Vasomedical Reports Financial Results for the Quarter Ended August 31, 2011

For the first quarter of fiscal 2012, which ended August 31, 2011, the Company had revenue of approximately $4.33 million, compared to revenue of $1.28 million for the quarter ended August 31, 2010, an increase of $3.05 million, or 239%. The increase is principally due to an increase in commission revenue at VasoHealthcare, as the agreement with GE Healthcare is now in full operation and had only begun in the first quarter of fiscal 2011. Net loss attributable to common stockholders was $1.74 million for the three months ended August 31, 2011, compared to a net loss of $2.60 million for the same period in the prior fiscal year. The significant decrease in the net loss is attributable to the increase in commission revenue offset by the related increase in commission expense. Due to the nature of our commission structure under the agreement with GEHC, we earn progressively higher commission rates as calendar year targets are met. As we achieve these targets the higher commission rates are retroactive to the beginning of the calendar year, and therefore we anticipate earning and recognizing greater revenue in the fourth quarter of the calendar year. We continue to record substantial amounts of deferred revenues, which will be recognized once the underlying equipment or service is accepted or performed. As of August 31, 2011, total deferred revenues were approximately $12.1 million, an increase of $200 thousand from $11.9 million at May 31, 2011.

Cash used in operating activities for the quarter ended August 31, 2011 improved by $403 thousand, to $1.84 million, compared to cash used in operating activities of $2.24 million for the same period in the prior year. As noted above, our commission rates under the agreement with GEHC are progressively higher as calendar year targets are met, therefore, we anticipate significantly higher commission billings and recognized revenue in the fourth quarter of the calendar year, as well as receiving payment for such billings in subsequent periods. Our financial position continues to be strong with more than $6.2 million of cash and cash equivalents on hand at August 31, 2011.

“We are excited that we have achieved significant revenue growth from our VasoHealthcare operations and made gains in our operating cash flows,” commented Dr. Jun Ma, Chief Executive Officer and President of Vasomedical. “The performance of VasoHealthcare has generated a significant backlog of deferred revenue to be recognized in ensuing quarters as well as a tremendous improvement in our operating cash flow.”

“Through the vertical integration and expansion of our product lines resulting from our recently announced acquisitions of Life Enhancement Technology Ltd. and BIOX Instruments Co. Ltd., Vasomedical is better positioned in the marketplace to realize our global vision while enhancing our growth and profitability potential,” said Dr. Ma.

About Vasomedical

Vasomedical, Inc. is primarily engaged in designing, manufacturing, marketing and supporting EECP^® external counterpulsation systems based on the Company’s proprietary technology. EECP^® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP^® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.

Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company’s website at www.vasomedical.com.

Summarized Financial Information

Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

WESTBURY, N.Y.–(BUSINESS WIRE)–Vasomedical, Inc. (“Vasomedical”) (OTC: VASO.PK), a leader in the manufacture and sale of devices for the non-invasive treatment and management of cardiovascular diseases and a leader in the sale of diagnostic imaging products, today announced the restructure of the Company to further align its business management structure and long term growth strategy. The Company will now be operating through three wholly-owned subsidiaries. Vaso Diagnostics, Inc., d/b/a/ VasoHealthcare will continue as an operating subsidiary for the sales representation of GE Healthcare diagnostic imaging products; Vasomedical Global Corp. will operate the Company’s newly acquired Chinese companies; and Vasomedical Solutions, Inc. has been formed to manage and coordinate its EECP^® therapy business as well as other medical equipment operations.

Vasomedical also has appointed Michael J. Beecher, as its Chief Financial Officer. Jonathan P. Newton, our previous Chief Financial Officer, will now assume the role of Vice President of Finance and Controller. Prior to joining Vasomedical, Mr. Beecher was Chief Financial Officer of Direct Insite Corp., a publicly held company, from December 2003 to September 2011. Prior to his position at Direct Insite, Mr. Beecher was Chief Financial Officer and Treasurer of FiberCore, Inc., also a publicly held company, in the fiber-optics industry. From 1989 to 1995 he was Vice-President Administration and Finance at the University of Bridgeport. During his many years as a financial executive, Mr. Beecher has accumulated extensive experience in private and public financings, mergers and acquisitions as well as in the integration of international and domestic operations. He began his career in public accounting with Haskins & Sells, an international public accounting firm. Mr. Beecher is a graduate of the University of Connecticut, a Certified Public Accountant and a member of the American Institute of Certified Public Accountants.

Welcoming Mr. Beecher to Vasomedical, President and CEO Jun Ma stated, “Together with the acquisition of the two companies in China, Life Enhancement Technology Limited and Biox Instruments Co. Ltd., the restructure of the Company is another important element of our global growth strategy. The timely addition of Mr. Beecher brings additional resources and valuable expertise to our management team and will help us move forward with our plans for future growth and expansion.”

About Vasomedical

Vasomedical, Inc. is engaged in designing, manufacturing, marketing and supporting EECP^® external counterpulsation systems based on the Company’s proprietary technology. EECP^® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP^® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.

Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company’s website at www.vasomedical.com.

Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

LET, based in Foshan, Guangdong, China, has been Vasomedical’s supplier for its proprietary Enhanced External Counterpulsation (EECP^®) systems, including certain Lumenair systems and all AngioNew^® systems. Biox, a leading developer and manufacturer of ambulatory monitoring devices in China, is located in Wuxi, Jiangsu, China, and has been Vasomedical’s partner on the BIOX series ECG Holter recorder and analysis software as well as ambulatory blood pressure monitoring systems. Vasomedical has obtained FDA clearance to market these products in the United States. The completion of this transaction demonstrates the Company’s commitment to implementing its global growth strategy by strengthening its manufacturing, distribution and technology base to prepare for an anticipated increase in demand for its EECP^® therapy systems and BIOX series products, as well as expanding its footprint in the worldwide medical device market. The consolidation of the businesses of the acquired entities into Vasomedical is expected to improve revenues, gross margin and profitability of the Company’s equipment segment.

Dr. Jun Ma, President and CEO of Vasomedical reiterated his prior comments issued in the August 23^rd, 2011 release, stating, “The completion of this accretive acquisition is an important step of our global strategy. The consolidation of resources and vertical integration of our businesses situates Vasomedical well in the rapidly changing and challenging medical marketplace to realize its vision to be a global leader.”

About Vasomedical

Vasomedical, Inc. is engaged in designing, manufacturing, marketing and supporting EECP^® external counterpulsation systems based on the Company’s proprietary technology. EECP^® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP^® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.

Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company’s website at www.vasomedical.com.

Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

For the fiscal year 2011, which ended May 31, 2011, the Company’s total revenues were $16.37 million, an increase of $12.17 million, or 289% as compared to revenues of $4.21 million for the last fiscal year. While the Company reported an operating loss of approximately $3.93 million for the year, compared to an operating loss of $1.98 million for the prior fiscal year, these losses were largely attributed to the revenue recognition rules applicable to the Company’s VasoHealthcare subsidiary, wherein a part of revenues were deferred. As of May 31, 2011, total deferred revenues for the Company were $11.92 million, including $10.81 million for the VasoHealthcare subsidiary, an increase of $10.89 million from $1.03 million for fiscal 2010. The substantial part of this deferred revenue should be recognized as revenue in fiscal 2012. Our strong performance in fiscal 2011 is further demonstrated by the significant cash flow generated in the fiscal year. Cash provided by operating activities was $4.14 million during fiscal year 2011, as compared to cash used in operating activities of $1.59 million during fiscal 2010. As of May 31, 2011, the Company had cash and cash equivalents of approximately $8.13 million.

“We are encouraged by our improved financial results, particularly our significant operating cash flow and increased revenues for the fiscal year,” commented Dr. Jun Ma, Chief Executive Officer and President of Vasomedical. “Our equipment segment revenues improved considerably over last year, with an increase of 25%; and our VasoHealthcare team delivered great performance that exceeded our expectation.” Dr. Ma continues, “With improved performance in all areas of business and our strong cash position, Vasomedical is now looking to further implement its growth strategy. This includes the initiative that we started with our consultants seeking to expand reimbursement for our proprietary EECP® therapy; seeking accretive acquisitions of compatible medical equipment products or partners, such as our recently announced agreement with Biox Instruments Co. Ltd.; and looking to expand our representation of GEHC products. The Company has also retained the services of a public relations firm to create greater visibility of our activities and programs as we implement our growth strategy.”

About Vasomedical

Vasomedical, Inc. is engaged in designing, manufacturing, marketing and supporting EECP® external counterpulsation systems based on the Company’s proprietary technology. EECP® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.

Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company’s website at www.vasomedical.com.

Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

Life Enhancement Technology Limited (LET), based in Foshan, Guangdong Province, China, has been for the last several years Vasomedical’s contract manufacturer for its Enhanced External Counterpulsation (“EECP”) systems including its AngioNew^® and Lumenair EECP^® systems. The acquisition of LET provides Vasomedical with consolidated technical and manufacturing capability in its EECP business which should significantly increase gross margins and enable the Company to meet anticipated increasing demand for its EECP systems. The original developer of the AngioNew series EECP systems, LET’s twenty person administrative, engineering and manufacturing staff have an average of more than 10 years of EECP experience including production of Vasomedical’s early model of EECP systems. LET operates in full compliance with ISO 13485, ISO 9001, US FDA cGMP as well as Medical Device Directive of the European Union.

Biox Instruments Co. Ltd. (Biox), located in Wuxi, Jiangsu Province, China, has been the developer and OEM partner of Vasomedical’s BIOX series ambulatory ECG Holter and blood pressure monitoring (ABPM) systems for several years. A leading company in ambulatory monitoring systems and analysis software in the People’s Republic of China, Biox with more than 40 employees is specialized in medical devices of low-power consumption and miniaturization. Over the years Biox has developed and accumulated substantial technology reserve in addition to the ECG Holter and ambulatory ABPM systems currently offered by Vasomedical. Also in full compliance with ISO 13485, ISO 9001, US FDA cGMP as well as Medical Device Directive of the European Union, Biox has marketed its products primarily in China. As its distributor in North America, Vasomedical successfully obtained a series of FDA clearances and now offers a complete line of BIOX products, including ECG Holter recorders, ABPM systems, combined ECG Holter/ABPM systems, as well as analysis and reporting software. The acquisition of Biox greatly enhances Vasomedical’s distribution network, technology and product portfolio, and with combined market and sales efforts of the two companies, should help improve performance and profitability of Vasomedical’s equipment segment.

Mr. Qiuming Shen, President of Biox Instruments, noted that the consolidation plan “further strengthens the proactive sales channel growth plan Biox has been implementing over the past few years and presents even greater sales opportunities for its highly profitable products, technology development and innovative management in a larger global marketplace.”

Mr. Xichang Li, President of Life Enhancement Technology, stated, “LET continues to develop state of the art products. It has positioned itself strategically to meet the challenge and support of anticipated increasing demand for the EECP systems worldwide.”

Dr. Jun Ma, President and CEO of Vasomedical, Inc., upon signing the agreement with Mr. Li, and Mr. Shen, commented, “This consolidation is the first step of Vasomedical’s long term strategic plan to position itself for growth and diversification in a rapidly changing and challenging global medical marketplace.” Dr. Ma stated, “While the acquisition of LET is a natural extension of our EECP business, the joining of Biox into the Vasomedical family not only enhances the Vasomedical business as a vertically integrated company but also provides access to the vast Chinese market for current and future products of Vasomedical.” Dr. Ma continued, “We anticipate the closing of these acquisitions to take place within the next two weeks. As part of our global growth strategy, we also expect to be looking for accretive acquisitions of other medical device companies.”

About Vasomedical

Vasomedical, Inc. is engaged in designing, manufacturing, marketing and supporting EECP^® external counterpulsation systems based on the Company’s proprietary technology. EECP^® therapy is a non-invasive, outpatient therapy for the treatment of cardiovascular diseases and is currently indicated for use in cases of angina, cardiogenic shock, acute myocardial infarction and congestive heart failure. The Company provides hospitals, clinics and private practices with EECP^® equipment, treatment guidance and a staff training and maintenance program designed to provide optimal patient outcomes. The Company also provides other noninvasive medical equipment including Holter monitors and ambulatory blood pressure monitors.

Vaso Diagnostics d/b/a VasoHealthcare, a wholly owned subsidiary of Vasomedical, Inc., is a professional sales representation organization offering vendors of medical devices an alternative third party sales channel. Through an agreement with GE Healthcare, it is currently engaged as an exclusive sales representative for certain GE Healthcare products. Additional information is available on the Company’s website at www.vasomedical.com.

Except for historical information contained in this release, the matters discussed are forward-looking statements that involve risks and uncertainties. When used in this release, words such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “may”, “plans”, “potential” and “intends” and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s management. Among the factors that could cause actual results to differ materially are the following: the effect of business and economic conditions; the effect of the dramatic changes taking place in the healthcare environment; the impact of competitive procedures and products and their pricing; medical insurance reimbursement policies; unexpected manufacturing or supplier problems; unforeseen difficulties and delays in the conduct of clinical trials and other product development programs; the actions of regulatory authorities and third-party payers in the United States and overseas; uncertainties about the acceptance of a novel therapeutic modality by the medical community; continuation of the GEHC agreement; and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.