0001493152-20-021209.txt : 20201113 0001493152-20-021209.hdr.sgml : 20201113 20201113061234 ACCESSION NUMBER: 0001493152-20-021209 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 64 CONFORMED PERIOD OF REPORT: 20200930 FILED AS OF DATE: 20201113 DATE AS OF CHANGE: 20201113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VYCOR MEDICAL INC CENTRAL INDEX KEY: 0001424768 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 203369218 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-34932 FILM NUMBER: 201309071 BUSINESS ADDRESS: STREET 1: 951 BROKEN SOUND PARKWAY STREET 2: SUITE 320 CITY: BOCA RATON, STATE: FL ZIP: 33487 BUSINESS PHONE: 562.558.2000 MAIL ADDRESS: STREET 1: 951 BROKEN SOUND PARKWAY STREET 2: SUITE 320 CITY: BOCA RATON, STATE: FL ZIP: 33487 10-Q 1 form10-q.htm

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

(Mark One)

 

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
  For the fiscal quarter ended September 30, 2020
   
[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
   
  For the transition period from to

 

VYCOR MEDICAL, INC.

(Exact name of small business issuer as specified in its charter)

 

Delaware   001-34932   20-3369218
(State of   (Commission   (IRS Employer
Incorporation)   File Number)   Identification No.)

 

951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487

(Address of principal executive offices) (Zip code)

 

Issuer’s telephone number: (561) 558-2020

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol   Name of each exchange on which registered
Common Stock   VYCO   OTCQB

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [  ] No [X]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer [  ]   Accelerated Filer [  ]
Non-accelerated Filer [  ] (Do not check if a smaller reporting company)   Smaller Reporting Company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). [  ] Yes [X] No

 

There were 26,895,692 shares outstanding of registrant’s common stock, par value $0.0001 per share, as of November 13, 2020.

 

Transitional Small Business Disclosure Format (check one): Yes [  ] No [X]

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
  PART I  
     
Item 1. Financial Statements 3
     
  Unaudited Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 3
     
  Unaudited Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019. 4
     
  Unaudited Consolidated Statement of Stockholders’ Deficiency for the three and nine months ended September 30, 2020 and 2019. 5
     
  Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019. 6
     
  Notes to Unaudited Consolidated Financial Statements 7
     
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation 17
     
Item 3. Quantitative and Qualitative Disclosures About Market Risk 24
     
Item 4. Controls and Procedures 24
     
  PART II  
     
Item 1. Legal Proceedings 25
     
Item 1A. Risk Factors 25
     
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25
     
Item 3. Defaults Upon Senior Securities 25
     
Item 4. Mine Safety Disclosures 25
     
Item 5. Other Information 25
     
Item 6. Exhibits 25
     
SIGNATURES 26

 

 2 

 

 

PART 1

 

ITEM 1. FINANCIAL STATEMENTS

VYCOR MEDICAL, INC.

Consolidated Balance Sheets

(Unaudited)

 

   September 30, 2020   December 31, 2019 
ASSETS          
Current Assets          
Cash  $74,935   $60,717 
Trade accounts receivable   137,397    274,551 
Inventory   179,714    208,353 
Prepaid expenses and other current assets   90,854    92,694 
Current assets of discontinued operations   2,004    20,117 
Total Current Assets   484,904    656,432 
           
Fixed assets, net   389,146    364,953 
           
Intangible and Other assets:          
Patents, net of accumulated amortization   14,343    23,326 
Security deposits   6,000    6,000 
Operating lease - right of use assets   135,003    31,658 
Long term assets of discontinued operations   -    9,574 
Total Intangible and Other assets   155,346    70,558 
TOTAL ASSETS  $1,029,396   $1,091,943 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY          
Current Liabilities          
Accounts payable  $131,117   $245,412 
Accrued interest: Other   316,798    280,765 
Accrued interest: Related party   66,767    44,921 
Accrued liabilities - Other   116,085    233,067 
Accrued liabilities - Related Party   1,297,480    973,110 
Notes payable: Other   555,666    328,032 
Notes payable: Related Party   310,873    230,873 
Current operating lease liabilities   44,079    28,010 
Current liabilities of discontinued operations   9,884    82,216 
Total Current Liabilities   2,848,749    2,446,406 
           
Operating lease liability - Long term   88,097    - 
           
STOCKHOLDERS’ DEFICIENCY          
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 270,307 and 270,307 issued and outstanding as at September 30, 2020 and December 31, 2019 respectively   27    27 
Common Stock, $0.0001 par value, 55,000,000 shares authorized at September 30, 2020 and December 31, 2019, 26,999,026 and 25,391,884 shares issued and 26,895,692 and 25,288,550 outstanding at September. 30, 2020 and December 31, 2019 respectively   2,700    2,539 
Additional Paid-in Capital   28,699,931    28,306,592 
Treasury Stock (103,334 shares of Common Stock as at September 30, 2020 and December 31, 2019 respectively, at cost)   (1,033)   (1,033)
Accumulated Deficit   (30,736,750)   (29,790,258)
Accumulated Other Comprehensive Income   127,675    127,670 
Total Stockholders’ Deficiency   (1,907,450)   (1,354,463)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY  $1,029,396   $1,091,943 

 

See accompanying notes to consolidated financial statements

 

 3 

 

 

VYCOR MEDICAL, INC.

Consolidated Statements of Comprehensive Loss

(Unaudited)

 

   For the three months ended
September 30,
   For the nine months ended
September 30,
 
   2020   2019   2020   2019 
                 
Revenue  $275,925   $322,884   $850,430   $1,061,393 
Cost of Goods Sold   40,551    28,962    98,338    97,446 
Gross Profit   235,374    293,922    752,092    963,947 
                     
Operating expenses:                    
Depreciation and Amortization   14,495    15,218    43,780    44,855 
General and administrative   427,250    444,371    1,260,742    1,344,853 
Total Operating expenses   441,745    459,589    1,304,522    1,389,708 
Operating loss   (206,371)   (165,667)   (552,430)   (425,761)
                     
Other income (expense)                    
Interest expense: Related Party   (7,836)   (5,315)   (21,846)   (15,331)
Interest expense: Other   (12,099)   (12,109)   (36,033)   (36,074)
Loss on foreign currency exchange   (484)   (3)   (829)   (207)
Gain on other income   6,000    -    6,000    - 
Total Other Income (expense)   (14,419)   (17,427)   (52,708)   (51,612)
                     
Loss Before Credit for Income Taxes   (220,790)   (183,094)   (605,138)   (477,373)
Credit for income taxes   -    -    -    - 
Net Loss from continuing operations   (220,790)   (183,094)   (605,138)   (477,373)
Income (Loss) from discontinued operations, net of tax   22,503    (26,515)   (16,984)   (97,838)
Net loss   (198,287)   (209,609)   (622,122)   (575,211)
                     
Preferred stock dividends   (162,185)   (162,185)   (324,370)   (324,370)
Net Loss available to common stockholders  $(360,472)  $(371,794)  $(946,492)  $(899,581)

Other Comprehensive Loss

                    
Foreign Currency Translation Adjustment   3    7    5    2 
Comprehensive Loss   (198,284)   (209,602)   (622,117)   (575,209)
                     

Net Loss Per Share – basic and diluted

                    
Loss from continuing operations  $(0.01)  $(0.01)  $(0.02)  $(0.02)
Income (Loss) from discontinued operations  $0.00   $(0.00)  $(0.00)  $(0.00)

Net loss available to common stockholders

  $(0.01)  $(0.02)  $(0.04)  $(0.04)
                     
Weighted Average Number of Shares Outstanding – Basic and Diluted   26,365,801    24,222,946    25,832,084    23,689,516 

`

 

See accompanying notes to consolidated financial statements

 

 4 

 

 

VYCOR MEDICAL, INC.

Consolidated Statement of Stockholders’ Deficiency

(Unaudited)

 

                                   Additional       Accum     
   Common Stock   Preferred  C   Preferred  D   Treasury Stock   Paid-in   Accumulated   OCI    
   Number   Amount   Number   Amount   Number   Amount   Number   Amount   Capital   Deficit   (Loss)   Total 
                                                 
Balance at June 30, 2020   26,463,312   $2,646    1   $0    270,306   $27    (103,334)  $(1,033)  $28,573,484   $(30,376,278)  $127,672   $(1,673,482)
Issuance of stock for board and consulting fees   535,714    54                                  112,447              112,501 
Directors deferred compensation granted   -                                       14,000              14,000 
Issuance of shares pursuant to exercise of warrants                                                          - 
Accumulated Comprehensive Loss                                                     3    3 
Net loss for period ended September 30, 2020                                                (360,472)        (360,472)
Balance at September 30, 2020   26,999,026   $2,700    1   $0    270,306   $27    (103,334)  $(1,033)  $28,699,931   $(30,736,750)  $127,675   $(1,907,450)

 

                                   Additional       Accum     
   Common Stock   Preferred  C   Preferred  D   Treasury Stock   Paid-in   Accumulated   OCI    
   Number   Amount   Number   Amount   Number   Amount   Number   Amount   Capital   Deficit   (Loss)   Total  
                                                 
Balance at December 31, 2019   25,391,884   $2,539    1   $0    270,306   $27    (103,334)  $(1,033)  $28,306,592   $(29,790,258)  $127,670   $(1,354,463)
Issuance of stock for board and consulting fees   1,607,142    161                                  337,339              337,500 
Directors deferred compensation granted   -                                       56,000              56,000 
Issuance of shares pursuant to exercise of warrants                                                          - 
Accumulated Comprehensive Loss                                                     5    5 
Net loss for period ended September 30, 2020                                                (946,492)        (946,492)
Balance at September 30, 2020   26,999,026   $2,700    1   $0    270,306   $27    (103,334)  $(1,033)  $28,699,931   $(30,736,750)  $127,675   $(1,907,450)

 

                                   Additional       Accum     
   Common Stock   Preferred  C   Preferred  D   Treasury Stock   Paid-in   Accumulated   OCI    
   Number   Amount   Number   Amount   Number   Amount   Number   Amount   Capital   Deficit   (Loss)   Total 
                                                 
Balance at June 30, 2019   24,320,456   $2,432    1   $0    270,306   $27    (103,334)  $(1,033)  $28,039,699   $(29,197,473)  $127,668   $(1,028,680)
Issuance of stock for board and consulting fees   535,714    54                                  112,447              112,501 
Directors deferred compensation granted   -                                       21,000              21,000 
Issuance of shares pursuant to exercise of warrants                                                          - 
Accumulated Comprehensive Loss                                                     7    7 
Net loss for period ended September 30, 2019                                                (371,794)        (371,794)
Balance at Setember 30, 2019   24,856,170   $2,486    1   $0    270,306   $27    (103,334)  $(1,033)  $28,173,146   $(29,569,267)  $127,675   $(1,266,966)

 

                                   Additional       Accum     
   Common Stock   Preferred  C   Preferred  D   Treasury Stock   Paid-in   Accumulated   OCI     
   Number   Amount   Number   Amount   Number   Amount   Number   Amount   Capital   Deficit   (Loss)   Total 
                                                 
Balance at December 31, 2018   23,244,028   $2,324    1   $0    270,306   $27    (103,334)  $(1,033)  $27,771,868   $(28,669,686)  $127,673   $(768,827)
Issuance of stock for board and consulting fees   1,612,142    162                                  338,278              338,440 
Directors deferred compensation granted   -                                       63,000              63,000 
Issuance of shares pursuant to exercise of warrants                                                          - 
Accumulated Comprehensive Loss                                                     2    2 
Net loss for period ended September 30, 2019                                                (899,581)        (899,581)
Balance at September 30, 2019   24,856,170   $2,486    1   $0    270,306   $27    (103,334)  $(1,033)  $28,173,146   $(29,569,267)  $127,675   $(1,266,966)

 

See accompanying notes to consolidated financial statements

 

 5 

 

 

VYCOR MEDICAL, INC.

Consolidated Statement of Cash Flows

(Unaudited)

 

   For the nine months ended 
   September 30, 
   2020   2019 
Cash flows from operating activities:          
Net loss  $(622,121)  $(575,211)
Adjustments to reconcile net loss to cash used in operating activities:          
Amortization of intangible assets   8,983    9,170 
Depreciation of fixed assets   35,939    37,201 
Inventory provision   9,418    9,418 
Stock based compensation   393,500    401,440 
           
Changes in assets and liabilities:          
Accounts receivable   137,154    44,521 
Inventory   19,221    (34,455)
Prepaid expenses   2,661    (33,309)
Accrued interest - Related Party   21,846    15,332 
Accrued interest - Other   36,033    35,901 
Accounts payable   (114,295)   104,518 
Accrued liabilities - Other   (116,982)   (25,818)
Changes in discontinued operations, net   (54,218)   497 
Cash used in operating activities   (242,862)   (10,795)
Cash flows from investing activities:          
Purchase of fixed assets   (60,132)   (21,560)
Changes in investing activities of discontinued operations, net   9,574    2,496 
Cash used in investing activities   (50,558)   (19,064)
Cash flows from financing activities:          
Proceeds from Notes Payable - Related Party   80,000    17,873 
Proceeds from Paycheck Protection Program and EIDL   208,600    - 
Proceeds net of repayments Notes Payable - Other   19,034    25,244 
Cash provided by financing activities   307,634    43,117 
Effect of exchange rate changes on cash   4    (1,093) 
Net increase (decrease) in cash   14,218    12,165 
Cash at beginning of period   60,717    78,011 
Cash at end of period  $74,935   $90,176 
           
Non-Cash Transactions:          
Common stock issued to related party for payment of accrued liabilities  $0   $0 

 

See accompanying notes to consolidated financial statements

 

 6 

 

 

VYCOR MEDICAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2020

(Unaudited)

 

1. BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements of Vycor Medical, Inc. (the “Company” or “Vycor”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in consolidated financial statements have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2019 derives from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

 

The unaudited consolidated financial statements as of and for the nine months ended September 30, 2020 and 2019, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition, results of operations and cash flows. The results of operations for the nine months ended September 30, 2020 and 2019 are not necessarily indicative of the results to be expected for any other interim period or for the entire year. Certain prior period amounts on the unaudited consolidated financial statements have been reclassified to conform to the current period presentation.

 

Ability to continue as a Going Concern

 

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of $946,492 for the nine months ended September 30, 2020 and has not generated sufficient positive cash flows from operations. As of September 30, 2020 the Company had a working capital deficiency of $688,725, excluding related party liabilities of $1,675,120. These conditions, among others, raise substantial doubt regarding our ability to continue as a going concern. The unaudited consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

 

The Company is executing on a plan to achieve a reduction in cash operating losses. Included within the working capital deficiency above is a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”), together with accrued interest of $316,798, which has a maturity date of December 31, 2020, having been extended on a number of occasions from its initial due date of June 11, 2011. At this time, it is not known whether any further extension of the note beyond December 31, 2020 will be available. However, the Company believes it may not have sufficient cash to meet its various cash needs through November 30, 2021 unless the Company is able to obtain additional cash from the issuance of debt or equity securities. Fountainhead, the Company’s largest shareholder, has provided working capital funding to the Company on an as-needed basis, although there is no guarantee that this will continue to be the case. The Company may consider seeking additional equity or debt funding, although there is no assurance that this would be available on acceptable terms or at all. If adequate funds are not available, the Company may have to delay or curtail development or commercialization of products, or cease some of its operations.

 

2. SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

The unaudited consolidated financial statements include the accounts of Vycor Medical, Inc., and its wholly-owned subsidiaries, NovaVision, Inc. (a Delaware corporation), NovaVision GmbH (a German corporation) and Sight Science Limited (a UK corporation), both wholly owned subsidiaries of NovaVision, Inc. The Company is headquartered in Boca Raton, FL. All material inter-company accounts, transactions, and profits have been eliminated in consolidation. Following the decision in April 2020 to close the German office of NovaVision, the activities of NovaVision GmbH have been accounted for as discontinued operations.

 

 7 

 

 

Recent Accounting Pronouncements

 

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that, other than as disclosed above, such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

 

Discontinued Operations

 

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations (which we presented as operations to be disposed and operations disposed), less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45.

 

Leases

 

The Company has one leased building in Boca Raton, Florida that is classified as operating lease right-of use (“ROU”) assets and operating lease liabilities in the Company’s unaudited consolidated balance sheet as per ASC 842. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date for leases exceeding 12 months. Minimum lease payments include only the fixed lease component of the agreement. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of Selling, General and Administrative expenses.

 

The standard was effective for us beginning January 1, 2019. The Company elected the available practical expedients on adoption. The adoption had a material impact on our unaudited consolidated balance sheets, but did not have a material impact on our unaudited consolidated statements of comprehensive loss. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases.

 

Net Loss Per Share

 

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of preferred stock and convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. No dilution adjustment has been made to the weighted average outstanding common shares in the periods presented because the assumed exercise of outstanding options and warrants and the conversion of preferred stock and debt would be anti-dilutive.

 

 8 

 

 

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share:

 

   September 30, 2020   September 30, 2019 
Stock options outstanding   680,000    700,000 
Warrants to purchase common stock   -    3,717,826 
Debentures convertible into common stock   2,937,133    2,707,933 
Preferred shares convertible into common stock   1,272,052    1,272,052 
Directors Deferred Compensation Plan   1,442,571    1,075,908 
Total   6,331,756    9,473,719 

 

Covid-19

 

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to a number of other countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, as of the time of the filing of this Form 10-Q, several states in the United States remain in states of emergency, and travel restrictions continue to be applied in several countries around the world, including the United States. Vycor Medical experienced a reduction in demand during the nine months ended September 30, 2020 in the US and Internationally. Although neurosurgery is not considered an elective procedure, general hospital dislocation and diversion of resources away from non-emergency surgeries, or surgeries that can be postponed for a short period without harm, has impacted our revenues during the nine months ended September 30, 2020 and could continue to do so. In addition, sales and marketing efforts by Vycor’s representatives have been disrupted or curtailed due to lockdown and social distancing, and this has and may continue to hinder the recovery of revenues. While our operations are principally located in the United States, and our sub-contract manufacturers are located in the United States, we participate in a global supply chain, and the existence of a worldwide pandemic, the fear associated with COVID-19, or any, pandemic, and the reactions of governments around the world in response to COVID-19, or any, pandemic, to regulate the flow of labor and products and impede the travel of personnel, may impact our ability to conduct normal business operations, which could adversely affect our results of operations and liquidity. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects on our manufacturing output and delivery schedule. Although we have implemented business continuity plans for our offices and personnel to enable continuity of service remotely, if a critical number of our employees become too ill to work, or we are not able to access a sufficient quantity of our inventory for shipment due to enforced office closures, our production ability could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to COVID-19, or any other, pandemic, demand for our products could also be materially adversely affected in a rapid manner. Global health concerns, such as COVID-19, could also result in social, economic, and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations.

 

3. DISCONTINUED OPERATIONS

 

In April 2020, the board of Vycor took the decision to close the German operations of NovaVision, including the German office and NovaVision GmbH, and instead migrate to a licensed business model; in June 2020 Vycor announced that it would be entering into a license agreement and transition agreement (the “Agreements”) with HelferApp GmbH, a cognitive therapy specialist. Under the Agreements, HelferApp is licensed to provide NovaVision’s products and therapies in Germany, Austria and Switzerland to patients and professionals; and has assumed responsibility for the current patients of NovaVision in the territory. The NovaVision German office was closed effective June 30, 2020. The Company will continue to fund the remaining expenses of the German operations, which are non-material, until such a time as NovaVision GmbH will be formally wound up.

 

 9 

 

 

Reconciliation of the Major Line Items constituting Loss from discontinued operations, net of tax, that are presented in the Consolidated Statements of Comprehensive Loss

 

   For the three months ended
September 30,
   For the nine months ended
September 30,
 
   2020   2019   2020   2019 
Major line items constituting loss from discontinued operations                    
Revenue  $2,851   $23,424   $41,527   $65,471 
Cost of Goods Sold   616    2,565    4,835    9,188 
Gross Profit   2,235    20,859    36,692    56,283 
                     
Operating expenses:                    
Depreciation and Amortization   -    (103)   -    156 
Selling, general and administrative   15,304    47,045    87,986    152,240 
Total Operating expenses   15,304    46,942    87,986    152,396 
Operating loss   (13,069)   (26,083)   (51,294)   (96,113)
                     
Other income (expense)                    
Loss on foreign currency exchange   (879)   (432)   (2,141)   (1,725)
Other income (loss)   36,451         36,451      
Total Other Income (expense)   35,572    (432)   34,310    (1,725)
                     
Income (loss) Before Credit for Income Taxes   22,503    (26,515)   (16,984)   (97,838)
Credit for income taxes   -    -    -    - 
Loss from discontinued operations, net of tax  $ 22,503   $ (26,515)  $ (16,984)  $ (97,838)

 

Other income comprises the net of non-cash adjustments made in connection with the Agreements with HeflerApp and the closure of the German operation: adjustments for assets and liabilities transferred to HelferApp or NovaVision Inc. or otherwise written off - $12,308; elimination of historic balance for NovaVision GmbH legal expenses funded by NovaVision Inc. - $34,727; and certain accruals for employee costs – ($10,584).

 

4. NOTES PAYABLE

 

Related Parties Notes Payable

 

Related Party Notes Payable consists of:

 

   September 30, 2020   December 31, 2019 
         
On June 25, 2018 the Company issued promissory notes to Peter Zachariou for $30,000. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee. The note was extended for another twelve months on its due date to June 25, 2021 or on demand by the Payee.  $30,000   $30,000 
Between March 26, 2018 and April 24, 2020 the Company issued various promissory notes to Fountainhead Capital Management Limited for $280,873. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee. Six notes were extended on their due dates for another twelve months. The Notes will be due between December 2020 and July 2021 or on demand by the Payee.   280,873    200,873 
Total Related Party Notes Payable  $310,873   $230,873 

 

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Other Notes Payable

 

Other Notes Payable consists of:

 

   September 30, 2020   December 31, 2019 
On March 25, 2011 the Company issued a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”). The term note bears interest at 16% per annum and was due June 25, 2011, and has been extended on a number of occasions. On the note’s most recent due date, the note was extended to December 31, 2020. The note is personally guaranteed by certain officers and directors of the Company. See further note below  $300,000   $300,000 
On May 16, 2020, the Company was granted a loan from Citizens Bank N.A. in the aggregate amount of $58,600, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 16, 2020 issued by the Borrower, matures on May 16, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 16, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Under the terms of the PPP, the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company’s use of the Loan qualifies and intends to apply once the forgiveness program commences.   58,600    - 
On July 7, 2020, the Company was advised that the Small Business Administration (SBA) had approved a $150,000 loan under the Economic Injury Disaster Loan Program pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act (“Loan”). The Loan, evidenced by a promissory note dated July 7, 2020, has a term of thirty (30) years, bears interest at a fixed rate of three and three-quarters percent (3.75%) per annum, with monthly payments in the amount of $731.00 per month commencing twelve (12) months from the date of the note and is secured by essentially all of the assets of the Company. The proceeds of the Loan will be used for general working capital purposes to alleviate economic injury caused by disaster occurring in the month of January 2020 and continuing thereafter.   150,000    - 
Insurance policy finance agreements and other.   47,066    28,032 
Total Other Notes Payable:  $555,666   $328,032 

 

In January 2018 the Company entered into an amendment agreement (the “Amendment”) with EuroAmerican Investments (“EuroAmerican”) regarding its $300,000 loan note (the “Note”). Under the Amendment, the Note was extended and the conversion terms of the Note were reduced to $0.21, the same as the offering price of the 2018 Offering. Conversion of the Note and accrued interest would result in the issuance of 2,937,133 shares of Common Stock as of September 30, 2020. Notwithstanding, EuroAmerican agreed that the Note could not be converted without first offering the Company the right to redeem the Note at principal and accrued interest, and secondly Fountainhead the right to purchase the Note, which cannot be converted prior to such offer and the failure of the Company and Fountainhead to exercise such option in accordance with the amendment terms. In addition, the Company agreed to issue warrants to purchase 2,308,405 shares of Common Stock at $0.27, the same terms as the 2018 Offering, exercisable for three years from January 1, 2018, if and when the conversion option is exercised. The amendment was recognized as a modification, based on the guidance in ASC 470-50.

 

The Company routinely finances all their insurance policies through a third party finance company which requires a down payment and subsequent monthly payments, the time periods vary from 10 months to 12 equal monthly payments.

 

5. LEASE

 

The Company leases office space located at 951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487 from WPT Land 2 L.P., for a gross rent of approximately $5,700 plus sales tax per month that will expire on September 30, 2020. Based on the original lease agreement, the Company had the one-time option to renew the lease for another three years with minimum annual rent at market price, not less than the original lease payment amount. In January 2020, the Company exercised the option to extend the original lease for another three years with the expiration date of August 31, 2023. In accordance with ASC 842-10-35, the Company considered this lease extension as the modification of the original lease and re-measured the lease liability and the right-of-use assets on the commencement date of the lease extension.

 

The Company recognized the following in its unaudited consolidated balance sheet at September 30, 2020 and December 31, 2019:

 

   September 30, 2020   December 31, 2019 
         
Operating Lease ROU Assets  $135,003   $31,658 
   $135,003   $31,658 
           
Operating Lease Liabilities          
 Current portion   44,079    28,010 
 Long-term portion  $88,097   $- 
   $132,176   $28,010 

 

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6. SEGMENT REPORTING, GEOGRAPHICAL INFORMATION

 

(a) Business segments

 

The Company operates in two business segments: Vycor Medical, which focuses on devices for neurosurgery; and NovaVision, which focuses on neuro stimulation therapies and diagnostic devices for the treatment and screening of vision field loss and which includes Sight Science. Discontinued operations were part of NovaVision and revenues and assets were in Europe; see Note 3. Set out below are the revenues, gross profits and total assets for each segment:

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2020   2019   2020   2019 
Revenue:                    
Vycor Medical  $250,648   $301,053   $776,932   $988,786 
NovaVision  $25,277   $21,831   $73,498   $72,607 
   $275,925   $322,884   $850,430   $1,061,393 
Gross Profit                    
Vycor Medical  $211,089   $273,146   $683,125   $895,484 
NovaVision  $24,285   $20,776   $68,967   $68,463 
   $235,374   $293,922   $752,092   $963,947 

 

  

September 30,

2020

  

December 31,

2019

 
Total Assets:          
Vycor Medical  $990,852   $1,036,857 
NovaVision   36,540    25,395 
Discontinued operations   2,004    29,691 
Total Assets  $1,029,396   $1,091,943 

 

(b) Geographic information

 

The Company operates in two geographic segments, the United States and Europe. Discontinued operations were part of NovaVision and revenues and assets were in Europe; see Note 3. Set out below are the revenues, gross profits and total assets for each segment.

 

   Three Months Ended September 30,   Nine Months Ended September 30, 
   2020   2019   2020   2019 
Revenue:                
United States  $270,851   $320,476   $839,992   $1,051,237 
Europe  $5,074   $2,408   $10,438   $10,156 
   $275,925   $322,884   $850,430   $1,061,393 
Gross Profit                    
United States  $230,321   $291,536   $741,675   $953,861 
Europe  $5,053   $2,386   $10,417   $10,086 
   $235,374   $293,922   $752,092   $963,947 

 

  

September 30,

2020

  

December 31,

2019

 
Total Assets:          
United States  $1,014,817   $1,055,312 
Europe   12,575    6,940 
Discontinued operations   2,004    29,691 
Total Assets  $1,029,396   $1,091,943 

 

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7. EQUITY

 

Common Stock and Stock Grants

 

During January to September 2020 and 2019, the Company granted 266,664 shares of Common Stock (valued at $56,000) to non-employee Directors. Under the terms of the Directors Deferred Compensation Plan, the receipt of these shares is deferred until the January 15th following the termination of their services as a director. As of September 30, 2020 these shares have yet to be issued.

 

During January to September 2020 and 2019, under the terms of the Consulting Agreement referred to in note 10, the Company issued 1,607,142 of Common Stock to Fountainhead for fees of $337,500 in each period respectively.

 

Warrants and Options

 

The details of the outstanding warrants and options are as follows:

 

STOCK WARRANTS:

 

          Weighted average  
    Number of shares     exercise price
per share
 
Outstanding at December 31, 2019     3,717,826     $ 0.27  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     (3,717,826 )   $ 0.27  
Outstanding at September 30, 2020     -     $ 0.00  

 

STOCK OPTIONS:

 

          Weighted average  
    Number of shares     exercise price
per share
 
Outstanding at December 31, 2019     700,000     $ 0.28  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     (20,000 )     (0.27 )
Outstanding at September 30, 2020     680,000     $ 0.28  

 

As of September 30, 2020, the weighted-average remaining contractual life of outstanding warrants and options is 0 and 0.74 years, respectively.

 

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8. SHARE-BASED COMPENSATION

 

Stock Option Plan

 

Under ASC Topic 718, the Company estimates the fair value of option awards on the date of grant using an option pricing model. The grant date fair value is recognized over the option-vesting period, the period during which an employee is required to provide service in exchange for the award. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Under these standards, compensation cost for employee cost for employee stock-based awards is based on the estimated grant-date fair value and recognized over the vesting period of the applicable award on a straight-line basis.

 

For each of the nine months ended September 30, 2020 and 2019, the Company recognized share-based compensation of $0 for employee stock options.

 

Stock appreciation rights may be granted either on a stand-alone basis or in conjunction with all or part of any other stock options granted under the plan. As of September 30, 2020 there were no awards of any stock appreciation rights.

 

Non-Employee Stock Compensation

 

The Company from time to time issues common stock, stock options or common stock warrants to acquire services or goods from non-employees. Common stock, stock options and common stock warrants issued to other than employees or directors are recorded on the basis of their fair value, which is measured as of the “measurement date”. The “measurement date” for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant.

 

Aggregate stock-based compensation for stock granted to non-employees for each of the nine months ended September 30, 2020 and 2019 was $266,664 and $299,997. The expense related to stock not issued during each of the periods ended September 30, 2020 and 2019 comprises $56,000 and $63,000, related to stock granted but not issued to directors under the Directors Deferred Compensation Plan. As of September 30, 2020, there was $0 of total unrecognized compensation costs related to warrant and stock awards and non-vested options.

 

Stock-based Compensation Valuation Methodology

 

Stock-based compensation resulting from the issuance of Common Stock is calculated by reference to the valuation of the Stock on the date of issuance, the expense being recognized as the compensation is earned. Stock-based compensation expenses related to employee options and warrants granted to non-employees are recognized as the stock options and warrants are earned. The fair value of the stock options or warrants granted is estimated at the grant date, using the Black-Scholes option pricing model, and the expense is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant. The grant date fair value of employee share options and similar instruments is estimated using the Black-Scholes option pricing model on the basis of the fair value of the underlying common stock on the measurement date, adjusted for the unique characteristics of those equity instruments, using the assumptions noted in the table below. Expected volatility is based on the historical volatility of a peer group of publicly traded companies. The expected term of options and warrants was based upon the expected life of the option or warrant, and the risk-free rate is based on the U.S. Treasury Constant Maturity rate.

 

There were no options or warrants issued during either of the periods ending September 30, 2020 and 2019.

 

9. COMMITMENTS AND CONTINGENCIES

 

Lease

 

The Company leases office space located at 951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487 from WPT Land 2 L.P., for a gross rent of approximately $5,700 plus sales tax per month. The lease terminates September 30, 2020 and has been extended for a further three years to August 31, 2023. The Company’s subsidiary in Germany occupied premises on a rolling 12 month lease agreement with a 3 month notice period of EUR1,650 per month (approximately $1,815), which was terminated effective June 30, 2020. Rent expense for the nine months ended September 30, 2020 and 2019 for the continuing operations was $59,008 and $57,202 respectively. See Note 5.

 

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Potential German tax liability

 

In June 2012 the Company’s NovaVision German subsidiary received a preliminary assessment for Magdeburg City trade tax of €75,000 (approximately $82,000), with an additional interest charge of €12,000 (approximately $13,200). This assessment is for the 2010 fiscal year and relates to the Company’s acquisition of the assets of the former NovaVision, Inc. An initial assessment for corporate tax for the same period was preliminarily reduced to zero. The Company did not accept this trade tax assessment and appealed against it to the relevant tax authorities with a view to its reduction. The relevant tax authorities agreed to suspend the assessment pending the outcome of certain court hearings and proposed tax legislation, and the Company agreed to make monthly payments on account totaling €75,000 (approximately $82,000) which were completed in October 2016 and fully expensed. At that time the Company appealed against the interest charge of €12,000 (approximately $13,200) which the tax authorities did not accept but also agreed to suspend pending the outcome of the hearings and proposed legislation outlined above. Accordingly, the Company has made no provision for this liability in the nine months ended September 30, 2020 and the year ended December 31, 2019 respectively.

 

10. CONSULTING AND OTHER AGREEMENTS

 

The following agreements were entered into or remained in force during the period ended September 30, 2020:

 

Consulting Agreement with Fountainhead

 

In March 2017 and effective April 1, 2017, the Company amended the Fountainhead Consulting Agreement (“the Amended Agreement”). Under the Amended Agreement, fees of $450,000 are payable to Fountainhead, with an option to receive $5,000 per month in cash and the remainder payable in Company Common Stock issued at the higher of $0.21 and the average price for the 30 days prior to issuance, and deliverable at the end of each fiscal quarter. The Consulting Agreement also contains provisions for Fountainhead to receive a higher proportion of its fees in cash subject to certain future liquidity events and Board approval. Under the terms of the Amended Agreement, Fountainhead provides the executive management team of the Company, including the positions of CEO, President and CFO, whose employment agreements with the Company stipulate they receive no remuneration from the Company.

 

During the nine months ended September 30, 2020 and September 30, 2019, under the terms of the Amended Agreement, Fountainhead received total fees of $337,500, which were paid through the issuance of 1,607,142 shares of Company Common Stock.

 

11. RELATED PARTY TRANSACTIONS

 

Peter Zachariou and David Cantor, directors of the Company, are investment managers of Fountainhead which owned, at September 30, 2020, 59.7% of the Company’s Common Stock and 70% of the Company’s Preferred D Stock. Peter Zachariou owns 26% of the Company’s Preferred D Stock. Adrian Liddell, Chairman, is a consultant for Fountainhead.

 

During each of the nine months ended September 30, 2020 and September 30, 2019, under the terms of the Consulting Agreement referred to in note 10, the Company issued 1,607,142 shares of Common Stock to Fountainhead for fees of $337,500.

 

During each of the nine months ended September 30, 2020 and 2019, the Company accrued an aggregate of $324,370 of Preferred D Stock dividends, of which $226,037 was in respect of Fountainhead and $83,386 was in respect of Peter Zachariou.

 

During the nine months ended September 30, 2020 and 2019 the Company issued unsecured loan notes to Fountainhead for a total of $80,000 and $17,873, respectively. The loan notes bear interest at a rate of 10% and are due on demand or by their one-year anniversary.

 

There were no other related party transactions during the nine months ended September 30, 2020 and 2019.

 

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12. CONCENTRATION

 

Vycor Medical sells its neurosurgical devices in the US primarily direct to hospitals, and internationally through distributors who in turn sell to hospitals.

 

Sales Concentration:

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Number of customers over 10%     0       1       1       1  
Percentage of sales     0 %     12 %     14 %     10 %

 

Accounts Receivable Concentration

 

    At September 30,     At December 31,  
    2020     2019  
             
Number of customers over 10%     2       1  
Percentage of accounts receivable      11% and 15 %     37 %

 

The Company has three sub-contract manufacturers from which it purchases, respectively, VBAS injection molded parts, completed and sterilized VBAS units, and VBAS extension arms. Purchases from these manufacturers vary from quarter to quarter, with no purchases in some quarters, however on an annual basis purchases from each manufacturer represent over 10% of total annual purchases.

 

13. SUBSEQUENT EVENTS

 

The Company has evaluated the existence of events and transactions subsequent to the balance sheet date through the date the unaudited consolidated financial statements were issued and has determined that there were no significant subsequent events or transactions which would require recognition or disclosure in the financial statements.

 

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

Forward Looking Statements

 

This Interim Report on Form 10-Q contains, in addition to historical information, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PLSRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) regarding Vycor Medical, Inc. (the “Company” or “Vycor,” also referred to as “us”, “we” or “our”). Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements involve risks and uncertainties. Forward-looking statements include statements regarding, among other things, (a) our projected sales, profitability, and cash flows, (b) our growth strategies, (c) anticipated trends in our industries, (d) our future financing plans and (e) our anticipated needs for working capital. They are generally identifiable by use of the words “may,” “will,” “should,” “anticipate,” “estimate,” “plans,” “potential,” “projects,” “continuing,” “ongoing,” “expects,” “management believes,” “we believe,” “we intend” or the negative of these words or other variations on these words or comparable terminology. These statements may be found under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Business,” as well as in this Form 10-Q generally. In particular, these include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results.

 

Any or all of our forward-looking statements in this report may turn out to be inaccurate. They can be affected by inaccurate assumptions we might make or by known or unknown risks or uncertainties. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially as a result of various factors, including, without limitation, the risks outlined under “Risk Factors” and matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to publicly update any forward-looking statements, whether as the result of new information, future events, or otherwise. We intend that all forward-looking statements be subject to the safe harbor provisions of the PSLRA.

 

1. Organizational History

 

The Company was formed as a limited liability company under the laws of the State of New York on June 17, 2005 as “Vycor Medical LLC”. On August 14, 2007, we converted into a Delaware corporation and changed our name to “Vycor Medical, Inc.”. The Company’s listing went effective on February 2009 and on November 29, 2010 Vycor completed the acquisition of substantially all of the assets of NovaVision, Inc. (“NovaVision”) and on January 4, 2012 Vycor, through its wholly-owned NovaVision subsidiary, completed the acquisition of all the shares of Sight Science Limited (“Sight Science”).

 

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2. Overview of Business

 

Vycor is dedicated to providing the medical community with innovative and superior surgical and therapeutic solutions and operates two distinct business units within the medical device industry. Vycor Medical designs, develops and markets medical devices for use in neurosurgery. NovaVision provides non-invasive rehabilitation therapies for those who have vision disorders resulting from neurological brain damage such as that caused by a stroke. Both businesses adopt a minimally or non-invasive approach. Both technologies have strong sales growth potential, address large potential markets and have the requisite regulatory approvals. The Company has 65 issued or allowed patents and a further 9 pending. The Company leverages joint resources across the divisions to operate in a cost-efficient manner.

 

The Company periodically engages in discussions with potential strategic partners for or purchasers of each or both of our operating divisions. In April 2020, the board of Vycor took the decision to close the German operations of NovaVision, including the German office and NovaVision GmbH, and instead migrate to a licensed business model; in June 2020 Vycor announced that it would be entering into a license agreement and transition agreement (the “Agreements”) with HelferApp GmbH, a cognitive therapy specialist. Under the Agreements, HelferApp is licensed to provide NovaVision’s products and therapies in Germany, Austria and Switzerland to patients and professionals; and has assumed responsibility for the current patients of NovaVision in the territory. The NovaVision German office was closed effective June 30, 2020.

 

Vycor Medical

 

Vycor Medical designs, develops and markets medical devices for use in neurosurgery. Vycor Medical’s ViewSite Brain Access System (“VBAS”) is a next generation retraction and access system that was fully commercialized in early 2010 and is the first significant technological change to brain tissue retraction in over 50 years in contrast to significant development in most other neuro-surgical technologies. Vycor Medical is ISO 13485:2016 and MDSAP (Medical Device Single Audit Program) certified, and VBAS has U.S. FDA 510(k) clearance and CE Marking for Europe (Class III) for brain and spine surgeries, and regulatory approvals in a number of other international markets. Vycor Medical has 27 granted and 9 pending patents.

 

NovaVision

 

NovaVision provides non-invasive, computer-based rehabilitation therapies targeted at people who have impaired vision as a result of stroke or other brain injury, and has 38 granted patents.

 

Strategy

 

The Company is continuing to execute on a plan to achieve revenue growth and a reduction in cash operating losses1. For Vycor Medical this plan includes in particular: increasing market penetration in the US through broadening of the distribution network and programs to increase penetration in existing hospitals; increasing international growth in territories where we are not represented or under represented; and continued new product development. The first phase of the modification of the existing VBAS product range to make it more compatible with the most common IGS systems was completed in September 2017 and has been well received by surgeons, resulting in increased hospital penetration and revenues particularly in the US. The second phase of the development of further IGS integration is complete, subject to regulatory clearances and approvals. Upon regulatory clearances and product release of this new VBAS AC model range the Company intends to conduct a multi-center study to provide additional clinical data on the product. We will also be exploring with surgeons and focus groups additional selected development work targeted at increasing the ease and applicability of our products to additional common procedures. For NovaVision, given the company’s resources, and the large size and diversity of its end markets, we believe that the most efficient way to tackle the distribution of its broad range of patient and professional products is by partnering with entities that have either direct access to the end users or a desire and financial wherewithal to leverage the NovaVision therapy platform. As a result, the Company has now closed the NovaVision German office and is entering into a license agreement with HelferApp, a cognitive therapy specialist, for Germany, Austria and Switzerland, and is seeking similar partnerships in other territories with regional companies able to leverage NovaVision’s clinically supported vision therapies. Management is also open to a broad range of alternatives for NovaVision as a whole, which could comprise distribution and marketing partnerships, licensing, merger or sale.

 

The NovaVision German operation accounted for a very substantial proportion of Vycor’s operating cash loss1 during the year ended December 31, 2019. This proportion has been reduced during the nine months ended September 30, 2020 for two reasons: firstly, the selling, general and administrative expenses of NovaVision Germany have been reduced as the operation has been wound down; and secondly due to the impact on Vycor revenues from Covid-19 discussed below.

 

 

1 Operating Loss before Depreciation, Amortization and non-cash Stock Compensation

 

 18 

 

 

COVID-19

 

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to a number of other countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, as of the time of the filing of this Form 10-Q, several states in the United States remain in states of emergency, and travel restrictions continue to be applied in several countries around the world, including the United States. Vycor Medical experienced a reduction in demand during the three months ended September 30, 2020 in the US and Europe. Although neurosurgery is not considered an elective procedure, general hospital dislocation and diversion of resources away from non-emergency surgeries, or surgeries that can be postponed for a short period without harm, has impacted our revenues during the nine months ended September 30, 2020 and could continue to do so. In addition, sales and marketing efforts by Vycor’s representatives have been disrupted or curtailed due to lockdown and social distancing, and this has and may continue to hinder the recovery of revenues. While our operations are principally located in the United States, and our sub-contract manufacturers are located in the United States, we participate in a global supply chain, and the existence of a worldwide pandemic, the fear associated with COVID-19, or any, pandemic, and the reactions of governments around the world in response to COVID-19, or any, pandemic, to regulate the flow of labor and products and impede the travel of personnel, may impact our ability to conduct normal business operations, which could adversely affect our results of operations and liquidity. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects on our manufacturing output and delivery schedule. Although we have implemented business continuity plans for our offices and personnel to enable continuity of service remotely, if a critical number of our employees become too ill to work, or we are not able to access a sufficient quantity of our inventory for shipment due to enforced office closures, our production ability could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to COVID-19, or any other, pandemic, demand for our products could also be materially adversely affected in a rapid manner. Global health concerns, such as COVID-19, could also result in social, economic, and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations.

 

Comparison of the Three Months Ended September 30, 2020 to the Three Months Ended September 30, 2019

 

Revenue and Gross Margin:

 

   Three months ended 
   September 30, 
   2020   2019   % Change 
Revenue:               
Vycor Medical  $250,648   $301,053    -17%
NovaVision  $25,277   $21,831    16%
   $275,925   $322,884    -15%
Gross Profit               
Vycor Medical  $211,089   $273,146    -23%
NovaVision  $24,285   $20,776    17%
   $235,374   $293,922    -20%

 

Vycor Medical recorded revenue of $250,648 from the sale of its products for the three months ended September 30, 2020, a decrease of $50,405 over the same period in 2019. Sales of VBAS devices have been significantly disrupted during the 2020 period in the US and internationally by COVID-19. Although neurosurgery is not considered an elective procedure, general hospital dislocation and diversion of resources away from non-emergency surgeries, or surgeries that can be postponed for a short period without harm, has impacted our revenues during the three months ended September 30, 2020. In addition, sales and marketing efforts by Vycor’s representatives have been disrupted or curtailed due to lockdown and social distancing, and this has hindered the recovery of revenues. Sales in the three months ended September 30, 2020 showed some recovery over the three month period ended June 30, 2020, increasing by $31,651 or 14%, primarily in the US. Gross margin of 84% and 91% was recorded for the three months ended September 30, 2020 and 2019, respectively.

 

NovaVision recorded revenues of $25,277 for the three months ended September 30, 2020, an increase of $3,446 over the same period in 2019. Gross margin was 96%, compared to 95% for the same period in 2019.

 

 19 

 

 

Selling, General and Administrative Expenses:

 

Selling, general and administrative expenses decreased by $17,121 to $427,250 for the three months ended September 30, 2020 from $444,371 for the same period in 2019. Included within Selling, General and Administrative Expenses are non-cash charges for stock based compensation as the result of amortizing employee and non-employee shares, warrants and options which have been issued by the Company over various periods. The charge for the three months ended September 30, 2020 was $126,500, a $7,000 decrease from the charge in 2019 of $133,500, following the departure from the Board of Oscar Bronsther from July 1, 2020. Also included within Selling, General and Administrative Expenses are Sales Commissions, which decreased by $3,955 from $56,761 to $52,806 in 2020, reflecting the reduced level of sales in the US due to COVID-19.

 

The remaining Selling, General and Administrative expenses decreased by $6,166 from $254,110 to $247,944 in 2020.

 

An analysis of the change in cash and non-cash G&A is shown in the table below:

 

   Cash G&A   Non-Cash G&A 
Legal, patent, audit/accounting, regulatory   (11,872)   - 
Board, financial and scientific advisory   (6,075)   (7,000)
Payroll   (2,380)   - 
Other (sales/travel/regulatory/premises)   14,161    - 
Commissions   (3,955)   - 
Total change   (10,121)   (7,000)

 

Interest Expense:

 

Interest comprises expense on the Company’s debt and insurance policy financing. Related Party Interest expense for the three months ended September 30, 2020 was $7,836 compared to $5,315 for 2019. Other Interest expense for the three months ended September 30, 2020 was $12,099 compared to $12,109 for 2019.

 

Comparison of the Nine Months Ended September 30, 2020 to the Nine Months Ended September 30, 2019

 

Revenue and Gross Margin:

 

   September 30, 
   2020   2019   % Change 
Revenue:               
Vycor Medical  $776,932   $988,786    -21%
NovaVision  $73,498   $72,607    1%
   $850,430   $1,061,393    -20%
Gross Profit               
Vycor Medical  $683,125   $895,484    -24%
NovaVision  $68,967   $68,463    1%
   $752,092   $963,947    -22%

 

Vycor Medical recorded revenue of $776,932 from the sale of its products for the nine months ended September 30, 2020, a decrease of $211,854. Sales of VBAS devices have been significantly disrupted, particularly from March to June, in the US and internationally by COVID-19 Although neurosurgery is not considered an elective procedure, general hospital dislocation and diversion of resources away from non-emergency surgeries, or surgeries that can be postponed for a short period without harm, has impacted our revenues during the six months ended September 30, 2020. In addition, sales and marketing efforts by Vycor’s representatives have been disrupted or curtailed due to lockdown and social distancing, and this has hindered the recovery of revenues. Gross margin of 88% was recorded for the nine months ended September 30, 2020 versus 91% for the same period in 2019.

 

NovaVision recorded revenues of $73,498 for the nine months ended September 30, 2020, an increase of $891 over the same period in 2019 and gross margin of 94%, compared to 94% for the same period in 2019.

 

 20 

 

 

Selling, General and Administrative Expenses:

 

Selling, general and administrative expenses decreased by $84,111 to $1,260,742 for the nine months ended September 30, 2020 from $1,344,853 for the same period in 2019. Included within Selling, General and Administrative Expenses are non-cash charges for share based compensation as the result of amortizing employee and non-employee shares, warrants and options which have been issued by the Company over various periods. The charge for the nine months ended September 30, 2020 was $393,500, a decrease of $7,940 over $401,440 in 2019, following the departure from the Board of Oscar Bronsther from July 1, 2020. Also included within Selling, General and Administrative Expenses are Sales Commissions, which decreased by $38,259 from $187,622 to $149,363, reflecting the reduced level of sales in the US due to COVID-19.

 

The remaining Selling, General and Administrative expenses decreased by $37,912 from $755,791 to $717,879. Regulatory fees reduced by $49,367 reflecting the completion of the transition to a new EU Notified Body for Vycor; patent fees reduced by $20,296 reflecting the level of patent filing and prosecution activity in the 2019 period; the professional fees related to the closure of NovaVision Germany and the license agreement resulted accounting and legal fees increasing by $17,303.

 

An analysis of the change in cash and non-cash G&A is shown in the table below:

 

   Cash G&A   Non-Cash G&A 
Legal, patent, audit/accounting, regulatory   (47,495)   - 
Board, financial and scientific advisory   (18,915)   (7,000)
Sales, marketing and travel   (7,215)   - 
Payroll   12,234    (939)
Other (travel/regulatory/premises)   23,478    - 
Commissions   (38,259)   - 
Total change   (76,172)   (7,939)

 

Interest Expense:

 

Interest comprises expense on the Company’s debt and insurance policy financing. Related Party Interest expense for the nine months ended September 30, 2020 was $21,846 compared to $15,331 for 2019. Other Interest expense for the nine months ended September 30, 2020 was $36,033 compared to $36,074 for 2019.

 

 Income (loss) from Discontinued Operations:

 

 The reduction in operating loss for the three and nine months ended September 30, 2020 compared to the same periods in 2019, from $26,083 to $13,069 and from $96,113 to $51,294, respectively, is primarily due to a reduction in Selling, general and administrative expenses as a result of the wind-down of operations in Germany.

 

 21 

 

 

Liquidity

 

The following table shows cash flow and liquidity data for the periods ended September 30, 2020 and December 31, 2019:

 

   September 30, 2020   December 31, 2019   $ Change 
Cash  $74,935   $60,717   $14,218 
Accounts receivable, inventory and other current assets  $409,969   $595,715   $(185,746)
Total current liabilities  $(2,848,749)  $(2,446,406)  $(402,343)
Working capital  $(2,363,845)  $(1,789,974)  $(573,871)
Cash provided by financing activities  $307,634   $43,117   $264,517 

 

Operating Activities. Cash used in operating activities comprises net loss adjusted for non-cash items and the effect of changes in working capital and other activities. The net repayment of normal insurance financing should also be taken into account when considering cash used in operating activities.

 

The following table shows the principle components of cash used in operating activities during the nine months ended September 30, 2020 and 2019, with a commentary of changes during the periods and known or anticipated future changes:

 

   September 30, 2020   September 30, 2019   $ Change 
Net loss  $(622,122)  $(575,211)  $(46,911)
                
Adjustments to reconcile net loss to cash used in operating activities:               
Amortization and depreciation of assets  $44,922   $46,371   $(1,449)
Share based compensation  $393,500   $401,440   $(7,940)
Other  $9,418   $9,418   $0 
   $447,840   $457,229   $(9,389)
                
Net loss adjusted for non-cash items  $(174,282)  $(117,982)  $(56,300)
Changes in working capital               
Accounts receivable  $137,154   $44,521   $92,633 
Accounts payable and accrued liabilities  $(231,277)  $78,700   $(309,977)
Inventory  $19,221   $(34,455)  $53,676 
Prepaid expenses and net insurance financing repayments  $21,695   $(8,065)  $29,760 
Accrued interest (not paid in cash)  $57,879   $51,233   $6,646 
Changes in discontinued operations, net  $(54,218)  $497   $(54,715)
   $(49,546)  $132,431   $(181,977)
                
Cash provided by (used in) operating activities, adjusted for net insurance repayments  $(223,828)  $14,449   $(238,277)

 

 22 

 

 

The adjustments to reconcile net loss to cash of $174,282 in the period have no impact on liquidity. The change in Net loss adjusted for non-cash items of ($56,300) was primarily due to the impact of COVID-19 on the Vycor division sales, which also accounts for the reduction in accounts receivable of $137,154. At December 31, 2019 there was an increase in accounts payable and accrued liabilities mainly due to expenditure on regulatory for the transition to a new EU Notified Body, and regulatory and testing for the VBAS development occurring during the fourth quarter. The change in accounts payable and accrued liabilities of $231,277 was mainly due to the settlement of these accounts. The net change of $54,218 in discontinued operations comprised a reduction of $72,331 in liabilities being transferred to the license partner, NovaVision, Inc. or eliminated; offset by a $18,113 reduction in assets being to the license partner, NovaVision, Inc. or written off.

 

Additional inventory of $40,559 was purchased during the nine months ended September 30, 2020 as part of normal production, and the Company anticipates purchasing additional new inventory of approximately $80,000 during the next twelve months.

 

Investing Activities. Cash used in investing activities of continuing operations for the nine months ended September 30, 2020 was $60,132, which reflected expenditure on the second phase of modifying the VBAS product suite to make it easier to integrate with IGS. The Company anticipates additional expenditures for this second phase, including work to obtain regulatory clearances and approvals, of approximately $40,000. The $9,574 change in investing activities of discontinued operations was due the writing off of long term assets.

 

Financing Activities. During the nine months ended September 30, 2020 the Company received funds of $80,000 in respect of loans from Fountainhead. The Company also received a loan of $58,600 during the period, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, and a $150,000 loan from the Small Business Administration (“SBA”) EIDL program.

 

Liquidity and Plan of Operations, Ability to Continue as a Going Concern

 

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of $946,492 for the nine months ended September 30, 2020 and has not generated sufficient positive cash flows from operations. As of September 30, 2020 the Company had a working capital deficiency of $688,725, excluding related party liabilities of $1,675,120. These conditions, among others, raise substantial doubt regarding our ability to continue as a going concern. The unaudited consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

 

As described earlier in this ITEM 2 “Strategy”, the Company is continuing to execute on a plan to achieve revenue growth and a reduction in cash operating losses2. For Vycor Medical this plan includes in particular: increasing market penetration in the US through broadening of the distribution network and programs to increase penetration in existing hospitals; increasing international growth in territories where we are not represented or under represented; and continued new product development. The first phase of the modification of the existing VBAS product range to make it more compatible with the most common IGS systems was completed in September 2017 and has been well received by surgeons, resulting in increased hospital penetration and revenues particularly in the US. The second phase of the development of further IGS integration is complete subject to regulatory clearances and approvals. Upon regulatory clearances and product release of this new VBAS AC model range the Company intends to conduct a multi-center study to provide additional clinical data on the product. We will also be exploring with surgeons and focus groups additional selected development work targeted at increasing the ease and applicability of our products to additional common procedures. For NovaVision, given the company’s resources, and the large size and diversity of its end markets, we believe that the most efficient way to tackle the distribution of its broad range of patient and professional products is by partnering with entities that have either direct access to the end users or a desire and financial wherewithal to leverage the NovaVision therapy platform. As a result, the Company has now closed the NovaVision German office and is entering into a license agreement with HelferApp, a cognitive therapy specialist, for Germany, Austria and Switzerland, and is seeking similar partnerships in other territories with regional companies able to leverage NovaVision’s clinically supported vision therapies. Management is also open to a broad range of alternatives for NovaVision as a whole, which could comprise distribution and marketing partnerships, licensing, merger or sale.

 

 

2 Operating Loss before Depreciation, Amortization and non-cash Stock Compensation

 

 23 

 

 

However, the Company believes it may not have sufficient cash to meet its various cash needs through November 30, 2021 unless the Company is able to obtain additional cash from the issuance of debt or equity securities. Included within the working capital deficiency above is a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”), together with accrued interest of $316,798, which has a maturity date of December 31, 2020, having been extended on a number of occasions from its initial due date of June 11, 2011. At this time, it is not known whether any further extension of the note beyond December 31, 2020 will be available. Fountainhead, the Company’s largest shareholder, has provided working capital funding to the Company on an as-needed basis, although there is no guarantee that this will continue to be the case. The Company may consider seeking additional equity or debt funding, although there is no assurance that this would be available on acceptable terms or at all. If adequate funds are not available, the Company may have to delay or curtail development or commercialization of products, or cease some of its operations.

 

Critical Accounting Policies and Estimates

 

Uses of estimates in the preparation of financial statements

 

The preparation of unaudited consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the unaudited consolidated financial statements and accompanying notes. Actual results could differ from those estimated. To the extent management’s estimates prove to be incorrect, financial results for future periods may be adversely affected. Significant estimates and assumptions contained in the accompanying unaudited consolidated financial statements include management’s estimate of the allowance for uncollectible accounts receivable, amortization of intangible assets, and the fair values of options and warrant included in the determination of debt discounts and stock-based compensation.

 

A detailed description of our significant accounting policies can be found in our most recent Annual Report on Form 10-K for the year ended December 31, 2019.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

(a) Disclosure Controls and Procedures

 

We are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer (also our principal executive officer) and our chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

 

The Company’s management, including our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”), have evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, our CEO and our CFO have concluded that, as of the end of such period, the Company’s disclosure controls and procedures were effective as of that date to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that information required to be disclosed by the Company in the reports its files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its CEO and its CFO, as appropriate, to allow timely decisions regarding required disclosure. There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

(b) Changes in Internal Controls

 

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

 

The Company’s management, including the Company’s CEO and CFO, does not expect that the Company’s internal control over financial reporting will prevent all errors and all fraud. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.

 

 24 

 

 

PART II

 

ITEM 1. LEGAL PROCEEDINGS

 

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. As of November 13, 2020, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

 

ITEM 1A. RISK FACTORS.

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

 

Issuance Type  Security   Shares 
FHC Management Fees   Common    1,607,142 

 

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

 

None.

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable.

 

ITEM 5. OTHER INFORMATION

 

None

 

Index to Exhibits

 

31.1   Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
31.2   Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
     
32.1   Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
     
32.2   Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

 25 

 

 

SIGNATURES

 

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on November 13, 2020

 

  Vycor Medical, Inc.
  (Registrant)
     
  By: /s/ Peter C. Zachariou
    Peter C. Zachariou
    Chief Executive Officer and Director
(Principal Executive Officer)
     
  Date November 13, 2020
     
  By: /s/ Adrian Liddell
    Adrian Liddell
    Chairman of the Board and Director
    (Principal Financial and Accounting Officer)
     
  Date November 13, 2020

 

 26 

EX-31.1 2 ex31-1.htm

 

EXHIBIT 31.1

 

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

I, Peter Zachariou, certify that:

 

  1. I have reviewed this Form 10-Q for the period ended September 30, 2020 of Vycor Medical, Inc.;
     
  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 13, 2020  
   
/s/ Peter Zachariou  
Peter C. Zachariou  
Principal Executive Officer  

 

 

 

EX-31.2 3 ex31-2.htm

 

EXHIBIT 31.2

 

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

I, Adrian Liddell, certify that:

 

  1. I have reviewed this Form 10-Q for the period ended September 30, 2020 of Vycor Medical, Inc.;
     
  2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
     
  3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
     
  4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

 

  a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
     
  b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
     
  c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
     
  d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

  5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

  a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
     
  b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: November 13, 2020  
   
/s/ Adrian Liddell  
Adrian Liddell  
Principal Financial Officer  

 

 

 

EX-32.1 4 ex32-1.htm

 

EXHIBIT 32.1

 

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Vycor Medical, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

 

The report on Form 10-Q for the period ended September 30, 2020 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 13, 2020

 

  /s/ Peter Zachariou
  Peter Zachariou
  Principal Executive Officer

 

A signed original of this written statement required by Section 906 has been provided to VYCOR MEDICAL, INC. and will be retained by VYCOR MEDICAL, INC. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

EX-32.2 5 ex32-2.htm

 

EXHIBIT 32.2

 

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

 

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), the undersigned officer of Vycor Medical, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge, that:

 

The report on Form 10-Q for the period ended September 30, 2020 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

 

Date: November 13, 2020

 

  /s/ Adrian Liddell
  Adrian Liddell
  Principal Accounting Officer

 

A signed original of this written statement required by Section 906 has been provided to VYCOR MEDICAL, INC. and will be retained by VYCOR MEDICAL, INC. and furnished to the Securities and Exchange Commission or its staff upon request.

 

 

 

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General and administrative Total Operating expenses Operating loss Other income (expense) Interest expense: Related Party Interest expense: Other Loss on foreign currency exchange Gain on other income Total Other Income (expense) Loss Before Credit for Income Taxes Credit for income taxes Net Loss from continuing operations Income (Loss) from discontinued operations, net of tax Net loss Preferred stock dividends Net Loss available to common stockholders Other Comprehensive Loss Foreign Currency Translation Adjustment Comprehensive Loss Net Loss Per Share - basic and diluted Loss from continuing operations Income (Loss) from discontinued operations Net loss available to common stockholders Weighted Average Number of Shares Outstanding - Basic and Diluted Statement [Table] Statement [Line Items] Balance Balance, shares Issuance of stock for board and consulting fees Issuance of stock for board and consulting fees, shares Directors deferred compensation granted Issuance of shares pursuant to exercise of warrants Issuance of shares pursuant to exercise of warrants, shares Accumulated Comprehensive Loss Net loss Balance Balance, shares Statement of Cash Flows [Abstract] Cash flows from operating activities: Net loss Adjustments to reconcile net loss to cash used in operating activities: Amortization of intangible assets Depreciation of fixed assets Inventory provision Stock based compensation Changes in assets and liabilities: Accounts receivable Inventory Prepaid expenses Accrued interest - Related Party Accrued interest - Other Accounts payable Accrued liabilities - Other Changes in discontinued operations, net Cash used in operating activities Cash flows from investing activities: Purchase of fixed assets Changes in investing activities of discontinued operations, net Cash used in investing activities Cash flows from financing activities: Proceeds from Notes Payable - Related Party Proceeds from Paycheck Protection Program and EIDL Proceeds net of repayments Notes Payable - Other Cash provided by financing activities Effect of exchange rate changes on cash Net increase (decrease) in cash Cash at beginning of period Cash at end of period Non-Cash Transactions: Common stock issued to related party for payment of accrued liabilities Organization, Consolidation and Presentation of Financial Statements [Abstract] Basis of Presentation Accounting Policies [Abstract] Significant Accounting Policies Discontinued Operations and Disposal Groups [Abstract] Discontinued Operations Debt Disclosure [Abstract] Notes Payable Leases [Abstract] Lease Segment Reporting [Abstract] Segment Reporting, Geographical Information Equity [Abstract] Equity Share-based Payment Arrangement [Abstract] Share-Based Compensation Commitments and Contingencies Disclosure [Abstract] Commitments and Contingencies Consulting And Other Agreements Consulting and Other Agreements Related Party Transactions [Abstract] Related Party Transactions Risks and Uncertainties [Abstract] Concentration Subsequent Events [Abstract] Subsequent Events Principles of Consolidation Recent Accounting Pronouncements Discontinued Operations Leases Net Loss Per Share Covid-19 Schedule of Common Stock Not Included in Calculation of Diluted Net Loss Per Share Schedule of Loss from Discontinued Operations Summary of Notes Payable Schedule of Supplemental Balance Sheet Information Related to Leases Schedule of Business Segments Information Summary of Geographic Information Schedule of Stock Warrants Schedule of Stock Options Schedule of Concentration Working capital deficiency Related party liabilities Term note Accrued interest Maturity date Potential shares of common stock that are not included in the calculation of diluted net loss per share Written off related to assets and liabilities transferred operations Legal expenses funded Accruals employee costs Revenue Cost of Goods Sold Gross Profit Depreciation and Amortization Selling, general and administrative Total Operating expenses Operating loss Loss on foreign currency exchange Other income (loss) Total Other Income (expense) Income (loss) Before Credit for Income Taxes Credit for income taxes Loss from discontinued operations, net of tax Note payable other Conversion price Debt conversion shares issued Warrant to purchase common stock Warrant exercise price Warrants exercisable term Short-term Debt, Type [Axis] Total Related Party Notes Payable Total Other Notes Payable Collaborative Arrangement and Arrangement Other than Collaborative [Axis] Value of notes issued Notes interest rate Debt due date Debt due date description Debt maturity date Loans payable Monthly payments Debt term Rent expense Lease expiration date Lease renewal term Lease term description Operating Lease ROU Assets Operating Lease ROU Assets Operating Lease Liabilities Current portion Operating Lease Liabilities Long-term portion Operating Lease Liabilities Number of reportable segments Segments [Axis] Gross Profit Total Assets Statistical Measurement [Axis] Shares issued for services Value of shares issued for services Number of common stock issued for fees Number of common stock issued for fees, value Weighted-average remaining contractual life of outstanding warrants Weighted-average remaining contractual life of outstanding options Number of shares Warrants Outstanding, Beginning Balance Number of shares Warrants, Granted Number of shares Warrants, Exercised Number of shares Warrants, Cancelled or expired Number of shares Warrants Outstanding, Ending Balance Weighted average exercise price per share Warrants, Outstanding, Beginning Balance Weighted average exercise price per share Warrants, Granted Weighted average exercise price per share Warrants, Exercised Weighted average exercise price per share Warrants, Cancelled or expired Weighted average exercise price per share Warrants, Outstanding, Ending balance Number of shares Options Outstanding, Beginning Balance Number of shares Options, Granted Number of shares Options, Exercised Number of shares Options, Cancelled or expired Number of shares Options Outstanding, Ending Balance Weighted average exercise price per share Options, Outstanding, Beginning Balance Weighted average exercise price per share Options, Granted Weighted average exercise price per share Options, Exercised Weighted average exercise price per share Options, Cancelled or Expired Weighted average exercise price per share Options, Outstanding, Ending balance Share-based compensation Stock granted but not issued Total unrecognized compensation costs Lease termination date Trade tax reduced Interest expenses Payment of fees Stock option cash Common stock exercise price Equity ownership percentage Accrued dividends Unsecured loan notes issued Unsecured loan notes interest rate Concentration risk, percentage Number of customers over 10% Accredited Investors [Member] Accrued interest other Accrued interest related party. For an unclassified balance sheet, the accumulated amortization, as of the reporting date, representing the periodic patents. Amendment Agreement [Member] Consultancy Agreement [Member] Consultancy [Member] Consulting Agreement [Member] Consulting and other agreements [Text Block] Customer One [Member] Customer Three [Member]. Customer Two [Member] Debentures Convertible into Common Stock [Member] Deferred Compensation Plan [Member] Directors Deferred Compensation Plan [Member]. Directors deffered compensation granted. Directors [Member] Employee Stock Options [Member] EuroAmerican Investment Corp [Member] Euro Currency [Member] Exchange Agreement [Member] Fountainhead Capital Management Limited [Member] Fountainhead Consulting Agreement [Member] Fountainhead [Member] Increase decrease accrued interest other. Insurance Policy Finance Agreements [Member] Sum of the carrying amounts as of the balance sheet date of all intangible asset and other assets that are expected to be realized in cash, sold or consumed after one year or beyond the normal operating cycle, if longer. Internally Developed Software [Member] International Distributor [Member] Issuance of shares pursuant to exercise of warrants. Issuance of shares pursuant to exercise of warrants, shares. Management and Employees [Member] Manufacturer One [Member]. Manufacturer Three [Member] Manufacturer Two [Member]. March 2017 and effective April 1, 2017 [Member] March 2016 Compensation Plan [Member] Milestones [Member] No Customer [Member] Non-employee Directors [Member] Non-employee [Member] NovaVision, Inc [Member] NovaVision [Member] Number of customers. Operating lease assets current portion. Peter Zachariou [Member] Preferred C [Member] Preferred D [Member] Preferred D Stock dividends [Member] Preferred D Stock [Member] Preferred shares convertible to common stock [Member]. Purchase [Member]. Purchased Software [Member] Related Parties [Member] Robert Anderson [Member] Sales and excise tax payable reduction current and noncurrent. Schedule of supplemental balance sheet information related to leases [Table Text Block] Weighted average exercise price per share Warrants, Cancelled or expired. Weighted average exercise price per share Warrants, Outstanding. Weighted average exercise price per share Warrants, Exercised. Weighted average exercise price per share Warrants, Granted. Short-Term Lease Agreement [Member]. Stock granted but not issued. Stock Option Outstanding [Member] Techmed Inc [Member] Term Note [Member] Therapy Devices [Member] Trademarks and Website [Member] 2008 Stock Option Plan [Member] 2018 Stock Incentive Plan [Member]. 2018 Stock Option Plan [Member] Unsecured Loan [Member] Vycor Medical [Member] Warrants to Purchase Common Stock [Member] Website. Working capital deficiency. Office Space [Member] Citizens Bank [Member] Payroll Protection Program [Member] Discontinued Operations [Member] Small Business Administration [Member] Covid-19 [Policy Text Bock] Warrants exercisable term. Gain on other income. Proceeds from paycheck protection program and eidl. Legal expenses funded. Disposal group including discontinued operation other income loss. Written off related to assets and liabilities transferred operations. Accruals employee costs. Paycheck Protection Program [Member] Disposal group including discontinued operation other income (expense). Accrued liabilities related party current. Depreciation and Amortization. DirectorsDeferredCompensationPlanMember Assets, Current IntangibleAndOtherAssetTotal Liabilities, Current Treasury Stock, Value Stockholders' Equity Attributable to Parent Liabilities and Equity Gross Profit [Default Label] Operating Expenses Operating Income (Loss) Interest Expense, Related Party Interest Expense, Other Foreign Currency Transaction Loss, before Tax Nonoperating Income (Expense) Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest Income (Loss) from Continuing Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest Net Income (Loss) Attributable to Parent Preferred Stock Dividends, Income Statement Impact Comprehensive Income (Loss), Net of Tax, Attributable to Parent Shares, Outstanding Increase (Decrease) in Accounts Receivable Increase (Decrease) in Inventories Increase (Decrease) in Prepaid Expense Increase (Decrease) in Accounts Payable Increase (Decrease) in Other Accrued Liabilities Net Cash Provided by (Used in) Operating Activities Payments to Acquire Property, Plant, and Equipment Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Period Increase (Decrease), Including Exchange Rate Effect Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations Discontinued Operations, Policy [Policy Text Block] Disposal Group, Including Discontinued Operation, Revenue Disposal Group, Including Discontinued Operation, Costs of Goods Sold DisposalGroupIncludingDiscontinuedOperationDepreciationsAndAmortization Discontinued Operation, Tax Effect of Discontinued Operation Operating Lease, Liability Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Exercised Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Expirations ShareBasedCompensationArrangementByShareBasedPaymentAwardNonOptionsEquityInstrumentsOutstandingWeightedAverageExercisePrice Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number Share-based Compensation Arrangement by Share-based Payment Award, Options, Expirations in Period Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price Share-based Compensation Arrangements by Share-based Payment Award, Options, Expirations in Period, Weighted Average Exercise Price EX-101.PRE 11 vyco-20200930_pre.xml XBRL PRESENTATION FILE XML 12 R1.htm IDEA: XBRL DOCUMENT v3.20.2
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2020
Nov. 13, 2020
Cover [Abstract]    
Entity Registrant Name VYCOR MEDICAL INC  
Entity Central Index Key 0001424768  
Document Type 10-Q  
Document Period End Date Sep. 30, 2020  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Current Reporting Status Yes  
Entity Interactive Data Current No  
Entity Filer Category Non-accelerated Filer  
Entity Small Business Flag true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   26,895,692
Document Fiscal Period Focus Q3  
Document Fiscal Year Focus 2020  
XML 13 R2.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Balance Sheets (Unaudited) - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Current Assets    
Cash $ 74,935 $ 60,717
Trade accounts receivable 137,397 274,551
Inventory 179,714 208,353
Prepaid expenses and other current assets 90,854 92,694
Current assets of discontinued operations 2,004 20,117
Total Current Assets 484,904 656,432
Fixed assets, net 389,146 364,953
Intangible and Other assets:    
Patents, net of accumulated amortization 14,343 23,326
Security deposits 6,000 6,000
Operating lease - right of use assets 135,003 31,658
Long term assets of discontinued operations 9,574
Total Intangible and Other assets 155,346 70,558
TOTAL ASSETS 1,029,396 1,091,943
Current Liabilities    
Accounts payable 131,117 245,412
Accrued interest: Other 316,798 280,765
Accrued interest: Related party 66,767 44,921
Accrued liabilities - Other 116,085 233,067
Accrued liabilities - Related Party 1,297,480 973,110
Notes payable: Other 555,666 328,032
Notes payable: Related Party 310,873 230,873
Current operating lease liabilities 44,079 28,010
Current liabilities of discontinued operations 9,884 82,216
Total Current Liabilities 2,848,749 2,446,406
Operating lease liability - Long term 88,097
STOCKHOLDERS' DEFICIENCY    
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, 270,307 and 270,307 issued and outstanding as at September 30, 2020 and December 31, 2019 respectively 27 27
Common Stock, $0.0001 par value, 55,000,000 shares authorized at September 30, 2020 and December 31, 2019, 26,999,026 and 25,391,884 shares issued and 26,895,692 and 25,288,550 outstanding at September. 30, 2020 and December 31, 2019 respectively 2,700 2,539
Additional Paid-in Capital 28,699,931 28,306,592
Treasury Stock (103,334 shares of Common Stock as at September 30, 2020 and December 31, 2019 respectively, at cost) (1,033) (1,033)
Accumulated Deficit (30,736,750) (29,790,258)
Accumulated Other Comprehensive Income 127,675 127,670
Total Stockholders' Deficiency (1,907,450) (1,354,463)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 1,029,396 $ 1,091,943
XML 14 R3.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares
Sep. 30, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Preferred stock, par value $ 0.0001 $ 0.0001
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 270,307 270,307
Preferred stock, shares outstanding 270,307 270,307
Common stock, par value $ 0.0001 $ 0.0001
Common stock, shares authorized 55,000,000 55,000,000
Common stock, shares issued 26,999,026 25,391,884
Common stock, shares outstanding 26,895,692 25,288,550
Treasury stock, shares 103,334 103,334
XML 15 R4.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Income Statement [Abstract]        
Revenue $ 275,925 $ 322,884 $ 850,430 $ 1,061,393
Cost of Goods Sold 40,551 28,962 98,338 97,446
Gross Profit 235,374 293,922 752,092 963,947
Operating expenses:        
Depreciation and Amortization 14,495 15,218 43,780 44,855
General and administrative 427,250 444,371 1,260,742 1,344,853
Total Operating expenses 441,745 459,589 1,304,522 1,389,708
Operating loss (206,371) (165,667) (552,430) (425,761)
Other income (expense)        
Interest expense: Related Party (7,836) (5,315) (21,846) (15,331)
Interest expense: Other (12,099) (12,109) (36,033) (36,074)
Loss on foreign currency exchange (484) (3) (829) (207)
Gain on other income 6,000 6,000
Total Other Income (expense) (14,419) (17,427) (52,708) (51,612)
Loss Before Credit for Income Taxes (220,790) (183,094) (605,138) (477,373)
Credit for income taxes
Net Loss from continuing operations (220,790) (183,094) (605,138) (477,373)
Income (Loss) from discontinued operations, net of tax 22,503 (26,515) (16,984) (97,838)
Net loss (198,287) (209,609) (622,122) (575,211)
Preferred stock dividends (162,185) (162,185) (324,370) (324,370)
Net Loss available to common stockholders (360,472) (371,794) (946,492) (899,581)
Other Comprehensive Loss        
Foreign Currency Translation Adjustment 3 7 5 2
Comprehensive Loss $ (198,284) $ (209,602) $ (622,117) $ (575,209)
Net Loss Per Share - basic and diluted        
Loss from continuing operations $ (0.01) $ (0.01) $ (0.02) $ (0.02)
Income (Loss) from discontinued operations 0.00 (0.00) (0.00) (0.00)
Net loss available to common stockholders $ (0.01) $ (0.02) $ (0.04) $ (0.04)
Weighted Average Number of Shares Outstanding - Basic and Diluted 26,365,801 24,222,946 25,832,084 23,689,516
XML 16 R5.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statement of Stockholders' Deficiency (Unaudited) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Common Stock [Member]        
Balance $ 2,646 $ 2,432 $ 2,539 $ 2,324
Balance, shares 26,463,312 24,320,456 25,391,884 23,244,028
Issuance of stock for board and consulting fees $ 54 $ 54 $ 161 $ 162
Issuance of stock for board and consulting fees, shares 535,714 535,714 1,607,142 1,612,142
Directors deferred compensation granted
Accumulated Comprehensive Loss
Net loss
Balance $ 2,700 $ 2,486 $ 2,700 $ 2,486
Balance, shares 26,999,026 24,856,170 26,999,026 24,856,170
Preferred C [Member]        
Balance $ 0 $ 0 $ 0 $ 0
Balance, shares 1 1 1 1
Issuance of stock for board and consulting fees
Directors deferred compensation granted
Accumulated Comprehensive Loss
Net loss
Balance $ 0 $ 0 $ 0 $ 0
Balance, shares 1 1 1 1
Preferred D [Member]        
Balance $ 27 $ 27 $ 27 $ 27
Balance, shares 270,306 270,306 270,306 270,306
Issuance of stock for board and consulting fees
Directors deferred compensation granted
Accumulated Comprehensive Loss
Net loss
Balance $ 27 $ 27 $ 27 $ 27
Balance, shares 270,306 270,306 270,306 270,306
Treasury Stock [Member]        
Balance $ (1,033) $ (1,033) $ (1,033) $ (1,033)
Balance, shares (103,334) (103,334) (103,334) (103,334)
Issuance of stock for board and consulting fees
Directors deferred compensation granted
Accumulated Comprehensive Loss
Net loss
Balance $ (1,033) $ (1,033) $ (1,033) $ (1,033)
Balance, shares (103,334) (103,334) (103,334) (103,334)
Additional Paid-In Capital [Member]        
Balance $ 28,573,484 $ 28,039,699 $ 28,306,592 $ 27,771,868
Issuance of stock for board and consulting fees 112,447 112,447 337,339 338,278
Directors deferred compensation granted 14,000 21,000 56,000 63,000
Accumulated Comprehensive Loss
Net loss
Balance 28,699,931 28,173,146 28,699,931 28,173,146
Accumulated Deficit [Member]        
Balance (30,376,278) (29,197,473) (29,790,258) (28,669,686)
Issuance of stock for board and consulting fees
Directors deferred compensation granted
Accumulated Comprehensive Loss
Net loss (360,472) (371,794) (946,492) (899,581)
Balance (30,736,750) (29,569,267) (30,736,750) (29,569,267)
Accumulated Other Comprehensive Income (Loss) [Member]        
Balance 127,672 127,668 127,670 127,673
Issuance of stock for board and consulting fees
Directors deferred compensation granted
Accumulated Comprehensive Loss 3 7 5 2
Net loss
Balance 127,675 127,675 127,675 127,675
Balance (1,673,482) (1,028,680) (1,354,463) (768,827)
Issuance of stock for board and consulting fees 112,501 112,501 337,500 338,440
Directors deferred compensation granted 14,000 21,000 56,000 63,000
Issuance of shares pursuant to exercise of warrants  
Accumulated Comprehensive Loss 3 7 5 2
Net loss (360,472) (371,794) (946,492) (899,581)
Balance $ (1,907,450) $ (1,266,966) $ (1,907,450) $ (1,266,966)
XML 17 R6.htm IDEA: XBRL DOCUMENT v3.20.2
Consolidated Statement of Cash Flows (Unaudited) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Cash flows from operating activities:    
Net loss $ (622,122) $ (575,211)
Adjustments to reconcile net loss to cash used in operating activities:    
Amortization of intangible assets 8,983 9,170
Depreciation of fixed assets 35,939 37,201
Inventory provision 9,418 9,418
Stock based compensation 393,500 401,440
Changes in assets and liabilities:    
Accounts receivable 137,154 44,521
Inventory 19,221 (34,455)
Prepaid expenses 2,661 (33,309)
Accrued interest - Related Party 21,846 15,332
Accrued interest - Other 36,033 35,901
Accounts payable (114,295) 104,518
Accrued liabilities - Other (116,982) (25,818)
Changes in discontinued operations, net (54,218) 497
Cash used in operating activities (242,862) (10,795)
Cash flows from investing activities:    
Purchase of fixed assets (60,132) (21,560)
Changes in investing activities of discontinued operations, net 9,574 2,496
Cash used in investing activities (50,558) (19,064)
Cash flows from financing activities:    
Proceeds from Notes Payable - Related Party 80,000 17,873
Proceeds from Paycheck Protection Program and EIDL 208,600
Proceeds net of repayments Notes Payable - Other 19,034 25,244
Cash provided by financing activities 307,634 43,117
Effect of exchange rate changes on cash 4 (1,093)
Net increase (decrease) in cash 14,218 12,165
Cash at beginning of period 60,717 78,011
Cash at end of period 74,935 90,176
Non-Cash Transactions:    
Common stock issued to related party for payment of accrued liabilities $ 0 $ 0
XML 18 R7.htm IDEA: XBRL DOCUMENT v3.20.2
Basis of Presentation
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation

1. BASIS OF PRESENTATION

 

The accompanying unaudited consolidated financial statements of Vycor Medical, Inc. (the “Company” or “Vycor”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Commission. In accordance with those rules and regulations certain information and footnote disclosures normally included in consolidated financial statements have been omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2019 derives from the audited financial statements at that date, but does not include all the information and footnotes required by GAAP. These unaudited consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

 

The unaudited consolidated financial statements as of and for the nine months ended September 30, 2020 and 2019, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial condition, results of operations and cash flows. The results of operations for the nine months ended September 30, 2020 and 2019 are not necessarily indicative of the results to be expected for any other interim period or for the entire year. Certain prior period amounts on the unaudited consolidated financial statements have been reclassified to conform to the current period presentation.

 

Ability to continue as a Going Concern

 

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of $946,492 for the nine months ended September 30, 2020 and has not generated sufficient positive cash flows from operations. As of September 30, 2020 the Company had a working capital deficiency of $688,725, excluding related party liabilities of $1,675,120. These conditions, among others, raise substantial doubt regarding our ability to continue as a going concern. The unaudited consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

 

The Company is executing on a plan to achieve a reduction in cash operating losses. Included within the working capital deficiency above is a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”), together with accrued interest of $316,798, which has a maturity date of December 31, 2020, having been extended on a number of occasions from its initial due date of June 11, 2011. At this time, it is not known whether any further extension of the note beyond December 31, 2020 will be available. However, the Company believes it may not have sufficient cash to meet its various cash needs through November 30, 2021 unless the Company is able to obtain additional cash from the issuance of debt or equity securities. Fountainhead, the Company’s largest shareholder, has provided working capital funding to the Company on an as-needed basis, although there is no guarantee that this will continue to be the case. The Company may consider seeking additional equity or debt funding, although there is no assurance that this would be available on acceptable terms or at all. If adequate funds are not available, the Company may have to delay or curtail development or commercialization of products, or cease some of its operations.

XML 19 R8.htm IDEA: XBRL DOCUMENT v3.20.2
Significant Accounting Policies
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Significant Accounting Policies

2. SIGNIFICANT ACCOUNTING POLICIES

 

Principles of Consolidation

 

The unaudited consolidated financial statements include the accounts of Vycor Medical, Inc., and its wholly-owned subsidiaries, NovaVision, Inc. (a Delaware corporation), NovaVision GmbH (a German corporation) and Sight Science Limited (a UK corporation), both wholly owned subsidiaries of NovaVision, Inc. The Company is headquartered in Boca Raton, FL. All material inter-company accounts, transactions, and profits have been eliminated in consolidation. Following the decision in April 2020 to close the German office of NovaVision, the activities of NovaVision GmbH have been accounted for as discontinued operations.

 

Recent Accounting Pronouncements

 

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that, other than as disclosed above, such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

 

Discontinued Operations

 

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations (which we presented as operations to be disposed and operations disposed), less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45.

 

Leases

 

The Company has one leased building in Boca Raton, Florida that is classified as operating lease right-of use (“ROU”) assets and operating lease liabilities in the Company’s unaudited consolidated balance sheet as per ASC 842. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date for leases exceeding 12 months. Minimum lease payments include only the fixed lease component of the agreement. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of Selling, General and Administrative expenses.

 

The standard was effective for us beginning January 1, 2019. The Company elected the available practical expedients on adoption. The adoption had a material impact on our unaudited consolidated balance sheets, but did not have a material impact on our unaudited consolidated statements of comprehensive loss. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases.

 

Net Loss Per Share

 

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of preferred stock and convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. No dilution adjustment has been made to the weighted average outstanding common shares in the periods presented because the assumed exercise of outstanding options and warrants and the conversion of preferred stock and debt would be anti-dilutive.

 

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share:

 

    September 30, 2020     September 30, 2019  
Stock options outstanding     680,000       700,000  
Warrants to purchase common stock     -       3,717,826  
Debentures convertible into common stock     2,937,133       2,707,933  
Preferred shares convertible into common stock     1,272,052       1,272,052  
Directors Deferred Compensation Plan     1,442,571       1,075,908  
Total     6,331,756       9,473,719  

 

Covid-19

 

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to a number of other countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, as of the time of the filing of this Form 10-Q, several states in the United States remain in states of emergency, and travel restrictions continue to be applied in several countries around the world, including the United States. Vycor Medical experienced a reduction in demand during the nine months ended September 30, 2020 in the US and Internationally. Although neurosurgery is not considered an elective procedure, general hospital dislocation and diversion of resources away from non-emergency surgeries, or surgeries that can be postponed for a short period without harm, has impacted our revenues during the nine months ended September 30, 2020 and could continue to do so. In addition, sales and marketing efforts by Vycor’s representatives have been disrupted or curtailed due to lockdown and social distancing, and this has and may continue to hinder the recovery of revenues. While our operations are principally located in the United States, and our sub-contract manufacturers are located in the United States, we participate in a global supply chain, and the existence of a worldwide pandemic, the fear associated with COVID-19, or any, pandemic, and the reactions of governments around the world in response to COVID-19, or any, pandemic, to regulate the flow of labor and products and impede the travel of personnel, may impact our ability to conduct normal business operations, which could adversely affect our results of operations and liquidity. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects on our manufacturing output and delivery schedule. Although we have implemented business continuity plans for our offices and personnel to enable continuity of service remotely, if a critical number of our employees become too ill to work, or we are not able to access a sufficient quantity of our inventory for shipment due to enforced office closures, our production ability could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to COVID-19, or any other, pandemic, demand for our products could also be materially adversely affected in a rapid manner. Global health concerns, such as COVID-19, could also result in social, economic, and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations.

XML 20 R9.htm IDEA: XBRL DOCUMENT v3.20.2
Discontinued Operations
9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations

3. DISCONTINUED OPERATIONS

 

In April 2020, the board of Vycor took the decision to close the German operations of NovaVision, including the German office and NovaVision GmbH, and instead migrate to a licensed business model; in June 2020 Vycor announced that it would be entering into a license agreement and transition agreement (the “Agreements”) with HelferApp GmbH, a cognitive therapy specialist. Under the Agreements, HelferApp is licensed to provide NovaVision’s products and therapies in Germany, Austria and Switzerland to patients and professionals; and has assumed responsibility for the current patients of NovaVision in the territory. The NovaVision German office was closed effective June 30, 2020. The Company will continue to fund the remaining expenses of the German operations, which are non-material, until such a time as NovaVision GmbH will be formally wound up.

 

Reconciliation of the Major Line Items constituting Loss from discontinued operations, net of tax, that are presented in the Consolidated Statements of Comprehensive Loss

 

    For the three months ended
September 30,
    For the nine months ended
September 30,
 
    2020     2019     2020     2019  
Major line items constituting loss from discontinued operations                                
Revenue   $ 2,851     $ 23,424     $ 41,527     $ 65,471  
Cost of Goods Sold     616       2,565       4,835       9,188  
Gross Profit     2,235       20,859       36,692       56,283  
                                 
Operating expenses:                                
Depreciation and Amortization     -       (103 )     -       156  
Selling, general and administrative     15,304       47,045       87,986       152,240  
Total Operating expenses     15,304       46,942       87,986       152,396  
Operating loss     (13,069 )     (26,083 )     (51,294 )     (96,113 )
                                 
Other income (expense)                                
Loss on foreign currency exchange     (879 )     (432 )     (2,141 )     (1,725 )
Other income (loss)     36,451               36,451          
Total Other Income (expense)     35,572       (432 )     34,310       (1,725 )
                                 
Income (loss) Before Credit for Income Taxes     22,503       (26,515 )     (16,984 )     (97,838 )
Credit for income taxes     -       -       -       -  
Loss from discontinued operations, net of tax   22,503     (26,515 )   (16,984 )   (97,838 )

 

Other income comprises the net of non-cash adjustments made in connection with the Agreements with HeflerApp and the closure of the German operation: adjustments for assets and liabilities transferred to HelferApp or NovaVision Inc. or otherwise written off - $12,308; elimination of historic balance for NovaVision GmbH legal expenses funded by NovaVision Inc. - $34,727; and certain accruals for employee costs – ($10,584).

XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Notes Payable

4. NOTES PAYABLE

 

Related Parties Notes Payable

 

Related Party Notes Payable consists of:

 

    September 30, 2020     December 31, 2019  
             
On June 25, 2018 the Company issued promissory notes to Peter Zachariou for $30,000. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee. The note was extended for another twelve months on its due date to June 25, 2021 or on demand by the Payee.   $ 30,000     $ 30,000  
Between March 26, 2018 and April 24, 2020 the Company issued various promissory notes to Fountainhead Capital Management Limited for $280,873. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee. Six notes were extended on their due dates for another twelve months. The Notes will be due between December 2020 and July 2021 or on demand by the Payee.     280,873       200,873  
Total Related Party Notes Payable   $ 310,873     $ 230,873  

 

Other Notes Payable

 

Other Notes Payable consists of:

 

    September 30, 2020     December 31, 2019  
On March 25, 2011 the Company issued a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”). The term note bears interest at 16% per annum and was due June 25, 2011, and has been extended on a number of occasions. On the note’s most recent due date, the note was extended to December 31, 2020. The note is personally guaranteed by certain officers and directors of the Company. See further note below   $ 300,000     $ 300,000  
On May 16, 2020, the Company was granted a loan from Citizens Bank N.A. in the aggregate amount of $58,600, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 16, 2020 issued by the Borrower, matures on May 16, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 16, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Under the terms of the PPP, the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company’s use of the Loan qualifies and intends to apply once the forgiveness program commences.     58,600       -  
On July 7, 2020, the Company was advised that the Small Business Administration (SBA) had approved a $150,000 loan under the Economic Injury Disaster Loan Program pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act (“Loan”). The Loan, evidenced by a promissory note dated July 7, 2020, has a term of thirty (30) years, bears interest at a fixed rate of three and three-quarters percent (3.75%) per annum, with monthly payments in the amount of $731.00 per month commencing twelve (12) months from the date of the note and is secured by essentially all of the assets of the Company. The proceeds of the Loan will be used for general working capital purposes to alleviate economic injury caused by disaster occurring in the month of January 2020 and continuing thereafter.     150,000       -  
Insurance policy finance agreements and other.     47,066       28,032  
Total Other Notes Payable:   $ 555,666     $ 328,032  

 

In January 2018 the Company entered into an amendment agreement (the “Amendment”) with EuroAmerican Investments (“EuroAmerican”) regarding its $300,000 loan note (the “Note”). Under the Amendment, the Note was extended and the conversion terms of the Note were reduced to $0.21, the same as the offering price of the 2018 Offering. Conversion of the Note and accrued interest would result in the issuance of 2,937,133 shares of Common Stock as of September 30, 2020. Notwithstanding, EuroAmerican agreed that the Note could not be converted without first offering the Company the right to redeem the Note at principal and accrued interest, and secondly Fountainhead the right to purchase the Note, which cannot be converted prior to such offer and the failure of the Company and Fountainhead to exercise such option in accordance with the amendment terms. In addition, the Company agreed to issue warrants to purchase 2,308,405 shares of Common Stock at $0.27, the same terms as the 2018 Offering, exercisable for three years from January 1, 2018, if and when the conversion option is exercised. The amendment was recognized as a modification, based on the guidance in ASC 470-50.

 

The Company routinely finances all their insurance policies through a third party finance company which requires a down payment and subsequent monthly payments, the time periods vary from 10 months to 12 equal monthly payments.

XML 22 R11.htm IDEA: XBRL DOCUMENT v3.20.2
Lease
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Lease

5. LEASE

 

The Company leases office space located at 951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487 from WPT Land 2 L.P., for a gross rent of approximately $5,700 plus sales tax per month that will expire on September 30, 2020. Based on the original lease agreement, the Company had the one-time option to renew the lease for another three years with minimum annual rent at market price, not less than the original lease payment amount. In January 2020, the Company exercised the option to extend the original lease for another three years with the expiration date of August 31, 2023. In accordance with ASC 842-10-35, the Company considered this lease extension as the modification of the original lease and re-measured the lease liability and the right-of-use assets on the commencement date of the lease extension.

 

The Company recognized the following in its unaudited consolidated balance sheet at September 30, 2020 and December 31, 2019:

 

    September 30, 2020     December 31, 2019  
             
Operating Lease ROU Assets   $ 135,003     $ 31,658  
    $ 135,003     $ 31,658  
                 
Operating Lease Liabilities                
 Current portion     44,079       28,010  
 Long-term portion   $ 88,097     $ -  
    $ 132,176     $ 28,010  
XML 23 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Reporting, Geographical Information
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Segment Reporting, Geographical Information

6. SEGMENT REPORTING, GEOGRAPHICAL INFORMATION

 

(a) Business segments

 

The Company operates in two business segments: Vycor Medical, which focuses on devices for neurosurgery; and NovaVision, which focuses on neuro stimulation therapies and diagnostic devices for the treatment and screening of vision field loss and which includes Sight Science. Discontinued operations were part of NovaVision and revenues and assets were in Europe; see Note 3. Set out below are the revenues, gross profits and total assets for each segment:

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Revenue:                                
Vycor Medical   $ 250,648     $ 301,053     $ 776,932     $ 988,786  
NovaVision   $ 25,277     $ 21,831     $ 73,498     $ 72,607  
    $ 275,925     $ 322,884     $ 850,430     $ 1,061,393  
Gross Profit                                
Vycor Medical   $ 211,089     $ 273,146     $ 683,125     $ 895,484  
NovaVision   $ 24,285     $ 20,776     $ 68,967     $ 68,463  
    $ 235,374     $ 293,922     $ 752,092     $ 963,947  

 

   

September 30,

2020

   

December 31,

2019

 
Total Assets:                
Vycor Medical   $ 990,852     $ 1,036,857  
NovaVision     36,540       25,395  
Discontinued operations     2,004       29,691  
Total Assets   $ 1,029,396     $ 1,091,943  

 

(b) Geographic information

 

The Company operates in two geographic segments, the United States and Europe. Discontinued operations were part of NovaVision and revenues and assets were in Europe; see Note 3. Set out below are the revenues, gross profits and total assets for each segment.

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Revenue:                        
United States   $ 270,851     $ 320,476     $ 839,992     $ 1,051,237  
Europe   $ 5,074     $ 2,408     $ 10,438     $ 10,156  
    $ 275,925     $ 322,884     $ 850,430     $ 1,061,393  
Gross Profit                                
United States   $ 230,321     $ 291,536     $ 741,675     $ 953,861  
Europe   $ 5,053     $ 2,386     $ 10,417     $ 10,086  
    $ 235,374     $ 293,922     $ 752,092     $ 963,947  

 

   

September 30,

2020

   

December 31,

2019

 
Total Assets:                
United States   $ 1,014,817     $ 1,055,312  
Europe     12,575       6,940  
Discontinued operations     2,004       29,691  
Total Assets   $ 1,029,396     $ 1,091,943  
XML 24 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Equity
9 Months Ended
Sep. 30, 2020
Equity [Abstract]  
Equity

7. EQUITY

 

Common Stock and Stock Grants

 

During January to September 2020 and 2019, the Company granted 266,664 shares of Common Stock (valued at $56,000) to non-employee Directors. Under the terms of the Directors Deferred Compensation Plan, the receipt of these shares is deferred until the January 15th following the termination of their services as a director. As of September 30, 2020 these shares have yet to be issued.

 

During January to September 2020 and 2019, under the terms of the Consulting Agreement referred to in note 10, the Company issued 1,607,142 of Common Stock to Fountainhead for fees of $337,500 in each period respectively.

 

Warrants and Options

 

The details of the outstanding warrants and options are as follows:

 

STOCK WARRANTS:

 

          Weighted average  
    Number of shares     exercise price
per share
 
Outstanding at December 31, 2019     3,717,826     $ 0.27  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     (3,717,826 )   $ 0.27  
Outstanding at September 30, 2020     -     $ 0.00  

 

STOCK OPTIONS:

 

          Weighted average  
    Number of shares     exercise price
per share
 
Outstanding at December 31, 2019     700,000     $ 0.28  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     (20,000 )     (0.27 )
Outstanding at September 30, 2020     680,000     $ 0.28  

 

As of September 30, 2020, the weighted-average remaining contractual life of outstanding warrants and options is 0 and 0.74 years, respectively.

XML 25 R14.htm IDEA: XBRL DOCUMENT v3.20.2
Share-Based Compensation
9 Months Ended
Sep. 30, 2020
Share-based Payment Arrangement [Abstract]  
Share-Based Compensation

8. SHARE-BASED COMPENSATION

 

Stock Option Plan

 

Under ASC Topic 718, the Company estimates the fair value of option awards on the date of grant using an option pricing model. The grant date fair value is recognized over the option-vesting period, the period during which an employee is required to provide service in exchange for the award. No compensation cost is recognized for equity instruments for which employees do not render the requisite service. Under these standards, compensation cost for employee cost for employee stock-based awards is based on the estimated grant-date fair value and recognized over the vesting period of the applicable award on a straight-line basis.

 

For each of the nine months ended September 30, 2020 and 2019, the Company recognized share-based compensation of $0 for employee stock options.

 

Stock appreciation rights may be granted either on a stand-alone basis or in conjunction with all or part of any other stock options granted under the plan. As of September 30, 2020 there were no awards of any stock appreciation rights.

 

Non-Employee Stock Compensation

 

The Company from time to time issues common stock, stock options or common stock warrants to acquire services or goods from non-employees. Common stock, stock options and common stock warrants issued to other than employees or directors are recorded on the basis of their fair value, which is measured as of the “measurement date”. The “measurement date” for options and warrants related to contracts that have substantial disincentives to non-performance is the date of the contract, and for all other contracts is the vesting date. Expense related to the options and warrants is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant.

 

Aggregate stock-based compensation for stock granted to non-employees for each of the nine months ended September 30, 2020 and 2019 was $266,664 and $299,997. The expense related to stock not issued during each of the periods ended September 30, 2020 and 2019 comprises $56,000 and $63,000, related to stock granted but not issued to directors under the Directors Deferred Compensation Plan. As of September 30, 2020, there was $0 of total unrecognized compensation costs related to warrant and stock awards and non-vested options.

 

Stock-based Compensation Valuation Methodology

 

Stock-based compensation resulting from the issuance of Common Stock is calculated by reference to the valuation of the Stock on the date of issuance, the expense being recognized as the compensation is earned. Stock-based compensation expenses related to employee options and warrants granted to non-employees are recognized as the stock options and warrants are earned. The fair value of the stock options or warrants granted is estimated at the grant date, using the Black-Scholes option pricing model, and the expense is recognized on a straight-line basis over the shorter of the period over which services are to be received or the life of the option or warrant. The grant date fair value of employee share options and similar instruments is estimated using the Black-Scholes option pricing model on the basis of the fair value of the underlying common stock on the measurement date, adjusted for the unique characteristics of those equity instruments, using the assumptions noted in the table below. Expected volatility is based on the historical volatility of a peer group of publicly traded companies. The expected term of options and warrants was based upon the expected life of the option or warrant, and the risk-free rate is based on the U.S. Treasury Constant Maturity rate.

 

There were no options or warrants issued during either of the periods ending September 30, 2020 and 2019.

XML 26 R15.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies
9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

9. COMMITMENTS AND CONTINGENCIES

 

Lease

 

The Company leases office space located at 951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487 from WPT Land 2 L.P., for a gross rent of approximately $5,700 plus sales tax per month. The lease terminates September 30, 2020 and has been extended for a further three years to August 31, 2023. The Company’s subsidiary in Germany occupied premises on a rolling 12 month lease agreement with a 3 month notice period of EUR1,650 per month (approximately $1,815), which was terminated effective June 30, 2020. Rent expense for the nine months ended September 30, 2020 and 2019 for the continuing operations was $59,008 and $57,202 respectively. See Note 5.

 

Potential German tax liability

 

In June 2012 the Company’s NovaVision German subsidiary received a preliminary assessment for Magdeburg City trade tax of €75,000 (approximately $82,000), with an additional interest charge of €12,000 (approximately $13,200). This assessment is for the 2010 fiscal year and relates to the Company’s acquisition of the assets of the former NovaVision, Inc. An initial assessment for corporate tax for the same period was preliminarily reduced to zero. The Company did not accept this trade tax assessment and appealed against it to the relevant tax authorities with a view to its reduction. The relevant tax authorities agreed to suspend the assessment pending the outcome of certain court hearings and proposed tax legislation, and the Company agreed to make monthly payments on account totaling €75,000 (approximately $82,000) which were completed in October 2016 and fully expensed. At that time the Company appealed against the interest charge of €12,000 (approximately $13,200) which the tax authorities did not accept but also agreed to suspend pending the outcome of the hearings and proposed legislation outlined above. Accordingly, the Company has made no provision for this liability in the nine months ended September 30, 2020 and the year ended December 31, 2019 respectively.

XML 27 R16.htm IDEA: XBRL DOCUMENT v3.20.2
Consulting and Other Agreements
9 Months Ended
Sep. 30, 2020
Consulting And Other Agreements  
Consulting and Other Agreements

10. CONSULTING AND OTHER AGREEMENTS

 

The following agreements were entered into or remained in force during the period ended September 30, 2020:

 

Consulting Agreement with Fountainhead

 

In March 2017 and effective April 1, 2017, the Company amended the Fountainhead Consulting Agreement (“the Amended Agreement”). Under the Amended Agreement, fees of $450,000 are payable to Fountainhead, with an option to receive $5,000 per month in cash and the remainder payable in Company Common Stock issued at the higher of $0.21 and the average price for the 30 days prior to issuance, and deliverable at the end of each fiscal quarter. The Consulting Agreement also contains provisions for Fountainhead to receive a higher proportion of its fees in cash subject to certain future liquidity events and Board approval. Under the terms of the Amended Agreement, Fountainhead provides the executive management team of the Company, including the positions of CEO, President and CFO, whose employment agreements with the Company stipulate they receive no remuneration from the Company.

 

During the nine months ended September 30, 2020 and September 30, 2019, under the terms of the Amended Agreement, Fountainhead received total fees of $337,500, which were paid through the issuance of 1,607,142 shares of Company Common Stock.

XML 28 R17.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions
9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

11. RELATED PARTY TRANSACTIONS

 

Peter Zachariou and David Cantor, directors of the Company, are investment managers of Fountainhead which owned, at September 30, 2020, 59.7% of the Company’s Common Stock and 70% of the Company’s Preferred D Stock. Peter Zachariou owns 26% of the Company’s Preferred D Stock. Adrian Liddell, Chairman, is a consultant for Fountainhead.

 

During each of the nine months ended September 30, 2020 and September 30, 2019, under the terms of the Consulting Agreement referred to in note 10, the Company issued 1,607,142 shares of Common Stock to Fountainhead for fees of $337,500.

 

During each of the nine months ended September 30, 2020 and 2019, the Company accrued an aggregate of $324,370 of Preferred D Stock dividends, of which $226,037 was in respect of Fountainhead and $83,386 was in respect of Peter Zachariou.

 

During the nine months ended September 30, 2020 and 2019 the Company issued unsecured loan notes to Fountainhead for a total of $80,000 and $17,873, respectively. The loan notes bear interest at a rate of 10% and are due on demand or by their one-year anniversary.

 

There were no other related party transactions during the nine months ended September 30, 2020 and 2019.

XML 29 R18.htm IDEA: XBRL DOCUMENT v3.20.2
Concentration
9 Months Ended
Sep. 30, 2020
Risks and Uncertainties [Abstract]  
Concentration

12. CONCENTRATION

 

Vycor Medical sells its neurosurgical devices in the US primarily direct to hospitals, and internationally through distributors who in turn sell to hospitals.

 

Sales Concentration:

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Number of customers over 10%     0       1       1       1  
Percentage of sales     0 %     12 %     14 %     10 %

 

Accounts Receivable Concentration

 

    At September 30,     At December 31,  
    2020     2019  
             
Number of customers over 10%     2       1  
Percentage of accounts receivable      11% and 15 %     37 %

 

The Company has three sub-contract manufacturers from which it purchases, respectively, VBAS injection molded parts, completed and sterilized VBAS units, and VBAS extension arms. Purchases from these manufacturers vary from quarter to quarter, with no purchases in some quarters, however on an annual basis purchases from each manufacturer represent over 10% of total annual purchases.

XML 30 R19.htm IDEA: XBRL DOCUMENT v3.20.2
Subsequent Events
9 Months Ended
Sep. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

13. SUBSEQUENT EVENTS

 

The Company has evaluated the existence of events and transactions subsequent to the balance sheet date through the date the unaudited consolidated financial statements were issued and has determined that there were no significant subsequent events or transactions which would require recognition or disclosure in the financial statements.

XML 31 R20.htm IDEA: XBRL DOCUMENT v3.20.2
Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Principles of Consolidation

Principles of Consolidation

 

The unaudited consolidated financial statements include the accounts of Vycor Medical, Inc., and its wholly-owned subsidiaries, NovaVision, Inc. (a Delaware corporation), NovaVision GmbH (a German corporation) and Sight Science Limited (a UK corporation), both wholly owned subsidiaries of NovaVision, Inc. The Company is headquartered in Boca Raton, FL. All material inter-company accounts, transactions, and profits have been eliminated in consolidation. Following the decision in April 2020 to close the German office of NovaVision, the activities of NovaVision GmbH have been accounted for as discontinued operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

 

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company’s accounting and reporting. The Company believes that, other than as disclosed above, such recently issued accounting pronouncements and other authoritative guidance for which the effective date is in the future will not have an impact on its accounting or reporting or that such impact will not be material to its financial position, results of operations and cash flows when implemented.

Discontinued Operations

Discontinued Operations

 

In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations (which we presented as operations to be disposed and operations disposed), less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45.

 

Leases

Leases

 

The Company has one leased building in Boca Raton, Florida that is classified as operating lease right-of use (“ROU”) assets and operating lease liabilities in the Company’s unaudited consolidated balance sheet as per ASC 842. ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date for leases exceeding 12 months. Minimum lease payments include only the fixed lease component of the agreement. Operating lease expense is recognized on a straight-line basis over the lease term and is included in cost of Selling, General and Administrative expenses.

 

The standard was effective for us beginning January 1, 2019. The Company elected the available practical expedients on adoption. The adoption had a material impact on our unaudited consolidated balance sheets, but did not have a material impact on our unaudited consolidated statements of comprehensive loss. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases.

Net Loss Per Share

Net Loss Per Share

 

Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of preferred stock and convertible debt. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. No dilution adjustment has been made to the weighted average outstanding common shares in the periods presented because the assumed exercise of outstanding options and warrants and the conversion of preferred stock and debt would be anti-dilutive.

 

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share:

 

    September 30, 2020     September 30, 2019  
Stock options outstanding     680,000       700,000  
Warrants to purchase common stock     -       3,717,826  
Debentures convertible into common stock     2,937,133       2,707,933  
Preferred shares convertible into common stock     1,272,052       1,272,052  
Directors Deferred Compensation Plan     1,442,571       1,075,908  
Total     6,331,756       9,473,719  

 

Covid-19

Covid-19

 

In December 2019, an outbreak of a novel strain of coronavirus (COVID-19) originated in Wuhan, China, and has since spread to a number of other countries, including the United States. On March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic. In addition, as of the time of the filing of this Form 10-Q, several states in the United States remain in states of emergency, and travel restrictions continue to be applied in several countries around the world, including the United States. Vycor Medical experienced a reduction in demand during the nine months ended September 30, 2020 in the US and Internationally. Although neurosurgery is not considered an elective procedure, general hospital dislocation and diversion of resources away from non-emergency surgeries, or surgeries that can be postponed for a short period without harm, has impacted our revenues during the nine months ended September 30, 2020 and could continue to do so. In addition, sales and marketing efforts by Vycor’s representatives have been disrupted or curtailed due to lockdown and social distancing, and this has and may continue to hinder the recovery of revenues. While our operations are principally located in the United States, and our sub-contract manufacturers are located in the United States, we participate in a global supply chain, and the existence of a worldwide pandemic, the fear associated with COVID-19, or any, pandemic, and the reactions of governments around the world in response to COVID-19, or any, pandemic, to regulate the flow of labor and products and impede the travel of personnel, may impact our ability to conduct normal business operations, which could adversely affect our results of operations and liquidity. Disruptions to our supply chain and business operations, or to our suppliers’ or customers’ supply chains and business operations, could include disruptions from the closure of supplier and manufacturer facilities, interruptions in the supply of raw materials and components, personnel absences, or restrictions on the shipment of our or our suppliers’ or customers’ products, any of which could have adverse ripple effects on our manufacturing output and delivery schedule. Although we have implemented business continuity plans for our offices and personnel to enable continuity of service remotely, if a critical number of our employees become too ill to work, or we are not able to access a sufficient quantity of our inventory for shipment due to enforced office closures, our production ability could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to COVID-19, or any other, pandemic, demand for our products could also be materially adversely affected in a rapid manner. Global health concerns, such as COVID-19, could also result in social, economic, and labor instability in the countries and localities in which we or our suppliers and customers operate. Any of these uncertainties could have a material adverse effect on our business, financial condition or results of operations.

XML 32 R21.htm IDEA: XBRL DOCUMENT v3.20.2
Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2020
Accounting Policies [Abstract]  
Schedule of Common Stock Not Included in Calculation of Diluted Net Loss Per Share

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share:

 

    September 30, 2020     September 30, 2019  
Stock options outstanding     680,000       700,000  
Warrants to purchase common stock     -       3,717,826  
Debentures convertible into common stock     2,937,133       2,707,933  
Preferred shares convertible into common stock     1,272,052       1,272,052  
Directors Deferred Compensation Plan     1,442,571       1,075,908  
Total     6,331,756       9,473,719  
XML 33 R22.htm IDEA: XBRL DOCUMENT v3.20.2
Discontinued Operations (Tables)
9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Loss from Discontinued Operations

Reconciliation of the Major Line Items constituting Loss from discontinued operations, net of tax, that are presented in the Consolidated Statements of Comprehensive Loss

 

    For the three months ended
September 30,
    For the nine months ended
September 30,
 
    2020     2019     2020     2019  
Major line items constituting loss from discontinued operations                                
Revenue   $ 2,851     $ 23,424     $ 41,527     $ 65,471  
Cost of Goods Sold     616       2,565       4,835       9,188  
Gross Profit     2,235       20,859       36,692       56,283  
                                 
Operating expenses:                                
Depreciation and Amortization     -       (103 )     -       156  
Selling, general and administrative     15,304       47,045       87,986       152,240  
Total Operating expenses     15,304       46,942       87,986       152,396  
Operating loss     (13,069 )     (26,083 )     (51,294 )     (96,113 )
                                 
Other income (expense)                                
Loss on foreign currency exchange     (879 )     (432 )     (2,141 )     (1,725 )
Other income (loss)     36,451               36,451          
Total Other Income (expense)     35,572       (432 )     34,310       (1,725 )
                                 
Income (loss) Before Credit for Income Taxes     22,503       (26,515 )     (16,984 )     (97,838 )
Credit for income taxes     -       -       -       -  
Loss from discontinued operations, net of tax   22,503     (26,515 )   (16,984 )   (97,838 )
XML 34 R23.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable (Tables)
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Summary of Notes Payable

Related Party Notes Payable consists of:

 

    September 30, 2020     December 31, 2019  
             
On June 25, 2018 the Company issued promissory notes to Peter Zachariou for $30,000. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee. The note was extended for another twelve months on its due date to June 25, 2021 or on demand by the Payee.   $ 30,000     $ 30,000  
Between March 26, 2018 and April 24, 2020 the Company issued various promissory notes to Fountainhead Capital Management Limited for $280,873. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee. Six notes were extended on their due dates for another twelve months. The Notes will be due between December 2020 and July 2021 or on demand by the Payee.     280,873       200,873  
Total Related Party Notes Payable   $ 310,873     $ 230,873  

 

Other Notes Payable

 

Other Notes Payable consists of:

 

    September 30, 2020     December 31, 2019  
On March 25, 2011 the Company issued a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”). The term note bears interest at 16% per annum and was due June 25, 2011, and has been extended on a number of occasions. On the note’s most recent due date, the note was extended to December 31, 2020. The note is personally guaranteed by certain officers and directors of the Company. See further note below   $ 300,000     $ 300,000  
On May 16, 2020, the Company was granted a loan from Citizens Bank N.A. in the aggregate amount of $58,600, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 16, 2020 issued by the Borrower, matures on May 16, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 16, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Under the terms of the PPP, the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company’s use of the Loan qualifies and intends to apply once the forgiveness program commences.     58,600       -  
On July 7, 2020, the Company was advised that the Small Business Administration (SBA) had approved a $150,000 loan under the Economic Injury Disaster Loan Program pursuant to the Coronavirus Aid, Relief and Economic Security (CARES) Act (“Loan”). The Loan, evidenced by a promissory note dated July 7, 2020, has a term of thirty (30) years, bears interest at a fixed rate of three and three-quarters percent (3.75%) per annum, with monthly payments in the amount of $731.00 per month commencing twelve (12) months from the date of the note and is secured by essentially all of the assets of the Company. The proceeds of the Loan will be used for general working capital purposes to alleviate economic injury caused by disaster occurring in the month of January 2020 and continuing thereafter.     150,000       -  
Insurance policy finance agreements and other.     47,066       28,032  
Total Other Notes Payable:   $ 555,666     $ 328,032  

 

XML 35 R24.htm IDEA: XBRL DOCUMENT v3.20.2
Lease (Tables)
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Schedule of Supplemental Balance Sheet Information Related to Leases

The Company recognized the following in its unaudited consolidated balance sheet at September 30, 2020 and December 31, 2019:

 

    September 30, 2020     December 31, 2019  
             
Operating Lease ROU Assets   $ 135,003     $ 31,658  
    $ 135,003     $ 31,658  
                 
Operating Lease Liabilities                
 Current portion     44,079       28,010  
 Long-term portion   $ 88,097     $ -  
    $ 132,176     $ 28,010  
XML 36 R25.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Reporting, Geographical Information (Tables)
9 Months Ended
Sep. 30, 2020
Segment Reporting [Abstract]  
Schedule of Business Segments Information

Discontinued operations were part of NovaVision and revenues and assets were in Europe; see Note 3. Set out below are the revenues, gross profits and total assets for each segment:

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Revenue:                                
Vycor Medical   $ 250,648     $ 301,053     $ 776,932     $ 988,786  
NovaVision   $ 25,277     $ 21,831     $ 73,498     $ 72,607  
    $ 275,925     $ 322,884     $ 850,430     $ 1,061,393  
Gross Profit                                
Vycor Medical   $ 211,089     $ 273,146     $ 683,125     $ 895,484  
NovaVision   $ 24,285     $ 20,776     $ 68,967     $ 68,463  
    $ 235,374     $ 293,922     $ 752,092     $ 963,947  

 

   

September 30,

2020

   

December 31,

2019

 
Total Assets:                
Vycor Medical   $ 990,852     $ 1,036,857  
NovaVision     36,540       25,395  
Discontinued operations     2,004       29,691  
Total Assets   $ 1,029,396     $ 1,091,943  
Summary of Geographic Information

Discontinued operations were part of NovaVision and revenues and assets were in Europe; see Note 3. Set out below are the revenues, gross profits and total assets for each segment.

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Revenue:                        
United States   $ 270,851     $ 320,476     $ 839,992     $ 1,051,237  
Europe   $ 5,074     $ 2,408     $ 10,438     $ 10,156  
    $ 275,925     $ 322,884     $ 850,430     $ 1,061,393  
Gross Profit                                
United States   $ 230,321     $ 291,536     $ 741,675     $ 953,861  
Europe   $ 5,053     $ 2,386     $ 10,417     $ 10,086  
    $ 235,374     $ 293,922     $ 752,092     $ 963,947  

 

   

September 30,

2020

   

December 31,

2019

 
Total Assets:                
United States   $ 1,014,817     $ 1,055,312  
Europe     12,575       6,940  
Discontinued operations     2,004       29,691  
Total Assets   $ 1,029,396     $ 1,091,943  

 

XML 37 R26.htm IDEA: XBRL DOCUMENT v3.20.2
Equity (Tables)
9 Months Ended
Sep. 30, 2020
Equity [Abstract]  
Schedule of Stock Warrants

STOCK WARRANTS:

 

          Weighted average  
    Number of shares     exercise price
per share
 
Outstanding at December 31, 2019     3,717,826     $ 0.27  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     (3,717,826 )   $ 0.27  
Outstanding at September 30, 2020     -     $ 0.00  
Schedule of Stock Options

STOCK OPTIONS:

 

          Weighted average  
    Number of shares     exercise price
per share
 
Outstanding at December 31, 2019     700,000     $ 0.28  
Granted     -       -  
Exercised     -       -  
Cancelled or expired     (20,000 )     (0.27 )
Outstanding at September 30, 2020     680,000     $ 0.28  
XML 38 R27.htm IDEA: XBRL DOCUMENT v3.20.2
Concentration (Tables)
9 Months Ended
Sep. 30, 2020
Risks and Uncertainties [Abstract]  
Schedule of Concentration

Sales Concentration:

 

    Three Months Ended September 30,     Nine Months Ended September 30,  
    2020     2019     2020     2019  
Number of customers over 10%     0       1       1       1  
Percentage of sales     0 %     12 %     14 %     10 %

 

Accounts Receivable Concentration

 

    At September 30,     At December 31,  
    2020     2019  
             
Number of customers over 10%     2       1  
Percentage of accounts receivable      11% and 15 %     37 %
XML 39 R28.htm IDEA: XBRL DOCUMENT v3.20.2
Basis of Presentation (Details Narrative) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Net loss $ (360,472) $ (371,794) $ (946,492) $ (899,581)
Working capital deficiency 688,725   688,725  
Related party liabilities 1,675,120   1,675,120  
EuroAmerican Investment Corp. [Member]        
Term note 300,000   300,000  
Accrued interest $ 316,798   $ 316,798  
Maturity date     Dec. 31, 2020  
EuroAmerican Investment Corp. [Member] | Extended Maturity [Member]        
Maturity date     Nov. 30, 2021  
XML 40 R29.htm IDEA: XBRL DOCUMENT v3.20.2
Significant Accounting Policies - Schedule of Common Stock Not Included in Calculation of Diluted Net Loss Per Share (Details) - shares
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Potential shares of common stock that are not included in the calculation of diluted net loss per share 6,331,756 9,473,719
Stock Options Outstanding [Member]    
Potential shares of common stock that are not included in the calculation of diluted net loss per share 680,000 700,000
Warrants to Purchase Common Stock [Member]    
Potential shares of common stock that are not included in the calculation of diluted net loss per share 3,717,826
Debentures Convertible into Common Stock [Member]    
Potential shares of common stock that are not included in the calculation of diluted net loss per share 2,937,133 2,707,933
Preferred Shares Convertible into Common Stock [Member]    
Potential shares of common stock that are not included in the calculation of diluted net loss per share 1,272,052 1,272,052
Directors Deferred Compensation Plan [Member]    
Potential shares of common stock that are not included in the calculation of diluted net loss per share 1,442,571 1,075,908
XML 41 R30.htm IDEA: XBRL DOCUMENT v3.20.2
Discontinued Operations (Details Narrative)
Sep. 30, 2020
USD ($)
Discontinued Operations and Disposal Groups [Abstract]  
Written off related to assets and liabilities transferred operations $ 12,308
Legal expenses funded 34,727
Accruals employee costs $ (10,584)
XML 42 R31.htm IDEA: XBRL DOCUMENT v3.20.2
Discontinued Operations - Schedule of Loss from Discontinued Operations (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Discontinued Operations and Disposal Groups [Abstract]        
Revenue $ 2,851 $ 23,424 $ 41,527 $ 65,471
Cost of Goods Sold 616 2,565 4,835 9,188
Gross Profit 2,235 20,859 36,692 56,283
Depreciation and Amortization (103) 156
Selling, general and administrative 15,304 47,045 87,986 152,240
Total Operating expenses 15,304 46,942 87,986 152,396
Operating loss (13,069) (26,083) (51,294) (96,113)
Loss on foreign currency exchange (879) (432) (2,141) (1,725)
Other income (loss) 36,451 36,451
Total Other Income (expense) 35,572 (432) 34,310 (1,725)
Income (loss) Before Credit for Income Taxes 22,503 (26,515) (16,984) (97,838)
Credit for income taxes
Loss from discontinued operations, net of tax $ 22,503 $ (26,515) $ (16,984) $ (97,838)
XML 43 R32.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable (Details Narrative) - USD ($)
1 Months Ended
Sep. 30, 2020
Jan. 31, 2018
EuroAmerican Investment Corp. [Member]    
Debt conversion shares issued 2,937,133  
Warrants exercisable term   3 years
EuroAmerican Investment Corp. [Member]    
Note payable other   $ 300,000
Conversion price   $ 0.21
EuroAmerican Investment Corp. [Member] | Stock Warrants [Member]    
Warrant to purchase common stock   2,308,405
Warrant exercise price   $ 0.27
XML 44 R33.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable - Summary of Notes Payable (Details) - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Total Related Party Notes Payable $ 310,873 $ 230,873
Total Other Notes Payable 555,666 328,032
Citizens Bank [Member]    
Total Other Notes Payable 58,600
EuroAmerican Investment Corp. [Member]    
Total Other Notes Payable 300,000 300,000
Peter Zachariou [Member]    
Total Related Party Notes Payable 30,000 30,000
Fountainhead Capital Management Limited [Member]    
Total Related Party Notes Payable 280,873 200,873
Small Business Administration [Member]    
Total Other Notes Payable 150,000
Insurance Policy Finance Agreements [Member]    
Total Other Notes Payable $ 47,066 $ 28,032
XML 45 R34.htm IDEA: XBRL DOCUMENT v3.20.2
Notes Payable - Summary of Notes Payable (Details) (Parenthetical) - USD ($)
9 Months Ended 25 Months Ended
Jul. 07, 2020
May 16, 2020
Jun. 25, 2018
Mar. 25, 2011
Sep. 30, 2020
Apr. 24, 2020
Small Business Administration [Member]            
Notes interest rate 3.75%          
Debt due date description The Loan, evidenced by a promissory note dated July 7, 2020, has a term of thirty (30) years, bears interest at a fixed rate of three and three-quarters percent (3.75%) per annum, with monthly payments in the amount of $731.00 per month commencing twelve (12) months from the date of the note and is secured by essentially all of the assets of the Company.          
Loans payable $ 150,000          
Monthly payments $ 731          
Debt term 30 years          
Citizens Bank [Member] | Paycheck Protection Program [Member]            
Value of notes issued   $ 58,600        
Notes interest rate   1.00%        
Citizens Bank [Member] | Payroll Protection Program [Member]            
Debt due date description   The Loan, which was in the form of a Note dated May 16, 2020 issued by the Borrower, matures on May 16, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 16, 2020.        
Debt maturity date   May 16, 2022        
EuroAmerican Investment Corp. [Member]            
Value of notes issued         $ 300,000  
Debt maturity date         Dec. 31, 2020  
EuroAmerican Investment Corp. [Member] | Extended Maturity [Member]            
Debt due date       Dec. 31, 2020    
Debt maturity date         Nov. 30, 2021  
EuroAmerican Investment Corp. [Member] | Term Note [Member]            
Value of notes issued       $ 300,000    
Notes interest rate       16.00%    
Debt due date       Jun. 25, 2011    
Peter Zachariou [Member]            
Value of notes issued     $ 30,000      
Notes interest rate     10.00%      
Debt due date     Jun. 25, 2021      
Fountainhead Capital Management Limited [Member]            
Value of notes issued           $ 280,873
Notes interest rate           10.00%
Debt due date description           The Notes will be due between December 2020 and July 2021 or on demand by the Payee.
XML 46 R35.htm IDEA: XBRL DOCUMENT v3.20.2
Lease (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Rent expense $ 59,008 $ 57,202
Lease expiration date Sep. 30, 2020  
Office Space [Member]    
Rent expense $ 5,700  
Lease expiration date Aug. 31, 2023  
Lease renewal term 3 years  
Lease term description Based on the original lease agreement, the Company has the one-time option to renew the lease for another three years with minimum annual rent at market price, not less than the original lease payment amount. In January 2020, the Company exercised the option to extend the original lease for another three years with the expiration date of August 31, 2023. In accordance with ASC 842-10-35, the Company considered this lease extension as the modification of the original lease and re-measured the lease liability and the right-of-use assets on the commencement date of the lease extension.  
XML 47 R36.htm IDEA: XBRL DOCUMENT v3.20.2
Lease - Schedule of Supplemental Balance Sheet Information Related to Leases (Details) - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
Operating Lease ROU Assets $ 135,003 $ 31,658
Operating Lease ROU Assets 135,003 31,658
Operating Lease Liabilities Current portion 44,079 28,010
Operating Lease Liabilities Long-term portion 88,097
Operating Lease Liabilities $ 132,176 $ 28,010
XML 48 R37.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Reporting, Geographical Information (Details Narrative)
9 Months Ended
Sep. 30, 2020
Number
Segment Reporting [Abstract]  
Number of reportable segments 2
XML 49 R38.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Reporting, Geographical Information - Schedule of Business Segments Information (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Revenue $ 275,925 $ 322,884 $ 850,430 $ 1,061,393  
Gross Profit 235,374 293,922 752,092 963,947  
Total Assets 1,029,396   1,029,396   $ 1,091,943
Vycor Medical [Member]          
Revenue 250,648 301,053 776,932 988,786  
Gross Profit 211,089 273,146 683,125 895,484  
Total Assets 990,852   990,852   1,036,857
Nova Vision [Member]          
Revenue 25,277 21,831 73,498 72,607  
Gross Profit 24,285 $ 20,776 68,967 $ 68,463  
Total Assets 36,540   36,540   25,395
Discontinued Operations [Member]          
Total Assets $ 2,004   $ 2,004   $ 29,691
XML 50 R39.htm IDEA: XBRL DOCUMENT v3.20.2
Segment Reporting, Geographical Information - Summary of Geographic Information (Details) - USD ($)
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Revenue $ 275,925 $ 322,884 $ 850,430 $ 1,061,393  
Gross Profit 235,374 293,922 752,092 963,947  
Total Assets 1,029,396   1,029,396   $ 1,091,943
Discontinued Operations [Member]          
Total Assets 2,004   2,004   29,691
United States [Member]          
Revenue 270,851 320,476 839,992 1,051,237  
Gross Profit 230,321 291,536 741,675 953,861  
Total Assets 1,014,817   1,014,817   1,055,312
Europe [Member]          
Revenue 5,074 2,408 10,438 10,156  
Gross Profit 5,053 $ 2,386 10,417 $ 10,086  
Total Assets $ 12,575   $ 12,575   $ 6,940
XML 51 R40.htm IDEA: XBRL DOCUMENT v3.20.2
Equity (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Weighted-average remaining contractual life of outstanding warrants 0 years  
Weighted-average remaining contractual life of outstanding options 8 months 26 days  
Fountainhead [Member] | Consulting Agreement [Member]    
Number of common stock issued for fees 1,607,142 1,607,142
Number of common stock issued for fees, value $ 337,500 $ 337,500
Non Employee Directors [Member] | Directors Deferred Compensation Plan [Member]    
Shares issued for services 266,664 266,664
Value of shares issued for services $ 56,000 $ 56,000
XML 52 R41.htm IDEA: XBRL DOCUMENT v3.20.2
Equity - Schedule of Stock Warrants (Details)
9 Months Ended
Sep. 30, 2020
$ / shares
shares
Equity [Abstract]  
Number of shares Warrants Outstanding, Beginning Balance | shares 3,717,826
Number of shares Warrants, Granted | shares
Number of shares Warrants, Exercised | shares
Number of shares Warrants, Cancelled or expired | shares (3,717,826)
Number of shares Warrants Outstanding, Ending Balance | shares
Weighted average exercise price per share Warrants, Outstanding, Beginning Balance | $ / shares $ 0.27
Weighted average exercise price per share Warrants, Granted | $ / shares
Weighted average exercise price per share Warrants, Exercised | $ / shares
Weighted average exercise price per share Warrants, Cancelled or expired | $ / shares 0.27
Weighted average exercise price per share Warrants, Outstanding, Ending balance | $ / shares $ 0.00
XML 53 R42.htm IDEA: XBRL DOCUMENT v3.20.2
Equity - Schedule of Stock Options (Details)
9 Months Ended
Sep. 30, 2020
$ / shares
shares
Equity [Abstract]  
Number of shares Options Outstanding, Beginning Balance | shares 700,000
Number of shares Options, Granted | shares
Number of shares Options, Exercised | shares
Number of shares Options, Cancelled or expired | shares (20,000)
Number of shares Options Outstanding, Ending Balance | shares 680,000
Weighted average exercise price per share Options, Outstanding, Beginning Balance | $ / shares $ 0.28
Weighted average exercise price per share Options, Granted | $ / shares
Weighted average exercise price per share Options, Exercised | $ / shares
Weighted average exercise price per share Options, Cancelled or Expired | $ / shares (0.27)
Weighted average exercise price per share Options, Outstanding, Ending balance | $ / shares $ 0.28
XML 54 R43.htm IDEA: XBRL DOCUMENT v3.20.2
Share-Based Compensation (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Non-employee [Member]    
Share-based compensation $ 266,664 $ 299,997
Directors [Member] | Directors Deferred Compensation Plan [Member]    
Stock granted but not issued 56,000 63,000
Total unrecognized compensation costs 0 0
Employee Stock Options [Member]    
Share-based compensation $ 0 $ 0
XML 55 R44.htm IDEA: XBRL DOCUMENT v3.20.2
Commitments and Contingencies (Details Narrative)
9 Months Ended
Oct. 31, 2016
USD ($)
Jun. 30, 2012
USD ($)
Jun. 30, 2012
EUR (€)
Sep. 30, 2020
USD ($)
Sep. 30, 2020
EUR (€)
Sep. 30, 2019
USD ($)
Jun. 30, 2012
EUR (€)
Rent expense       $ 59,008   $ 57,202  
Lease termination date       Sep. 30, 2020 Sep. 30, 2020    
Trade tax reduced $ 82,000 $ 82,000          
Interest expenses 13,200 $ 13,200          
Euro Currency [Member]              
Trade tax reduced 75,000           € 75,000
Interest expenses $ 12,000   € 12,000        
German [Member]              
Rent expense       $ 1,815      
German [Member] | Euro Currency [Member]              
Rent expense | €         € 1,650    
Office Space [Member]              
Rent expense       $ 5,700      
Lease termination date       Aug. 31, 2023 Aug. 31, 2023    
XML 56 R45.htm IDEA: XBRL DOCUMENT v3.20.2
Consulting and Other Agreements (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Stock option cash $ 393,500 $ 401,440
Fountainhead Consulting Agreement [Member] | March 2017 and Effective April 1, 2017 [Member]    
Payment of fees 450,000  
Stock option cash $ 5,000  
Common stock exercise price $ 0.21  
Amendment Agreement [Member]    
Number of common stock issued for fees, value $ 337,500 $ 337,500
Number of common stock issued for fees 1,607,142 1,607,142
XML 57 R46.htm IDEA: XBRL DOCUMENT v3.20.2
Related Party Transactions (Details Narrative) - USD ($)
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Fountainhead [Member] | Consultancy Agreement [Member]    
Number of common stock issued for fees 1,607,142 1,607,142
Number of common stock issued for fees, value $ 337,500 $ 337,500
Preferred D Stock dividends [Member]    
Accrued dividends 324,370 324,370
Fountainhead [Member]    
Accrued dividends 226,037 226,037
Fountainhead [Member] | Unsecured Loan [Member]    
Unsecured loan notes issued $ 80,000 $ 17,873
Unsecured loan notes interest rate 10.00% 10.00%
Fountainhead [Member] | Directors [Member]    
Equity ownership percentage 59.70%  
Fountainhead [Member] | Directors [Member] | Series D Preferred Stock [Member]    
Equity ownership percentage 70.00%  
Fountainhead [Member] | Peter Zachariou [Member] | Series D Preferred Stock [Member]    
Equity ownership percentage 26.00%  
Peter Zachariou [Member]    
Accrued dividends $ 83,386 $ 83,386
XML 58 R47.htm IDEA: XBRL DOCUMENT v3.20.2
Concentration (Details Narrative) - Purchase [Member]
9 Months Ended
Sep. 30, 2020
Manufacturer One [Member]  
Concentration risk, percentage 10.00%
Manufacturer Two [Member]  
Concentration risk, percentage 10.00%
Manufacturer Three [Member]  
Concentration risk, percentage 10.00%
XML 59 R48.htm IDEA: XBRL DOCUMENT v3.20.2
Concentration - Schedule of Concentration (Details) - Number
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Dec. 31, 2019
Sales Revenue [Member]          
Number of customers over 10% 0 1 1 1  
Sales Revenue [Member] | Customer One [Member]          
Concentration risk, percentage 0.00% 12.00% 14.00% 10.00%  
Accounts Receivable [Member]          
Number of customers over 10%     2   1
Accounts Receivable [Member] | Customer One [Member]          
Concentration risk, percentage         37.00%
Accounts Receivable [Member] | Customer One [Member] | Minimum [Member]          
Concentration risk, percentage     11.00%    
Accounts Receivable [Member] | Customer One [Member] | Maximum [Member]          
Concentration risk, percentage     15.00%    
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