakes  no  obligation  to update  forward-looking  statements as a
result of future events or developments.

                                       10
<PAGE>
                       VASOMEDICAL, INC. AND SUBSIDIARIES
                       ----------------------------------
                          PART II - OTHER INFORMATION
                          ---------------------------

ITEM 1 - LEGAL PROCEEDINGS:

        Previously reported.

ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS:

        None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES:

        None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     A. The registrant  held its Annual Meeting of  Stockholders  on October 11,
2000.
     B. Not applicable.
     C. Four  directors  were elected at the Annual Meeting to serve in Class II
until the Annual Meeting of  Stockholders  for fiscal 2002.  They are Abraham E.
Cohen, John C.K. Hui, Photios T. Paulson and Forrest R. Whittaker. One director,
D.  Michael  Deignan,  was  elected at the Annual  Meeting to serve in Class III
until the Annual Meeting of Stockholders  for fiscal 2001. The minimum number of
votes cast in favor of their elections was 52,237,246.

     The other  matter voted upon was the  ratification  of the  appointment  of
Grant Thornton LLP as the Company's independent certified public accountants for
the fiscal year ended May 31, 2001. The votes cast are as follows:

          Votes For: 52,174,296; Votes Against: 123,490; Votes Abstained: 94,212

ITEM 5 - OTHER INFORMATION:

        None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K:

        Exhibits:
          No.  10 Employment Agreement dated December 1, 2000 between Registrant
               and D. Michael Deignan
          No.  27 Financial Data Schedule

        Reports on Form 8-K:
                None

                                       11
<PAGE>


     In accordance with to the  requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


                                 VASOMEDICAL, INC.

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

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

Date:  January 3, 2001