Vycor Medical Inc 10-Q for FY2024 Q3
Vycor Medical Inc (VYCO)
About this 10-Q
Vycor Medical Inc filed this 10-Q on November 13, 2024, covering the quarter ended September 30, 2024 (FY2024 Q3).
Headline figures
Quarter ended September 30, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $390.85K
- up 26.7% from $308.59K a year earlier
- Net loss
- $59.82K
- compared with a net loss of $51.9K a year earlier
- Diluted EPS
- -$0.01
- compared with -$0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM
(Mark One)
| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For
the fiscal quarter ended | |
| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT | |
| For the transition period from to |
(Exact name of small business issuer as specified in its charter)
| (State of | (Commission | (IRS Employer | ||
| Incorporation) | File Number) | Identification No.) |
(Address of principal executive offices) (Zip code)
Issuer’s
telephone number:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||
| 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.
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 ☐
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 ☐ |
| Smaller
Reporting Company | |
| Emerging
Growth Company |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes
There were shares outstanding of registrant’s common stock, par value $ per share, as of November 13, 2024.
Transitional Small Business Disclosure Format (check one): Yes ☐ No ☒
TABLE OF CONTENTS
| 2 |
PART 1
ITEM 1. FINANCIAL STATEMENTS
VYCOR MEDICAL, INC.
Consolidated Balance Sheets
(Unaudited)
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Trade accounts receivable | ||||||||
| Inventory | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Current assets of discontinued operations | ||||||||
| Total Current Assets | ||||||||
| Fixed assets, net | ||||||||
| Intangible and Other assets: | ||||||||
| Security deposits | ||||||||
| Operating lease - right of use assets | ||||||||
| Total Intangible and Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued interest: Other | ||||||||
| Accrued interest: Related Party | ||||||||
| Accrued interest | ||||||||
| Accrued liabilities - Other | ||||||||
| Dividends payable - Related Party | ||||||||
| Notes payable: Related Party | ||||||||
| Notes payable: Other | ||||||||
| Notes payable | ||||||||
| Current operating lease liabilities | ||||||||
| Current liabilities of discontinued operations | ( | ) | ( | ) | ||||
| Total Current Liabilities | ||||||||
| Operating lease liability - long term | ||||||||
| Loan payable - SBA EIDL | ||||||||
| Total Liabilities | ||||||||
| STOCKHOLDERS’ DEFICIENCY | ||||||||
| Preferred stock, $ par value, shares authorized | ||||||||
| Preferred C Stock, and share issued and outstanding as at September 30, 2024 and December 31, 2023 respectively | ||||||||
| Preferred D Stock, and shares issued and outstanding as at September 30, 2024 and December 31, 2023 respectively | ||||||||
| Preferred Stock, Value | ||||||||
| Common Stock, $ par value, shares authorized at September 30, 2024 and December 31, 2023, and shares issued and and shares outstanding at September 30, 2024 and December 31, 2023 respectively | ||||||||
| Additional Paid-in Capital | ||||||||
| Treasury Stock ( shares of Common Stock as at September 30, 2024 and December 31, 2023 respectively, at cost) | ( | ) | ( | ) | ||||
| Accumulated Deficit | ( | ) | ( | ) | ||||
| Accumulated Other Comprehensive Income | ||||||||
| Total Stockholders’ Deficiency | ( | ) | ( | ) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIENCY | $ | $ | ||||||
See accompanying notes to consolidated financial statements
| 3 |
VYCOR MEDICAL, INC.
Consolidated Statements of Comprehensive Income (Loss)
(Unaudited)
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Research and development | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total Operating Expenses | ||||||||||||||||
| Operating income (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense: Related Party | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense: Other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income | ||||||||||||||||
| Loss on foreign currency exchange | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total Other Income (Expense) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (Loss) Before Provision for Income Taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Provision for income taxes | ||||||||||||||||
| Net Income (Loss) from continuing operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from discontinued operations, net of tax | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Income (Loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Preferred stock dividends | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Loss Available to Common Stockholders | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other Comprehensive Income (Loss) | ||||||||||||||||
| Foreign Currency Translation Adjustment | ||||||||||||||||
| Comprehensive Income (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| Loss Per Share - basic and diluted | ||||||||||||||||
| Loss from continuing operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Loss from discontinued operations | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Loss available to common stockholders | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted Average Number of Shares Outstanding – Basic and Diluted | ||||||||||||||||
See accompanying notes to consolidated financial statements
| 4 |
VYCOR MEDICAL, INC.
Consolidated Statements of Stockholders’ Deficiency
(Unaudited)
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | Capital | Deficit | (Loss) | Total | |||||||||||||||||||||||||||||||||||||
| Common Stock | Preferred C | Preferred D | Treasury Stock | Additional Paid-in | Accumulated | Accum OCI | ||||||||||||||||||||||||||||||||||||||||||
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | Capital | Deficit | (Loss) | Total | |||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock for board and consulting fees | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss for three months ended September 30, 2024 | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Preferred Stock dividends | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock for board and consulting fees | ||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and cancellation of stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net loss for nine months ended September 30, 2024 | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock dividends | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| 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, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock for board and consulting fees | ||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of stock for board and consulting fees, shares | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss for three months ended September 30, 2023 | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||||||||||
| Preferred Stock dividends | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock for board and consulting fees | ||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | ||||||||||||||||||||||||||||||||||||||||||||||||
| Net income for nine months ended September 30, 2023 | - | - | - | - | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock dividends | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Balance | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | $ | ( | ) | ||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements
| 5 |
VYCOR MEDICAL, INC.
Consolidated Statements of Cash Flows
(Unaudited)
| For the nine months ended | ||||||||
| September 30, | September 30, | |||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | ( | ) | $ | ||||
| Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||||
| Depreciation of fixed assets | ||||||||
| Allowance for doubtful accounts – accounts receivable | ||||||||
| Stock based compensation | ||||||||
| Changes in operating 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 provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Purchase of fixed assets net of sales | ( | ) | ( | ) | ||||
| Cash used by investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds - Notes Payable Other | ||||||||
| Repayments - Notes Payable Other | ( | ) | ( | ) | ||||
| Cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ||||||||
| Net increase in cash | ||||||||
| Cash at beginning of period | ||||||||
| Cash at end of period | $ | $ | ||||||
| Supplemental Disclosures of Cash Flow information: | ||||||||
| Cash paid for interest | $ | $ | ||||||
| Cash paid for income tax | $ | $ | ||||||
| Non-Cash Activities | ||||||||
| Non-cash accrued dividends | $ | $ | ||||||
| Unamortized stock compensation | $ | $ | ||||||
See accompanying notes to consolidated financial statements
| 6 |
VYCOR MEDICAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2024
(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, 2023 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, 2023.
The unaudited consolidated financial statements as of and for the three and nine months ended September 30, 2024 and 2023, 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 three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected for any other interim period or for the entire year.
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 $
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 $
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 account balances, 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 FASB issued Accounting Standards Update (ASU) 2023-07 in November 2023, effective for fiscal years beginning after December 15, 2023. The ASU is designed to improve reportable segment disclosures. Management has assessed the ASU and has concluded that it does not have an impact on its accounting or reporting, as the additional disclosure effects items that are not applied at a segment level. The Company believes that other 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.
| 7 |
During the nine months ended September 30, 2024 the Company repurchased shares from a single shareholder. The Company followed guidance ASC 505-30-30, retiring the stock and reducing Equity by the nominal value of the shares repurchased and reducing Additional Paid In Capital by the balance of the consideration paid.
Revenue Recognition
On January 1, 2018, the Company adopted, ASC 606, Revenue from Contracts with Customers and all the related amendments (new revenue standard) to all contracts.
Vycor Medical generates revenue from the sale of its surgical access system to hospitals and other medical professionals. Vycor Medical records revenue from product sales when obligations under the terms of a contract with customers are satisfied. Generally, this occurs with the transfer of control of the goods to customers. Vycor Medical does not provide for product returns or warranty costs.
Vycor determines revenue recognition through the following steps:
| ● | Identification of the contract, or contracts, with a customer | |
| ● | Identification of the performance obligations in the contract | |
| ● | Determination of the transaction price | |
| ● | Allocation of the transaction price to the performance obligations in the contract | |
| ● | Recognition of revenue when Vycor satisfy a performance obligation |
NovaVision generates revenues from various programs, therapy services and other sources such as software license sales. Therapy services revenues represent fees from NovaVision’s vision restoration therapy software, eye movement training software, diagnostic software, clinic set up and training fees, and the professional and support services associated with the therapy. NovaVision provides vision restoration therapy directly to patients. The typical therapy program consists of NeuroEyeCoach, performed over 2-4 weeks, and six modules of Vision Restoration Therapy, performed over 6 months. A patient contract comprises set-up fees and monthly therapy fees. Set-up fees are recognized at the outset of the contract and therapy revenue is recognized ratably over the therapy period. Patient therapy is restricted to being completed by a patient within a specified time frame.
Deferred revenue results from patients paying for the therapy in advance of receiving the therapy.
The Company disaggregates its revenue by division – Vycor and NovaVision – and by geography – United States and Europe – and presents the disaggregation in Note 7.
Basic net income (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (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 conversion of preferred stock and convertible debt. Such potentially dilutive shares are excluded when the effect would be to increase a net income per share or reduce a net loss per share. No dilution adjustment has been made to the weighted average outstanding common shares in the periods presented of net loss because the assumed conversion of preferred stock and debt would be anti-dilutive.
SCHEDULE OF COMMON STOCK NOT INCLUDED IN CALCULATION OF DILUTED NET LOSS PER SHARE
| September 30, 2024 | September 30, 2023 | ||||||||
| Debentures convertible into common stock | |||||||||
| Preferred shares convertible into common stock | |||||||||
| Total | |||||||||
| Anti-dilutive shares | |||||||||
Reclassifications
Certain prior period amounts have been reclassified to conform with the current period presentation; on the cash flow statement, proceeds from and repayments of insurance financing has been separated out rather than being netted off; on the statements of stockholders’ deficiency, net income (loss) for the period and preferred stock dividends have been separated out rather than being combined.
| 8 |
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; effective July 1, 2020, Vycor entered into a license agreement with a German-based partner. 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 from discontinued operations that are presented in the unaudited consolidated balance sheets and unaudited consolidated statements of comprehensive income (loss) are as follows:
SCHEDULE OF DISCONTINUED OPERATIONS
Major line items constituting assets and liabilities in the unaudited consolidated balance sheets
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash | $ | $ | ||||||
| Total Current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Other current liabilities | ( | ) | ( | ) | ||||
| Total Current Liabilities | $ | ( | ) | $ | ( | ) | ||
Major line items constituting loss from discontinued operations
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Goods Sold | ||||||||||||||||
| Gross Profit | ||||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Total Operating Expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Loss on foreign currency exchange | ( | ) | ||||||||||||||
| Total Other Income (Expense) | ( | ) | ||||||||||||||
| Loss Before Provision for Income Taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Loss from discontinued operations, net of tax | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| 9 |
4. NOTES PAYABLE
Related Parties Notes Payable
Related Party Notes Payable consists of:
SUMMARY OF NOTES PAYABLE
| September 30, 2024 | December 31, 2023 | |||||||
| On
June 25, 2018 the Company issued promissory notes to Peter Zachariou for $ | $ | $ | ||||||
| Between
March 26, 2018 and November 17, 2022 the Company issued fifteen promissory notes to Fountainhead Capital Management Limited for $ | ||||||||
| Total Related Party Notes Payable | $ | $ | ||||||
Other Notes Payable
Other Notes Payable consists of:
| September 30, 2024 | December 31, 2023 | |||||||
| On
March 25, 2011 the Company issued a term note for $ | $ | $ | ||||||
| Insurance policy finance agreements and current portion of EIDL Loan (see Long-Term Notes Payable below) | ||||||||
| Total Other Notes Payable: | $ | $ | ||||||
Long-Term Notes Payable consists of:
| September 30, 2024 | December 31, 2023 | |||||||
| On
July 7, 2020, the Company was granted a $ | $ | $ | ||||||
| Total Long-term Notes Payable: | $ | $ | ||||||
| 10 |
In
January 2018 the Company entered into an amendment agreement (the “Amendment”) with EuroAmerican Investments (“EuroAmerican”)
regarding its $
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. INVENTORY
SCHEDULE OF INVENTORY
September 30, 2024 | December 31, 2023 | |||||||
| Raw materials and work in process | $ | $ | ||||||
| Finished goods | ||||||||
| Total Inventory | $ | $ | ||||||
6. LEASE
The Company recognized the following related to a lease in its unaudited consolidated balance sheets at September 30, 2024 and December 31, 2023:
SCHEDULE OF SUPPLEMENTAL BALANCE SHEET INFORMATION RELATED TO LEASES
| September 30, 2024 | December 31, 2023 | |||||||
| Operating Lease ROU Assets | $ | $ | ||||||
| Operating Lease Liabilities | ||||||||
| Current portion | $ | $ | ||||||
| Long-term portion | ||||||||
| Operating Lease Liabilities Total | $ | $ | ||||||
| 11 |
7. SEGMENT REPORTING, GEOGRAPHICAL INFORMATION
(a) Business segments
The
Company operates in
SCHEDULE OF BUSINESS SEGMENTS INFORMATION
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue: | ||||||||||||||||
| Vycor Medical | $ | $ | $ | $ | ||||||||||||
| NovaVision | ||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Gross Profit | ||||||||||||||||
| Vycor Medical | $ | $ | $ | $ | ||||||||||||
| NovaVision | ||||||||||||||||
| Gross Profit | $ | $ | $ | $ | ||||||||||||
| Operating Income (Loss) | ||||||||||||||||
| Vycor Medical | $ | $ | $ | $ | ||||||||||||
| NovaVision | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Corporate | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating Income (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Total Assets: | ||||||||
| Vycor Medical | $ | $ | ||||||
| NovaVision | ||||||||
| Discontinued operations | ||||||||
| Total Assets | $ | $ | ||||||
(b) Geographic segments
The
Company operates in
SUMMARY OF GEOGRAPHIC INFORMATION
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue: | ||||||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Europe | ||||||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Gross Profit | ||||||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Europe | ||||||||||||||||
| Gross Profit | $ | $ | $ | $ | ||||||||||||
| Operating Income (Loss) | ||||||||||||||||
| United States | $ | $ | $ | $ | ||||||||||||
| Europe | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Corporate | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Operating Income (Loss) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Total Assets: | ||||||||
| United States | $ | $ | ||||||
| Europe | ||||||||
| Discontinued operations | ||||||||
| Total Assets | $ | $ | ||||||
| 12 |
8. EQUITY
Equity Transactions
On August 16, 2024 pursuant to a Share Purchase Agreement, Vycor repurchased and cancelled shares of Company Common Stock from Alvaro Pascual-Leone M.D. for a total purchase price of $.
On
August 27, 2024 Vycor issued shares of Company Common Stock (valued at $
During
each of the three and nine months ended September 30, 2024 and 2023, the Company accrued $
On April 1, 2023 the Company issued shares of Common Stock to Ricardo Komotar (RJK Consulting), a consultant, in accordance with the terms of a consulting agreement (see Note 11).
Equity Classes
Our authorized capital stock consists of shares of common stock, par value $ per share, and shares of preferred stock, par value $ per share, the rights and preferences of which may be established from time to time by our board. As of November 13, 2024, there were shares of common stock, one () share of Series C Preferred Stock (“Preferred C Stock”) and shares of Series D Preferred Stock (“Preferred D Stock”) outstanding.
Holders of our common stock are entitled to one vote for each share on all matters voted upon by our stockholders, including the election of directors, and do not have cumulative voting rights. Subject to the rights of holders of any then outstanding shares of our preferred stock, our common stockholders are entitled to any dividends that may be declared by our board. Holders of our common stock are entitled to share ratably in our net assets upon our dissolution or liquidation after payment or provision for all liabilities and any preferential liquidation rights of our preferred stock then outstanding. Holders of our common stock have no preemptive rights to purchase shares of our stock. The shares of our common stock are not subject to any redemption provisions and are not convertible into any other shares of our capital stock. All outstanding shares of our common stock are, and the shares of common stock to be issued in the offering will be, upon payment therefor, fully paid and non-assessable. The rights, preferences and privileges of holders of our common stock will be subject to those of the holders of any shares of our preferred stock we may issue in the future.
Preferred C Stock shares are convertible (at the Holder’s option or mandatorily upon the occurrence of certain events) into shares of the Company’s Common Stock (at $ per share). The Preferred C Stock carries no dividend or other rights.
Preferred
D Stock shares are convertible into Company Common Shares at a price of $. The Series D carry a cumulative preferred dividend of
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” using an option pricing model, or their contractual value if different in the case of common stock. 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.
Non-Employee Stock Compensation
Aggregate stock-based compensation for shares of common stock granted to non-employees for each of the nine months ended September 30, 2024 and 2023 was $ and $ respectively. Aggregate stock-based compensation for shares of common stock granted to non-employees for each of the three months ended September 30, 2024 and 2023 was $ and $ respectively. As of September 30, 2024 and December 31, 2023, there was $ and $ respectively of total unrecognized compensation costs related to warrant and stock awards and non-vested options (see Note 11).
| 13 |
10. 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 $
Potential German tax liability
In
June 2012 the Company’s NovaVision German subsidiary received a preliminary assessment for Magdeburg City trade tax of €
11. CONSULTING AND OTHER AGREEMENTS
The following agreements were entered into or remained in force during the periods ended September 30, 2024 and 2023:
On
August 27, 2024 Vycor entered into a financial advisory and investment banking services agreement (“Agreement”) with Maxim.
Under the terms of the Agreement, Maxim will assist Vycor in its strategy to grow the Company through strategic acquisitions and assist
the Company with efforts to position itself for a potential uplisting to a US exchange. Vycor issued shares of Company Common
Stock (valued at $
On
March 30, 2021, Vycor entered into a Consulting Agreement with Ricardo J. Komotar, M.D. (the “Agreement”) to provide certain
specified services over the three-year term of the Agreement. On April 1, 2023, shares
of Company Common Stock (valued at $
12. RELATED PARTY TRANSACTIONS
Peter
Zachariou and David Cantor, directors of the Company, are investment managers of Fountainhead which owned, at September 30, 2024,
During
each of the nine months ended September 30, 2024 and 2023, the Company accrued an aggregate of $
During
the nine months ended September 30, 2024 and 2023 the Company accrued interest on related party loans of $
During
the three months ended September 30, 2024 and 2023 the Company accrued interest on related party loans of $
| 14 |
13. CONCENTRATION
Vycor Medical sells its neurosurgical devices in the US primarily direct to hospitals, and internationally through distributors who in turn sell to hospitals.
SCHEDULE OF CONCENTRATION
Sales Concentration:
| For
the three months ended September 30, | For
the nine months ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Number of customers over 10% | ||||||||||||||||
| Percentage of sales | % | % | % | % | ||||||||||||
Accounts Receivable Concentration
At September 30, 2024 | At December 31, 2023 | |||||||
| Number of customers over 10% | ||||||||
| Percentage of accounts receivable | % | % | ||||||
The
Company has three sub-contract manufacturers from which it purchases, respectively, VBAS injection molded parts, completed and sterilized
VBAS units, and 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
14. 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 that would require recognition or disclosure in the financial statements.
| 15 |
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.” (“Vycor”). 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”), a previous competitor to NovaVision.
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. The Company leverages joint resources across the divisions to operate in a cost-efficient manner.
| 16 |
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. 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 several other international markets.
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.
Strategy
The Company is continuing to execute on a plan to achieve revenue growth. The strategy for Vycor Medical includes: increasing market penetration in the US; increasing international growth in territories where we are not represented or under-represented; continued new product development in response to market demands and demonstrating applicability in a broader range of pathologies; and adding products complementary to VBAS where the Company is able to leverage its existing distribution network.
The strategy 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 patient and professional products is by partnering with entities that have either direct access to the end users or the technological capability to leverage the NovaVision therapy platform, particular in digital health and into non-medical areas. 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.
In August 2024 the Company engaged the services of Maxim Group LLC to assist in its strategy to accelerate the growth of the Company through strategic acquisitions and partnerships.
Comparison of the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023
Revenue and Gross Margin:
| Three months ended September 30, | ||||||||||||
| 2024 | 2023 | % Change | ||||||||||
| Revenue: | ||||||||||||
| Vycor Medical | $ | 372,837 | $ | 287,559 | 30 | % | ||||||
| NovaVision | 18,015 | 21,034 | -14 | % | ||||||||
| $ | 390,852 | $ | 308,593 | 27 | % | |||||||
| Gross Profit | ||||||||||||
| Vycor Medical | $ | 337,404 | $ | 256,435 | 32 | % | ||||||
| NovaVision | 16,652 | 19,824 | -16 | % | ||||||||
| $ | 354,056 | $ | 276,259 | 28 | % | |||||||
Vycor Medical recorded revenue of $372,837 from the sale of its products for the three months ended September 30, 2024, an increase of $85,278, or 30%, over the same period in 2023, primarily in the US. Gross margin of 90% and 89% was recorded for the three months ended September 30, 2024 and 2023, respectively.
NovaVision recorded revenues of $18,015 for the three months ended September 30, 2024, a decrease of $3,019, or (14%), over the same period in 2023. Gross margin was 92%, compared to 94% for the same period in 2023.
| 17 |
Selling, General and Administrative Expenses:
Selling, general and administrative expenses increased by $87,773 to $367,886 for the three months ended September 30, 2024 from $280,113 for the same period in 2023. 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, 2024 was $6,105, a $3,742 increase from the charge in 2023. Also included within Selling, General and Administrative Expenses are Sales Commissions, which increased by $26,613 from $50,088 in 2023 to $76,701 in 2024 reflecting higher US sales during the current period of 2024.
The remaining Selling, General and Administrative expenses increased by $57,418 from $227,662 in 2023 to $285,080 in 2024, as follows:
| Regulatory | $ | 33,915 | ||
| Payroll | 21,371 | |||
| Other | 2,132 | |||
| $ | 57,418 |
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, 2024 was $12,571 compared to $12,436 for 2023. Other Interest expense for the three months ended September 30, 2024 was $13,419 compared to $13,484 for 2023.
Other Income:
Other income comprises the historic customer credits written off of $1,458 during the three months ended September 30, 2024.
Operating loss from Discontinued Operations:
Operating loss from Discontinued Operations decreased by $378 to $47 in 2024 from $425 in 2023; the Company has some minor ongoing costs related to the wind-down of the discontinued operations in Germany but no revenues.
Comparison of the Nine Months Ended September 30, 2024 to the Nine Months Ended September 30, 2023
Revenue and Gross Margin:
| Nine months ended | ||||||||||||
| September 30, | ||||||||||||
| 2024 | 2023 | % Change | ||||||||||
| Revenue: | ||||||||||||
| Vycor Medical | $ | 1,078,644 | $ | 1,087,758 | -1 | % | ||||||
| NovaVision | 55,454 | 64,597 | -14 | % | ||||||||
| $ | 1,134,098 | $ | 1,152,355 | -2 | % | |||||||
| Gross Profit | ||||||||||||
| Vycor Medical | $ | 973,443 | $ | 989,288 | -2 | % | ||||||
| NovaVision | 51,690 | 60,137 | -14 | % | ||||||||
| $ | 1,025,133 | $ | 1,049,425 | -2 | % | |||||||
Vycor Medical recorded revenue of $1,078,644 from the sale of its products for the nine months ended September 30, 2024, a decrease of $9,114, or (1%), over the same period in 2023. The 2023 revenues included an international pre-order of which approximately $35,000 related to sales that would normally have occurred in the October to December 2023 period. Gross margin of 90% and 91% was recorded for the nine months ended September 30, 2024 and for the same period in 2023.
NovaVision recorded revenues of $55,454 for the nine months ended September 30, 2024, a decrease of $9,143, or (14%), over the same period in 2023. Gross margin was 93% for both periods in 2024 and 2023.
| 18 |
Selling, General and Administrative Expenses:
Selling, general and administrative expenses increased by $118,549 to $1,000,293 for the nine months ended September 30, 2024 from $881,744 for the same period in 2023. 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 nine months ended September 30, 2024 was $8,469, an increase of $692 from $7,777 in 2023. Also included within Selling, General and Administrative Expenses are Sales Commissions, which increased by $14,513 from $208,559 in 2023 to $223,072 in 2024 reflecting higher US sales during the current period of 2024.
The remaining Selling, General and Administrative expenses increased by $103,344 from $665,408 to $768,752 in 2024 as follows:
| Regulatory | $ | 57,635 | ||
| Rent | 9,321 | |||
| Scientific and clinical consulting | 8,300 | |||
| Other | 28,088 | |||
| Total change | $ | 103,344 |
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, 2024 was $37,443 compared to $37,080 for 2023. Other Interest expense for the nine months ended September 30, 2024 was $40,084 compared to $40,077 for 2023.
Other Income:
Other income comprises the historic customer credits written off of $6,002 during the nine months ended September 30, 2024.
Operating loss from Discontinued Operations:
Operating loss from Discontinued Operations decreased by $3,320 to $197 in 2024 from $3,517 in 2023; the Company has some minor ongoing costs related to the wind-down of the discontinued operations in Germany but no revenues.
Liquidity
The following table shows liquidity data as of September 30, 2024 and December 31, 2023:
| September 30, 2024 | December 31, 2023 | $ Change | ||||||||||
| Cash | $ | 157,633 | $ | 57,291 | $ | 100,342 | ||||||
| Accounts receivable, inventory and other current assets | $ | 585,797 | $ | 526,799 | $ | 58,998 | ||||||
| Total current liabilities | $ | (4,552,889 | ) | $ | (4,074,487 | ) | $ | (478,402 | ) | |||
| Working capital | $ | (3,809,459 | ) | $ | (3,490,397 | ) | $ | (319,062 | ) | |||
The following table shows cash flow for the periods ended September 30, 2024 and 2023:
| September 30, 2024 | September 30, 2023 | $ Change | ||||||||||
| Cash provided by operating activities | $ | 98,391 | $ | 23,922 | $ | 74,469 | ||||||
| Cash used in investing activities | $ | (4,369 | ) | $ | (3,482 | ) | $ | (887 | ) | |||
| Cash provided by financing activities | $ | 6,320 | $ | 11,578 | $ | (5,258 | ) | |||||
| Effect of exchange rate changes on cash | $ | - | $ | 2 | $ | (2 | ) | |||||
| Net increase in cash | $ | 100,342 | $ | 32,020 | $ | 68,322 | ||||||
| 19 |
Operating Activities. Cash provided by 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 provided by operating activities.
The following table shows the principal components of cash provided by operating activities during the nine months ended September 30, 2024 and 2023, with a commentary of changes during the periods and known or anticipated future changes:
| September 30, 2024 | September 30, 2023 | $ Change | ||||||||||
| Net income (loss) | $ | (100,463 | ) | $ | 23,364 | $ | (123,827 | ) | ||||
| Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||||||||||||
| Depreciation of fixed assets | $ | 47,041 | $ | 45,650 | $ | 1,391 | ||||||
| Allowance for doubtful accounts - accounts receivable | $ | 3,375 | $ | - | $ | 3,375 | ||||||
| Stock based compensation | $ | 8,469 | $ | 7,777 | $ | 692 | ||||||
| $ | 58,885 | $ | 53,427 | $ | 5,458 | |||||||
| Net income (loss) adjusted for non-cash items | $ | (41,578 | ) | $ | 76,791 | $ | (118,369 | ) | ||||
| Changes in working capital | ||||||||||||
| Accounts receivable | $ | (26,844 | ) | $ | (99,062 | ) | $ | 72,218 | ||||
| Accounts payable and accrued liabilities | $ | 69,358 | $ | (56,319 | ) | $ | 125,677 | |||||
| Inventory | $ | 46,518 | $ | 44,135 | $ | 2,383 | ||||||
| Prepaid expenses | $ | (22,737 | ) | $ | (15,519 | ) | $ | (7,218 | ) | |||
| Accrued interest (not paid in cash) | $ | 73,477 | $ | 72,981 | $ | 496 | ||||||
| Changes in discontinued operations, net | $ | 197 | $ | 915 | $ | (718 | ) | |||||
| $ | 139,969 | $ | (52,869 | ) | $ | 192,838 | ||||||
| Cash provided by operating activities | $ | 98,391 | $ | 23,922 | $ | 74,469 | ||||||
The adjustments to reconcile net loss to cash of $58,885 in the period have no impact on liquidity. The negative change in net income (loss) adjusted for non-cash items of $118,369 was primarily due a decrease in sales and an increase in certain expenses, particularly regulatory. The change in accounts payable and accrued liabilities of $125,677 between the 2024 and 2023 periods was partly due to the settlement of expenses during the 2023 period that were incurred during the final quarter of 2022 and a timing increase in accounts payable and accrued liabilities in the 2024 period.
Additional inventory of $46,292 was purchased during the nine months ended September 30, 2024 as part of normal production, and the Company anticipates purchasing additional new inventory of approximately $100,000 during the next twelve months for VBAS devices.
Investing Activities. Cash used for the purchase of chinrests, net of sales, during the nine months ended September 30, 2024 and 2023 was $4,369 and $3,482, respectively. The Company anticipates limited investing activities during the next twelve months.
Financing Activities. During the nine months ended September 30, 2024, the Company repaid loans primarily related to insurance of $54,660 and received insurance financing proceeds of $60,980. During the nine months ended September 30, 2023 the Company received insurance financing proceeds of $64,786 and made repayments of $53,208.
| 20 |
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 $100,463 for the nine months ended September 30, 2024 and has not generated sufficient positive cash flows from operations. As of September 30, 2024 the Company had a working capital deficiency of $3,809,459, which includes related party liabilities of $3,321,298. 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 1 “Strategy”, the Company is executing on a plan to achieve a growth in revenues. Included within the working capital deficiency above is a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”), together with accrued interest of $508,931, which has a maturity date of March 31, 2025, 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 March 31, 2025 will be available. However, the Company believes it may not have sufficient cash to meet its various cash needs through November 30, 2025 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.
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, provision for inventory obsolescence, useful life 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, 2023.
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 a material weakness occurred as of April 1, 2021 with the resignation of the independent members of the Company’s Audit Committee as of that date. Effective that date, our disclosure and controls were no longer effective to ensure 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.
The matter involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were a lack of a functioning audit committee with independent members, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures. This weakness occurred as of April 1, 2021 due to the resignation of the independent members of the Audit Committee from the Board of Directors effective as of April 1, 2021.
| 21 |
Management believes that the material weakness set forth did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors, results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.
(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.
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, 2024, 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 | ||||||
| Advisory agreement fees: Maxim Group LLC | Common | 813,971 | ||||||
| Shares repurchase and cancelled: Alvaro Pascual-Leone | Common | (70,010 | ) | |||||
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. | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| 22 |
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, 2024
| Vycor Medical, Inc. | ||
| (Registrant) | ||
| By: | /s/ Peter C. Zachariou | |
| Peter C. Zachariou | ||
| Chief Executive Officer and Director | ||
| (Principal Executive Officer) | ||
| Date | November 13, 2024 | |
| By: | /s/ Adrian Liddell | |
| Adrian Liddell | ||
| Chairman of the Board and Director | ||
| (Principal Financial and Accounting Officer) | ||
| Date | November 13, 2024 | |
| 23 |
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, 2024 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, 2024 | |
| /s/ Peter Zachariou | |
| Peter C. Zachariou | |
| Principal Executive Officer |
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, 2024 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, 2024 | |
| /s/ Adrian Liddell | |
| Adrian Liddell | |
| Principal Financial Officer |
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, 2024 (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, 2024
| /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.
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, 2024 (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, 2024
| /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.