SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: June 21, 2007
(Date of earliest event reported)
VASOMEDICAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-18105 11-2871434
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(State or other (Commission File (IRS Employer
jurisdiction of incorporation) Number) Identification No.)
180 Linden Avenue, Westbury, New York 11590
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (516) 997-4600
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
[ ] Pre-commencement communications pursuant to Rule 13e-4c under the Exchange
Act (17 CFR 240.13e-4c)
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On June 21, 2007 we entered into a Securities Purchase Agreement with Kerns
Manufacturing Corp. ("Kerns"). Concurrently with our entry into the Securities
Purchase Agreement, we also entered into a Distribution Agreement and a Supplier
Agreement with Living Data Technology Corporation, an affiliate of Kerns
("Living Data"). A copy of the Securities Purchase Agreement, including as
exhibits thereto the Distribution Agreement and Supplier Agreement, is filed as
Exhibit 1.1 to this report and is incorporated in its entirety. The following
description of the terms and conditions of each of the Securities Purchase
Agreement, the Distribution Agreement and the Supplier Agreement is modified and
supplemented by such reference.
We sold to Kerns pursuant to the Securities Purchase Agreement, 21,428,572
shares of our common stock at $.07 per share for an aggregate of $1,500,000 as
well a five-year warrant to purchase 4,285,572 shares of our common stock at an
initial exercise price of $.08 per share (the "Warrant"). We also have an option
to sell an additional $1 million of our common stock to Kerns. The agreement
further provided for the appointment to our Board of Directors of two
representatives of Kerns. In furtherance thereof, Mr. Jun Ma and Mr. Simon
Srybnik, Chairman of both Kerns and Living Data, have been appointed members of
our Board of Directors. Pursuant to the Distribution Agreement, we have become
the exclusive distributor in the United States of the AngioNew ECP systems
manufactured by Living Data. As additional consideration for such agreement, we
agreed to issue an additional 6,990,840 shares of our common stock to Living
Data. Pursuant to the Supplier Agreement, Living Data now will be the exclusive
supplier to us of the ECP therapy systems that we market under the registered
trademark EECP. The Distribution Agreement and the Supplier Agreement each have
an initial term extending through May 31, 2012.
Pursuant to a Registration Rights Agreement, we granted to Kerns and Living
Data, subject to certain restrictions, "piggyback registration rights" covering
the shares sold to Kerns as well as the shares issuable upon exercise of the
Warrant and the shares issued to Living Data.
ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES
See Item 1.01 above.
Item 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF PRINCIPAL OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS
(d)(1) Mr. Jun Ma and Mr. Simon Srybnik were elected to serve as directors
on June 21, 2007.
(2) There are no agreements related to the appointments except that:
(a) the appointment of Mr. Ma and Mr. Srybnik satisfied an obligation of
Company to appoint two representatives of Kerns to the Board of Directors
under the Securities Purchase Agreement, and (b) the Company's Board of
Directors has agreed to use their best efforts to have the shareholders of
the Company continue to elect two representatives of Kerns to the Board of
Directors. See Item 1.01 above.
(3) No determination of committee obligations for the Directors has
been made.
(4) As affiliates of Living Data and Kerns, Mr. Ma and Mr. Srybnik
have each been directly involved in the transactions between Living Data
and Kerns, and the Company, which are the Securities Purchase Agreement,
the Distribution Agreement and the Supplier Agreement described in Item
1.01 above.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
4.1 Securities Purchase Agreement dated June 21, 2007, including as
exhibits thereto the Supplier Agreement dated June 21, 2007 and
the Distribution Agreement dated June 21, 2007.
4.2 Form of Common Stock Purchase Warrant.
4.3 Registration Rights Agreement dated June 21, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
VASOMEDICAL, INC.
Date: June 25, 2007
By: /s/ John C. K. Hui
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John C. K. Hui
President and Chief Executive Officer