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 August 31, 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 October 1, 1999                       51,001,285
                                                          ----------

     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
               August 31, 1999 and May 31, 1999 (Unaudited)                   3

          Consolidated Condensed Statements of Operations for
               the Three Months Ended
               August 31, 1999 and 1998 (Unaudited)                           4

          Consolidated Condensed Statement of Changes in Stockholders'
               Equity for the Three Months Ended
               August 31, 1999 (Unaudited)                                    5

          Consolidated Condensed Statements of Cash Flows for the
               Three Months Ended August 31, 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                                                  11
<PAGE>
                        Vasomedical, Inc. and Subsidiary

                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                August 31,            May 31,
                                                                   1999                1999
                                                                   ----                ----
<S>                                                             <C>                 <C>
          ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                  $2,014,473          $1,678,175
     Accounts receivable                                         1,672,362           1,585,432
     Inventories                                                   598,198             594,093
     Other current assets                                          128,520             177,713
                                                                ----------          ----------
         Total current assets                                    4,413,553           4,035,413

PROPERTY AND EQUIPMENT, net                                        486,222             571,368
CAPITALIZED COST IN EXCESS OF FAIR
     VALUE OF NET ASSETS ACQUIRED, net                             515,003             568,277
OTHER ASSETS                                                        23,114              23,114
                                                                ----------          ----------
                                                                $5,437,892          $5,198,172
                                                                ----------          ----------
     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Accounts payable and accrued expenses                        $580,213            $705,640
     Accrued warranty and customer support expenses                417,000             382,000
     Accrued professional fees                                     180,466             271,438
     Accrued commissions                                           358,670             307,951
     Dividends payable                                             199,466             193,610
                                                                ----------          ----------
         Total current liabilities                               1,735,815           1,860,639

ACCRUED WARRANTY COSTS                                              99,000             114,000
OTHER LONG-TERM LIABILITIES                                         38,000              70,000

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY
     Preferred stock, $.01 par value; 1,000,000
       shares authorized; 147,000 and 175,000 shares at
       August 31, 1999 and May 31, 1999, respectively,
       issued and outstanding (liquidation preference of
       $2,940,000 and $3,500,000 at August 31, 1999 and
       May 31, 1999, respectively)                                   1,470               1,750
     Common stock, $.001 par value; 110,000,000 shares
       authorized; 50,978,538 and 50,402,687 shares
       at August 31, 1999 and May 31, 1999, respectively,
       issued and outstanding                                       50,979              50,403
     Additional paid-in capital                                 37,891,045          37,749,483
     Accumulated deficit                                       (34,378,417)        (34,648,103)
                                                                ----------          ----------
         Total stockholders' equity                              3,565,077           3,153,533
                                                                ----------          ----------
                                                                $5,437,892          $5,198,172
                                                                ----------          ----------
<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>
                                                                   Three months ended
                                                                   ------------------
                                                                      August 31,
                                                                      ----------
                                                                  1999            1998
                                                                  ----            ----
<S>                                                            <C>               <C>
Revenues
 Equipment sales                                               $2,890,180     $   350,000
 Equipment rentals and services                                   129,300          78,100
                                                               ----------     -----------
                                                                3,019,480         428,100
                                                               ----------     -----------
Costs and expenses
 Cost of sales and services                                       612,270         330,368
 Selling, general and administrative                            1,742,316       1,270,664
 Research and development                                         253,148         189,664
 Depreciation and amortization                                    121,607          93,083
 Interest and financing costs                                       2,012           5,209
 Interest and other income - net                                 (20,022)        (52,214)
                                                               ----------     -----------
                                                                2,711,331       1,836,774
                                                               ----------     -----------
 NET EARNINGS (LOSS)                                              308,149      (1,408,674)

       Deemed dividend on preferred stock                               -        (661,000)
       Preferred stock dividend requirement                      (38,463)         (54,756)
                                                               ----------     -----------
 EARNINGS (LOSS) APPLICABLE TO
    COMMON STOCK                                                 $269,686     $(2,124,430)
                                                               ----------     -----------
Earnings (loss) per common share (basic and diluted)                 $.01           $(.04)
                                                                     ----           -----
Weighted average common shares outstanding
   Basic                                                       50,850,526      48,659,766
                                                               ----------     -----------
   Diluted                                                     56,216,368      48,659,766
                                                               ----------     -----------
<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, 1999   175,000  $1,750   50,402,687   $50,403   $37,749,483   $(34,648,103)  $3,153,533
Conversion of preferred
 stock                    (28,000)   (280)     477,912       478          (198)                          -
Preferred stock dividend
 requirement                                                                          (38,463)     (38,463)
Common stock issued in
 lieu of preferred stock
 dividends                                      27,764        28        32,580                      32,608
Exercise of options and
 warrants                                       70,175        70        51,180                      51,250
Stock options granted for
 services                                                               58,000                      58,000
Net earnings                                                                          308,149      308,149
                          -------  ------   ----------   -------   -----------   ------------   ----------
Balance at August 31,
 1999                     147,000  $1,470   50,978,538   $50,979   $37,891,045   $(34,378,417)  $3,565,077
                          -------  ------   ----------   -------   -----------   ------------   ----------




<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>
                                                               Three months ended August 31,
                                                               -----------------------------
                                                                   1999         1998
                                                                   ----         ----
<S>                                                              <C>         <C>
Cash flows from operating activities
  Net earnings (loss)                                          $  308,149    $(1,408,674)
                                                               ----------    -----------
  Adjustments to reconcile net earnings (loss)
    to net cash provided by (used in) operating activities
      Depreciation and amortization                               121,607         93,083
      Stock options granted for services                           58,000              -
      Changes in operating assets and liabilities
        Accounts receivable                                       (86,930)       741,413
        Inventories                                                29,676       (139,749)
        Other current assets                                       49,193       (144,340)
        Other assets                                                    -            402
        Accounts payable, accrued expenses and other
         current liabilities                                     (130,680)      (392,178)
        Other liabilities                                         (47,000)        42,500
                                                               ----------    -----------
                                                                   (6,134)       201,131
                                                               ----------    -----------
     Net cash provided by (used in) operating activities          302,015     (1,207,543)
                                                               ----------    -----------
Cash flows from investing activities
  Purchase of property and equipment                              (16,967)        (8,796)
                                                               ----------    -----------
     Net cash used in investing activities                        (16,967)        (8,796)
                                                               ----------    -----------
Cash flows from financing activities
  Proceeds from exercise of options and warrants                   51,250              -
                                                               ----------    -----------
     Net cash provided by financing activities                     51,250              -
                                                               ----------    -----------
      NET INCREASE (DECREASE) IN
        CASH AND CASH EQUIVALENTS                                 336,298     (1,216,339)
Cash and cash equivalents - beginning of period                 1,678,175      4,367,986
                                                               ----------    -----------
Cash and cash equivalents - end of period                      $2,014,473     $3,151,647
                                                               ----------    -----------


Non-cash investing and financing activities were as follows:
Deemed dividend on preferred stock                                              $661,000
Issuance of common stock in lieu of preferred dividends           $32,608          9,246
Inventories transferred to (from) property and equipment,
   attributable to operating leases - net                         (57,334)       160,000



<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
                                 August 31, 1999
                                   (unaudited)

NOTE A - BASIS OF PRESENTATION
     The  consolidated  condensed  balance  sheet as of August 31,  1999 and the
related  consolidated  condensed  statements of operations  for the  three-month
periods ended August 31, 1999 and 1998, changes in stockholders'  equity for the
three-month  period  ended  August 31,  1999 and cash flows for the  three-month
periods ended August 31, 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 and results of operations as of August
31, 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,  1999.  Results  of
operations  for the periods  ended August 31, 1999 and 1998 are not  necessarily
indicative of the operating results expected or reported for the full year.

NOTE B - STOCKHOLDERS' EQUITY
     In January  1999,  the Company's  Board of Directors  granted stock options
under the 1997 Plan to a consultant to purchase  150,000  shares of common stock
at an exercise price of $.875 per share (which represented the fair market value
of the  underlying  common stock at the time of grant)  contingent  upon meeting
certain performance criteria. The stock options were fair-valued at $87,000. The
Company  recorded a charge to operations  of $58,000 in June 1999,  commensurate
with the partial satisfaction of the performance criteria defined therein.
     In July 1999,  the  Company's  Board of  Directors  approved the 1999 Stock
Option Plan (the "1999  Plan"),  for which the Company  reserved an aggregate of
2,000,000  shares of common stock. In addition,  the Board of Directors  granted
stock options under its 1997 and 1999 Plans to certain officers and employees to
purchase an  aggregate  of 175,000  shares and 150,000  shares of common  stock,
respectively,  at an  exercise  price of $1.69 per share,  and to an employee to
purchase  30,000 shares of common stock at an exercise  price of $1.53 per share
(which  represented the fair market value of the underlying  common stock at the
time of the respective grants).
     In the first quarter of fiscal 2000,  28,000 shares of preferred stock were
converted into 477,912 shares of common stock. In addition, options and warrants
to purchase 70,175 shares of common stock were exercised, aggregating $51,250 in
proceeds to the Company.

NOTE C - 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. Potential common shares were
excluded  from the diluted  calculation  for the three  months  ended August 31,
1998, as their effects were anti-dilutive.

     The  following  table  sets  forth the  computation  of basic  and  diluted
earnings per share for the three months ended August 31, 1999:
<TABLE>
<CAPTION>
<S>                                              <C>
Numerator:
   Basic earnings per share                      $269,686
      Preferred stock dividends                    38,463
                                                 --------
   Diluted earnings per share                    $308,149
                                                 --------
</TABLE>
<PAGE>
                        Vasomedical, Inc. and Subsidiary

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
                                 August 31, 1999
                                   (unaudited)

NOTE C - EARNINGS PER COMMON SHARE (continued)
<TABLE>
<CAPTION>
<S>                                                             <C>
Denominator:
   Basic weighted average shares                                50,850,526
     Stock options                                                 853,100
     Warrants                                                    1,300,926
     Convertible preferred stock                                 3,211,806
                                                                ----------
   Diluted weighted average shares                              56,216,368
                                                                ----------
Basic and diluted earnings per share                                  $.01
                                                                      ----
</TABLE>

NOTE D - COMMITMENTS AND CONTINGENCIES
Employment Agreements
---------------------
     Approximate aggregate minimum annual compensation  obligations under active
employment agreements at August 31, 1999 are summarized as follows:
<TABLE>
<CAPTION>
          Twelve months ended August 31,       Amount
          ------------------------------       ------
                              <S>             <C>
                              2000            $569,000
                              2001             283,000
                              2002              58,000
                                              --------
                                              $910,000
                                              --------
</TABLE>
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
sought damages in the  approximate sum of  $50,000,000,  declaratory  relief and
punitive  damages.  The  Company  denied the  existence  of any  agreement,  and
contended that the complaint was frivolous and without  merit.  The Company also
asserted  substantial  counterclaims.  In August  1999,  the motion for  summary
judgment to dismiss the  complaint in its  entirety was granted.  It is expected
that this decision will be appealed.
     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 the
damages  sought under the complaint are 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.

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 system,  subject to certain performance  standards,  as defined. At
August 31, 1999, the Company had outstanding  purchase  commitments of $486,000.
The Company  believes  that VAMED will be able to meet the  Company's  needs for
EECP systems.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
--------------------------------------------------------------------------
OPERATIONS
----------
Results of Operations
---------------------
Three Months Ended August 31, 1999 and 1998
-------------------------------------------
     The Company  generated  revenues from the sale and lease of EECP systems of
$3,019,000  and $428,000 for the  three-month  periods ended August 31, 1999 and
1998, respectively. The Company generated earnings of $308,000 (before deducting
$38,000 in preferred  stock  dividend  requirements)  for the three months ended
August 31, 1999. For the comparable  prior-year  period,  the Company incurred a
net loss of  $1,409,000  (before  deducting  $661,000  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 $55, 000 in preferred stock 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.   In  addition,   the  results  of  the  Company's   multicenter,
prospective,   randomized,   blinded,   controlled   clinical   study   of  EECP
("MUST-EECP")  was  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  the  Company's  one-year  follow-up
quality-of-life  outcomes study at the American Heart  Association  (AHA) annual
meeting in November  1998, at the American  College of  Cardiology  (ACC) annual
meeting in March 1999 and subsequent  scientific  meetings.  Management  expects
these events to provide a strong  foundation  for  accelerated  growth in fiscal
2000, if Medicare  contractors  establish  appropriate  payment levels that take
into account the value of the  resources  health care  providers  must deploy to
deliver EECP therapy.
     Revenues for fiscal 1999,  particularly  for the first two fiscal quarters,
were 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 and effective  payment date of July 1, 1999, that the
conversion of several  placements  made in the past under rental or  fee-for-use
arrangements  to financed  leases or outright  sales will continue in the second
quarter of fiscal 2000, 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 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.
Consequently,  the gross margin  realized  during the current  period may not be
indicative of future margins.
     Selling,  general and  administrative  (SGA)  expenses for the three months
ended August 31, 1999 and 1998 were  approximately  $1,742,000  and  $1,271,000,
respectively.  The $471,000  increase in SGA expenses for the comparable  fiscal
year  resulted  primarily  from an  increase in sales and  marketing  personnel,
commissions and other selling expenses related to increased revenues.
     Research and  development  (R&D)  expenses in the three months ended August
31, 1999 increased by $63,000 from the  comparable  prior-year  period.  Current
period  expenses  relate to the  long-term  follow-up  phase of the  multicenter
clinical study,  i.e., a  quality-of-life  outcomes study,  the expansion of the
International  EECP  Patient  Registry  at the  University  of  Pittsburgh,  the
development of an upgraded model of the EECP system, and the ongoing feasibility
study in congestive heart failure, all of which, to some extent, are expected to
further affect operating results in fiscal 2000.

Liquidity and Capital Resources
-------------------------------
     The  Company  has  financed  its  fiscal  2000  operations  primarily  from
internally  generated  proceeds.  For the past two fiscal  years,  the Company's
operations  were  primarily  funded from the  proceeds of equity  financings  in
fiscal  1998  (described  below).  At August 31,  1999,  the  Company had a cash
balance of  $2,014,000  and working  capital of  $2,678,000,  compared to a cash
balance of $1,678,000  and working  capital of  $2,175,000 at May 31, 1999.  The
Company's operating activities provided (used) cash of $302,000 and $(1,208,000)
for the three  months  ended  August 31, 1999 and 1998,  respectively.  Net cash
provided  during the three months ended August 31, 1999  consisted  primarily of
earnings from  operations,  decreases in inventories  and other current  assets,
offset by increases in accounts receivable and decreases in accounts payable and
accrued expenses.
<PAGE>
     Investing  activities  used net cash of $17,000 and $9,000 during the three
months ended August 31, 1999 and 1998, respectively. The principal uses were for
the purchase of property and equipment.  At August 31, 1999, the Company did not
have any material commitments for capital expenditures.
     Financing activities provided cash of $51,000 during the three months ended
August 31, 1999.  Financing activities during fiscal 2000 consisted primarily of
cash proceeds from the exercise of Company common stock warrants by officers and
directors.
     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.  By February  1999,  all of the Series B
preferred stock (150,000 shares) had been converted into 2,135,946 shares of the
Company's  common  stock.  As of  August  31,  1999,  28,000  shares of Series C
preferred stock, representing 16% of the total outstanding,  were converted into
approximately 478,000 shares of the Company's common stock.
     Management  believes that its working capital  position at August 31, 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.

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.
     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
has or  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  inquired of its major  suppliers  about their  progress in
identifying  and addressing  problems  related to the Year 2000.  Certain of the
Company's  major suppliers have informed the Company that they do not anticipate
problems in their business  operations due to Year 2000 compliance  issues.  The
Company is unable to determine  the extent to which Year 2000 issues will affect
its  other  suppliers  or the  extent  to which it  would be  vulnerable  to the
suppliers'  failure to remediate  any of their Year 2000  problems.  Although no
assurance can be given that all of the Company's major  suppliers'  systems will
be Year 2000 compliant, the Company believes that the risk is not significant.


     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.
<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:  October 5, 1999