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 February 28, 1999

[ ] 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 April 12, 1999                      50,402,687
                                                        ----------

     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 Subsidiary



                                      INDEX



PART I - FINANCIAL INFORMATION

     Item 1 - Financial Statements:                                         Page
                                                                            ----
          Consolidated Condensed Balance Sheets as of 
               February 28, 1999 and May 31, 1998 (Unaudited)                 3

          Consolidated Condensed Statements of Operations for
               the Nine and Three Months Ended
               February 28, 1999 and 1998 (Unaudited)                         4

          Consolidated Condensed Statement of Changes in Stockholders'
               Equity for the Nine Months Ended
               February 28, 1999 (Unaudited)                                  5

          Consolidated Condensed Statements of Cash Flows for the
               Nine Months Ended February 28, 1999 and 1998 (Unaudited)       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                                                  12
<PAGE>
                        Vasomedical, Inc. and Subsidiary

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (unaudited)
<TABLE>
<CAPTION>

                                                              February 28,           May 31,
                                                                   1999               1998
                                                                   ----               ----
<S>                                                             <C>                 <C>    
         ASSETS                                                           
CURRENT ASSETS
     Cash and cash equivalents                                  $1,578,487          $4,367,986
     Accounts receivable                                           451,293             976,341
     Inventories                                                   853,134             678,302
     Other current assets                                          151,262             164,826
                                                              ------------        ------------ 
         Total current assets                                    3,034,176           6,187,455

PROPERTY AND EQUIPMENT, net                                        588,157             352,902
CAPITALIZED COST IN EXCESS OF FAIR
     VALUE OF NET ASSETS ACQUIRED, net                             621,551             781,373
OTHER ASSETS                                                        23,114              23,516
                                                              ------------        ------------ 
                                                                $4,266,998          $7,345,246
                                                              ------------        ------------
     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable and accrued expenses                        $707,024            $436,730
     Accrued warranty and customer support expenses                297,000             240,000
     Accrued professional fees                                     116,478             225,833
     Accrued commissions                                           144,033             176,553
     Dividends payable                                             149,860              62,137
                                                              ------------        ------------ 
         Total current liabilities                               1,414,395           1,141,253

ACCRUED WARRANTY COSTS                                             161,000             334,000
OTHER LONG-TERM LIABILITIES                                         76,440             117,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $.01 par value; 1,000,000
       shares authorized; 175,000 and 225,750 shares 
       at February 28, 1999 and May 31, 1998, respectively,
       issued and outstanding                                        1,750               2,258
     Common stock, $.001 par value; 110,000,000 shares 
       authorized; 50,402,687 and 48,531,278 shares at
       February 28, 1999 and May 31, 1998, respectively,
       issued and outstanding                                       50,403              48,531
     Additional paid-in capital                                 37,749,483          36,458,155
     Accumulated deficit                                      (35,186,473)        (30,755,951)
                                                              ------------        ------------ 
                                                                 2,615,163           5,752,993
                                                              ------------        ------------ 
                                                                $4,266,998          $7,345,246
                                                              ------------        ------------ 
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
<PAGE>
                        Vasomedical, Inc. and Subsidiary

                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (unaudited)
<TABLE>
<CAPTION>
                                          Nine months ended       Three months ended
                                       -----------------------   -----------------------                                         
                                            February 28,              February 28,
                                       -----------------------   ----------------------- 
                                          1999        1998         1999         1998
                                          ----        ----         ----         ----   
<S>                                    <C>          <C>          <C>          <C>   
Revenues  
 Equipment sales                       $2,007,100   $3,650,080   $1,457,100   $1,625,664
 Equipment rentals and services           469,179      205,231      227,079       52,499
                                       ----------   ----------   ----------   ---------- 
                                        2,476,279    3,855,311    1,684,179    1,678,163
                                       ----------   ----------   ----------   ---------- 
Costs and expenses
 Cost of sales and services             1,164,174    1,063,367      590,384      423,647
 Selling, general and administrative    4,014,589    4,175,189    1,366,313    1,668,656
 Research and development                 470,752    1,279,966      130,989      331,101
 Depreciation and amortization            324,559      275,179      122,850       92,863
 Interest and financing costs               9,415        1,546        2,078          470
 Interest and other income - net         (102,101)    (132,385)     (18,036)     (35,780)
                                       ----------   ----------   ----------   ---------- 
                                        5,881,388    6,662,862    2,194,578    2,480,957
                                       ----------   ----------   ----------   ---------- 
 NET LOSS                              (3,405,109)  (2,807,551)    (510,399)    (802,794)

   Deemed dividend on preferred stock    (864,000)    (857,000)        -            -
   Preferred stock dividend requirement  (161,413)     (69,659)     (53,342)     (16,720)
                                       ----------   ----------   ----------   ---------- 
 LOSS APPLICABLE TO
    COMMON STOCK                      $(4,430,522) $(3,734,210)   $(563,741)   $(819,514)
                                       ----------   ----------   ----------   ---------- 

Net loss per common share (basic and 
 diluted)                                   $(.09)       $(.08)       $(.01)       $(.02)
                                            -----        -----        -----        ----- 

Weighted average common shares
 outstanding (basic and diluted)       49,025,137   47,689,862   49,614,736   48,235,284
                                       ----------   ----------   ----------   ---------- 
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
<PAGE>
                        Vasomedical, Inc. and Subsidiary

      CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                                                         Total
                                                                                      Additional        Accum-           stock-
                                       Preferred Stock            Common stock         paid-in          ulated           holders'
                                      Shares      Amount       Shares      Amount      capital          deficit          equity
                                      ------      ------       ------      ------     ----------      ------------     ----------
<S>                                   <C>         <C>        <C>           <C>        <C>             <C>              <C>       
Balance at June 1, 1998               225,750     $2,258     48,531,278    $48,531    $36,458,155     $(30,755,951)    $5,752,993

Conversion of preferred stock         (50,750)      (508)       975,882        976           (468)                           -
Deemed dividend on preferred stock                                                        864,000         (864,000)          -
Preferred stock dividend requirement                                                                      (161,413)      (161,413)
Common stock issued in lieu of 
   preferred stock dividends                                     70,527         71         73,621                          73,692
Exercise of warrants                                            825,000        825        354,175                         355,000
Net loss                                                                                                (3,405,109)    (3,405,109)
                                      -------     ------     ----------    -------    -----------     ------------     ---------- 
Balance at February 28, 1999          175,000     $1,750     50,402,687    $50,403    $37,749,483     $(35,186,473)    $2,615,163
                                      -------     ------     ----------    -------    -----------     ------------     ----------



<FN>
The accompanying notes are an integral part of this condensed statement.
</FN>
</TABLE>
<PAGE>
                        Vasomedical, Inc. and Subsidiary

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (unaudited)
<TABLE>
<CAPTION>
                                                             Nine months ended February 28,
                                                             -----------------------------
                                                                  1999           1998
                                                                  ----           ----
<S>                                                           <C>             <C>    
Cash flows from operating activities
  Net loss                                                    $(3,405,109)    $(2,807,551)
                                                              -----------     -----------
  Adjustments to reconcile net loss
    to net cash used in operating activities
      Depreciation and amortization                               324,559         275,179
Changes in operating assets and liabilities
        Accounts receivable                                       525,048        (758,629)
        Inventory                                                (549,943)         88,772
        Other current assets                                       13,564        (164,382)
        Other assets                                                  402            (403)
        Accounts payable, accrued expenses
          and other current liabilities                           185,421         192,685
        Other liabilities                                        (213,560)        191,370
                                                              -----------     -----------
                                                                  285,491        (175,408)
                                                              -----------     -----------
     Net cash used in operating activities                     (3,119,618)     (2,982,959)
                                                              -----------     -----------
Cash flows from investing activities
  Purchase of property and equipment                              (24,881)        (23,891)
                                                              -----------     -----------
Net cash used in investing activities                             (24,881)        (23,891)
                                                              -----------     -----------
Cash flows from financing activities
  Proceeds from exercise of options and warrants                  355,000         484,463
  Proceeds from issuance of preferred stock, net                                2,817,900
                                                              -----------     -----------
Net cash provided by financing activities                         355,000       3,302,363
                                                              -----------     -----------
      NET (DECREASE) INCREASE IN
        CASH AND CASH EQUIVALENTS                              (2,789,499)        295,513
Cash and cash equivalents - beginning of period                 4,367,986       1,753,004
                                                              -----------     -----------
Cash and cash equivalents - end of period                      $1,578,487      $2,048,517
                                                              -----------     -----------


Non-cash investing and financing activities were as follows:
Deemed dividend on preferred stock                               $864,000        $857,000
Issuance of common stock in lieu of preferred dividends            73,692         25,602
Inventories transferred to property and equipment,
   attributable to operating leases - net                         375,111          75,000






<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
<PAGE>
                        Vasomedical, Inc. and Subsidiary

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                February 28, 1999
                                   (unaudited)

NOTE A - BASIS OF PRESENTATION
     The  consolidated  condensed  balance sheet as of February 28, 1999 and the
related  consolidated  condensed  statements  of  operations  for the  nine- and
three-month  periods ended February 28, 1999 and 1998,  changes in stockholders'
equity for the nine-month  period ended February 28, 1999 and cash flows for the
nine-month  periods  ended  February  28,  1999 and 1998 have been  prepared  by
Vasomedical,  Inc. and Subsidiary (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 as of February
28, 1999 and for all periods presented have been made.
     Certain  information  and  footnote   disclosures,   normally  included  in
financial  statements  prepared in accordance with generally accepted accounting
principles, 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,  1998.  Results  of
operations for the periods ended February 28, 1999 and 1998 are not  necessarily
indicative of the operating results expected or reported for the full year.

NOTE B - STOCKHOLDERS' EQUITY
     On April 30, 1998, the Company completed a second tranche of financing with
an accredited  investor and issued  175,000  shares of newly created 5% Series C
Cumulative  Convertible Preferred Stock ("Series C Preferred"),  $.01 par value,
pursuant to Regulation D under the  Securities Act of 1933 at a price of $20 per
share, for net cash proceeds of $3,294,000. The Series C Preferred has no voting
rights and was  convertible  into common  stock of the  Company at an  effective
conversion  price of the lower of (i) $2.08 or (ii) 85% of the  average  closing
bid  price  of the  Company's  common  stock  for  the  five  (5)  trading  days
immediately  preceding the conversion  date (the "Average  Closing  Price"),  as
defined  in the  Certificate  of  Designation  of the  Series  C  Preferred.  In
addition, the investor was granted five-year warrants to purchase 413,712 shares
of  common  stock at an  exercise  price of $2.08 per  share.  The  Company  has
estimated the value of the deemed dividend,  representing the discount resulting
from the  allocation of proceeds to the  beneficial  conversion  feature and the
fair value of the  underlying  warrants,  to approximate  $936,000.  Such deemed
dividend  has been  recognized  from the date of issuance  through the date such
preferred   stock  was  first   convertible  (on  or  about  August  15,  1998).
Accordingly,  the Company recognized a deemed dividend of $275,000 in the fourth
quarter  of fiscal  1998 and  recognized  the  remaining  portion  of the deemed
dividend of $661,000 in the first quarter of fiscal 1999.
     Based upon negotiations  between the Company and the holder of the Series C
Preferred  in  December  1998  relating  to  the  delayed   effectiveness  of  a
registration  statement  covering the  underlying  shares of common  stock,  the
conversion  price with respect to the Series C Preferred has been reduced to the
lower of (i) $2.00 per share,  or (ii) 81% of the  Average  Closing  Price.  The
Company has estimated the incremental value of the deemed dividend, representing
the  additional  discount  resulting  from the  allocation  of  proceeds  to the
beneficial conversion feature, to approximate $203,000. Accordingly, the Company
recognized  this  incremental  deemed  dividend in the second  quarter of fiscal
1999.
     In the first, second and third quarters of fiscal 1999, 9,250 shares, 8,000
shares and 33,500 shares of preferred  stock were converted into 167,636 shares,
196,392 shares and 611,854 shares of common stock, respectively.
    In January 1999,  the Company's  Board of Directors  increased the number of
shares  authorized  for issuance  under the Company's  1997 Stock Option Plan by
1,000,000  shares to  2,800,000  shares.  In  addition,  the Board of  Directors
granted  stock  options  under the plan to  directors,  officers,  employees and
consultants to purchase an aggregate of 830,000 shares,  470,000 shares, 313,500
shares, and 150,000 shares of common stock,  respectively,  at an exercise price
of $.875 per share (which  represented  the fair market value of the  underlying
common stock at the time of grant). The stock options granted to consultants are
contingent upon certain performance criteria.
     In the third quarter of fiscal 1999, warrants to purchase 825,000 shares of
common stock were exercised, aggregating $355,000.
<PAGE>
                        Vasomedical, Inc. and Subsidiary

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
                                February 28, 1999
                                   (unaudited)

NOTE C - COMMITMENTS AND CONTINGENCIES
Employment Agreements
---------------------
     Approximate aggregate minimum annual compensation  obligations under active
employment agreements at February 28, 1999 are summarized as follows:
<TABLE>
<CAPTION>
          Twelve months ended February 28,     Amount
          --------------------------------     ------
                              <S>             <C>          
                              2000            $569,000
                              2001             498,000
                              2002             123,000
                                            ---------- 
                                            $1,195,000
                                            ---------- 
</TABLE>
SEC Investigation
-----------------
     In  February  1995,  the  Company  received a subpoena  duces  tecum by the
broker-dealer  branch of the Northeast  Regional  Office of the  Securities  and
Exchange  Commission  ("SEC")  requesting  certain  documents  from the  Company
pursuant to a formal order of private  investigation in connection with possible
registration  and  reporting  violations.  The Company has  cooperated  with the
investigation. As stated in the subpoena, the "investigation is confidential and
should  not be  construed  as an  indication  by the SEC or its  staff  that any
violations  of law have  occurred,  nor should it be  interpreted  as an adverse
reflection on any person,  entity or security."  The Company is not aware of any
activity  concerning  this  investigation  since  April  1998,  and is unable to
establish the likelihood of an unfavorable outcome or the existence or amount of
any potential loss.

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 systems. The complaint
seeks damages in the  approximate  sum of  $50,000,000,  declaratory  relief and
punitive  damages.  The Company denies the existence of any agreement,  believes
that the complaint is frivolous  and without  merit and is vigorously  defending
the claims as well as asserting substantial counterclaims. 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.
     In May 1998, an action was commenced in the New York Supreme Court, Suffolk
County,  against the Company and other parties.  The action seeks 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.  The Company
and its insurer  believe that the  complaint is frivolous  and without merit and
are vigorously defending the claims. Furthermore,  management believes that this
action is fully covered by insurance.  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.
     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.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
--------------------------------------------------------------------------
OPERATIONS
----------
Results of Operations
---------------------
Nine and Three Months Ended February 28, 1999 and 1998
------------------------------------------------------
     The Company  generated  revenues from the sale and lease of EECP systems of
$2,476,000  and  $3,855,000  and  $1,684,000  and  $1,678,000  for the nine- and
three-month periods ended February 28, 1999 and 1998, respectively.  The Company
incurred  net losses of  $3,405,000  and  $2,807,000  for the nine months  ended
February  28,  1999  and  1998,  respectively  (before  deducting  $864,000  and
$857,000, respectively, in deemed dividends on preferred stock which represented
the  discount  resulting  from the  allocation  of  proceeds  to the  beneficial
conversion feature and the fair value of the underlying warrants,  and $161, 000
and $70,000,  respectively,  in dividend  requirements,  in connection  with the
Company's April 1998 and June 1997 financings).  The Company incurred net losses
of $510,000 and $803,000 for the three months ended  February 28, 1999 and 1998,
respectively  (before deducting $53,000 and $17,000,  respectively,  in dividend
requirements  in  connection  with  the  Company's  April  1998  and  June  1997
financings).

     The number of cardiology  practices  and  hospitals  interested in becoming
providers of enhanced external  counterpulsation  (EECP) has 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  38  million
beneficiaries.  Interest in EECP therapy has also been spurred by the results of
the Company's one-year follow-up quality-of-life outcomes study presented at the
American Heart  Association (AHA) annual meeting in November 1998 and additional
reports  presented at the American College of Cardiology annual meeting in March
1999.  The number of EECP systems  placed in the first three  quarters of fiscal
1999 has exceeded that of systems placed in all four quarters of the prior year;
however,  revenues in the current  fiscal  year,  particularly  in the first two
fiscal  quarters,  have been adversely  affected by the nature of the commercial
arrangements   under  which  those  units  were  placed.  The  Company  expects,
especially  as a  result  of  HCFA's  recent  coverage  decision,  that  several
placements made so far under rental or fee-for-use  arrangements will convert to
financed leases or outright sales in the fourth quarter of fiscal 1999, although
there can be no assurance that this will occur.

     Gross margins are dependent on a number of factors, particularly the mix of
EECP units sold and rented  during the period,  the ongoing  costs of  servicing
such units, and by certain fixed period costs, including facilities, payroll and
insurance.  Gross  margins  are  furthermore  affected  by the  location  of the
Company's  customers  and the amount and nature of  training  and other  initial
costs   required  to  place  the  EECP  system  in  service  for  customer  use.
Accordingly,  the gross  margin  realized  during the current  period may not be
indicative of future margins.
<PAGE>
     Selling,  general  and  administrative  (SGA)  expenses  for the  nine- and
three-month  periods  ended  February  28,  1999  and  1998  were  approximately
$4,015,000 and  $4,175,000,  and $1,366,000 and  $1,669,000,  respectively.  The
$161,000 decrease in SGA expenses for the comparable  nine-month period resulted
primarily from the decrease in commissions and other related selling expenses as
a result of decreased  revenues.  The $302,000  decrease in SGA expenses for the
comparable  three-month period resulted primarily from substantial  expenditures
in the prior period for public relations programs related to the announcement of
the  aforementioned  multicenter  study's  results and for new  promotional  and
educational materials.

     Research and development (R&D) expenses decreased $809,000 and $200,000 for
the nine and three months ended February 28, 1999 compared to the prior periods.
The decreases were the result of significant  prior period  expenses  related to
the completion of the Company's multicenter clinical study of EECP (completed in
July 1997) and the  front-loaded  expenses for the development of a new model of
the EECP system. Current period expenses relate to the long-term follow-up phase
of the  multicenter  clinical  study,  i.e., a  quality-of-life  outcomes  study
(completed  in July 1998),  the  expansion  of the  International  EECP  Patient
Registry at the University of Pittsburgh,  and the ongoing  feasibility study in
congestive heart failure,  all of which, to some extent, are expected to further
affect operating results in fiscal 1999.

Liquidity and Capital Resources
-------------------------------
     Working capital  decreased by $3,426,000 from $5,046,000 at May 31, 1998 to
$1,620,000 at February 28, 1999, principally as a result of continuing operating
losses.  In the third quarter of fiscal 1999, the Company  received  proceeds of
$355,000 from the exercise of warrants.

     In fiscal 1998,  the Company issued an aggregate of 325,000 shares of newly
created 5% Series B and Series C Convertible  Preferred  Stock to one accredited
investor at a price of $20 per share, realizing net cash proceeds of $6,112,000.
Dividends due on such preferred stock have been, and are expected to be, paid in
shares of the Company's  common  stock.  Through  February 28, 1999,  all of the
Series B preferred  stock  (150,000  shares) have been  converted into 2,135,946
shares of the Company's  common stock.  To date,  none of the Series C preferred
stock has been converted into common stock.

     Management  believes that its present working capital  position at February
28,  1999,  along  with  the  ongoing   commercialization  of  the  EECP  system
(including,  but not limited to, the conversion of current units under rental or
use  arrangements to outright sales or financed  leases),  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 the next twelve months.  Management  will revise its business
plans in the event actual  revenues  deviate from  current  projections.  If the
Company's future cash  requirements  are not adequately  generated from the sale
and lease of EECP  systems,  the  Company may require  infusions  of  additional
capital from equity or debt issuances.

Impact of the Year 2000 on Information Systems

     The Year 2000 issue arises as the result of computer  programs  having been
written, and systems having been designed,  using two digits rather than four to
define the  applicable  year.  Consequently,  such software has the potential to
recognize  a date using "00" as the year 1900  rather  than the year 2000.  This
could  result in a system  failure or  miscalculations  causing  disruptions  of
operations,  including,  among other  things,  a temporary  inability to process
transactions, send invoices, or engage in similar normal business activities.
<PAGE>
     The  Company's  sole product is not expected to be affected by Year 2000 as
it does not rely on date- sensitive software or affected hardware. The Company's
current accounting and other systems were purchased "off-the-shelf". The Company
intends to timely update its  accounting  and other systems which are determined
to be affected  by Year 2000 by  purchasing  Year 2000  compliant  software  and
hardware available from retail vendors at reasonable costs.

     The Company has not yet  contacted  other  companies on whose  services the
Company  depends to  determine  whether  such  companies'  systems are Year 2000
compliant.  If the systems of the Company or other  companies on whose  services
the  Company  depends,  including  the  Company's  customers,  are not Year 2000
compliant,  there could be a material adverse effect on the Company's  financial
condition or results of operations.




     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.
<PAGE>
                        VASOMEDICAL, INC. AND SUBSIDIARY
                        -------------------------------- 
                           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:

     None

ITEM 5 - OTHER INFORMATION:

     None

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

     Exhibits:
          No. 27 Financial Data Schedule

     Reports on Form 8-K:
          None
<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/ Anthony Viscusi
                             ------------------- 
                             Anthony Viscusi
                             President, Chief Executive Officer and Director
                             (Principal Executive Officer)

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

Date:  April 14, 1999