UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the quarterly period ended November 30, 2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the transition period from _______________ to ______________
Commission File Number: 0-18105
VASOMEDICAL, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 11-2871434
--------------------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
180 Linden Ave., Westbury, New York 11590
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(Address of principal executive offices)
Registrant's Telephone Number (516) 997-4600
Number of Shares Outstanding of Common Stock,
$.001 Par Value, at December 31, 2000 56,407,042
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
--- --
<PAGE>
Vasomedical, Inc. and Subsidiaries
INDEX
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements (unaudited) Page
Consolidated Condensed Balance Sheets as of
November 30, 2000 and May 31, 2000 3
Consolidated Condensed Statements of Earnings for the
Six Months Ended November 30, 2000 and 1999 4
Consolidated Condensed Statement of Changes in Stockholders'
Equity for the Period from June 1, 2000 to
November 30, 2000 5
Consolidated Condensed Statements of Cash Flows for the
Six Months Ended November 30, 2000 and 1999 6
Notes to Consolidated Condensed Financial Statements 7
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II - OTHER INFORMATION 11
2
<PAGE>
Vasomedical, Inc. and Subsidiaries
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
November 30, May 31,
2000 2000
---- ----
ASSETS (unaudited) (audited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 3,801,963 $ 3,058,367
Accounts receivable, net of allowance for doubtful accounts of
$502,000 at November 30, 2000 and $400,000 at May 31, 2000 7,227,330 4,832,810
Inventories 1,812,101 906,984
Deferred income taxes 1,186,000 400,000
Other current assets 643,923 479,267
----------- -----------
Total current assets 14,671,317 9,677,428
PROPERTY AND EQUIPMENT, net 1,822,521 548,316
CAPITALIZED COST IN EXCESS OF FAIR VALUE OF NET ASSETS
ACQUIRED, net of accumulated amortization of $1,243,065 and
$1,136,517 at November 30, 2000 and May 31, 2000, respectively 248,633 355,181
OTHER ASSETS 43,792 8,037
----------- -----------
$16,786,263 $10,588,962
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,281,926 $ 1,219,803
Accrued warranty and customer support expenses 368,000 258,000
Accrued professional fees 168,000 276,000
Accrued commissions 487,415 543,389
Note Payable 1,141,667 -
----------- -----------
Total current liabilities 4,447,008 2,297,192
ACCRUED WARRANTY COSTS 113,000 129,000
OTHER LONG-TERM LIABILITIES - 16,000
DEFERRED REVENUES 233,514 203,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 1,000,000 shares authorized;
none issued and outstanding - -
Common stock, $.001 par value; 110,000,000 shares authorized;
56,407,042 and 55,921,330 shares at November 30, 2000 and
May 31, 2000, respectively, issued and outstanding 56,407 55,921
Additional paid-in capital 41,892,568 40,939,158
Accumulated deficit (29,956,234) (33,051,309)
----------- -----------
Total stockholders' equity 11,992,741 7,943,770
----------- -----------
$16,786,263 $10,588,962
=========== ===========
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
3
<PAGE>
Vasomedical, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(unaudited)
<TABLE>
<CAPTION>
Six months ended Three months ended
---------------- ------------------
November 30, November 30,
------------ ------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues
Equipment sales $11,524,944 $5,669,175 $6,331,035 $2,778,995
Equipment rentals and services 173,677 306,400 122,927 177,100
----------- ---------- ---------- ----------
11,698,621 5,975,575 6,453,962 2,956,095
----------- ---------- ---------- ----------
Costs and expenses
Cost of sales and services 2,960,496 1,369,287 1,648,540 757,017
Selling, general and administrative 5,279,369 3,348,738 2,950,861 1,606,422
Research and development 933,600 646,852 490,886 393,704
Depreciation and amortization 226,230 250,708 109,249 129,101
Provision for doubtful accounts 102,000 - 51,000 -
Interest and financing costs 4,546 3,562 2,119 1,550
Interest and other income - net (116,695) (41,447) (65,449) (21,425)
----------- ---------- ---------- ----------
9,389,546 5,577,700 5,187,206 2,866,369
----------- ---------- ---------- ----------
NET EARNINGS BEFORE
INCOME TAXES 2,309,075 397,875 1,266,756 89,726
Deferred income tax benefit 786,000 - 428,000 -
----------- ---------- ---------- ----------
NET EARNINGS 3,095,075 397,875 1,694,756 89,726
Preferred stock dividend requirement - (74,243) - (35,780)
----------- ---------- ---------- ----------
EARNINGS APPLICABLE TO
COMMON STOCK $3,095,075 $323,632 $1,694,756 $53,946
=========== ========== ========== ==========
Earnings per common
share (basic and diluted) $.05 $.01 $.03 $.00
==== ==== ==== ====
Weighted average common shares
outstanding
Basic 56,255,508 50,971,701 56,383,350 51,092,875
=========== ========== ========== ==========
Diluted 59,772,176 55,848,051 59,851,517 55,488,074
=========== ========== ========== ==========
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
4
<PAGE>
Vasomedical, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(unaudited)
<TABLE>
<CAPTION>
Total
Additional Accum- stock
Common Stock paid-in ulated holders'
Shares Amount capital deficit equity
--------- ------ ----------- ------------ ----------
<S> <C> <C> <C> <C> <C>
Balance at June 1, 2000 55,921,330 $55,921 $40,939,158 $(33,051,309) $7,943,770
Exercise of options and warrants 485,712 486 953,410 953,896
Net earnings 3,095,075 3,095,075
---------- ------- ----------- ------------ -----------
Balance at November 30, 2000 56,407,042 $56,407 $41,892,568 $(29,956,234) $11,992,741
========== ======= =========== ============ ===========
<FN>
The accompanying notes are an integral part of this condensed statement.
</FN>
</TABLE>
5
<PAGE>
Vasomedical, Inc. and Subsidiaries
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six months ended
----------------
November 30,
------------
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities
Net earnings $3,095,075 $ 397,875
---------- ----------
Adjustments to reconcile net earnings
to net cash used in operating activities
Depreciation and amortization 226,230 250,708
Provision for bad debts 102,000 -
Deferred income taxes (786,000) -
Stock options granted for services - 58,000
Changes in operating assets and liabilities
Accounts receivable (2,496,520) (1,019,050)
Inventories (1,002,730) 166,164
Other current assets (164,655) 14,443
Other assets (36,047) 22,076
Accounts payable, accrued expenses and other current liabilities 1,008,150 (71,982)
Other liabilities (1,486) (18,000)
---------- ----------
(3,151,058) (597,641)
---------- ----------
Net cash used in operating activities (55,983) (199,766)
---------- ----------
Cash flows from investing activities
Purchase of property and equipment (1,295,984) (30,913)
---------- ----------
Net cash used in investing activities (1,295,984) (30,913)
---------- ----------
Cash flows from financing activities
Proceeds from notes 1,141,667 -
Proceeds from exercise of options and warrants 953,896 51,250
---------- ----------
Net cash provided by financing activities 2,095,563 51,250
---------- ----------
NET INCREASE/(DECREASE) IN
CASH AND CASH EQUIVALENTS 743,596 (179,429)
Cash and cash equivalents - beginning of period 3,058,367 1,678,175
---------- ----------
Cash and cash equivalents - end of period $3,801,963 $1,498,746
========== ==========
Non-cash investing and financing activities were as follows:
Issuance of common stock in lieu of preferred dividends - $50,962
Inventories transferred (from)/to property and equipment,
attributable to operating leases - net $97,612 8,444
<FN>
The accompanying notes are an integral part of these condensed statements.
</FN>
</TABLE>
6
<PAGE>
Vasomedical, Inc. and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
November 30, 2000
(unaudited)
NOTE A - BASIS OF PRESENTATION
The consolidated condensed balance sheet as of November 30, 2000 and the
related consolidated condensed statements of earnings for the six-month periods
ended November 30, 2000 and 1999, changes in stockholders' equity for the
six-month period ended November 30, 2000 and cash flows for the six-month
periods ended November 30, 2000 and 1999 have been prepared by Vasomedical, Inc.
and Subsidiaries (the "Company") without audit. In the opinion of management,
all adjustments (which include only normal, recurring accrual adjustments)
necessary to present fairly the financial position and results of operations as
of November 30, 2000 and for all periods presented have been made.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America, have been condensed or omitted. These
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Annual Report on Form 10-K for the year ended
May 31, 2000. Results of operations for the periods ended November 30, 2000 and
1999 are not necessarily indicative of the operating results expected or
reported for the full year.
NOTE B - INVENTORIES
<TABLE>
<CAPTION>
November 30, May 31,
------------ -------
Inventories consist of the following: 2000 2000
---- ----
<S> <C> <C>
Raw materials $1,485,601 $545,924
Finished goods 326,500 361,060
---------- --------
$1,812,101 $906,984
========== ========
</TABLE>
NOTE C - NOTE PAYABLE
In November 2000, the Company purchased its present operating facilities
and secured a note payable from a financial institution for $1,141,667. The note
bears interest at the Libor Rate plus 150 basis points (approximately 8% at
November 30, 2000) and is due in monthly payments of interest only, with a
balloon payment due in May 2001. The note is secured by the building, and the
Company maintains a restricted cash balance with the financial institution for
the amount of the note during its term. The Company has received long-term
financing commitments under two programs sponsored by New York State at
favorable fixed interest rates. The existing note will be refinanced under these
commitments by May 2001.
NOTE D - STOCKHOLDERS' EQUITY
In the first half of fiscal 2001, the Board of Directors granted stock
options under the 1999 Stock Option Plan to employees to purchase an aggregate
of 528,000 shares of common stock at exercise prices ranging from $3.88 to $4.69
per share (which represented the fair market value of the underlying common
stock at the time of the respective grants).
In the first half of fiscal 2001, options and warrants to purchase 485,712
shares of common stock were exercised, aggregating $953,896 in proceeds to the
Company.
7
<PAGE>
Vasomedical, Inc. and Subsidiaries
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (continued)
November 30, 2000
(unaudited)
NOTE E - EARNINGS PER COMMON SHARE
Basic earnings per share are based on the weighted average number of common
shares outstanding without consideration of potential common stock. Diluted
earnings per share are based on the weighted number of common and potential
common shares outstanding. The calculation takes into account the shares that
may be issued upon the exercise of stock options and warrants, reduced by the
shares that may be repurchased with the funds received from the exercise, based
on the average price during the period, and convertible preferred stock,
assuming conversion at the beginning of the period.
The following table sets forth the computation of basic and diluted
earnings per share:
<TABLE>
<CAPTION>
Six months ended November 30, Three months ended November 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Numerator:
Basic earnings $ 3,095,075 $ 397,875 $1,694,756 $ 89,726
Preferred stock dividends - 74,243 - 35,780
----------- ----------- ---------- -----------
Diluted earnings $ 3,095,075 $ 323,632 $1,694,756 $ 53,946
=========== =========== ========== ===========
Denominator:
Basic - weighted average shares 56,255,508 50,971,701 56,383,350 51,092,875
Stock options 2,391,063 621,009 2,308,485 388,907
Warrants 1,125,605 1,178,631 1,159,682 1,056,337
Convertible preferred stock - 3,076,710 - 2,949,955
----------- ----------- ---------- -----------
Diluted - weighted average shares 59,772,176 55,848,051 59,851,517 55,488,074
=========== =========== ========== ===========
</TABLE>
NOTE F - COMMITMENTS AND CONTINGENCIES
Litigation
----------
In May 1996, an action was commenced in the Supreme Court of the State of
New York, Nassau County, against the Company, its directors and certain of its
officers and employees for the alleged breach of an agreement to appoint a
non-affiliated party as its exclusive distributor of EECP(R) systems. In August
1999, a motion for summary judgment to dismiss the complaint in its entirety was
granted. In November 2000, this dismissal was affirmed on appeal.
In May 1998, an action was commenced in the New York Supreme Court, Suffolk
County, against the Company and other parties. The action sought damages in the
sum of $5,000,000 based upon alleged injuries resulting from the alleged
negligence of the defendants in the use of the Company's product. In October
2000, the court dismissed the plaintiff's complaint in its entirety.
In February 1999, an action was commenced in the Massachusetts Superior
Court, Essex County, against the Company. The action seeks damages in the sum of
$1,000,000 based upon an alleged breach of a sales contract. The Company
believes that the complaint is frivolous and without merit and is vigorously
defending the claims. This matter is in its preliminary stages, and the Company
is unable to establish the likelihood of an unfavorable outcome or the existence
or amount of any potential loss.
Agreement with VAMED
--------------------
In connection with an acquisition in 1995, the Company assumed commitments
under an agreement, expiring November 2008, with VAMED Medical Instrument
Company Ltd. ("VAMED"), a Chinese company, for the contract manufacture of its
current EECP(R) system, subject to certain performance standards, as defined. At
November 30, 2000, the Company had outstanding purchase commitments of $972,000.
The Company believes that VAMED will be able to meet the Company's needs for
EECP(R) systems.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
--------------------------------------------------------------------------
OPERATIONS
----------
Results of Operations
---------------------
Six Months and Three Months Ended November 30, 2000 and 1999
------------------------------------------------------------
The Company generated revenues from the sale and lease of EECP(R) systems
of $11,699,000 and $5,976,000 for the six-month periods ended November 30, 2000
and 1999, respectively and $6,454,000 and $2,596,000 for the three-month periods
ended November 30, 2000 and 1999 respectively. The Company generated earnings of
$3,095,000 and $398,000, respectively (before deducting $74,000 in preferred
stock dividend requirements for the six months ended November 30, 1999), for the
six months ended November 30, 2000 and 1999 and earnings of $1,695,000 and
$90,000, respectively (before deducting $36,000 in preferred stock dividend
requirements for the three months ended November 30, 1999), for the three months
ended November 30, 2000 and 1999.
The number of cardiology practices and hospitals interested in becoming
providers of enhanced external counterpulsation (EECP) increased following the
announcement by the Health Care Financing Administration (HCFA) in February 1999
of its decision to extend Medicare coverage nationally to the Company's
noninvasive, outpatient treatment for coronary artery disease. HCFA is the
federal agency that administers the Medicare program for approximately 38
million beneficiaries. In addition, the results of the Company's multicenter,
prospective, randomized, blinded, controlled clinical study of EECP (MUST-EECP)
were published in the June 1999 issue of the Journal of the American College of
Cardiology. Interest in EECP therapy has also been spurred by the announcement
of the results of six-month and twelve-month post-treatment outcomes reported by
the International EECP Patient Registry and presented at major scientific
meetings, including the American Heart Association (AHA) and the American
College of Cardiology (ACC) annual meetings.
Revenue growth in the prior fiscal period (fiscal 2000) was initially
hindered because local Medicare contractors established inappropriate payment
levels that did not take into account the full value of the resources health
care providers must deploy to deliver EECP therapy. Consequently, in November
1999, HCFA created a specific code for external counterpulsation therapy and
established a nationally applicable allowable charge, which became effective on
January 1, 2000. The allowable charge under the new code was based upon a
preliminary determination of Relative Value Units (RVUs) assigned by HCFA to the
resources needed for the administration of the therapy. Certain patients may
require additional services, such as evaluation and management, which may be
billed separately. The Company estimates the standard national charge to
approximate $130 per session of EECP therapy, which may be adjusted by certain
geographic indices. This would result in a standard charge of $4,550 for a full
course of therapy, which typically involves 35 one-hour outpatient sessions. The
assigned code will allow EECP providers to bill Medicare electronically,
substantially reducing the process for receiving reimbursement. Moreover, in
light of the new payment instructions, local Medicare contractors will no longer
have the responsibility of establishing reimbursement rates. Beginning August 1,
2000, Medicare coverage was extended to include EECP treatment received on an
outpatient basis at hospitals and outpatient clinics under the new APC
(Ambulatory Payment Classification) system. The national average payment rate
approximates $150 per session. These events led to an increased demand for EECP
therapy and EECP(R) equipment and, consequently, to revenue growth. An 11%
increase in the reimbursement rate for EECP therapy has been approved by HCFA
with effect from January 1, 2001. This raises the average Medicare payment to
$143.85.
Gross margins are dependent on a number of factors, particularly the mix of
EECP(R) units sold and rented during the period, the ongoing costs of servicing
such units, and certain fixed period costs, including facilities, payroll and
insurance. Gross margins are furthermore affected by the location of the
Company's customers (including non- domestic business or distributorship
arrangements which, for discounted equipment purchase prices, co-invest in
establishing a market for EECP(R) equipment) and the amount and nature of
training and other initial costs required to place the EECP(R) system in service
for customer use. Consequently, the gross margin realized during the current
period may not be indicative of future margins.
Selling, general and administrative (SG&A) expenses for the six months
ended November 30, 2000 and 1999 were $5,279,000 and $3,349,000, respectively,
and $2,951,000 and $1,606,000, respectively, for the three months ended November
30, 2000 and 1999. The increases in SG&A expenses of $1,930,000 and $1,345,000
from the comparable prior-year fiscal periods resulted primarily from increases
in administration, sales and marketing personnel, as well as other selling
expenses related to increased revenues.
9
<PAGE>
Research and development (R&D) expenses in the six and three months ended
November 30, 2000 increased by $287,000 and $97,000 from the comparable
prior-year periods. The increases relate primarily to continued product design
and development costs (including an increase in personnel), as well as the
initiation of the pivotal study in heart failure (which received FDA approval in
July 2000). The Company's newly developed EECP system, Model TS-3, received FDA
510(k) clearance to market in December 2000.
The increase in interest income is the result of larger average cash
balances invested during the current period.
Liquidity and Capital Resources
-------------------------------
The Company has financed its fiscal 2001 and 2000 operations primarily from
working capital and operating results. At November 30, 2000, the Company had a
cash balance of $3,802,000 and working capital of $10,224,000, compared to a
cash balance of $3,058,000 and working capital of $7,380,000 at May 31, 2000.
The Company's operating activities used cash of $56,000 and $200,000 for the six
months ended November 30, 2000 and 1999, respectively. Net cash used during the
six months ended November 30, 2000 consisted primarily of earnings from
operations, increases in accounts payable and accrued expenses, offset by
increases in accounts receivable, other current assets and inventories. The
increase in inventories, particularly raw materials, and the increase in
accounts payable are attributable to the purchase of components and assemblies
for the production of the new Model TS-3 system, which was recently cleared for
marketing by the FDA.
Investing activities used net cash of $1,296,000 and $31,000 during the six
months ended November 30, 2000 and 1999, respectively. The principal uses were
for the purchase of property and equipment, including the purchase of the
Company's present operating facilities in mid-November 2000. The purchase price,
including planned improvements, is estimated at $1,400,000. The Company has
secured long-term financing at favorable interest rates through two financing
programs sponsored by New York State, which are expected to close in early 2001
upon the completion of building renovations. In the interim period, the Company
has secured bridge financing with a financial institution for a period of six
months, for which $1,141,667 cash has been restricted as collateral.
Financing activities provided cash of $2,096,000 and $51,000 during the six
months ended November 30, 2000 and 1999, respectively. Financing activities
during fiscal 2001 and 2000 consisted primarily from the November 2000
transaction to finance the purchase of the Company's operating facilities, as
well as $954,000 from the sale of common stock and receipt of cash proceeds upon
the exercise of Company common stock warrants by officers, directors, employees
and consultants.
Management believes that its working capital position at November 30, 2000,
along with the ongoing commercialization of the EECP(R) system and possible
further proceeds from the exercise of options and warrants, will make it
possible for the Company to support its internal overhead expenses and to
implement its business plans for at least the next twelve months.
Except for historical information contained herein, the matters discussed
are forward-looking statements that involve risks and uncertainties. When used
in this report, words such as "anticipate", "believe", "estimate", "expect" and
"intend" and similar expressions, as they relate to the Company or its
management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of the Company's management, as well as assumptions
made by and information currently available to the Company's management. Among
the factors that could cause actual results to differ materially are the
following: the effect of the dramatic changes taking place in the healthcare
environment; the impact of competitive procedures and products and their
pricing; unexpected manufacturing problems in foreign supplier facilities;
unforeseen difficulties and delays in the conduct of clinical trials and other
product development programs; the actions of regulatory authorities and
third-party payers in the United States and overseas; uncertainties about the
acceptance of a novel therapeutic modality by the medical community; and the
risk factors reported from time to time in the Company's SEC reports. The
Company undertakes no obligation to update forward-looking statements as a
result of future events or developments.
10
<PAGE>
VASOMEDICAL, INC. AND SUBSIDIARIES
----------------------------------
PART II - OTHER INFORMATION
---------------------------
ITEM 1 - LEGAL PROCEEDINGS:
Previously reported.
ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS:
None
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES:
None
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A. The registrant held its Annual Meeting of Stockholders on October 11,
2000.
B. Not applicable.
C. Four directors were elected at the Annual Meeting to serve in Class II
until the Annual Meeting of Stockholders for fiscal 2002. They are Abraham E.
Cohen, John C.K. Hui, Photios T. Paulson and Forrest R. Whittaker. One director,
D. Michael Deignan, was elected at the Annual Meeting to serve in Class III
until the Annual Meeting of Stockholders for fiscal 2001. The minimum number of
votes cast in favor of their elections was 52,237,246.
The other matter voted upon was the ratification of the appointment of
Grant Thornton LLP as the Company's independent certified public accountants for
the fiscal year ended May 31, 2001. The votes cast are as follows:
Votes For: 52,174,296; Votes Against: 123,490; Votes Abstained: 94,212
ITEM 5 - OTHER INFORMATION:
None
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K:
Exhibits:
No. 10 Employment Agreement dated December 1, 2000 between Registrant
and D. Michael Deignan
No. 27 Financial Data Schedule
Reports on Form 8-K:
None
11
<PAGE>
In accordance with to the requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
VASOMEDICAL, INC.
By: /s/ D. Michael Deignan
----------------------
D. Michael Deignan
President, Chief Executive Officer and Director
(Principal Executive Officer)
/s/ Joseph A. Giacalone
-----------------------
Joseph A. Giacalone
Chief Financial Officer (Principal Financial
and Accounting Officer)
Date: January 3, 2001
