UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13G
Under the Securities Exchange Act of 1934
(Amendment No. )
VASOMEDICAL, INC.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
922321104
(CUSIP Number)
July 19, 2005
(Date of Event Which Requires Filing of this Statement)
|_| Rule 13d-1(b)
|X| Rule 13d-1(c)
|_| Rule 13d-1(d)
SCHEDULE 13G
CUSIP No. 922321104 Page 2 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Momentum Fund, L.P.
EIN:03-0021366
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
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3. SEC USE ONLY
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4. CITIZENSHIP OR PLACE OF ORGANIZATION
California
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NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 1,491,534
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EACH 7. SOLE DISPOSITIVE POWER
REPORTING 0
-----------------------------------------------------------------
PERSON 8. SHARED DISPOSITIVE POWER
WITH 1,491,534
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9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,491,534
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10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
2.48%
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12. TYPE OF REPORTING PERSON*
PN
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SCHEDULE 13G
CUSIP No. 922321104 Page 3 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Mercator Momentum Fund III, L.P.
EIN:32-0056070
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
California
--------------------------------------------------------------------------------
NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 918,784
-----------------------------------------------------------------
EACH 7. SOLE DISPOSITIVE POWER
REPORTING 0
-----------------------------------------------------------------
PERSON 8. SHARED DISPOSITIVE POWER
WITH 918,784
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
918,784
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
1.54%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
PN
--------------------------------------------------------------------------------
-3-
SCHEDULE 13G
CUSIP No. 922321104 Page 4 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
Monarch Pointe Fund, Ltd.
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
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4. CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
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NUMBER OF 5. SOLE VOTING POWER
SHARES 0
-----------------------------------------------------------------
BENEFICIALLY 6. SHARED VOTING POWER
OWNED BY 3,555,816
-----------------------------------------------------------------
EACH 7. SOLE DISPOSITIVE POWER
REPORTING 0
-----------------------------------------------------------------
PERSON 8. SHARED DISPOSITIVE POWER
WITH 3,555,816
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,555,816
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
5.73%
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12. TYPE OF REPORTING PERSON*
PN
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-4-
SCHEDULE 13G
CUSIP No. 922321104 Page 5 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
M.A.G. Capital, LLC
EIN: 300021359
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
--------------------------------------------------------------------------------
3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
California
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
0
-----------------------------------------------------------------
NUMBER OF 6. SHARED VOTING POWER
SHARES 6,344,578, some of which are held by Mercator Momentum Fund
and Mercator Momentum Fund III (together, the "Funds"),
BENEFICIALLY some of which are owned by Monarch Pointe Fund, Ltd.
("MPF") and some of which are owned by M.A.G. Capital, LLC
OWNED BY ("MAG"). MAG is the general partner of the Funds and
controls the investments of MPF.
EACH -----------------------------------------------------------------
7. SOLE DISPOSITIVE POWER
REPORTING
0
PERSON -----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
WITH
6,344,578, some of which are held by the Funds, some by MPF
and some by MAG.
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,344,578
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.78%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
IA
--------------------------------------------------------------------------------
-5-
SCHEDULE 13G
CUSIP No. 922321104 Page 6 of 13 Pages
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1. NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
David F. Firestone
--------------------------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |_|
(b) |X|
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3. SEC USE ONLY
--------------------------------------------------------------------------------
4. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
--------------------------------------------------------------------------------
5. SOLE VOTING POWER
NUMBER OF
0
SHARES -----------------------------------------------------------------
6. SHARED VOTING POWER
BENEFICIALLY
OWNED BY 6,344,578, all of which are held by the Funds, MPF and MAG.
David F. Firestone is Managing Member of MAG.
EACH -----------------------------------------------------------------
7. SOLE DISPOSITIVE POWER
REPORTING
0
PERSON -----------------------------------------------------------------
8. SHARED DISPOSITIVE POWER
WITH
6,344,578, all of which are held by the Funds, MPF and MAG.
David F. Firestone is Managing Member of MAG.
--------------------------------------------------------------------------------
9. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,344,578
--------------------------------------------------------------------------------
10. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*
|_|
--------------------------------------------------------------------------------
11. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (9)
9.78%
--------------------------------------------------------------------------------
12. TYPE OF REPORTING PERSON*
IN
--------------------------------------------------------------------------------
-6-
SCHEDULE 13G
CUSIP No. 922321104 Page 7 of 13 Pages
This statement is hereby amended and restated in its entirety as follows:
Item 1. Issuer.
(a) The name of the issuer is Vasomedical, Inc. (the "Issuer").
(b) The address of the Issuer's principal executive office is 180 Linden
Avenue, Westbury, New York 11590.
Item 2. Reporting Person and Security.
(a) Mercator Momentum Fund, L.P. ("Momentum Fund") and Mercator Momentum
Fund III, L.P. ("Momentum Fund III" and, with Momentum Fund, the "Funds") are
private investment limited partnerships organized under California law. The
general partner of each of the Funds is M.A.G. Capital, LLC ("MAG"), a
California limited liability company. David F. Firestone is the Managing Member
of MAG. Monarch Pointe Fund, Ltd. ("MPF") is a corporation organized under the
laws of the British Virgin Islands. MAG controls the investments of MPF. The
Funds, MPF, MAG and David F. Firestone are referred to herein as the "Reporting
Persons."
(b) The business address of each of the Funds, MAG and David F. Firestone
is 555 S. Flower Street, Suite 4200, Los Angeles, CA 90071. The business address
of MPF is c/o Bank of Ireland Securities Services, Ltd., New Century House,
International Financial Services Center, Mayor Street Lower, Dublin 1, Republic
of Ireland.
(c) Each of the Funds is a California limited partnership. MAG, their
general partner, is a California limited liability company. MPF is a corporation
organized under the laws of the British Virgin Islands.
(d) The title of the class of securities to which this statement relates
is the common stock of the Issuer, par value $0.001 per share (the "Common
Stock").
(e) The CUSIP number is 922321104.
Item 3. If This Statement is Filed Pursuant to Rule 13d-1(b) or 13d-2(b) or (c),
Check Whether the Person Filing is a:
(a) |_| Broker or dealer registered under Section 15 of the Act (15 U.S.C.
78o).
(b) |_| Bank as defined in Section 3(a)(6) of the Act (15 U.S.C. 78c).
(c) |_| Insurance company as defined in Section 3(a)(19) of the Act (15
U.S.C. 78c).
(d) |_| Investment company registered under Section 8 of the Investment
Company Act of 1940 (15 U.S.C. 80a-8).
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SCHEDULE 13G
CUSIP No. 922321104 Page 8 of 13 Pages
(e) |_| An investment adviser in accordance with ss. 240.13d-1(b)(1)(ii)
(E).
(f) |_| An employee benefit plan or endowment fund in accordance with ss.
240.13d-1(b)(1)(ii)(F).
(g) |_| A parent holding company or control person in accordance with ss.
240.13d-1(b)(1)(ii)(G).
(h) |_| A savings association as defined in Section 3(b) of the Federal
Deposit Insurance Act (12 U.S.C. 1813).
(i) |_| A church plan that is excluded from the definition of an
investment company under Section 3(c)(14) of the Investment Company Act of 1940
(15 U.S.C. 80a-3).
(j) |_| Group, in accordance with ss. 240.13d-1(b)(1)(ii)(J).
Not Applicable.
Item 4. Ownership.
The Funds, MPF and MAG each own warrants to purchase shares of Common
Stock. The Funds and MPF each own shares of the Issuer's Series D Preferred
Stock (the "Series D Stock") which is convertible into Common Stock. Each share
of Series D Stock is convertible into the number of shares of Common Stock
determined by dividing $100 by the Conversion Price at the time of conversion.
The Conversion Price is defined as 85% of the volume weighted average trading
price of the Common Stock during the five trading days immediately preceding the
conversion, rounded to the nearest ten thousandth; providing, however, that the
Conversion Price may not be less than $0.40 or more than $0.6606, adjusted for
stock splits and similar events. The documentation governing the terms of the
warrants and the Series D Stock contains provisions prohibiting any exercise of
the warrants or conversion of Series D Stock that would result in the Reporting
Persons owning beneficially more than 9.99% of the outstanding shares of Common
Stock as determined under Section 13(d) of the Securities Exchange Act of 1934.
As a result of these provisions, the Reporting Persons have never had beneficial
ownership of more than 9.99% of the outstanding shares of Common Stock.
As of July 19, 2005, the Funds, MPF and MAG owned the following securities
of the Issuer:
Momentum Fund owned 6,250 shares of Series D Stock and warrants to
purchase up to 378,444 shares of Common Stock.
Momentum Fund III owned 3,850 shares of Series D Stock and warrants to
purchase up to 233,121 shares of Common Stock.
MPF owned 14,900 shares of Series D Stock and warrants to purchase up to
902,210 shares of Common Stock.
-8-
SCHEDULE 13G
CUSIP No. 922321104 Page 9 of 13 Pages
MAG owned warrants to purchase up to 378,444 shares of Common Stock.
David F. Firestone owned no securities of the Issuer directly.
The right to vote and the right to dispose of the shares beneficially
owned by Momentum Fund, Momentum Fund III and MPF are, in each case, shared
among either Momentum Fund, Momentum Fund III or MPF, as applicable, and both
MAG and David F. Firestone. The right to vote and the right to dispose of the
shares beneficially owned by MAG are shared by MAG and David F. Firestone.
The Issuer had 58,552,688 shares of Common Stock outstanding as of April
14, 2005, according to its Quarterly Report on Form 10-Q for the quarter ended
February 28, 2005. Based on the foregoing assumptions, as of July 19, 2005, the
individual Reporting Persons had beneficial ownership of the following numbers
of shares of Common Stock which represented the following percentages of the
Common Stock outstanding:
Shares Owned Percentage
------------ ----------
Momentum Fund 1,491,534 2.48%
Momentum Fund III 918,784 1.54%
MPF 3,555,816 5.73%
MAG 6,344,578 9.78%
David F. Firestone 6,344,578 9.78%
The percentages of the outstanding Common Stock held by the Reporting
Persons set forth above and on the cover pages to this report were determined,
using a Conversion Price of $0.5615 with respect to the Series D Stock.
Item 5. Ownership of Five Percent or Less of a Class.
If this Schedule is being filed to report the fact that as of the date
hereof the Reporting Person has ceased to be the beneficial owner of more than
five percent of the class of securities, check the following [__]
Not Applicable.
Item 6. Ownership of More than Five Percent on Behalf of Another Person.
Not Applicable.
-9-
SCHEDULE 13G
CUSIP No. 922321104 Page 10 of 13 Pages
Item 7. Identification and Classification of the Subsidiary Which Acquired the
Security Being Reported on By the Parent Holding Company or Control
Person.
Not Applicable.
Item 8. Identification and Classification of Members of the Group.
Not Applicable.
Item 9. Notice of Dissolution of Group.
Not Applicable.
Item 10. Certifications.
By signing below I certify that, to the best of my knowledge and belief,
the securities referred to above were not acquired and are not held for the
purpose of or with the effect of changing or influencing the control of the
issuer of the securities and were not acquired and are not held in connection
with or as a participant in any transaction having that purpose or effect.
-10-
SCHEDULE 13G
CUSIP No. 922321104 Page 11 of 13 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 2, 2005 MERCATOR MOMENTUM FUND, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: August 2, 2005 MERCATOR MOMENTUM FUND III, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: August 2, 2005 MONARCH POINTE FUND, LTD.
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: August 2, 2005 M.A.G. CAPITAL, LLC
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
Dated: August 2, 2005
/s/ David F. Firestone
--------------------------------------
David F. Firestone
-11-
SCHEDULE 13G
CUSIP No. 922321104 Page 12 of 13 Pages
EXHIBIT INDEX
Exhibit A Agreement of Joint Filing
-12-
SCHEDULE 13G
CUSIP No. 922321104 Page 11 of 13 Pages
EXHIBIT A
AGREEMENT OF JOINT FILING
The undersigned hereby agree that they are filing jointly pursuant to Rule
13d-1 of the Securities Exchange Act of 1934 a report on Schedule 13G,
containing the information required by Schedule 13G, for shares of the common
stock of Vasomedical, Inc. beneficially owned by Mercator Momentum Fund, L.P.,
Mercator Momentum Fund III, L.P., Monarch Pointe Fund, Ltd., M.A.G. Capital, LLC
and David F. Firestone and such other holdings as may be reported therein.
Dated: August 2, 2005
MERCATOR MOMENTUM FUND, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
MERCATOR MOMENTUM FUND III, L.P.
By: M.A.G. CAPITAL, LLC,
its general partner
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
MONARCH POINTE FUND, LTD.
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
M.A.G. CAPITAL, LLC
By: /s/ Harry Aharonian
----------------------------------
Harry Aharonian, Portfolio Manager
/s/ David F. Firestone
--------------------------------------
David F. Firestone
-13-