<PAGE> 1
Registration No. 33-
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VASOMEDICAL, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 11-2871434
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
150 MOTOR PARKWAY ANTHONY VISCUSI, PRESIDENT
HAUPPAUGE, NEW YORK 11788 VASOMEDICAL, INC.
(516) 348-0500 150 MOTOR PARKWAY
(Address, including zip code and telephone HAUPPAUGE, NEW YORK 11788
number, including area code) (516) 348-0500
(Name, address and telephone number,
including area code, of agent for service)
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Copy to:
DAVID H. LIEBERMAN, ESQ.
BLAU, KRAMER, WACTLAR & LIEBERMAN, P.C.
100 JERICHO QUADRANGLE
JERICHO, NEW YORK 11753
(516) 822-4820
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
CALCULATION OF REGISTRATION FEE
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===================================================================================================================
Amount to be Proposed maximum Proposed Amount of
Title of each class of registered offering price per maximum registration fee
securities to be registered security(1) aggregate offering
price(1)
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Common Stock, par 14,833,418 shs. $1.44 $21,323,038 $7,615
value $.001 per share
===================================================================================================================
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(1) Estimated solely for the purpose of calculating the registration fee,
based on the last reported sales price of the Common Stock reported in the
consolidated reporting system on August 29, 1995.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 2
VASOMEDICAL, INC.
CROSS REFERENCE SHEET
SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS ON FORM S-3
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ITEM NO. PROSPECTUS CAPTION
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1. Forepart of the Registration Statement Outside Front Cover Page of
and Outside Front Cover Page Prospectus
of Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside Back
Cover Pages of Prospectus
3. Summary Information, Risk Factors and *
Ratio of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Outside Front Cover Page
6. Dilution *
7. Selling Security Holders Selling Stockholders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be Registered Description of Capital
Stock; Selling Stockholders
10. Interests of Named Experts and Counsel Legal Opinion; Experts
11. Material Changes *
12. Incorporation of Certain Information Incorporation of Certain
by Reference Documents by Reference
13. Disclosure of Commission Position on *
Indemnification for Securities Act Liabilities
</TABLE>
__________
*Omitted since answer to item is negative or inapplicable
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECTED TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED ________, 1995
VASOMEDICAL, INC.
14,833,418 SHARES OF COMMON STOCK, $.001 PAR VALUE
The 14,833,418 shares of Common Stock, $.001 par value per share
(the"Shares"), of Vasomedical, Inc. (the "Company") being covered by this
Prospectus represent 2,505,000 shares previously issued, 8,328,418 shares
underlying Common Stock Purchase Warrants and 4,000,000 shares issuable upon
the exercise of convertible debentures. They are being offered by an aggregate
of thirty-five (35) selling stockholders and any pledgees, transferees, donees
or other successors in interest thereof (the "Selling Stockholders"). The
Shares may be offered by the Selling Stockholders from time to time in
transactions on the NASDAQ, in privately negotiated transactions, or by a
combination of such methods of sale, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares to or through broker-dealers and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholder or the purchaser of the
Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation to a particular broker- dealer might be
in excess of customary commissions). See "Selling Stockholders" and "Plan of
Distribution."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company, except to the extent that the
Common Stock Purchase Warrants are exercised. If all the Common Stock Purchase
Warrants are exercised at current exercise prices, the net proceeds to the
Company from this offering would be $5,013,000. The Company will bear the
expenses in connection with the offering, including filing fees and the
Company's legal and accounting fees, estimated at $16,000.
The Company's Common Stock is traded on the NASDAQ Small-Cap Issues
market (Symbol: VASO). On August 29, 1995, the last reported sale price of the
Company's Common Stock as reported by NASDAQ was $1.44 per share.
-------------------
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "CERTAIN INVESTMENT CONSIDERATIONS", PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-------------------
THE DATE OF THIS PROSPECTUS IS SEPTEMBER , 1995
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No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offer
contained herein, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or by any
agent, dealer or underwriter. This Prospectus does not constitute an offer of
any securities other than those to which it relates or an offer to sell, or a
solicitation of an offer to buy, those to which it relates in any state to any
person to whom it is not lawful to make such offer in such state.
TABLE OF CONTENTS
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PAGE
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Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Certain Investment Considerations . . . . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Price Range of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits relating thereto. For further
information with respect to the Company and the shares of Common stock offered
by this Prospectus, reference is made to such Registration Statement and the
exhibits thereto. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement for a full statement of the
provisions thereof; each such statement contained herein is qualified in its
entirety by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained at the
office of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's Regional Offices at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and 7 World Trade Center, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549, at prescribed rates. Copies of such material can also
be obtained at the offices of the National Association of Securities Dealers,
Inc. at 1735 K Street, Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the
Commission (File No. 0-18105) pursuant to the Exchange Act, are incorporated by
reference in this Prospectus and shall be deemed to be a part hereof:
- The Company's Annual Report on Form 10-KSB for the fiscal year ended
May 31, 1995.
All documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Prospectus and prior to the termination
of this offering of Common Stock shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any subsequently filed document that also is
or is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any or all of the documents incorporated by reference (except
for exhibits thereto unless specifically incorporated by reference therein).
Requests for such copies should be directed to the Secretary, Vasomedical,
Inc., 150 Motor Parkway, Hauppauge, New York 11788 (516) 348-0500.
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THE COMPANY
The Company is engaged, through the ownership of patents and exclusive
worldwide manufacturing and marketing rights (except in China), in the
manufacturing and marketing of Enhanced External Counterpulsation ("EECP(TM)"),
a non-invasive device for the treatment of cardiac patients suffering from
angina pectoris, acute myocardial infarction and cardiogenic shock. In addition
to introductory marketing efforts, the Company is currently carrying out, at
several leading university hospitals, a clinical study for the purpose, among
other things, of gathering information to apply for medical reimbursement. The
device has received marketing clearance from the Food and Drug Administration
("FDA") under a 510(k) premarket notification.
The Company's executive offices are located at 150 Motor Parkway,
Hauppauge, New York 11788, and its telephone number is (516) 348-0500.
CERTAIN INVESTMENT CONSIDERATIONS
The following information, in addition to other information in this
Prospectus and in the documents incorporated herein by reference, should be
considered carefully by potential purchasers in evaluating the Company, its
business and an investment in shares of the Common Stock offered hereby.
1. Need for Additional Funds. Management believes that its present
working capital position at July 31, 1995, in addition to internally generated
funds, if any, from its operations, will be sufficient to support its internal
overhead expenses and to implement its new development and business plans
through at least May 31, 1996. These plans presently call for cash requirements
of approximately $4,000,000 for internal overhead, a multi-center clinical
study and expenses to support the commercialization of EECP(TM). While the
Company intends to finance its future cash requirements from internally
generated funds, if any, or through debt or equity financing, there is no
assurance that the Company can be successful in these efforts.
2. Development Stage Company. While it has initiated commercial
activities, the Company has been in the research and development stage and
generated no revenue from continuing operations through May 31, 1995. Potential
investors should be aware of the difficulties and delays normally encountered
by a company in the development stage, especially in view of the regulated
environment in which the Company operates and the paradigm shift in the
treatment of coronary heart disease that EECP(TM) represents. The Company is
concentrating substantially all of its efforts on EECP(TM) for which it is
conducting a multi-center clinical study and is incurring introductory
marketing expenses. Although the Company anticipates revenue from EECP(TM) in
fiscal 1996, there is no assurance that the Company will generate enough
revenue to fund internal working capital requirements beyond May 31, 1996.
While the Company has received premarketing clearance from the FDA for
EECP(TM), the likelihood of the product's success also must be considered in
light of the problems, expenses, difficulties, complications and delays
frequently encountered in connection with the development and marketing of new
medical devices.
3. Historical and Anticipated Losses. The Company was incorporated in
July 1987 and, to date, has had limited revenues, all of which have been from
since discontinued operations. For the years ended May
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31, 1995, 1994 and 1993, the Company sustained net losses of $3,117,000,
$4,811,000 and $4,357,000, respectively. No revenues were generated during
fiscal 1995 and $1,370,000 and $1,108,000 in revenues were recognized for the
years ended May 31, 1994 and 1993, respectively. All revenues to date were
from since disposed subsidiaries. The Company anticipates limited revenues and
continued losses through May 31, 1996.
4. Uncertainty of Market Acceptance of the Company's Products. With
respect to EECP(TM), management believes that it represents a new and
innovative treatment for patients suffering from coronary heart disease.
Additional efforts will be required to confirm that this procedure is effective
and safe and to acquaint potential purchasers, such as doctors, hospitals,
suppliers of medical equipment and other potential purchasers of the device.
The Company cannot guarantee acceptance by the medical community.
5. Dependence on Key Personnel. The Company is substantially dependent
upon the efforts of its executive officers, particularly Dr. John Hui. The
Company maintains limited key-man life insurance. Despite the existence of
employment agreements with Dr. Hui and others, there are no assurances that
Company's key executives will continue their employment with the Company.
6. Technological Obsolescence. The Company is engaged in an area
characterized by extensive research and development activities. New
developments are expected to continue at a rapid pace and there can be no
assurance that new discoveries will not render the Company's products,
processes and devices uneconomical or obsolete. Potential investors should be
aware of the difficulties and delays normally encountered by a company in the
development stage, especially in view of the regulated environment in which the
Company operates. The likelihood of success for any of the Company's products
must be considered in light of the problems, expenses, difficulties,
complications and delays frequently encountered in connection with the
development of new medical processes, devices and products and their level of
acceptance by the medical community.
7. Competition. There are other companies engaged in development,
manufacture and/or marketing of products intended for the same uses as the
Company's products, processes and devices. These companies' products may
receive more widespread commercial acceptance than the Company's EECP(TM)
because of greater financial resources and marketing capabilities.
8. Future Sales of Common Stock. Of the Company's Common Stock
currently outstanding, approximately 8,487,000 shares are "restricted
securities" as that term is defined in Rule 144 under the Securities Act and,
under certain circumstances, may be sold without registration pursuant to that
Rule. The restricted securities as well as the 14,833,418 shares of Common
Stock registered hereunder represent approximately 45.5% of the Company's
outstanding Common Stock upon full exercise of the warrants and conversion of
the debentures referenced hereunder. Their sale, or even potential sale,
pursuant to Rule 144, this registration statement or otherwise, would likely
have an adverse effect on the market price of the Company's Common Stock.
9. Government Regulation. The development, testing, production and
marketing of the Company's products are subject to regulation by the FDA as
devices under 1976 Medical Device Amendments to the Federal Food, Drug and
Cosmetic Act. Additionally, the Company's products may be subject to regulation
by similar agencies in other states and foreign countries. While the Company
believes that it has complied
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<PAGE> 8
with all applicable laws and regulations, no assurance can be given that
continued compliance with such laws or regulations, including any new laws or
regulations, will not impose additional costs on the Company which could
adversely affect its financial performance and results of operations.
10. Discretion in Application of Net Proceeds. To the extent that
the Common Stock Purchase Warrants are fully exercised, the Company will
receive net proceeds from this offering of approximately $5,000,000.
Management of the Company has certain discretion over the use and expenditure
of approximately 50% of these proceeds. As a result, the success of the
Company may be substantially dependent upon the discretion and judgment of the
management of the Company with respect to the application and allocation of
such net proceeds.
USE OF PROCEEDS
The Company will not receive any proceeds from this offering, except
to the extent that the Common Stock Purchase Warrants are exercised. If all the
Common Stock Purchase Warrants are exercised at current exercise prices, the
net proceeds to the Company from this offering would be $5,013,000. If such
proceeds are received, the Company intends to use approximately $2,500,000 to
support further expansion of its sales force for EECP(TM) and conduct new
clinical studies designed to confirm additional therapeutic claims with the
balance to be utilized for capital expenditures and general working capital.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the National Association of
Securities Dealers Automated Quotation (NASDAQ) Small- Cap Issues market under
the symbol VASO. The table below sets forth the range of high and low bid
prices of the Common Stock as reported by NASDAQ for the fiscal periods
specified. These prices represent inter-dealer quotations without retail
markups, markdowns or commissions and do not necessarily represent actual
transactions. The approximate number of record holders of Common Stock as of
August 29, 1995 was approximately 698.
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Fiscal 1993 Fiscal 1994 Fiscal 1995
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High Low High Low High Low
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First Quarter. . . . . . . . . 3 11/32 1 11/16 1 1/2 1 21/32 3/8
Second Quarter. . . . . . . . . 1 7/8 1 1/32 1 5/16 27/32 7/16 1/4
Third Quarter. . . . . . . . . 2 1/8 1 7/32 1 21/32 3/4 9/32
Fourth Quarter. . . . . . . . . 1 21/32 1 3/16 7/8 1/2 27/32 1/2
</TABLE>
The last bid price of the Company's Common Stock on August 29, 1995
was $1.44 per share. The Company has never paid any cash dividends on its
Common Stock. While the Company does not intend to pay cash dividends in the
foreseeable future, payment of cash dividends, if any, will be dependent upon
the earnings and financial position of the Company, investment opportunities
and such other factors as the Board of Directors deems appropriate. Stock
dividends, if any, also will be dependent on such factors as the Board of
Directors deems appropriate.
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DESCRIPTION OF CAPITAL STOCK
CAPITAL STOCK
The Company's authorized capital stock consists of 85,000,000 shares
of common stock, $.001 par value per share ("Common Stock") and 1,000,000
shares of Serial Preferred Stock, $.01 par value per share, of which 500,000
shares have been designated as Series A.
COMMON STOCK
General. The Company has 85,000,000 authorized shares of common
stock, $.001 par value.
Voting Rights. Each share of Common Stock entitles the holder thereof
to one vote, either in person or by proxy, at meetings of shareholders. The
Company's Board consists of three classes each of which serves for a term of
three years. At each annual meeting of the stockholders, the directors in only
one class will be elected. The holders are not permitted to vote their shares
cumulatively. Accordingly, the holders of more than fifty percent (50%) of the
issued and outstanding shares of Common Stock can elect all of the directors of
the Company.
Dividend Policy. All shares of Common Stock are entitled to
participate ratably in dividends when and as declared by the Company's Board of
Directors out of the funds legally available therefor. Any such dividends may
be paid in cash, property or additional shares of Common Stock. The Company
has not paid any cash dividends since its inception and pesently anticipates
that all earnings, if any, will be retained for development of the Company's
business and that no dividends on the shares of Common Stock will be declared
in the foreseeable future. Any future dividends will be subject to the
discretion of the Company's Board of Directors and will depend upon, among
other things, future earnings, the operating and financial condition of the
Company, its capital requirements, general business conditions and other
pertinent facts. Therefore, there can be no assurance that any dividends on
the Common Stock will be paid in the future.
Miscellaneous Rights and Provisions. Holders of Common Stock have no
preemptive or other subscription rights, conversion rights, redemption or
sinking fund provisions. In the event of the liquidation of dissolution,
whether voluntary or involuntary, of the Company, each share of Common Stock is
entitled to share ratably in any assets available for distribution to holders
of the equity of the Company after satisfaction of all liabilities; subject to
the rights of holders of Preferred Stock.
SERIAL PREFERRED STOCK
The Board of Directors is authorized by the Company's Certificate of
Incorporation to authorize and issue one or more series of Serial Preferred
Stock, $.01 par value. To date, 500,000 shares of Series A Preferred Stock
have been issued by the Company, which shares have been converted to 1,000,000
shares of Common Stock. No additional shares of Preferred Stock have been
authorized for issuance by the Board and the Company has no present plans to
issue any such shares. In the event that the Board of Directors does issue
additional Preferred Stock, it may exercise its discretion in establishing the
terms of the Preferred Stock. In the exercise of such discretion, the Board of
Directors may determine the voting rights, if any, of
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<PAGE> 10
the series of Preferred Stock being issued, which could include the right to
vote separately or as a single class with the Common Stock and/or other series
of Preferred Stock; to have more or less voting power per share than that
possessed by the Common Stock or other series of Preferred Stock; and to vote
on certain specified matters presented to the stockholders or on all of such
matters or upon the occurrence of any specified event or condition. On
liquidation, dissolution or winding up of the Company, the holders of Preferred
Stock may be entitled to receive preferential cash distributions fixed by the
Board of Directors when creating the particular series thereof before the
holders of the Common Stock are entitled to receive anything. Preferred Stock
authorized by the Board of Directors could be redeemable or convertible into
shares of any other class or series of stock of the Company.
The issuance of Preferred Stock by the Board of Directors could
adversely affect the rights of holders of shares of Common Stock by, among
other things, establishing preferential dividends, liquidation rights or voting
power. The issuance of Preferred Stock could be used to discourage or prevent
efforts to acquire control of the Company through the acquisition of shares of
Common Stock.
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SELLING STOCKHOLDERS
The following table sets forth the ownership of the Selling Stockholders
of shares of Common Stock of the Company prior to and after giving effect to
the sale of the Shares covered by this Prospectus.
<TABLE>
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Number (Percentage) of
Number (Percentage) of Shares Owned After
Shares Owned Prior to Number (Percentage) of Giving Effect to Sale
Name of Selling Sale of Shares Covered Shares Covered of Shares Covered by
Stockholder (1) by this Prospectus * (2) by this Prospectus * this Prospectus *
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Directors, Officers and
employees (current and former):
Alexander G. Bearn 100,000 shs. 100,000 shs. (3) -
David S. Blumenthal 100,000 shs. 100,000 shs. (4) -
Abraham E. Cohen 625,000 shs. 1.6% 625,000 shs. (5) 1.6% -
Yair Devash 540,000 shs. 1.4% 535,000 shs. (6) 1.4% 5,000 shs.
Paul Erhlich 25,000 shs. 25,000 shs. (7) -
Joseph A. Giacalone 300,000 shs. 300,000 shs. (8) -
Eugene H. Glicksman (31) 1,837,888 shs. 4.7% 190,000 shs. 1,647,888 shs. 4.2%
Frederic D. Heller 125,000 shs. 125,000 shs. (9) -
John C.K. Hui 1,260,000 shs. 3.2% 300,000 shs.(10) 960,000 shs. 2.4%
Barbara A. Janetschek 5,000 shs. 5,000 shs.(11) -
Anthony E. Peacock 327,000 shs. 300,000 shs.(12) 27,000 shs.
Kenneth W. Rind 350,000 shs. 350,000 shs.(13) -
Arthur G. Rosenberg 100,000 shs. 100,000 shs.(14) -
E. Donald Shapiro 635,000 shs. 1.6% 625,000 shs.(15) 1.6% 10,000 shs.
Zhi-yun Tang 130,000 shs. 30,000 shs.(16) 100,000 shs.
Anthony Viscusi 1,125,000 shs. 2.8% 1,125,000 shs.(17) 2.8% -
Outside Consultants:
Lonn E. Berney 350,000 shs. 350,000 shs.(18) -
Strategic Growth International 360,360 shs. 360,360 shs.(19) -
Indelible Inc. 25,000 shs. 25,000 shs.(20) -
Arye Rubinstein 225,000 shs. 200,000 shs.(21) 25,000 shs.
FK Consultants, Inc. 70,789 shs. 70,789 shs.(22) -
David H. Lieberman 131,666 shs. 125,000 shs.(23) 6,666 shs.
Edward S. Wactlar 23,166 shs. 12,500 shs.(24) 10,666 shs.
Edward I. Kramer 12,500 shs. 12,500 shs.(25) -
Jack M. Ferraro 552,500 shs. 1.4% 552,500 shs.(26) 1.4% -
JMF Consultants, Inc. 600,000 shs. 1.5% 600,000 shs. 1.5% -
Investors:
Ados Equities Corp. 550,443 shs. 1.4% 528,169 shs.(27) 1.4% 22,274 shs.
Ispep Equities Corp. 550,443 shs. 1.4% 528,169 shs.(27) 1.4% 22,274 shs.
Sprite Equities Corp. 550,443 shs. 1.4% 528,169 shs.(27) 1.4% 22,274 shs.
Shefa Equities Corp. 550,443 shs. 1.4% 528,169 shs.(27) 1.4% 22,274 shs.
Individual Securities Ltd. (32) 444,453 shs. 1.1% 444,453 shs.(28) 1.1% -
Carl Lanzisera (32) 460,140 shs 1.1% 460,140 shs.(29) 1.1% -
Banca del Gottardo 4,000,000 shs 9.3% 4,000,000 shs.(30) 9.3% -
Egger & Co. 360,000 shs. 360,000 shs.(31) -
Christopher J. Lockwood 312,500 shs. 312,500 shs. -
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14,833,418 shs.
---------------
</TABLE>
____________
-9-
<PAGE> 12
(1) Unless otherwise indicated, the Company has been advised that all holders
are the record and beneficial owners of the number of shares set forth
opposite their names. Ownership represents sole voting and investment
power.
(2) Includes Common Stock issuable upon the exercise of Common Stock Purchase
Warrants or Convertible Debentures.
(3) Includes warrants to purchase 50,000 shares of Common Stock at $1.50 per
share expiring in March 1998 and warrants to purchase 50,000 shares of
Common Stock at $.28 per share expiring in November 1999.
(4) Includes warrants to purchase 50,000 shares of Common Stock at $1.50 per
share expiring in March 1998 and warrants to purchase 50,000 shares of
Common Stock at $.45 per share expiring in June 1999.
(5) Includes warrants to purchase 150,000 shares of Common Stock at $1.50 per
share expiring in September 1997, warrants to purchase 200,000 shares of
Common Stock at $1.03 per share expiring in November 1998 and warrants to
purchase 150,000 shares of Common Stock at $.45 per share expiring in
June 1999.
(6) Includes warrants to purchase 35,000 shares of Common Stock at $1.50 per
share expiring in October 1995 and warrants to purchase 500,000 shares of
Common Stock at $.91 per share expiring in February 1999.
(7) Includes warrants to purchase 25,000 shares of Common Stock at $1.03 per
share expiring in November 1998.
(8) Includes warrants to purchase 100,000 shares of Common Stock at $.91 per
share expiring in November 1998 and warrants to purchase 200,000 shares
of Common Stock at $.41 per share expiring in February 2000, of which
150,000 shares vest in three equal annual installments beginning February
1996 contingent upon continued employment.
(9) Includes warrants to purchase 125,000 shares of Common Stock at $.91 per
share expiring in November 1998.
(10) Includes warrants to purchase 300,000 shares of Common Stock at $.40 per
share expiring in February 2000, which vest in three equal annual
installments beginning February 1996 contingent upon continued
employment.
(11) Includes warrants to purchase 5,000 shares of Common Stock at $.41 per
share expiring in February 2000.
(12) Includes warrants to purchase 300,000 shares of Common Stock at $.38 per
share expiring in January 2000, which vest in three equal annual
installments beginning January 1996 contingent upon continued employment.
(13) Includes warrants to purchase 350,000 shares of Common Stock at $.40 per
share expiring in February 2000, of which 300,000 shares vest in three
equal annual installments beginning February 1996 contingent upon
continued service as a director of the Company.
(14) Includes warrants to purchase 25,000 shares of Common Stock at $1.03 per
share expiring in November 1998 and warrants to purchase 75,000 shares of
Common Stock at $.45 per share expiring in November 1999.
(15) Includes warrants to purchase 150,000 shares of Common Stock at $1.50 per
share expiring in September 1997, warrants to purchase 200,000 shares of
Common Stock at $1.03 per share expiring in November 1998 and warrants to
purchase 150,000 shares of Common Stock at $.45 per share expiring in
June 1999.
-10-
<PAGE> 13
(16) Includes warrants to purchase 30,000 shares of Common Stock at $.41 per
share expiring in February 2000 which vest in three equal annual
installments beginning February 1996 contingent upon continued
employment.
(17) Includes warrants to purchase 1,000,000 shares of Common Stock at $.45
per share expiring in June 2000 of which 750,000 shares vest in three
equal annual installments beginning June 1996 contingent upon continued
employment.
(18) Includes warrants to purchase 150,000 shares of Common Stock at $1.50 per
share expiring in December 1998 and warrants to purchase 200,000 shares
of Common Stock at $.91 per share expiring in October 2006.
(19) Includes warrants to purchase 360,360 shares of Common Stock at $1.11 per
share expiring in March 1997, subject to anti- dilution provisions.
(20) Includes warrants to purchase 25,000 shares of Common Stock at $1.03 per
share expiring in November 1998.
(21) Includes warrants to purchase 100,000 shares of Common Stock at $.91 per
share expiring in February 1999 and warrants to purchase 100,000 shares
of Common Stock at $.91 per share expiring in June 1999.
(22) Includes warrants to purchase 65,789 shares of Common Stock at $.76 per
share expiring in October 1999, subject to anti- dilution provisions.
(23) Includes warrants to purchase 125,000 shares of Common Stock at $.45 per
share expiring in June 1999.
(24) Includes warrants to purchase 12,500 shares of Common Stock at $.45 per
share expiring in June 1999.
(25) Includes warrants to purchase 12,500 shares of Common Stock at $.45 per
share expiring in June 1999.
(26) Includes warrants to purchase 240,000 shares of Common Stock at $.25 per
share expiring in December 1999.
(27) Includes warrants to purchase 528,169 shares of Common Stock at $.71 per
share expiring in September 1997, subject to anti- dilution provisions.
(28) Includes warrants to purchase 199,030 shares of Common Stock at $.90 per
share expiring in July 1997, options to purchase 151,403 shares of Common
Stock at $1.37 per share expiring in June 1997 and warrants to purchase
28,701 shares of Common Stock at $1.32 per share expiring in July 1997,
subject to anti-dilution provisions.
(29) Includes warrants to purchase 162,640 shares of Common Stock at $1.32 per
share expiring in July 1997, subject to anti- dilution provisions.
(30) Includes shares of Common Stock issuable upon the exercise of Convertible
Debentures on or after December 1, 1995 through July 2, 2000.
(31) Mr. Glicksman may be deemed a "parent" and "promoter" of the Company as
those terms are defined in the Rules and Regulations under the Securities
Act of 1933.
(32) Individual Securities, Ltd. ("ISL") and Mr. Carl Lanzisera, a principal
of ISL, were the Company's underwriters for its initial public offering
in October 1988.
* Represents less than 1% of the Company's Common Stock, unless otherwise
indicated.
-11-
<PAGE> 14
PLAN OF DISTRIBUTION
The Shares may be offered by the Selling Stockholders from time to
time in transactions on NASDAQ, in privately negotiated transactions, or by a
combination of such methods of sale, at fixed prices that may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling the Shares to or through broker-dealers and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholder or the purchaser of the
Shares for whom such broker-dealers may act as agent or to whom they sell as
principal or both (which compensation to a particular broker-dealer might be in
excess of customary commissions). See "Selling Stockholders."
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon for the Company by Blau, Kramer, Wactlar & Lieberman, P.C., Jericho, New
York 11753. Members of this firm own 17,332 shares of Common Stock and
warrants to purchase 150,000 shares of Common Stock at $.45 per share. The
shares of Common Stock issuable upon exercise of these warrants are covered by
this Registration Statement.
EXPERTS
The consolidated financial statements incorporated by reference in
this Prospectus and elsewhere in the Registration Statement, to the extent and
for the periods indicated in their reports, have been audited by Grant Thornton
LLP, independent certified public accountants, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said Reports.
-12-
<PAGE> 15
No dealer, salesperson, or other person has been authorized by the
Company to give any information or to make any representations other than those
contained in this Prospectus and, if given or made, such other information or
representations must not be relied upon as having been so authorized by the
Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities other than the securities to
which it relates, or an offer to or solicitation of any person in any
jurisdiction in which such offer or solicitation would be unlawful. Neither
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create any implication that the information herein is correct as
of any time subsequent to the date hereof.
VASOMEDICAL, INC.
14,833,418 COMMON SHARES
PROSPECTUS
DATED: SEPTEMBER ___, 1995
<PAGE> 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee . . . . . . . . . . . . $ 7,615
Legal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Accounting Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000
Miscellaneous Expenses . . . . . . . . . . . . . . . . . . . . . . . . 385
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,000
=======
</TABLE>
Item 15. Indemnification of Directors and Officers
Under provisions of the By-Laws of the Company, each person who is
or was a director or officer of the Company shall be indemnified by the Company
as of right to the full extent permitted or authorized by the General
Corporation Law of Delaware.
Under such law, to the extent that such person is successful on
the merits of defense of a suit or proceeding brought against him by reason of
the fact that he is a director or officer of the Company, he shall be
indemnified against expenses (including attorneys' fees) reasonably incurred in
connection with such action. If unsuccessful in defense of a third-party civil
suit or a criminal suit is settled, such a person shall be indemnified under
such law against both (1) expenses (including attorneys' fees) and (2)
judgements, fines and amounts paid in settlement if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the Company, and with respect to any criminal action, had no
reasonable cause to believe his conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of
the Company, or if such suit is settled, such a person shall be indemnified
under such law only against expenses (including attorneys' fees) incurred in
the defense or settlement of such suit if he acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests
of the Company except that if such a person is adjudged to be liable in such
suit for negligence or misconduct in the performance of his duty to the
Company, he cannot be made whole even for expenses unless the court determines
that he is fairly and reasonably entitled to indemnity for such expenses.
The officers and directors of the Company are covered by officers
and directors liability insurance. The policy coverage is $2,000,000, which
includes reimbursement for costs and fees. There is a maximum deductible for
officers and directors under the policy of $75,000 for each claim. The Company
has entered into Indemnification Agreements with each of its officers and
directors. The Agreements provide for reimbursement for all direct and indirect
costs of any type or nature whatsoever (including attorneys' fees and related
disbursements) actually and reasonably incurred in connection with either the
investigation, defense or appeal of a Proceeding, as defined, including amounts
paid in settlement by or on behalf of an Indemnitee.
II-1
<PAGE> 17
Item 16. Exhibits
<TABLE>
<S> <C>
4 Form of Warrant Agreement
5 Opinion of Blau, Kramer, Wactlar & Lieberman, P.C.
23(a) Consent of Grant Thornton LLP
23(b) Consent of Blau, Kramer, Wactlar & Lieberman, P.C. (included in their opinion)
24 Power of Attorney
</TABLE>
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information
set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination
of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Act"), each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public
II-2
<PAGE> 18
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
(d) The undersigned Registrant hereby undertakes:
(1) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of a registration
statement in reliance upon Rule 430A and contained in a form of prospectus
filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Act shall be deemed to be part of the registration statement as of the time it
was declared effective.
(2) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
II-3
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf thereunto duly authorized, in
Hauppauge, New York on the 1st day of September, 1995.
VASOMEDICAL, INC.
:
By: /s/ Anthony Viscusi
--------------------------------------------------
Anthony Viscusi, President, Chief Executive
Officer and Director (Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Anthony Viscusi and Joseph A. Giacalone,
and each of them, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post- effective amendments) to this Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this registration statement was signed by the following persons in the
capacities indicated on September 1, 1995.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
/s/ Alexander G. Bearn Director
------------------------------------
Alexander G. Bearn
Director
------------------------------------
David S. Blumenthal
Chairman of the Board
------------------------------------
Abraham E. Cohen
/s/ Joseph A. Giacalone Secretary and Treasurer (Principal
------------------------------------ Financial and Accounting Officer)
Joseph A. Giacalone
/s/ Eugene H. Glicksman Executive Vice President
------------------------------------ and Director
Eugene H. Glicksman
/s/ John C. K. Hui Director
------------------------------------
John C. K. Hui
/s/ Kenneth W. Rind Director
------------------------------------
Kenneth W. Rind
Director
------------------------------------
E. Donald Shapiro
/s/ Anthony Viscusi President, Chief Executive Officer and
------------------------------------ Director (Principal Executive Officer)
Anthony Viscusi
Director
------------------------------------
Zhen-sheng Zheng
</TABLE>
II-4
<PAGE> 20
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Page No.
in this
Exhibit No. Description Filing
----------- ----------- --------
<S> <C> <C>
4 Form of Warrant Agreement
5 Opinion of Blau, Kramer, Wactlar &
Lieberman, P.C.
23.1 Consent of Grant Thornton LLP
23.2 Consent of Blau, Kramer, Wactlar &
Lieberman, P.C. (included in Exhibit 5
hereof)
24 Power of Attorney (included on page II-4)
</TABLE>
<PAGE> 1
EXHIBIT 4
These securities may not be publicly offered or sold unless at the time of such
offer or sale, the person making such offer of sale delivers a prospectus
meeting the requirements of the Securities Act of 1933 forming a part of a
registration statement, or post-effective amendment thereto, which is effective
under said act, or unless in the opinion of counsel to the Company, such offer
and sale is exempt from the provisions of Section 5 of said Act.
W A R R A N T
For the Purchase of Common Stock, Par Value $.001 per Share of
VASOMEDICAL, INC.
(Incorporated under the Laws of the State of Delaware)
VOID AFTER 5 P.M. _______________
(unless otherwise extended as provided herein)
No. ___ Warrant to Purchase
___________ Shares
THIS IS TO CERTIFY that, for value received, _________________
is entitled, subject to the terms and conditions set forth, until 5 P.M., New
York City Time, on __________________, to purchase the number of shares set
forth above of Common Stock, par value $.001 per share (the "Common Stock"), of
VASOMEDICAL, INC., a Delaware corporation (the "Company"), from the Company at
a purchase price per share of $_____ if and to the extent this Warrant is
exercised, in whole or in part, during the period this Warrant remains in
force, subject in all cases to adjustment as provided in Section 2 hereof, and
to receive a certificate or certificates representing the shares of Common
Stock so purchased, upon presentation and surrender to the Company of this
Warrant, with the form of subscription attached hereto duly
-1-
<PAGE> 2
executed, and accompanied by payment of the purchase price of each share
purchased either in cash or by certified or bank cashier's check payable to the
order of the Company.
1. The rights represented by this Warrant are exercisable
at the option of the holder hereof in whole at any time, or in part from time
to time, within the period above specified at the price specified on page 1
hereof. In case of the purchase of less than all the shares as to which this
Warrant is exercisable, the Company shall cancel this Warrant upon the
surrender hereof and shall execute and deliver a new Warrant of like tenor for
the balance of the shares purchasable hereunder.
2. Adjustments to Exercise Price and Number of Securities.
2.1 Subdivision and Combination. In case the Company shall
at any time subdivide or combine the oustanding shares of Common Stock, the
Exercise Price shall forthwith be proportionately decreased in the case of
subdivision or increase in the case of combination.
2.2 Adjustment in Number of Securities. Upon each
adjustment of the Exercise Price pursuant to the provisions of this Section 2,
the number of Units issuable upon the exercise of each Warrant shall be
adjusted to the nearest full amount by multiplying a number equal to the
Exercise Price in effect immediately prior to such adjustment by the number of
Units issuable upon exercise of the Warrants immediately prior to such
adjustment and dividing the product so obtained by the adjusted Exercise Price.
2.3 Definition of Common Stock. For the purpose of this
Agreement, the term "Common Stock" shall mean (i) the class of stock designated
as Common Stock in the Certificate of Incorporation of the Company as may be
amended as of the date hereof, or (ii) any other class of stock resulting from
successive changes or reclassifications of such Common Stock consisting solely
of changes in par value, or from par value to no par value, or from no par
value to par value.
2.4 Merger or Consolidation. In case of any consolidation
or the Company with, or merger of the Company with, or merger of the Company
into, another corporation (other than a consolidation or merger which does not
result in any reclassification or change of the outstanding Common Stock), the
corporation formed by such consolidation or merger shall execute and deliver to
the Holder a supplemental warrant agreement providing that the holder of each
Warrant then outstanding or to be outstanding shall have the right thereafter
(until the expiration of such Warrant) to receive, upon exercise of such
warrant, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the
number of shares of Common Stock of the Company for which such warrant might
have been exercised immediately prior to such consolidation, merger, sale or
transfer. Such supplemental warrant agreement shall provide for adjustments
which shall be identical to the adjustments
-2-
<PAGE> 3
provided in Section 2. The above provisions of this Subsection shall similarly
apply to successive consolidations or mergers.
3. Registration Rights.
3.1 (a) Demand Registration Rights. The Company agrees
that it will, at the written request of the Warrantholder on and after
_________________, and at the Company's expense pursuant to subparagraph (b) of
this Section, file with the Securities and Exchange Commission (sometimes the
"SEC") and other appropriate commissions and agencies a registration statement
on the appropriate forms under the Securities Act of 1933, as amended (the
"Act" or the "Securities Act"), and such state, district or territorial
securities laws as the Investors shall reasonably request, registering or
qualifying the Common Stock underlying the Warrants for distribution or public
offering, and the Company agrees to cause the above filings to become effective
at the earliest practicable date and remain effective for no less than the
longer of (x) nine months after such registration statement's effective date,
or (y) sixteen months after the date of the most recently audited balance sheet
of the Company filed as part of the registration statement's financial
statements; provided, however, if the Warrantholder shall be required by the
Company or any regulatory authority to discontinue the sale or disposition of
any Underlying Stock registered pursuant to this paragraph for any period for
any reason ("Discontinuance Period)", then the period of time during which the
Company shall be required to maintain the registration statement effective
shall be extended by an amount of time equal to such Discontinuance Period. If
any registration statement requested to be filed pursuant to this Section is
not promptly filed or is either withdrawn or fails to become effective for any
reason, such request shall not be counted as a request under this Section.
(b) Registration Expenses. All expenses incident to the
Company's performance of or compliance with this Agreement, including without
limitation all registration and filing fees, shall be borne by the Company
whether or not any of the registration statements or notifications become
effective, including fees with respect to filings required to be made with the
SEC and National Association of Securities Dealers, Inc., fees and expenses of
compliance with securities or blue sky laws, and fees and disbursements of
counsel for the Company and of independent certified public accountants of the
Company, securities acts liability insurance if the Company so desires and fees
and expenses of other persons retained by the Company (all such expenses being
herein called "Registration Expenses").
3.2 Indemnification Provisions.
(i) Indemnification by Company. Whenever pursuant to
this paragraph a registration statement or notification relating to the
Underlying Stock is filed under the Act or any state "Blue Sky" securities law,
or is amended or supplemented, the Company will indemnify and hold harmless the
Warrantholder, and each underwriter (within the meaning of the Act) of such
-3-
<PAGE> 4
securities and each person, if any, who controls (within the meaning of the
Act) any such underwriter, against any losses, claims, damages or liabilities,
joint or several, to which the Warrantholder, any such controlling person or
any such underwriter may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement or any
preliminary prospectus or final prospectus constituting a part thereof or any
amendment or supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or arise out of the Company's
breaching any of its obligations hereunder, or the inaccuracy of any of the
Company's representations and warranties hereunder; and the Company will
reimburse the Warrantholder and each underwriter for any legal or other
expenses reasonably incurred by the Warrantholder or such underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be liable in
any such case to the extent, but only to the extent, that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement in said
registration statement, said preliminary prospectus, said final prospectus or
said amendment or supplement in reliance upon and in conformity with written
information furnished by the Warrantholder for use in the preparation thereof.
(ii) Indemnification by the Warrantholder. The Warrantholder
will indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed said registration statement or notification and
such amendments and supplements thereto, and each person, if any, who controls
the Company (within the meaning of the Act) against any losses, claims, damages
or liabilities that arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in said registration statement, said
preliminary prospectus, said final prospectus, or said amendment or supplement,
or that arise out of or are based upon the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in said registration statement, said
preliminary prospectus, said final prospectus or said amendment or supplement
in reliance upon and in conformity with written information furnished by the
Warrantholder for use in the preparation thereof; and will reimburse the
Company or any such director, officer or controlling person for any legal or
other expenses reasonably incurred by him or them in connection with
investigating or defending any such loss, claim, damage, liability or action.
Notwithstanding the foregoing, the maximum amount which may be recovered from
the Warrantholder shall be limited to the amount of proceeds received by such
person in said Registration Statement from the sale of the Underlying Stock.
(iii) Notice of Claim. Promptly after receipt by an
indemnified party under this paragraph (iii) of notice of the commencement of
any action, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party, give the indemnifying party notice
-4-
<PAGE> 5
of the commencement thereof; but the omission to so notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under this paragraph (iii).
(iv) Defense of Claim. If any such action is brought against
any indemnified party, and the indemnified party notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate in, and to assume the defense thereof, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof. If the indemnifying party
determines that it cannot assume the defense of such action for any reason, the
indemnifying party will pay all reasonable attorney's fees and disbursements
incurred by the indemnified party in connection with such action. Nothing
herein shall prevent the indemnified parties from retaining their own counsel
at their own expense in connection with any such action. No indemnified party
shall settle any claim or action without the prior written consent of the
indemnifying party.
4. The Company agrees at all times to reserve or hold available
a sufficient number of shares of Common Stock to cover the number of shares
issuable upon the exercise of this and all other Warrants of the same class.
The Company hereby represent and warrants that this Warrant has been duly
authorized by the Company and has been validly executed and delivered by the
Company and the Warrant constitutes the legal, valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the extent
that the enforceability hereof or thereof may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws from time to time in
effect and affecting the rights of creditors generally, (b) limitations upon
the power of a court to grant specific performance or any other equitable
remedy, and (c) a finding by a court of competent jurisdiction that the
indemnification provisions herein are in violation of public policy. The
Common Stock issuable upon exercise of this Warrant has been duly authorized
and, when issued and paid for in accordance with the terms hereof, will be
validly issued, fully paid and non-assessable; the holders thereof are not and
will not be subject to personal liability solely by reason of being such
holders; the Warrants and the Common Stock are not and will not be subject to
the preemptive rights of any stockholder of the Company; and all corporate
action required to be taken for the authorization, issuance and sale of the
Warrants and the underlying Common Stock has bee duly and validly taken by the
Company.
5. This Warrant shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the Company, or to any other
rights whatsoever except the rights herein expressed, and no dividends shall be
payable or accrue in respect of this Warrant or the interest represented hereby
or the shares purchasable hereunder until or unless, and except to the extent
that, this Warrant shall be exercised.
-5-
<PAGE> 6
6. This Warrant has been issued in connection with services
performed by Warrantholder.
7. This Warrant is exchangeable upon the surrender hereof by
the holder hereof to the Company for new Warrants of like tenor representing in
the aggregate the right to purchase the number of shares purchasable hereunder,
each of such new Warrants to represent the right to purchase such number of
shares as shall be designated by the holder hereof at the time of such
surrender. This Warrant may be transferred in whole or in part to officers,
directors, shareholders, partners or affiliates (as such term is defined in the
Securities Act of 1934, as amended) of the holder.
8. The Company will transmit to the holder of this Warrant such
information, documents and reports as are generally distributed to shareholders
of the Company concurrently with the distribution thereof to such shareholders.
9. Notices to be given to the holder of this Warrant shall be
deemed to have been sufficiently given if delivered personally or sent by
overnight courier or messenger or sent by registered or certified mail (air
mail if overseas), return receipt requested, or by telex, facsimile
transmission, telegram or similar means of communication. Notices shall be
deemed to have been received on the date of personal delivery, facsimile
transmission, or if sent by certified or registered mail, return receipt
requested, shall be deemed to be delivered on the third business day after the
date of mailing. The address of the Company is 150 Motor Parkway, Hauppauge,
New York 11788, and the Company shall give written notice of any change of
address to the holder hereof.
10. The Company consents to the jurisdiction of any court of the
State of New York and of any federal court located in New York. The Company
waives personal service of any summons, complaint or other process in connection
with any such action or proceeding and agrees that service thereof may be made,
by certified mail directed to the Company or, in the alternative, in any other
form or manner permitted by law.
11. This Warrant shall be governed, construed and interpreted
under the laws of the State of New York without giving effect to the rules
governing conflicts of law.
12. This Warrant shall not be assignable without the written
consent of the Company.
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<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by the signature of its President and its seal affixed and attested by
its Secretary.
Dated:
------------
VASOMEDICAL, INC.
By:
---------------------------
[Corporate Seal] PRESIDENT
ATTEST:
-------------------------------
Secretary
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<PAGE> 1
[BLAU, KRAMER, WACTLAR & LIEBERMAN, P.C. LETTERHEAD]
August 31, 1995
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Vasomedical, Inc.
Registration Statement on Form S-3
Gentlemen:
Reference is made to the filing by Vasomedical, Inc. (the "Company")
of a Registration Statement (the "Registration Statement") on Form S-3 with the
Securities and Exchange Commission pursuant to the provisions of the Securities
Act of 1933, as amended, covering the registration of 14,833,418 shares of the
Company's Common Stock, $.001 par value per share (the "Common Stock").
As counsel for the Corporation, we have examined its corporate
records, including its Certificate of Incorporation, as amended, By-laws, as
amended, its corporate minutes, the form of its Common Stock certificate and
such other documents as we have deemed necessary or relevant under the
circumstances.
Based upon our examination, we are of the opinion that:
1. The Company is duly organized and validly existing under the laws of
the State of Delaware.
2. The 2,505,000 previously issued shares of Common Stock covered by
the Registration Statement have been legally issued, fully paid and are
non-assessable and the 12,328,418 shares of Common Stock issuable upon
conversion of debentures or exercise of warrants will be, when converted or
exercised pursuant to their terms, legally issued, fully paid and
non-assessable.
<PAGE> 2
Securities and Exchange Commission
August 31, 1995
Page -2-
We hereby consent to be named in the Registration Statement and in the
prospectus which constitutes a part thereof as counsel of the Corporation, and
we hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ BLAU, KRAMER, WACTLAR & LIEBERMAN, P.C.
-------------------------------------------
BLAU, KRAMER, WACTLAR &
LIEBERMAN, P.C.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated August 10, 1995, accompanying the consolidated
financial statements of Vasomedical, Inc. and Subsidiaries (a development stage
enterprise) contained in the Registration Statement and Prospectus on Form S-3.
We consent to the use of the aforementioned report in the Registration
Statement and Prospectus, and to the use of our name as it appears under the
caption "Experts".
GRANT THORNTON LLP
Melville, New York
August 31, 1995
