As filed with the Securities and Exchange Commission on July 31, 1998April 5, 2000
Registration No. ____________
UNITED STATES333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, DCD.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
VASOMEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-2871434
(State or other jurisdiction of (IRS(I.R.S. Employer Identification No.)
incorporation or organization)
180 Linden Avenue Anthony ViscusiD. Michael Deignan, President
Westbury, New York 11590 Vasomedical, Inc.
(516) 997-4600 180 Linden Avenue
(Address, including zip code and telephone Westbury, New York 11590
telephone number, including area code, (516) 997-4600
of registrant's (516) 997-4600
principal executive offices) Name,(Name address and telephone number,
offices) including area code, of agent for
service)
--------
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.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.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.box [X].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering.
[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
box []
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Proposed Maximum Proposed Maximum
Securities to be Amount to be Proposed Maximum Offering Proposed MaximumAggregate Amount of
to be
Registered Registered Price Per ShareSecurity (1) Aggregate Offering Price (1) Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Common Stock,
par value $.001
6,841,758 shs. $1.344 $9,195,323 $2,713
per share reserved for issuance
upon conversion of Series B
Convertible Preferred Stock (2)(3) 100,000 shs. $6.41 $641,000 $278
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 883,068 shs. $1.344 $1,186,843 $350
per share, reserved for issuance
upon the exercise of Common
Stock Purchase Warrants (2) (3)
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(1) Estimated solely for the purpose of calculating the registration fee, based
on the closing price of the Common Stockcommon stock reported in the consolidated
reporting system on July 23, 1998.March 29, 2000.
(2) This Registration Statement also covers the associated Share Purchase Rights reserved for issuanceRepresents 100,000 shares of common stock issuable upon the exercise of
the
securities.
(3) Pursuant to Rule 416, this Registration Statement also covers any additional shares of Common Stock which may become issuable
by virtue of the anti-dilution provisions of such securities.common stock purchase warrants.
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.
VASOMEDICAL, INC.
Cross Reference Sheet
Showing location in Prospectus of Information Required by Items on Form S-3
Item No. Prospectus Caption
- ---------------------------
1. Forepart of the Registration Outside Front Cover
Statement and Outside Front Cover Page Page of Prospectus
of Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside
Pages of Prospectus 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;
Selling Security Holders
6. Dilution *
7. Selling Security Holders Selling Security Holders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be *
Registered
10. Interests of Named Experts and Counsel Legal Opinion;
Experts
11. Material Changes *
12. Incorporation of Certain Documents Incorporation of
by Reference Certain Documents
By Reference
13. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
* Omitted since answer to item is negative or inapplicable
Information contained herein is subject 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.
Preliminary Prospectus
SUBJECT TO COMPLETION
Dated July 31, 1998April 5, 2000
VASOMEDICAL, INC.
7,724,826100,000 Shares of Common Stock
$.001 par value
The 7,724,826Vasomedical, Inc. is selling 100,000 shares of Common Stock, $.001 par value per share (the
"Shares"), of Vasomedical, Inc. (the "Company") being covered by this Prospectus
represent 4,561,172common stock. The shares issuable upon the conversion of Series C Convertible
Preferred Stock, and 588,712 issuableare
to be issued upon the exercise of Common Stock Purchase
Warrants. They are being offered by two (2) selling security Holders and any
pledgees, transferees, donees or other successors in interest thereof (the
"Selling Security Holders"). This Prospectus also covers 2,574,942 shares of
Common Stock associated with the Company's Share Purchase Rights, which are
reserved for issuance upon the exercise of the foregoing securities. The Shares
may be offered by the Selling Security Holders 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 Security Holders 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 Security Holders 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 compensationVasomedical's outstanding common stock
purchase warrants issued to a particular broker-dealer might be in excessselling securityholder. Each warrant represents
the right to purchase one share of customary commissions). See "Selling Security Holders" and "Plancommon stock at an exercise price of Distribution."
None of the proceeds from the sale of the Shares by the Selling Security
Holders 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 $1,225,000. The Company$1.44
per share until February 26, 2001.
Vasomedical will bear the expenses in connection with the offering,
including filing fees and the Company'sVasomedical's legal and accounting fees, estimated at
$19,000.
The Company's Common Stock$10,000.
Vasomedical's common stock is traded on the Nasdaq SmallCap Issues market
(Symbol: VASO).National Market System
under the symbol VASO. On July 23, 1998,March 29, 2000, the last reported sale price of the
Company's
Common Stockcommon stock as reported by NASDAQthe Nasdaq National Market System was $1.344$6.41 per
share.
---------------
AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "CERTAIN INVESTMENT CONSIDERATIONS", PAGE 4.
--------------
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 _______, 1998
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection withNeither the offer
contained herein,Securities 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 inExchange Commission nor any state securities
commission has approved or disapproved of these securities, or determined if
this prospectus is truthful or complete. Any representation to any
person to whom itthe contrary is not lawful to make such offer in such state.a
criminal offense.
Prospectus dated _______, 2000
TABLE OF CONTENTS
Page
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Available----
Risk Factors .............................................................. 2
The Company ............................................................... 4
Use of Proceeds ........................................................... 14
Price Range of Common Stock ............................................... 15
Dividend Policy ........................................................... 15
Performance Chart ......................................................... 16
Description of Securities ................................................. 16
Plan of Distribution ...................................................... 18
Legal Matters ............................................................. 18
Experts ................................................................... 18
Where You Can Find More Information . . . . . . . . . . . . . . 3....................................... 19
Incorporation of Certain Documents by Reference . 3
The Company . . . . . . . . . . . . . . . . . . . 4
Certain Investment Considerations . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . 5
Description of Capital Stock. . . . . . . . . . . 6
Selling Security Holders. . . . . . . . . . . . . 7
Plan of Distribution. . . . . . . . . . . . . . . 8
Indemnification of Directors and Officers . . . . 10
Legal Matters . . . . . . . . . . . . . . . . . . 11
Experts . . . . . . . . . . . . . . . . . . . . . 11
AVAILABLE INFORMATION
The Company has filed with........................... 19
You should rely only on the Securities and Exchange Commission (the
"Commission"), Washington, DC, 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 asdocument or to the contents of
any contract or otherwhich
Vasomedical, Inc. has referred you. Vasomedical, Inc. has not authorized anyone
to provide you with information that is different. This document are not necessarily complete and in each instance
referencemay only be
used where it is madelegal 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.sell these securities. 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 Room 1024, 450 Fifth Street, N.W., Washington, DC 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, DC 20549, at
prescribed rates, and from the Securities and Exchange Commission's web site at
the address http://www.sec.gov. Copies of such material can also be obtained at
the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, Washington, DC 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 shalldocument may only be deemed to be a part hereof:
(1) The Company's Annual Reportaccurate on Form 10-K for the fiscal year ended May
31, 1998.
(2) The Company's Proxy Statement dated December 4, 1997 for its 1997
Annual Meeting of Stockholders.
(3) The Registration Statement on Form 8-A dated May 11, 1995 with respect
to the Company's Share Purchase Rights.
(4) The Company's Form 8-K dated April 30, 1998.
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 priordocument.
RISK FACTORS
In evaluating whether to buy the termination ofsecurities offered by this offering of Common Stock shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof fromprospectus, you
should consider carefully 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.,
180 Linden Avenue, Westbury, New York 11590 (516) 997-4600.
THE COMPANY
The Company is engaged in the commercialization of the EECP(R) enhanced
external counterpulsation system ("EECP"), a microprocessor-based medical device
for the non-invasive, atraumatic treatment of patients with coronary artery
disease. EECP is marketed worldwide to hospitals, clinics and other cardiac
health care providers. The Company has the worldwide exclusive marketing rights
(except in China) to EECP , which rights it acquired in fiscal 1992.
In addition to its marketing efforts, the Company has recently completed,
at several leading university hospitals, a clinical study for the purpose, among
other things, of gathering information to apply for medical reimbursement. EECP
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 180 Linden Avenue, Westbury,
New York 11590, and its telephone number is (516) 997-4600.
CERTAIN INVESTMENT CONSIDERATIONSfollowing factors.
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,Vasomedical, its
business and an investment in shares of the Common Stock offered hereby.
1. Need for Additional Funds. Management believes that its working capital
position at July 31, 1998,February 29, 2000, and the ongoing commercialization of EECP , will
make it possible for the CompanyVasomedical to support its internal overhead expenses and
to implement its new development and business plans at least through May 31, 1999.February
28, 2001. While the CompanyVasomedical intends to finance its future cash requirements from
the sale and lease of EECP systems, there is no assurance that the CompanyVasomedical can
be successful in these efforts.
2. Dependence on Limited Products. Currently, EECP is the Company'sVasomedical's only
product. The CompanyVasomedical is concentrating substantially all of its efforts on EECP ,
which was recently approved for which it has recently concluded a multicenter clinical studyMedicare reimbursement, and is incurring sales
and marketing expenses. Although the CompanyVasomedical generated revenue from EECP insince
fiscal 1998,1996, there is no assurance that the CompanyVasomedical will continue to generate
enough revenue to fund internal working capital requirements beyond May 31,
1999.February
2001.
3. Historical and Anticipated Losses. The CompanyVasomedical was incorporated in July 1987 and, to
date, has had limited revenues. For the yearsnine months ended May 31, 1998,
1997,February 29, 2000 and 1996, the Company sustained net losses of $5,031,000, $4,516,000, and
$2,643,000, respectively. The Company recognized $5,225,000, $2,097,000 and
$2,683,000 in revenues for
the years ended May 31, 1999 and 1998, 1997Vasomedical recorded net income of
$574,000, and 1996,sustained net losses of $3,892,000 and $5,031,000, respectively.
Vasomedical recognized $9,154,000,$6,024,000 and $5,225,000 in revenues for the
nine months ended February 29, 2000 and the years ended May 31, 1999 and 1998,
respectively.
4. Uncertainty of Market Acceptance of the Company'sVasomedical's Products. With respect
to EECP , 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 CompanyVasomedical
cannot guarantee acceptance by the medical community.
5. Dependence on Key Personnel. The CompanyVasomedical is substantially dependent upon
the efforts of its executive officers, particularly Dr. John Hui. The Companyofficers. However, Vasomedical maintains limited
key-man life insurance. Despite the existence of employment
agreements with Dr. Hui and others, thereThere are no assurances that Company's key executives
will continue their employment with the Company.
Vasomedical.
6. Technological Obsolescence. The CompanyVasomedical 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'sVasomedical's products, processes and devices
uneconomical or obsolete. The likelihood of success for the Company'sVasomedical'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'sVasomedical's products, processes and devices. These companies' products may
receive more widespread commercial acceptance than the Company'sVasomedical's EECP because of
greater financial resources and marketing capabilities.
8. Future Sales of Common Stock. Of the Company'sVasomedical's Common Stock currently
outstanding, approximately 1,707,0002,538,683 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. An
additional 22,456,85635,755,589 shares are covered by currently effective registration
statements, of which 12,239,68420,161,143 shares are included in the Company'sVasomedical's outstanding
shares at July 23, 1998.March 29, 2000. The restricted securities, the previously registered
securities, as well as the 7,724,826100,000 shares of Common Stock registered hereunder
represent approximately 35% of the Company'sVasomedical's outstanding Common Stock on a
fully-diluted basis. Their sale, or even potential sale, pursuant to Rule 144,
its prior registration statement,statements, this registration statement or otherwise,
would likely have an adverse effect on the market price of the Company'sVasomedical's Common
Stock.
9. Government Regulation. The development, testing, production and
marketing of the Company'sVasomedical'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'sVasomedical's products may be subject to regulation
by similar agencies in other states and foreign countries. While the CompanyVasomedical
believes that it has complied 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
CompanyVasomedical which could adversely affect its financial performance and results
of operations.
10. DiscretionForward-Looking Statement
Except for historical information contained in Applicationthis Prospectus, the matters
discussed are forward looking statements that involve risks and uncertainties.
When used in this Prospectus, words such as "anticipate", "believe", "estimate",
"expect" and "intend" and similar expressions, as they relate to Vasomedical or
its management, identify forward-looking statements. Such forward-looking
statements are based on the beliefs of Net Proceeds. ToVasomedical's management, as well as
assumptions made by and information currently available to Vasomedical's
management. Among the extentfactors that could cause actual results to differ
materially are the following: the effect of business and economic conditions;
the impact of competitive products and pricing; capacity and supply constraints
or difficulties; product development, commercialization or technological
difficulties; the regulatory and trade environment; and the risk factors
reported from time to time in Vasomedical's SEC reports. Vasomedical undertakes
no obligation to update forward-looking statements as a result of future events
or developments.
THE COMPANY
General
Vasomedical, incorporated in Delaware in July 1987, is engaged in the
commercialization of the EECP enhanced external counterpulsation ("EECP ")
system, a computer-based medical device for the noninvasive, atraumatic
treatment of patients with coronary artery disease. The EECP system is marketed
worldwide to hospitals, clinics and other cardiac health care providers.
In fiscal 1992, Vasomedical, through the purchase of a 55% interest in Vaso
Interim Corp. ("Vaso Interim"), acquired the worldwide exclusive marketing
rights (except in China) to the EECP system and agreed to fund the research and
development activities of Vasogenics, Inc. ("Vasogenics"), its joint-venture
partner in Vaso Interim and sole minority shareholder. Vasogenics held the
intellectual property rights to the EECP technology, including patents and
manufacturing rights.
In January 1995, Vasomedical acquired all the capital stock of Vasogenics for
stock consideration and the assumption of certain liabilities. In connection
with the acquisition, Vasomedical retained certain key employees of Vasogenics
who had been involved in the development of the EECP technology. Vasogenics and
Vaso Interim were subsequently merged into Vasomedical.
EECP received marketing clearance from the Food and Drug Administration
("FDA") under a 510(k) premarket notification in February 1995 and received a
national payment level and coverage policy from Medicare in January 2000.
The EECP Enhanced External Counterpulsation System
General Discussion
According to the American Heart Association, coronary heart disease ("CHD") is
the single largest killer of American males and females. CHD caused 481,287
deaths in the United States in 1995. A major complication of CHD is angina
pectoris, from which millions of Americans suffer. It is caused by obstruction
of arteries which supply the heart muscle with blood. The pain associated with
angina pectoris can be disabling, and conventional therapy, when medication
fails, consists of invasive procedures, such as percutaneous transluminal
coronary angioplasty ("PTCA") and coronary artery bypass grafting ("CABG").
According to a Report of the American College of Cardiology/American Heart
Association Task Force on Assessment of Diagnostic and Therapeutic
Cardiovascular Procedures, re-occlusion of dilated vessels occurs within six
months of PTCA interventions in 30% to 40% of cases (Journal of the American
College of Cardiology Vol. 22, No. 7, December 1993:2033-2054) and localized or
diffuse narrowings occur in half of vein grafts by ten years after CABG
(Circulation Vol. 83, No. 3, March 1991:1125-1173).
In March 1989, Vasogenics received 510(k) marketing clearance from the FDA for
the MC1 model of the EECP system. In February 1995, Vasomedical received 510(k)
marketing clearance for its EECP- MC2 model, which incorporated technological
improvements of external counterpulsation. Marketing clearance was for use of
the EECP procedure in the treatment of patients suffering from stable or
unstable angina pectoris, acute myocardial infarction and cardiogenic shock.
Vasomedical decided, however, to focus initially only on the stable angina
pectoris indication.
The System
EECP is an advanced treatment system utilizing fundamental hemodynamic
principles to relieve angina pectoris. Treatment involves the inflation and
deflation of a series of compressive air cuffs applied to the patient's lower
extremities - the calves, lower thighs, and upper thighs, including the
buttocks. Timing for inflation and deflation is regulated by a microprocessor
running electrocardiogram ("ECG") signals through sets of algorithms that
monitor safety and precision.
Upon diastole, the cuffs are inflated sequentially and rapidly from the calves
proximally, creating a retrograde arterial pressure wave that increases systemic
aortic diastolic pressure, coronary perfusion pressure and blood flow.
Compression of the vascular beds of the legs also increases venous return.
Instantaneous decompression of all cuffs at the onset of systole lowers vascular
impedance, thereby decreasing ventricular workload. This latter effect, when
coupled with the augmented venous return, can raise cardiac output by as much as
63%.
Patients usually begin to experience symptomatic relief of angina after 15 or
20 hours of a 35-hour treatment regimen. Positive effects are sustained between
treatments and usually persist years after completion of a full course of
therapy, as reported in the April 15, 1995 issue of the American Journal of
Cardiology.
The mechanism by which EECP produces long-term patient benefits remains
uncertain, but thallium-201 and exercise stress test results combined are
strongly indicative of an improvement in myocardial perfusion and resolution of
reversible ischemic defects. The most logical explanation for these observations
is that EECP in some way stimulates collateral vessel recruitment and/or growth.
Collateral vessels may be regarded as one of the heart's emergency systems, and
can be called upon to open up and also to be extended, in response to ischemia.
The results of studies carried out at the State University of New York's
University Medical Center at Stony Brook ("Stony Brook"), supported by previous
experience in China, provided the first indication that EECP therapy may
stimulate collateral flow in coronary artery disease patients. In support of
this hypothesis is the observation that the Common Stock Purchase Warrants are fully exercised,presence of one or more vascular
conduits without significant stenosis appears to be predictive of a favorable
response to EECP therapy. In fact, effectiveness has been shown to be directly
related to the Company will receive net
proceeds fromnumber of patent coronary vessels in the treated patients. The
explanation appears to be that a proximally patent conduit is necessary to allow
transmission of augmented diastolic pressure and flow to distal coronary
vessels, by which collateral recruitment or development is promoted.
Clinical Studies
Early experiments with counterpulsation at Harvard in the 1950s demonstrated
that this offering of approximately $1,225,000. Managementtechnique markedly reduces the workload, and thus oxygen consumption,
of the Companyleft ventricle. This basic effect has certain discretionbeen demonstrated over the usepast 40
years in both animal experiments and expenditurein patients. The clinical benefits of
external counterpulsation were not consistently achieved in early studies
because the equipment used then lacked some of the features found in the EECP
system, such as the computer-controlled operating system that makes sequential
cuff inflation possible. As the technology improved, however, it became apparent
that both internal and external forms of counterpulsation were capable of
improving survival in patients with cardiogenic shock following myocardial
infarction. Later, in the 1980s, Dr. Zheng and colleagues in China reported on
their extensive experience in treating angina using the newly developed enhanced
sequential device - EECP . Not only did a course of treatment with EECP reduce
the frequency and severity of anginal symptoms during normal daily functions and
also during exercise, but the improvements were sustained for years after
therapy.
These results prompted a group of investigators at Stony Brook to undertake
studies with EECP to reproduce the Chinese results, using both subjective and
objective endpoints. The first study group consisted of 18 patients with chronic
stable angina, despite medical and surgical intervention, as well as evidence,
assessed by thallium-201 perfusion imaging, of ischemia during an exercise
stress test. EECP treatment was administered for one hour daily for a total of
36 hours over approximately seven weeks. During the course of treatment, all 18
patients experienced substantial subjective improvements in symptoms, and 16
were completely free of angina during normal daily activities. Looking at
objective measures of benefit, a comparison of maximal stress test results
before and after treatment showed that EECP produced a significant increase
(19%) in exercise tolerance in the total patient population.
Intriguingly, results of thallium-201 scans before and after treatment also
showed a complete resolution of perfusion defects in 12 patients (67%) and a
decrease in the size of the ischemic zone in another two. Thus, 14 of 18
patients (78%) experienced a reduction in ischemia as assessed by radionuclide
imaging.
Subsequent data from a group of 50 angina patients who were treated with EECP
are consistent with the above results. All of these proceeds.
Aspatients reported a
reduction in symptoms and 80% demonstrated improvement by radionuclide testing.
Patients with one- or two-vessel disease were significantly more likely to
respond than those with three-vessel disease.
Seventeen of the original 18 patients studied, including 13 of the 14 patients
who had previously shown a reduction in myocardial ischemia, were followed up
for an average of three years. One of these 13 patients suffered a myocardial
infarction, and another underwent a revascularization procedure during the
intervening period. Of the remaining 11 patients, all remained free of limiting
angina. Ten patients underwent repeat stress thallium testing. In these
patients, the mean double product at three years was not significantly different
from the baseline value; however, eight patients (80%) demonstrated persistent
improvements in the results of thallium scintigraphy.
Another study of 27 patients with angina pectoris indicated that EECP
outpatient therapy appears to exert effects on the heart similar to those
achieved by exercise training. After receiving EECP , approximately 80% of the
patients studied achieved an increase in exercise time as measured during
thallium stress tests. Although exercise usually causes increases in the heart
rate and blood pressure, these patients exhibited lower than expected heart rate
increases and no significant increases in blood pressure during their stress
tests. This indicates that they achieved similar conditioning benefits from EECP
as might be expected from engaging in a regular program of exercise.
In this study, 26 men and one woman received 35 hours of EECP . A maximal
radionuclide stress test was performed prior to entry into the study. Upon
completion of the EECP treatment course, patients were again tested to the same
cardiac workload and to maximum effort. The radionuclide imaging results were
similar to those reported in previous studies with 78% of patients having a
partial or complete resolution of perfusion defects indicating better or
normalized blood flow to ischemic areas of the heart.
Only those who had improved post-EECP radionuclide images demonstrated
meaningful increases in maximal exercise times. However, in the "unimproved"
group, there was a significant decrease in post- EECP double product, indicating
a useful decrease in peripheral vascular resistance. The authors concluded that
the two proposed mechanisms of EECP , improved stress perfusion of the ischemic
myocardium and decreased peripheral vascular resistance, are complementary and
may explain the improved exercise tolerance and symptomatic relief sometimes
seen in patients with unchanged stress perfusion imaging.
A five-year follow-up study of morbidity and mortality in 33 angina patients
treated with EECP was reported by the Stony Brook center in April 1997. These
patients had received 35 hours of EECP between 1989 and 1996, had documented CHD
and had undergone pre- and post-exercise testing. The initial group of 18
patients previously reported at three years of follow-up was included in this
expanded cohort. Cardiac angiography had been performed in 18 patients, with 16
of these patients having multi-vessel disease; ten of 33 patients treated had
prior myocardial infarction and 13 had undergone either CABG or PTCA, with eight
having undergone both treatments. Of the 33 patients treated, 4 died 1-5 years
after initial treatment with EECP , and complete follow-up data concerning
cardiac events was obtained in the 29 surviving patients. Although nine patients
required interim hospitalizations for one or more cardiac conditions, which
consisted of acute myocardial infarcts (4), new CABG or PTCA (6), other cardiac
surgery (1) or unstable angina (1), 20 of the 33 patients treated experienced
none of the above 4-7 years post-EECP treatment. Since over 60% of the original
cohort of 33 patients with advanced CHD are alive and well and without new
events, this five-year follow-up study suggests that EECP is effective both in
the short- and long-term therapy of chronic angina pectoris.
In 1995, Vasomedical began a large randomized, controlled and double-blinded
multicenter clinical study ("MUST-EECP") in four leading university hospitals in
the United States to confirm at other sites the patient benefits observed in
open studies conducted at the Stony Brook center and to provide scientific
evidence of this treatment's effectiveness. The University of California San
Francisco, Columbia University College of Physicians & Surgeons at the
Columbia-Presbyterian Medical Center in New York, Beth Israel Deaconess
Hospital, a teaching affiliate of Harvard Medical School, and Yale University
School of Medicine were the institutions that participated in the study. These
institutions were later joined by Loyola University, University of Pittsburgh
and Grant/Riverside Methodist Hospitals. MUST-EECP was completed in July 1997
and results were announced at the annual meeting of the American Heart
Association in November 1997 and of the American College of Cardiology in March
1998. The results of MUST-EECP were published in the Journal of the American
College of Cardiology, a major peer-review medical journal, in June 1999.
This study shows that EECP therapy is a safe and effective choice for more
than seven million patients suffering from angina pectoris, a common symptom of
CHD. This study provides scientific evidence of this novel treatment's
effectiveness, even in patients on maximal medication and for whom invasive
revascularization procedures are no longer an option. Results of MUST-EECP
confirm clinical benefits shown in previous open trials: a decline in anginal
frequency, an increase in the ability to exercise and a decrease in
exercise-induced signs of myocardial ischemia.
MUST-EECP was conducted from May 1995 to July 1997. One hundred and
thirty-nine (139) patients suffering from chronic angina pectoris and on maximal
medication were randomized to receive treatment or sham. The sham group was
treated in a manner identical in every way to the treatment group except that
cardiovascular hemodynamics were not affected. Neither patients nor physicians
involved with the study knew to which group an individual patient belonged.
Participants were representative of patients with severe CHD. Average age
was 63 years (range 40- 81 years): 88% were males; 58% had undergone either CABG
or PTCA; and 49% had experienced prior myocardial infarctions. In addition,
among those who benefited, 74% were in Canadian Class II or III, and 55% had
"residual" multivessel coronary artery disease despite revascularization.
Despite a considerable amount of medication prior to and during treatment,
patients in the treated group still were able to show improvement averaging 11%
in the time before the onset of ischemia demonstrated by stress ECG. Those in
the sham (control) group showed no improvement at all. Additionally, even in the
maximally medicated patients, exercise duration increased 10% in the average
participant receiving treatment as measured by exercise treadmill; exercise
duration increased only 6% in the sham group. Study participants followed a four
to seven week treatment program. The protocol required patients to undergo EECP
in one-hour sessions, until they had completed 35 hours of treatment.
In fiscal 1999, Vasomedical completed a long-term quality-of-life study
with EECP in the same institutions and with the same patients that participated
in MUST-EECP. The positive results of this study have already been presented at
major scientific meetings, and a publication in a major peer-review journal is
expected during 2000.
In pursuit of its claim expansion program, Vasomedical applied for and
received FDA approval in April 1998 to study, under an Investigational Device
Exemption protocol, the application of EECP in the treatment of congestive heart
failure ("CHF"), a disabling condition affecting nearly 5 million Americans and
the most frequent cause of hospitalization for those over 65 years of age. The
study is being conducted simultaneously at the University of Pittsburgh, the
University of California San Francisco and the Grant Hospital in Columbus,Ohio,
and is expected to be completed in April 2000. Favorable preliminary results
have been presented at major scientific meetings, including The Heart Failure
Society of America in September 1999 and The American College of Cardiology in
March 2000. CHF occurs when the heart is unable to pump blood well enough to
meet the body's needs. The circulatory system becomes congested when the heart
fails to empty its chambers sufficiently, leading to an accumulation in the
chest and lower limbs. According to the American Heart Association, 2.5 million
men and 2.4 million women in the United States have CHF. About 400,000 new cases
of the disease occur each year. The need to find new and effective methods to
treat CHF is pressing, since the prevalence of the disease is growing rapidly as
a result the success of the Companyaging population and the improved survival rate of heart
attacks, while deaths caused by the disease increased 116% from 1979 to 1995.
Vasomedical's Plans
Vasomedical's short- and long-term plans are to:
- - Establish EECP therapy as a new standard of care in CHD.
- - Publish the results of its long-term quality-of-life outcomes study in a
major peer-review medical journal in 2000.
- - Engage in educational campaigns designed to highlight the
cost-effectiveness and quality-of-life advantages of EECP therapy to State
Welfare (Medicaid) agencies, commercial insurance companies, and managed
care organizations.
- - Complete a feasibility study for the use of EECP in CHF and present
preliminary results in 2000.
- - Initiate a pivotal multicenter study for the use of EECP in CHF in 2000.
- - Complete the development of an upgraded EECP system and initiate its
in-house assembly in fiscal 2000.
- - Continue to establish a distribution network in international markets.
- - Continue to establish and support academic reference centers in the United
States and overseas in order to accelerate the growth and prestige of EECP
therapy and to increase the number and diversity of clinical and
mode-of-action studies, as well as the number of presentations,
publications, speakers and advocates
- - Create new products for use in noninvasive cardiovascular medicine.
Glossary of Terms
Acute Myocardial heart attack
Infarction
Angina Pectoris literally "chest pain"
Cardiogenic shock severe reduction in blood pressure owing to weak pumping
action of the heart
Collateral the use (recruitment) of small supplemental, usually unused
circulation channels through which blood can be made to flow when normal
blood supply is impeded because of obstructions in coronary
arteries
Coronary Artery a surgical transplant of a vein to connect the aorta with an
Bypass Graft obstructed coronary artery
or CABG
Coronary arteries those that supply blood to the heart muscle
Diastole rest period during which the heart chambers fill with blood
and the heart muscle receives most of its supply of oxygen
and other nutrients
Enhanced External "Enhanced" describes Vasomedical's proprietary system which
Counterpulsation increases the level of diastolic augmentation by 40-50% over
or EECP that of earlier devices
Ischemia lack of blood supply
Occlusion blockage of blood vessels
Percutaneous
Transluminal
Coronary
Angioplasty
or PTCA insertion of a wire into a coronary artery to which a
balloon or other instrument is attached for the purpose of
widening a narrowed vessel
Stenosis the narrowing of a blood vessel's diameter
Systole contracting period during which the heart is pumping blood
to the rest of the body
Thallium an imaging medium used to detect areas of ischemia within
the heart muscle
Sales and Marketing
Domestic Operations
Vasomedical's direct sales and marketing team consists of eight (8) regional
and territory sales managers, four (4) clinical application specialists,
customer support and communications managers, and directors of sales and
marketing. Their efforts are supplemented by those of a network of independent
manufacturers' representatives. Sales and marketing personnel are expected to
increase in fiscal 2000.
Marketing activities are designed to support Vasomedical's direct sales team
and independent representatives, and include journal advertising, newsletters,
physician educational programs, exhibits at trade shows and seminars at
professional association meetings.
Vasomedical has developed a multi-day, on-site clinical training program for
physicians and therapists. After initial customer training, these clinical
applications specialists provide routine on- and off-site customer support,
including the review of clinical charts, certification of new personnel and
updating of customers on new clinical developments.
Vasomedical employs service technicians responsible for the installation of
EECP systems and, in many instances, on-site training of a customer's biomedical
engineering personnel. Vasomedical provides a one-year warranty that includes
parts and labor. Vasomedical intends to offer extended service to our customers
under annual service contracts or on a fee-for-service basis.
In fiscal 1999 and 1998, Vasomedical had sales to Parimist Funding Corp. and
HPSC, Inc. (medical equipment financing firms) in each period, accounting for
21% and 10% of Vasomedical's revenues, respectively.
International Operations
Vasomedical's key objective is to appoint distributors in exchange for
exclusive marketing rights to EECP in their respective countries. Vasomedical
currently has distribution agreements for Japan, and some European and Latin
American countries. Each distribution agreement contains a number of
requirements that must be met for the distributor to retain exclusivity,
including minimum performance standards. In most cases, foreign distributors
must either obtain an FDA-equivalent marketing clearance or establish
confirmation clinical evaluations conducted by local opinion leaders in
cardiology. Each distributor is responsible for obtaining any required approval.
There can be no assurance that any of Vasomedical's distributors will be
successful in obtaining proper approvals for the EECP system in their respective
countries or that these distributors will be successful in their marketing
efforts. Vasomedical plans to enter into additional distribution agreements to
enhance its international distribution base. There can be no assurance that
Vasomedical will be successful in entering into any additional distribution
agreements.
To date, revenues from international operations have not been significant.
International sales may be subject to certain risks, including export/import
licenses, tariffs, other trade regulations and local medical regulations. Tariff
and trade policies, domestic and foreign tax and economic policies, exchange
rate fluctuations and international monetary conditions have not significantly
affected Vasomedical's business to date.
Competition
Presently, Vasomedical is aware of only one competitor with an external
counterpulsation device on the market. While Vasomedical believes that this
competitor's involvement in the market is limited, there can be no assurance
that this company will not become a significant competitive factor. Further,
there can be no assurance that other companies will not enter the market
intended for EECP systems. Such companies may have substantially dependent upongreater
financial, manufacturing and marketing resources and technological expertise
than those possessed by Vasomedical and may, therefore, succeed in developing
technologies or products that are more efficient than those offered by
Vasomedical and that would render Vasomedical's technology and existing products
obsolete or noncompetitive.
Government Regulations
The EECP system is subject to extensive regulation by the discretionFDA. Pursuant to the
Federal Food, Drug and judgmentCosmetic Act, as amended, the FDA regulates and must
approve the clinical testing, manufacture, labeling, distribution and promotion
of medical devices in the United States.
If a medical device manufacturer can establish that a newly developed device
is "substantially equivalent" to a device that was legally marketed prior to May
28, 1976, the date on which the Medical Device Amendments of 1976 was enacted,
the manufacturer may seek marketing clearance from the FDA to market the device
by filing a 510(k) premarket notification. The 510(k) premarket notification
must be supported by appropriate data establishing the claim of substantial
equivalence to the satisfaction of the managementFDA. Pursuant to recent amendments to the
law, the FDA can now require clinical data or other evidence of safety and
effectiveness. The FDA may have authority to deny marketing clearance if the
device is not shown to be safe and effective even if the device is
"substantially equivalent" to a device marketed prior to May 28, 1976.
Vasomedical's EECP system can be marketed in the United States based on the
FDA's determination of substantial equivalence. There can be no assurance that
Vasomedical's EECP system will not be reclassified in the future by the FDA and
subject to additional regulatory requirements.
If substantial equivalence cannot be established or if the FDA determines that
more extensive efficacy and safety data are in order, the FDA will require the
manufacturer to submit a premarket application ("PMA") for full review and
approval. Management does not believe that the EECP system will ultimately
require PMA approval for continued commercialization; however, Vasomedical so
designed the protocol for MUST-EECP as to be able to generate some of the Companydata
needed in the event that a PMA is required at some future date.
Typically it takes one year from the date of filing to complete the PMA review
and approval process. There can be no assurance that the FDA would not take more
than one year to review and approve a PMA for EECP and there can be no assurance
that EECP would receive PMA approval.
In most countries to which Vasomedical seeks to export the EECP system, it must
first obtain documentation from the local medical device regulatory authority
stating that the marketing of the device is not in violation of that country's
medical device laws. The regulatory review process varies from country to
country. Presently, Vasomedical is in the process of obtaining regulatory
approval of the EECP system overseas.
There can be no assurance that all the necessary FDA clearances, including
approval of any PMA that may eventually be required, and overseas approvals will
be granted for EECP , its future-generation upgrades or newly developed
products, on a timely basis or at all. Delays in receipt of or failure to
receive such clearances could have a material adverse effect on Vasomedical's
financial condition and results of operations.
In June 1998, the EECP system was awarded the CE Mark, which satisfies the
regulatory provisions for marketing in all 15 countries of the European Union.
The CE Mark was awarded by DGM of Denmark, an official notified regulatory body,
under the European Council Directive concerning medical devices. The CE Mark, in
combination with respectthe ISO 9001 certification awarded by Underwriter's
Laboratories (UL) in February 1998, places Vasomedical in full compliance with
requirements for the marketing of the EECP system in the countries of the
European Union. The ISO 9001 Certificate covers Vasomedical's design and
manufacturing operation for the EECP system and recognizes that Vasomedical has
established and operates a world-class quality system.
Compliance with current Good Manufacturing Practices ("GMP") regulations is
necessary to receive FDA approval to market new products and to continue to
market current products. Vasomedical's manufacturing (including its contract
manufacturer), quality control and quality assurance procedures and
documentation are currently in compliance, but will be inspected and evaluated
periodically in the future by the FDA.
Third-Party Reimbursements
Health care providers, such as hospitals and physicians, that purchase or
lease medical devices, such as the EECP system, for use on their patients
generally rely on third-party payers, principally Medicare, Medicaid and private
health insurance plans, to reimburse all or part of the costs and fees
associated with the procedures performed with these devices. Even if a device
has FDA approval, Medicare and other third- party payers may deny reimbursement
if they conclude that the device is not cost-effective, is experimental or is
used for an unapproved indication.
In February 1999, the Health Care Financing Administration ("HCFA"), the
federal agency that administers the Medicare program for more than 38 million
beneficiaries, issued a national coverage policy for the use of the EECP system
for patients with disabling angina pectoris who, in the opinion of a
cardiologist or cardiothoracic surgeon, are not readily amenable to surgical
interventions, such as balloon angioplasty and cardiac bypass. In July 1999,
HCFA communicated payment instructions for the EECP therapy to its contractors
around the country, stipulating coverage for services provided on or after July
1, 1999. These instructions were subsequently modified whereby HCFA established
a specific code and national payment level effective January 1, 2000.
Vasomedical continues its dialogue with several large commercial health care
payers for the establishment of positive coverage policies. Vasomedical believes
that its discussions with these third-party payers will, as a minimum, continue
to define circumstances that justify reimbursement on a case-by-case basis and
create a pathway for rapid review of patient data and determination of medical
necessity. To date, there have been many such reimbursements. Vasomedical is
optimistic that, given the recent HCFA coverage and payment decisions, as well
as the publication of the results of MUST-EECP in JACC, many of these
third-party payers will issue positive coverage policies for EECP therapy in
2000. In anticipation of receiving approval for broad-based coverage,
Vasomedical will pursue, through the cardiology profession, the establishment of
a Current Procedural Code ("CPT") specific to the applicationEECP procedure. Although such
code is not essential and allocationalthough there is no assurance that a new code will be
established, Vasomedical believes that having a CPT code specifically assigned
to EECP will accelerate the processing of reimbursement claims.
Limited availability of third-party coverage or the inadequacy of the
reimbursement level for treatment procedures using the EECP system would
adversely affect Vasomedical's business, financial condition and results of
operations. Moreover, Vasomedical is unable to forecast what additional
legislation or regulation, if any, relating to the health care industry or
Medicare coverage and payment level may be enacted in the future or what effect
such net proceeds.legislation or regulation would have on Vasomedical.
Insurance
Vasomedical currently carries product liability insurance for an aggregate
coverage limit of $5,000,000. However, there can be no assurance that it will be
able to continue to secure such insurance in adequate amounts or at reasonable
premiums. Product liability insurance costs have been increasing rapidly and
dramatically during the last few years and many carriers are reducing coverage,
insisting upon large deductibles and contributions to defense costs, and
abandoning lines. Should Vasomedical be unable to secure adequate product
liability insurance, its business could be seriously damaged by claims arising
out of the allegedly improper manufacture or use of its products.
Patents and Trademarks
A U.S. patent (which expires in 2005) covering EECP design and functions was
issued in June 1988 and it is now owned by Vasomedical. Additional international
and domestic patent applications were filed in May 1993. New US patents were
issued to Vasomedical in October 1996 (which expires in 2013), and December 1999
(which also expires in 2013) and several international patents have been issued
since then. Such international patents expire in 2013. Vasomedical expects
additional international patents to issue during fiscal 2000. Such patents cover
several specific enhancements to the current EECP model.
Moreover, a trademark has been registered for the name "EECP", and in 1999
Vasomedical filed for registration of additional trademarks, including "Natural
Bypass".
Vasomedical pursues a policy of seeking patent protection, both in the United
States and abroad, for its proprietary technology. There can be no assurance
that Vasomedical's patents will not be violated or that any issued patents will
provide protection that has commercial significance. Litigation may be necessary
to protect Vasomedical's patent position. Such litigation may be costly and
time-consuming, and there can be no assurance that Vasomedical will be
successful in such litigation. The loss or violation of Vasomedical's EECP
patents and trademarks could have a material adverse effect upon Vasomedical's
business.
Employees
As of March 31, 2000, Vasomedical employed thirty-six full-time persons
with ten in sales, four in clinical applications, twelve in manufacturing and
service, three in marketing, and seven in administration (including its four
executive officers). None of Vasomedical's employees are represented by a labor
union. Vasomedical believes that its employee relations are satisfactory.
Manufacturing
Vasomedical currently contracts for the manufacture of its current EECP
system with VAMED Medical Instrument Company Ltd. ("VAMED"), a Chinese company,
subject to certain performance standards, as defined. Vasomedical believes that
VAMED will be able to meet Vasomedical's needs for EECP systems.
USE OF PROCEEDS
The CompanyVasomedical will not receive any proceeds from this offering, except to the
extent that the Common Stock Purchase Warrantscommon stock purchase warrants are exercised. If all the Common
Stock Purchase Warrantscommon
stock purchase warrants are exercised at currentthe exercise prices, the net
proceeds to the Company from this offering would be $1,225,000. If such proceeds
are received, the Companyprice of $1.44 per share,
Vasomedical will receive an aggregate $144,000. Vasomedical intends to use allthe
proceeds received on any warrant exercise.
PRICE RANGE OF COMMON STOCK
Vasomedical's common stock is traded in the Nasdaq Small Cap Market under
the symbol VASO. The following table sets forth the high and low sales price as
reported by the Nasdaq Small Cap for the Vasomedical common stock for the
periods indicated:
Common Stock
- ------------
High Low
---- ---
Fiscal Year 1998
First Quarter $ 2.063 $1.563
Second Quarter $ 3.563 $1.719
Third Quarter $ 2.250 $1.719
Fourth Quarter $ 2.094 $1.500
Fiscal Year 1999
First Quarter $ 1.688 $ .750
Second Quarter $ 1.210 $ .625
Third Quarter $ 2.063 $ .656
Fourth Quarter $ 1.500 $1.000
Fiscal Year 2000
First Quarter $ 2.000 $1.219
Second Quarter $ 1.688 $ .813
Third Quarter $ 3.375 $ .781
Fourth Quarter (through March 29, 2000) $ 14.188 $5.063
The closing price of the common stock on March 29, 2000 was $6.41. As of
March 29, 2000 there were approximately 924 record holders of the common stock.
DIVIDEND POLICY
Vasomedical has never paid any cash dividends on its Common Stock. There
have been no stock dividends declared or paid by Vasomedical on its common stock
during the past two years. Payment of future dividends, if any, will be
dependent upon the earnings and financial position of Vasomedical and such
proceedsfactors as the Board of Directors shall deem appropriate.
PERFORMANCE CHART
The following graph sets forth the cumulative total return* to
support further
expansion of its marketing activities for EECP , conduct new clinical studies
designed to confirm additional therapeutic claimsVasomedical's stockholders during the five-year period ended May 31, 1999 as
well as an overall stock market index (NASDAQ Stock Market Index) and
general working capital.
Vasomedical's peer group index (S&P Medical Products and Supplies):
Cumulative Total Return
5/31/94 5/31/95 5/31/96 5/31/97 5/31/98 5/31/99
------- ------- ------- ------- ------- -------
Vasomedical, Inc. 100 137 421 284 263 216
NASDAQ Stock Market (US) 100 119 173 195 247 347
S&P Health Care (Medical
Products and Supplies) 100 147 200 248 330 413
* $100 invested on 5/31/94 in stock or index - including reinvestment of
dividends.
DESCRIPTION OF CAPITAL STOCKSECURITIES
Capital Stock
The Company's authorized capital stock consists of 110,000,000 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 and issued on December 5, 1994, 150,000 shares have
been designated as Series B Convertible Preferred Stock and issued on June 25,
1997, and 175,000 shares have been designated as Series C Convertible Preferred
Stock (the "Series C Preferred Stock").and issued on April 30, 1998. Common Stock
General. The Company has 110,000,000 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 presently 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.
Share Purchase Rights. In March 1995, the Company's Board of Directors
approved a Shareholder Rights Plan, under which a dividend distribution of one
Right for each outstanding share of the Company's Common Stock is authorized.
Each Right entitles shareholders to purchase one-half share of Common Stock at a
50% discount to market price if a person or group acquires 20% or more of the
Company's outstanding stock. At present, the Company is not aware of any such
person or group seeking to acquire 20% or more of the Company's outstanding
Common Stock.
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, 150,000 shares have been designated and issued as Series B
Convertible Preferred Stock, of which 107,500 shares have been converted to 1,309,6002,135,946
shares of Common Stock, and 175,000 shares have been designated and issued as
Series C Convertible Preferred Stock, which shares have been converted into
3,095,612 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 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.
SELLING SECURITY HOLDERS
The Selling Security Holders are (i) JNC Opportunity Fund Ltd. ("JNC"), the
purchaser of the Series C Preferred Stock and 413,712 Common Stock Purchase
Warrants ("Warrants") (which are exercisable at $2.08 per share) in connection
with the placement of the Series C Preferred Stock, and (ii) Wharton Capital
Partners, Ltd., who received 175,000 Warrants in connection with the placement
of the Series C Preferred Stock. Except as otherwise disclosed herein, none of
the Selling Security Holders has had any position, office or other material
relationship with the Company or its predecessors or affiliates within the past
three years.
The following table sets forth the names of the Selling Security Holders,
the number of shares of Common Stock beneficially owned by each of the Selling
Security Holders, and the number of shares which may be offered for resale
pursuant to this Prospectus. For the purpose of calculating the number of shares
of Common Stock beneficially owned by the holder of the Series C Preferred
Stock, the number of shares of Common Stock calculated to be issuable upon
conversion is based on a conversion price of $.81 per share (without taking into
account shares issuable as dividends or under Share Purchase Rights). The
conversion price for the Series C Preferred Stock is the lower of (i) $2.08 per
share, or (ii) 85% of the average closing bid price on the Nasdaq SmallCap
Issues Market of the Common Stock for the five (5) trading days immediately
preceding the date of conversion. Also, the holder was granted one Warrant for
every six (6) shares issuable upon conversion (determined at closing) to
purchase one (1) share of Common Stock at $2.08 per share. Holders of the Series
C Preferred Stock are entitled to receive quarterly dividends at a rate of 5%
per annum, payable in cash or, subject to certain conditions, shares of Common
Stock. The actual number of shares issuable upon conversion of the Series C
Preferred Stock, shares underlying the associated Warrants and shares available
for resale under this Prospectus could be materially greater based upon the
market price of the Common Stock at the time or times of conversion. The number
of shares shown as being offered hereunder by the holder of the Series C
Preferred Stock is the number of shares registered by the Registration Statement
of which this Prospectus is a part with respect to shares issuable upon
conversion of and as dividends on the Series C Preferred Stock, as well as
shares underlying associated Warrants and Share Purchase Rights, pursuant to the
terms of the Registration Agreement.
The information included below is based upon information provided by the
Selling Security Holders. Because the Selling Security Holders may offer all,
some or none of their shares, no definitive estimate as to the number of shares
that will be held by the Selling Security Holders after such offering can be
provided.
Number of shares of Common Stock
Beneficially Owned Prior to the
Selling Security Holder Offering
- -------------------------------------------------------------------
JNC Opportunity Fund Ltd. 9,629,909 (1) (2) (3)
Wharton Capital Partners, Ltd. 431,250 (4)
-------------------
10,061,159
-------------------
(1) Represents shares issuable upon a hypothetical conversion of 175,000 shares
of Series C Preferred Stock, with a stated value of $3,500,000, acquired on
April 30, 1998, 413,712 shares issuable upon the exercise of warrants, 217,199
shares issuable as dividends and 2,487,442 shares issuable pursuant to Share
Purchase Rights. Also represents shares issuable upon a hypothetical conversion
of 42,500 shares of Series B Convertible Preferred Stock, with a stated value of
$850,000, previously acquired on June 25, 1997, 340,000 shares issuable upon the
exercise of warrants, 99,999 shares issuable as dividends and 722,528 shares
issuable pursuant to Share Purchase Rights.
(2) The number of shares of Common Stock registered pursuant to the registration
statement of which this Prospectus is a part and the number of shares of Common
Stock offered hereby have been determined by agreement between the Company and
JNC. Because the number of shares of Common Stock that will ultimately be issued
to JNC upon conversion of the Series C Preferred Stock is dependent upon the
conversion formula described above, such number of shares (and therefore, the
number of shares of Common Stock offered hereby) cannot be determined at this
time.
(3) JNC has contractually agreed not to use its conversion rights with respect
to the Series C Preferred Stock to obtain in excess of 4.9% of the total
outstanding shares of Common Stock.
(4) Represents shares issuable upon the exercise of warrants and Share Purchase
Rights.
PLAN OF DISTRIBUTION
The shares of Common Stock offered herebycommon stock are traded on the Nasdaq Small Cap Market System
under the symbol VASO. The shares may be offered for resale by the
Selling Security Holders (or their donees, transferees or successors in
interest)sold from time to time in transactions for their own account (whichdirectly by the
selling securityholder. Alternatively, the selling securityholder may include block transactions) on any nationalfrom time
to time offer such securities exchangethrough underwriters, dealers or quotation
service on whichagents. The
distribution of securities by the Common Stockselling securityholder may be listedeffected in one
or quoted atmore transactions that may take place on the time of sale,
in the over-the-counter market, inNasdaq Small Cap Market System,
including ordinary broker's transactions, otherwise than on such exchanges
(including privately negotiated transactions)privately-negotiated transactions or
in the over-the-counter market,
through the writing of options,sales to one or a combinationmore broker-dealers for resale of such methods of sale, at
fixed prices (which may be changed),shares as
principals, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Selling Security Holders may effect such transactions by selling the
shares of Common Stock toUsual and customary or
through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessionsspecifically negotiated brokerage fees or commissions frommay be paid by the Selling Security Holders and/orselling
securityholder in connection with such sales of securities.
At the purchasers of shares for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as totime a particular broker-dealer might be in excessoffer of customary commissions). From time to time the Selling Security Holder may engage
in short sales, including short sales against the box, puts and calls and other
transactions in securities is made by or on behalf of the
Company or derivatives thereof, and may sell
and deliverselling securityholder, to the Common Stock in connection therewith. Further, except asextent required, a prospectus will be distributed
which will set forth herein, the Selling Security Holders are not restricted as to the number of shares which may be sold at any one time,being offered and it is possible that a
significant number of shares could be sold at the same time, which may have a
depressive effect on the market price of the Company's Common Stock. The Selling
Security Holders may also pledge shares of Common Stock as collateral for margin
accounts, and such shares could be resold pursuant to the terms of such
accounts. The Selling Security Holders andthe
offering, including the name or names of any underwriters, dealers or agents, participating
inif
any, the distribution ofpurchase price paid by any underwriter for shares purchased from the
Common Stock may be deemed to be "underwriters" as
defined in the Securities Act and any profit on the sale of the Common Stock by
themselling securityholder and any discounts, commissions or concessions received by any suchallowed or
reallowed or paid to dealers, or agents might be deemed to be underwriting discounts and commissions under the Securities Act. The Company will not receive any proceeds of the sales of the
Common Stock by the Selling Security Holders.
To comply with the securities laws of certain jurisdictions, if applicable,
the Common Stock will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the Common Stock may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or an exemption from registration or
qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Common Stock may not simultaneously engage in
market-making activities with respect to such securities for a period of two to
nine business days priorproposed selling price to the commencement of such distribution. In addition
to and without limiting the foregoing, each Selling Security Holder and any
other person participating in a distribution will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation Rules 10b-6 and 10b-7, which provisions may limit
the timing of purchases and sales of any of the securities by the Selling
Security Holders or any such other person. All of the foregoing may affect the
marketability of the Common Stock and the brokers' and dealers' ability to
engage in market-making activities with respect to these securities.
All expenses of the registration of the Common Stock will be paid by the
Company, including, without limitation, Commission filing fees and expenses of
compliance with state securities or "blue sky" laws; provided, however, that the
Selling Security Holders will pay all underwriting discounts and selling
commissions, if any. The Selling Security Holders will be indemnified by the
Company against certain civil liabilities, including certain liabilities under
the Securities Act, or will be entitled to contribution in connection therewith.
The Company will be indemnified by the Selling Security Holders against certain
civil liabilities, including certain liabilities under the Securities Act, or
will be entitled to contribution in connection therewith.
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, including against liabilities under the Securities Act of 1933.
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) judgments, 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 $5,000,000, 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 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.
public.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon for
the CompanyVasomedical by Blau, Kramer, Wactlar & Lieberman, P.C., Jericho, New York 11753.
David H. Lieberman owns 20,000 shares of Common Stock and warrants to
purchase 37,500 shares of Common Stock at $2.18 per share.
EXPERTS
The consolidated financial statements incorporated by referenceincluded in this Prospectusprospectus and elsewhere in the
Registration Statement, to the extent and for
the periods indicated in their reports,registration statement have been audited by Grant Thornton LLP, independent
certified public accountants, and areas set forth in their reports. The financial statements
referred to above have been included herein in reliance upon the authority of
said firmthose forms as experts in accounting and auditing in giving said Reports.
No dealer, salesperson,reports.
WHERE YOU CAN FIND MORE INFORMATION
Vasomedical has filed with the Securities and Exchange Commission,
Washington, D.C., a registration statement under the Securities Act of 1933,
with respect to the common stock offered by this prospectus. This prospectus
does not contain all the information set forth in the registration statement and
its exhibits. For further information about Vasomedical and the common stock
offered by this prospectus, reference is made to the registration statement and
its exhibits. Statements in this prospectus about the contents of any contract
or other person hasdocument are not necessarily complete and in each instance Vasomedical
refers you to the copy of such contract or other document filed as an exhibit to
the registration statement for a full statement of the provisions of that
contract or document.
Vasomedical is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. In accordance with the Exchange Act,
Vasomedical files reports, proxy statements and other information with the
Commission. You may read and obtain copies of any materials filed by Vasomedical
with the Commission at the Commission's Public Reference Room at 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. You may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330. Copies of such material can also be obtained from
the Securities and Exchange Commission's Web site at the address
http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been authorizedfiled by Vasomedical with the CompanyCommission
pursuant to give any informationthe Exchange Act, are incorporated by reference in this prospectus
and shall be deemed to be a part of this prospectus:
(1) Vasomedical's Annual Report on Form 10-K for the fiscal year ended May
31, 1999.
(2) Vasomedical's Quarterly Reports on Form 10-Q for the quarters ended
August 31, 1999, November 30, 1999 and February 29, 2000.
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 make any representations other than thosethe termination of
this offering shall be deemed to be incorporated by reference in this prospectus
and to be part of this prospectus from the date they are filed.
Any statement contained in a document incorporated or deemed to be
incorporated by reference in this Prospectus and, if givenprospectus shall be deemed to be modified or
made, such other informationsuperseded for purposes of this prospectus to the extent that a statement in
this prospectus or representations mustin any subsequently filed document that also is or is deemed
to be incorporated by reference in this prospectus modifies or supersedes that
statement. Any statement which is modified or superseded shall not be relieddeemed,
except as so modified or superseded, to constitute a part of this prospectus.
Vasomedical will provide without charge to each person to whom a copy of
this prospectus is delivered, upon as having been so authorized by the Company. This Prospectus does not constitute an offer to sell,written or oral request of that person, a
solicitation
of an offer to buy, any securities other than the securities to which it
relates, or an offer to or solicitationcopy of any person in any jurisdiction in
which such offer or solicitation would be unlawful. Neither deliveryall of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implicationthe documents incorporated by reference; except that
the information herein is correct as of any time subsequentVasomedical will not provide exhibits to the date hereof.
VASOMEDICAL, INC.
7,724,826 Common Shares
PROSPECTUS
Dated: ________, 1998documents incorporated by reference
unless the exhibits are specifically incorporated by reference. Requests for
copies should be directed to the Secretary, Vasomedical, Inc., 180 Linden
Avenue, Westbury, New York 11590, (516) 997-4600.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission
Filing Fee. . . .Fee ......................................... $ 3,063
Nasdaq Additional Listing Fee . . . . . . . . . . . 7,500300
Legal Fees . . . . . . . . . . . . . . . . . . . . . 5,000and Accounting Fees . . . . . . . . . . . . . . . . . . 2,500.......................... 9,500
Miscellaneous . . . . . . . . . . . . . . . . . . . 937
---------...................................... 200
-------
Total . . . . . . . . . . . . . . . . . . . . . $ 19,000
=========.............................................. $10,000
=======
The Company
Vasomedical will pay all of these expenses.
Item 15. Indemnification of Directors and Officers
Under provisions of the by-lawsBy-Laws of the Company,Vasomedical, each person who is or was a
director or officer of the Company shallVasomedical may be indemnified by the Company as of
rightVasomedical 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,Vasomedical, 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 if a criminal
suit is settled, such a person shallmay be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgments,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,Vasomedical, 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,Vasomedical, or if such suit is settled, such a person shallmay 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
CompanyVasomedical 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,Vasomedical, he
cannot be made whole even for expenses unless the court determines that he is
fairly and reasonably entitled to indemnity for such expenses.
TheVasomedical and its officers and directors of the CompanyVasomedical are covered by
officers and directors liability insurance. The policy coverage is $5,000,000,
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 CompanyVasomedical has entered into
Indemnification Agreements with eachcertain 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.
Item 16. Exhibits
4.1 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)
23.2 Consent of Grant Thornton LLP
24 Power of Attorney (included on Signature Page).
Item 17. Undertakings
(a) 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.
(b) 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 Securities and Exchange Commission such
indemnification is against public 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.
(c) The undersigned registrantRegistrant hereby undertakes:
(1) to file, duringFor purposes of determining any period in which offers or sales are being made,liability under the Act, the
information omitted from the form of prospectus filed as part of a
post-effective amendment to this registration
statement in reliance upon Rule 430A and contained in a form of prospectus filed
by the registrant pursuant to include any
material information with respectRule 424(b)(1) or (4) or 497(h) under the Act
shall be deemed to the planbe part of distribution not
previously disclosed in the registration statement or any material
change to such information inas of the registration statement;time it was
declared effective.
(2) that, forFor the purpose of determining any liability under the Act, each
such 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; and
(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.thereof.
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
Statementregistration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Westbury, New York on the 31st4th day of July, 1998.April, 2000.
VASOMEDICAL, INC.
By: /s/ Anthony Viscusi
--------------------------------
Anthony Viscusi,/s/ D. Michael Deignan
-----------------------------
D. Michael Deignan
President, Chief Executive Officer and Director
(PrincipalPrincipal Executive Officer)Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that eachPursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on April 4, 2000, by the following
persons in the capacities indicated. Each person whose signature appears below
also constitutes and appoints Anthony ViscusiAbraham E. Cohen and Joseph A. Giacalone,Michael Diegnan, and each of
them, his true and lawful attorneys-in-factattorney-in-fact and agents,agent, 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 all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-factattorney-in-fact and agents, and each of them,agent 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-factattorney-in-fact and agents or any of them, or theiragent
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 July 31, 1998.
SignaturesSignature Title
- ------------------- -----
/s/ Alexander G. Bearn Director
- ---------------------------------------------------
Alexander G. Bearn
/s/ David S. BlumentalBlumenthal Director
- ---------------------------------------------------
David S. Blumenthal
/s/ Francesco Bolgiani Director
- ----------------------
Francesco Bolgiani
/s/ Abraham E. Cohen
Chairman of the Board
- -------------------------------------------------
Abraham E. Cohen
/s/ D. Michael Deignan President, Chief Executive Officer and
- ----------------------------- Director (Principal Executive Officer)
D. Michael Deignan
/s/ Joseph A. Giacalone
Secretary and Treasurer- ----------------------------- Chief Financial Officer (Principal - ----------------------- Financial
Joseph A. Giacalone and Accounting Officer)
Joseph A. Giacalone
/s/ John C.K. Hui
- ----------------------------- Senior Vice President, R&D and Manufacturing
John C.K. Hui and Director
- -----------------
John C. K. Hui
/s/ Kenneth W. Rind Director
- ------------------------------------------------
Kenneth W. Rind
/s/ E. Donald Shapiro Director
- --------------------------------------------------
E. Donald Shapiro
/s/ Anthony Viscusi President, Chief Executive Officer andDirector
- ------------------- Director (Principal Executive Officer)-----------------------------
Anthony Viscusi
/s/Director
- -----------------------------
Zhen-sheng Zheng Director
- --------------------
Zhen-sheng Zheng
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Vasomedical, Inc.
Form S-3 Registration Statement
E X H I B I T I N D E X
Page No. in Sequential
Exhibit Numbering of all Pages,
Number Exhibit Description including Exhibit Pages
- --------------------------------------------------------------------------------
5 Opinion of Blau, Kramer, Wactlar & Lieberman, P.C. . .
23.1 Consent of Blau, Kramer, Wactlar & Lieberman, P.C. . . See Exhibit 5
23.2 Consent of Grant Thornton LLP . . . . . . . . . . . .
24 Power of Attorney . . . . . . . . . . . . . . . . . . See signature page