UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A
Amendment No. 1

x  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2010

Or

o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  ___________ to ___________

Commission file number: 333-149782

 

VYCOR MEDICAL, INC.

(Exact name of registrant as specified in charter)

 

	Delaware			20-3369218
	(State or other jurisdiction of			(I.R.S. Employer
	incorporation or organization)			Identification No.)

3651 FAU Boulevard, Suite 300, Boca Raton, FL 33434
(Address of principal executive offices) (Zip Code)

Registrant's telephone Number: (561) 558-2000
Securities registered pursuant to section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
o   Yes     x   No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
o   Yes     x   No

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.     x   Yes     o   No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

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", "non-accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

	Large Accelerated Filer o						Accelerated Filer o
	Non-accelerated Filer o (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).     o   Yes     x   No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. $5,669,817 (assuming $0.03 per share)

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. 732,317,876 shares of common stock par value $0.0001 as of March 28, 2011.

DOCUMENTS INCORPORATED BY REFERENCE: NONE

 

TABLE OF CONTENTS

							Page
				PART I
	Item 1.			Business			5
	Item 1A			Rick Factors			11
	Item 1B			Unresolved Staff Comments			11
	Item 2.			Properties			11
	Item 3.			Legal Proceedings			11
	Item 4.			[Removed and Reserved]			11
				PART II
	Item 5.			Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities			12
	Item 6			Selected Financial Data			13
	Item 7.			Management's Discussion and Analysis of Financial Condition and Results of Operation			14
	Item 7A			Quantitative and Qualitative Disclosures About Market Risk			19
	Item 8.			Financial Statements and Supplementary Data			19
	Item 9.			Changes In and Disagreements with Accountants on Accounting and Financial Disclosure			45
	Item 9A.			Controls and Procedures			45
	Item 9B.			Other Information			46
				PART III
	Item 10.			Directors, Executive Officers, Promoters and Corporate Governance			47
	Item 11.			Executive Compensation			49
	Item 12.			Security Ownership of Certain Beneficial Owners and Management
				and Related Stockholder Matters			50
	Item 13.			Certain Relationships and Related Transactions, and Director Independence			51
	Item 14.			Principal Accountant Fees and Services			52
				PART IV
	Item 15.			Exhibits, Financial Statement Schedules			53
	SIGNATURES						54

Forward-looking Statements

In addition to historical information, this Annual Report on Form 10-K/A includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended ("the Exchange Act"). The forward-looking statements involve risks and uncertainties. Forward-looking statements are identified by words such as "anticipates," "believes," "expects," "intends," "may," "will," and other similar expressions. However, these words are not the only way we identify forward-looking statements. In addition, any statements which refer to expectations, projections, or other characterizations of future events, or circumstances, are forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those set forth below in "Management's Discussion and Analysis of Financial Condition and Results of Operations" "Risk Factors" and those described elsewhere in this report, and those described in our other reports filed with the Securities and Exchange Commission ("SEC"). We caution you not to place undue reliance on these forward-looking statements, which speak only as of the date of this report, and we undertake no obligation to update these forward-looking statements after the filing of this report. You are urged to review carefully and consider our various disclosures in this report and in our other reports publicly disclosed or filed with the SEC that attempt to advise you of the risks and factors that may affect our business.

 

EXPLANATORY NOTE

Vycor Medical, Inc. is filing this Amendment No. 1 on Form 10-K/A (the "Amendment") to its Annual Report on Form 10-K for the year ended December 31, 2010, originally filed March 31, 2011 (the "Original Filing") to amend and restate the following previously-filed consolidated financial statements and selected financial data (and related disclosures) (the "Restatement"): (1) our audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009 and the notes thereto contained in Part II, Item 8 of this Amendment; (2) the selected financial data as of and for the three fiscal years ended December 31, 2010 contained in Part II, Item 6 of this Amendment; and (3) management's discussion and analysis of financial condition and results of operations as of and for the fiscal years ended December 31, 2010 and 2009 contained in Part II, Item 7 of this Amendment.

Financial information related to the years ended December 31, 2010 and 2009, and the interim periods commencing with the period ended March 31, 2010 included in the reports on Forms 10-K and 10-Q previously filed by us and all related earnings press releases and similar communications issued by us during these periods, should not be relied upon. In the event there are discrepancies between this Amendment and previous reports, press releases and similar communications, the information in this Amendment shall control.

Background of the Restatement

In late July 2011, the Company's management re-evaluated certain of its accounting policies and procedures in connection with the preparation of the Company's financial statements for the periods ended June 30, 2011, and determined that it had not properly accounted for warrants issued in connection with certain service agreements and for the beneficial conversion feature of certain convertible debentures. Specifically, management determined that the Company had previously not recognized the fair value of warrants issued in connection with certain consulting or other service agreements at the measurement date, and had previously recognized the expense ratably over the life of the warrant. The Company's management further determined that the proper accounting, following the guidance in ASC Topic 505, is to record the fair value of these warrants as a prepaid expense on the date of issuance, and recognize the expense ratably over the life of the underlying service agreement. In addition, the Company had, since December 2009, been determining the existence of a beneficial conversion feature of convertible debt based on the fair value of the conversion feature on the date of issuance, rather than using the intrinsic value of the conversion feature on the date of issuance, as required under ASC Topic 470.

Following discussions with the Company's independent registered public accounting firm, the Company's management met on August 12, 2011 with the Company's Board of Directors, which concluded that the Company's previously issued consolidated financial statements: (i) for the years ended December 31, 2009 and 2010 (the "Annual Financial Statements") included in the Company's Annual Reports on Form 10-K for the years then ended (the "Annual Reports"); and (ii) for the interim periods ended March 31, 2010, June 30, 2010, September 30, 2010 and March 31, 2011 (collectively, the "Quarterly Financial Statements") included in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010, September 30, 2010 and March 31, 2011 respectively (the "Quarterly Reports") should no longer be relied upon and that the Company should, as soon as practicable, file with the SEC amendments to the aforementioned Annual Reports and Quarterly Reports to restate such Annual Financial Statements and Quarterly Financial Statements to properly record the warrants and beneficial conversion features and to make related adjustments and disclosures in connection therewith. This Amendment to the Form 10-K for the year ended December 31, 2010 incorporates such restatement for the periods presented in this report.

Restatement of Other Financial Statements

The Board of Directors concluded that the Company's accounting for such warrants and the beneficial conversion feature associated with such debentures had not appropriately been recognized for the following periods as follows;

	(i)			for the year ended December 31, 2009 included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2010;
	(ii)			for the three months ended March 31, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 12, 2010;
	(iii)			for the three and six months ended June 30, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 16, 2010;
	(iv)			for the three and nine months ended September 30, 2010 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2010; and
	(v)			for the three months ended March 31, 2011 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 14, 2011

Total Impact from the Foregoing Adjustments

The Company expects that the net impact on the Company's previously reported Net Loss for the 18 month period of October 1, 2009 through March 31, 2011 will be to increase losses by approximately $152,000.

Internal Control Deficiencies

Management determined that there was a deficiency in its internal controls that constitutes a significant deficiency, as discussed in Part II — Item 9A of the Amended Filing. A material weakness in internal control over financial reporting is defined in Section 210.1-02(4) of Regulation S-X as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company's financial reporting.  For a discussion of management's consideration of the Company's disclosure controls and procedures and the significant deficiency identified, see Part II — Item 9 included in this Amended Filing.

For the convenience of the reader, this Amended Filing sets forth the Original Filing in its entirely as modified and superseded where necessary to reflect the restatement. The following items in this report have been amended as a result of the Restatement:

Part II:

Item 6: Selected Financial Data;

Item 7: Management's Discussion and Analysis of Financial Condition and Results of Operations;

Item 8: Financial Statements and Supplementary Data;

Item 9A: Controls and Procedures

Part IV:

Item 15: Exhibits and Financial Statement Schedules

We have not modified or updated disclosures presented in our original annual report on Form 10-K, except as required to reflect the effects of this Restatement. Accordingly, this Form 10-K/A does not reflect events occurring after the Original Filing and does not modify or update those disclosures affected by subsequent events, except specifically referenced herein. Information not affected by the Restatement is unchanged and reflects the disclosures made at the time of the Original Filing on March 31, 2011. References to the annual report on Form 10-K herein shall refer to the annual report on Form 10-K originally filed on March 31, 2011.

PART I

This Form 10-K contains some forward-looking statements. 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 "Business," as well as in this Form 10-K 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-K 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.

ITEM 1. DESCRIPTION OF BUSINESS.

1. Organizational History

We were 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" or the "Company"). The Company's listing went effective on February 2009 and on November 29, 2010, Vycor completed an acquisition of substantially all of the assets of NovaVision, Inc., a company that had been in the business of researching, developing and providing medical technologies to restore the vision of patients with neurological visual loss predominantly resulting from Stroke or Traumatic Brain Injury.

2. Overview of Business

Vycor operates two distinct business units--Vycor Medical Inc. ("Vycor Medical") and NovaVision, Inc ("NovaVision"). Vycor Medical is a medical device company that designs, develops and markets medical devices for use in neurosurgery. NovaVision develops non-invasive, computer-based visual neuro-stimulation therapy called VRT for those suffering from vision loss resulting from neurological trauma. In addition to our existing products and products in development, we actively seek acquisition, joint venture and in-licensing opportunities in the medical device field which we believe will add shareholder value.

Vycor Medical, Inc.

Introduction

Vycor Medical is a medical device company that designs, develops and markets medical devices for use in neurosurgery. Vycor Medical is ISO 13485:2003 compliant, has U.S. FDA 510(k) clearance for brain and spine surgeries, CE Marking for Europe and Canadian HPB licensing for sale in Canada of its brain access system. Vycor Medical first product, the ViewSite Brain Access System (VBAS), is a next generation access system which was commercially launched in November 2008. The VBAS addresses a market that has not changed materially in over 50 years in contrast to development in most other neuro-surgical technologies.

The second product in Vycor Medical's pipeline is the Cervical Access System (VCAS), which requires further prototyping and successful market testing prior to commercialization launch. Like the VBAS, this product is designed to assist the surgeon in cervical surgeries, allowing the surgeon to gain access to the anterior cervical surgery site.

Vycor Medical has received FDA 510(k) clearance for its products, with which we are authorized to take market our products in the U.S. without further approvals.

Vycor Medical's Products

Viewsite Brain Access System (VBAS)

To access a surgical site in the brain, the surgeon needs to remove part of the skull (crainiotomy) and then part (retract) the soft brain tissue to access the target site. The current standard of care utilizes a metal bladeretractor to force the tissue apart; to maintain the opening the blades are attached to a head frame and tension is applied to the tissue

The VBAS series is used by neurosurgeons to access the surgical site in the brain. This is done by inserting the VBAS into the brain tissue and then removing the VBAS introducer, leaving the remaining hollow working channel in place to provide the surgeon with access to the precise location desired for surgery.

The VBAS is available in multiple sizes and is a single-use product. The series consists of twelve disposable products, offered in four different port diameters of 17mm and 21mm, 12mm and 28 mm and a choice of three lengths for each of 3, 5, and 7cm We intend to add additional models in the future.

We believe our Brain Access System offers several advantages over the brain retractor systems, commonly known as ribbon or blade retractors that are metallic. When designing the products, we felt that if we could incorporate certain features into our products, the surgeon reaction and acceptance would be favorable. We attempted to incorporate the following features:

	•			Gently separate delicate tissue by utilizing a tapered forward edge;
	•			Minimize venous pressure caused by pulling tissue in one direction in the brain;
	•			To allow direct surgical visualization of the brain tissue via optically transparent construction;
	•			Reduce "target shift" to allow the surgeon to reach the site accurately;
	•			Minimize healthy tissue damage while reaching the target site;
	•			Allow for accurate neuronavigational image guidance systems ("IGS") performance;
	•			Integrate in due course with the leading surgical IGS systems such as Medtronic® and BrainLab®, Stryker and GE;
	•			Improve surgical outcomes (reducing potential surgeon and hospital liability), for example, decreased insertion tissue trauma, less need for readjustment during surgery and minimum interface surface pressures;
	•			Reduce damage to healthy brain tissue potentially leading to shorter post-op recovery and reduced hospital stay

VBAS products have the potential to significantly reduce brain tissue trauma resulting from the currently used retractors when accessing deep brain targets.. First, the unique design of the product can minimize the size of the brain entry access necessary for surgical procedures, and in turn the amount of brain tissue exposed. For instance, a brain procedure involving the removal of a 7cm cystic astrocyctoma would result in an access site (corticotomy) of approximately 20mm. However, the same procedure that was performed utilizing the Company's VBAS product required a corticotomy of only 2mm.

Because our products are relatively new to the market, there is no guarantee that any of the above mentioned features would prove effective and be useful to the end user.

IGS Opportunity for the Brain Access System

The VBAS product has the potential to improve accuracy in targeting the surgical site when used with of Image Guidance Systems( IGS), by addressing two substantial IGS-related problems of target shifting and the lack of real-time retractor positioning data during procedures:

•     Target Shifting

The normal surgical procedure utilizing standard retractors in brain surgery require pulling away the healthy tissue to expose the targeted region of the brain located underneath. However, in many cases, the amount of pulling required causes the targeted area to shift away from what is shown on the IGS system. This target shifting then requires the surgeon to cause possible additional trauma to healthy tissue and spend additional time as the shifted target area is located and the retractor is repositioned. The VBAS system is designed to minimize or eliminate target shift, as the elliptical shape of the product distributes relatively uniform pressure on the surrounding brain tissue.

•     Real-Time Retractor Positioning Data

Current retractor technology (commonly known as ribbon or blade retractors) does not integrate well with IGS systems. During insertion and retraction, the surgeon typically does not have real-time data to allow visualization of retractor insertion on the IGS monitor. The VBAS product line has the potential to adapt to IGS systems, such that the use of a Brain Access System unit will allow the surgeon to see on the surgical monitor, in real-time, exactly where the retractor is in relation to critical brain structures and underlying pathologies. With the IGS enabled unit, the tip of the introducer is literally the "pointer" on the IGS system.

Vycor Medical Product Pipeline

Brain Access and Related Products

The Company's future plans include developing additional Brain Access Systems that are designed for the requirements of specific surgical applications like aneurisms, tumors and endoscopic work and identifying other products that can be used in conjunction with our VBAS product.

Cervical Access Products

The Company will continue its preliminary work to design Cervical Access System products which would be used by the surgeon to access the anterior cervical surgical site (the uppermost vertebrae located in the neck). While the Company has filed certain intellectual property applications with respect to this technology, such development is in an early stage.

Sales and Marketing

Domestic Sales Strategy

VBAS was launched in November 2008 with a strategy of driving sales through leading neurosurgeons. In this regard, the Company has adopted a dual strategy of targeting both the leading neurosurgeons and the leading neurosurgery hospitals. The Company believes that out of the 4,500 neurosurgeons in the US approximately 1,500 focus predominantly on craniotomies or cranial procedures that could potentially benefit from the VBAS product. Management believes that there are approximately 750-1,000 hospitals that represent the majority of its target market.

We are currently using independent distributors who have existing relationships with neurosurgeons and target hospitals to drive our sales. The Company's distributors have approximately 50 sales representatives who cover approximately 75% of the U.S. population.

International Sales

The Company utilizes select medical device distributors with experience in neurosurgical devices in select countries. In Europe, the company has agreements with exclusive distributors for Spain, Italy, Belgium, Scandanavia, Switzerland and the U.K. who are all focused in neurosurgery. In China, Vycor Medical has entered into a distribution agreement for its VBAS. The Company has filed for but not yet received SFDA approval, which is required to sell and market products in China.

Reference Hospitals Program

The Company has developed a Reference Hospital Program to identify centers of excellence and to provide neurosurgeons with evidence of support for our products.

VBAS Market and the Hospital Adoption Process

The market for VBAS in the US is relatively concentrated, with approximately 1,500 neurosurgeons focusing on the relevant procedures in 750-1,100 hospitals. Teaching hospitals not only carry out more relevant procedures but also provide a natural way to drive adoption through the conversion of new surgeons. We focus our efforts initially on surgeons as the principle proponent within the hospital. Vycor has found that the learning curve is only 1-2 cases for surgeons, who like the simplicity of design and ease of use after trialing the product. Hospital Administration is required to approve the purchase of a new product and sometimes even a trial or evaluation product. The focus for Hospital Administration is the potential hard and soft cost savings and benefits of VBAS versus the cost compared to existing practice. We use clinical studies, papers and other peer reviews evidencing the clinical benefits of the products as well as surgery time in the operating room.

Experience has been that approval process can take up to six months for each hospital, and in some cases may even be longer. However, this time reduces as more leading hospitals become approved and as more clinical paper/studies and other peer reviews are published. Management is assembling a body of clinical evidence to speed up the adoption process.

Manufacturing

Vycor Medical has executed agreements with Lacey Manufacturing Company of Bridgeport, Connecticut ("Lacey") and C&J Industries, Meadville PA ("C&J") to provide a full range of engineering, contract manufacturing and logistical support for our products.

Lacey and C&J are recognized leaders in the medical contract manufacturing sector, providing vertically integrated full services. They are U.S. Food and Drug Administration registered and meet ISO standards and certifications. Lacey and C&J have shipped orders to Vycor Medical and have made production runs of all 12 sizes.

Market

The market for our Brain Access System product lines is the neurosurgical community. The Company has analyzed and estimated the market for its products from an analysis of available statistics, discussion with surgeons, distributors and other market participants. Vycor Medical is currently focusing its attention for VBAS on the US, China and Europe.

Competition

Competitive manufacturers of brain retractors include:

Cervical Access System competitors include Medtronic, Asculap/B. Braun, Cardinal and Nuvasive, Cloward Instruments, among others. In addition to the standard "blade retractors" distributed by the aforementioned companies. In addition companies such as Endius and EBI have announced cervical retractor systems.

Customers

Vycor Medical sells to stocking regional distributors and direct to hospitals through independent representatives. The Company believes that its products currently are being evaluated or utilized in approximately 80 hospitals in the United States. In addition, in year ended December 31, 2010 international sales accounted for approximately 20% of revenues.

Intellectual Property

Patent Applications

Vycor Medical has the following granted, but not yet issued, patents:

Additionally, Vycor has 13 patents pending for its technology and products in: the U.S., Canada, Europe, India, Japan, and Hong Kong

Trademarks

VYCOR MEDICAL is a registered trademark and VIEWSITE is pending registration as a trademark with the United States Patent and Trademark Office.

NovaVision, Inc.

Introduction

NovaVision develops non-invasive, computer-based visual neuro-stimulation therapy called VRT for those suffering from vision loss resulting from neurological trauma. VRT is a patient-specific diagnostic and therapeutic platform that improves patient's vision and enables them to experience significant functional improvements. VRT is currently focused on visual deficits resulting from stroke, traumatic brain injury, or other acquired brain injuries. NovaVision operates in the US and in Germany through a wholly-owned subsidiary.

VRT is successful in treating vision loss because people look with their eyes and see with their brain. VRT is based on NovaVision's platform technology which management believes induces neuroplasticity, the brain's natural ability to repair or remap broken neural connections that cause vision loss. Before VRT, such patients were informed that their vision loss would likely be permanent and they were prescribed therapy or aids to merely compensate for their lost vision.

VRT is a patient-specific diagnostic and therapeutic platform. The VRT diagnostic program maps the area of lost visual field. Proprietary algorithms help generate a customized therapy which delivers light-based stimuli to neurologically stimulate the visual cortex of the brain and restore the lost visual field. VRT is generally performed over a six month period, twice a day for an hour total, six days a week. The Company maintains broad IP protection NovaVision has collected significant amounts of data from clinical studies and peer reviewed papers that support the Company's claims about the benefits of its platform technology for vision restoration and other indications. NovaVision has received 510(k) clearance and CE Marking for VRT.

Platform Technology

The management of NovaVision believes that the underlying basis for the visual field recovery it has witnessed, and the functional outcome improvements it has noted with its patients is largely due to neuroplasticity of the visual field which is the brain's ability to remap or repair itself in response to a pre-programmed and deliberate stimulation. Neuroplasticity has been discussed over the last 20 years or so and as far back as 1990 Gilbert & Weisel talked about the cortex not having a fixed functional architecture.. The platform technology is comprised of proprietary algorithms that generate patient-specific therapies which enable NovaVision's products to be used as both diagnostic and therapeutic tools. The platform technology generates light-based, or photic, stimulus programs consisting of a fixation point on a display screen. As the patient focuses on this fixation point, a series of photic stimuli are delivered on the screen that are specific to the patient's neurological requirements, and relayed directly to the brain using the eye as a conduit.

Management believes that it is this programmed light sequences that stimulate the border zone between the "seeing" and "blind" visual fields and which induces neuroplasticity. The diagnostic algorithm in the VRT product first maps the visual field and defines the areas of defect in patients suffering vision loss. The therapeutic algorithm in the VRT product is then specifically designed for each patient based upon the results of the diagnostic program and it repetitively challenges the visual cortex with thousands of stimuli over the course of time. While neuroplasticity for explaining VRT has never been conclusively demonstrated, Randy Mashall's study using MRI did demonstrate that VRT results in increased neural activity in the visual cortex. Management is also aware of other studies which should be published during the course of 2011 which will shed further light on this. Irrespective of mechanism patient studies point to significantly improved functional outcomes for patients who have done VRT treatment. This improvement manifests itself in greater confidence to move around and an average shift of 4.9 degrees in the border between seeing and blind visual fields. The visual field is the portion of space surrounding an individual which is visible at any given time by that individual while their gaze is held stationary. To humans, the central 10° of visual field holds the greatest functional importance for focal and cognitive tasks.

Clinical Data Relating to VRT

NovaVision has accumulated significant amounts of clinical data as a result of company-sponsored trials as well as studies conducted by independent third parties.

Pipeline Products Utilizing NovaVision's Platform Technology

Management is looking to further develop its product range leveraging its existing technology platform. To this end it is in the process of launching a new portable visual field screening device called head mounted perimeter (HMP). The Company has registered to sell the HMP as a Class 1 device as a screening tool for physicians. Physicians would use this novel portable HMP as a low-cost screening tool providing automated perimetry for visual field screenings performed more efficiently in the clinician's office, waiting room, nursing homes or within the hospital setting by Ophthalmologists, Optometrists and even the Primary Care Physician. The visual field test qualifies for reimbursement under CPT code 92082 (ranging from $60 - $70). While entirely focused on just screening and as such not as complex as an Oculus or Humphreys its screening ability is actually more resolute as it tests every 4 degrees compared to every 6 degrees. Its greatest advantage is its portability which enables it to be utilized in a number of situations where patients with a Visual Field Deficit may otherwise not be able to take a table mounted test.

Regulatory Matters

In the U.S., NovaVision's products are regulated by the Food and Drug Administration ("FDA") as Class U medical devices subject to 510(k) clearances, and in Europe NovaVision has CE Marking for VRT as a Class I device. NovaVision received its 510(k) clearance for VRT specific to Stroke and TBI indications in 2003.

Intellectual Property

Patents

NovaVision maintains a portfolio of patent protection on its methods and apparatus in the form of issued patents and applications, both domestically and internationally, with a total of 14 granted and 24 pending patents.

In the U.S., the Company has a total of 8 issued patents and 7 pending applications. The international patent portfolio includes 6 issued patent and 17 pending applications, in Canada, Europe, China, Hong Kong, India, Japan and Australia

Trademarks

NovaVision maintains a portfolio of registered trademarks for NovaVision, NovaVision VRT and Vision Restoration Therapy amongst others, both in the US and internationally.

Manufacturing and Operations

NovaVision is based at the Vycor Medical, Inc. group headquarters at a 1,000 square foot leased facility in Boca Raton, Florida. NovaVision purchases electronics and custom fabricated hardware from third party vendors and assembles and tests all of its medical devices within the facility. NovaVision has an FDA Establishment Registration and the Company does not have any long-term contractual obligations with its vendors to purchase products from them, nor are suppliers contractually obligated to sell products to NovaVision.

3. Other Matters

Product Liability Insurance

We presently have Product Liability insurance for both Vycor Medical and NovaVision.

Government Regulations

We are committed to an integrated total quality management system. We believe that we have completed the necessary procedures and are certified to the ISO standards expected of medical device manufacturers as follows:

ISO 13485:2003 Medical Devices — Quality Management Systems

The certification of a quality management system to ISO 13485, specifically for medical devices, is advantageous and often essential for medical companies to export their products to the global market, as well as maintain and enter into certain agreements and business growth opportunities within the U.S. For example, Canada requires that medical device manufacturers marketing their products in Canada must have a quality system certified to ISO 13485:2003. The certification is also required for placement of branded devices into the European Union.

Vycor Medical has the following certification/licensing:

Employees

 

We currently have 14 full-time employees.

ITEM 1A. RISK FACTORS

Smaller reporting companies are not required to provide the information required by this item.

ITEM 1B. UNRESOLVED STAFF COMMENTS

N/A

ITEM 2. PROPERTIES

The Company leases approximately 14,000 sq. ft located at 3651 FAU Boulevard, Suite 300, Boca Raton, FL 33431 from Boca R & D Project 7, LLC for a basic rent of $8,500 plus sales taxper month. The term of the lease is twelve (12) months terminating November 30, 2011.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, active, pending or threatened proceeding against us or our subsidiaries, nor are we, or any subsidiary, involved as a plaintiff or defendant in any material proceeding or pending litigation.

ITEM 4. [REMOVED AND RESERVED]

 

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET INFORMATION

Beginning on July 20, 2009, our Common Stock was quoted on the OTC Bulletin Board under the symbol "VYCO".

The following table shows the high and low prices of our common shares on the OTC Bulletin Board for each quarter since our common stock began to trade on the OTC Bulletin Board in July 2009. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

	Period			High			Low
	July 20, 2009-September 30, 2009			$0.04			$0.02
	October 1, 2009-December 31, 2009			$0.07			$0.01
	January 1, 2010-March 31, 2010			$0.15			$0.04
	April 1, 2010-June 30, 2010			$0.06			$0.01
	July 1, 2010-September 30, 2010			$0.03			$0.01
	October 1, 2010-December 31, 2010			$0.04			$0.01

The market price of our common stock, like that of other technology companies, is highly volatile and is subject to fluctuations in response to variations in operating results, announcements of technological innovations or new products, or other events or factors. Our stock price may also be affected by broader market trends unrelated to our performance.

Holders

As of March 28, 2011 there were 732,317,876 shares of common stock outstanding and approximately 83 stockholders of record.

Transfer Agent and Registrar

Our transfer agent is Corporate Stock Transfer, Inc., 3200 Cherry Creek Dr. South, Suite 430, Denver, CO 80209, tel. (303) 282-4800.

Dividend Policy

We have never paid any cash dividends on our Common Stock and do not anticipate paying any cash dividends on our Common Stock in the foreseeable future. We intend to retain future earnings to fund ongoing operations and future capital requirements of our business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.

RECENT SALES OF UNREGISTERED SECURITIES

Below is a list of securities sold by us within during 2010 which were not registered under the Securities Act.

Name of Purchaser

Date of Sale

Title of Security

Amount of Securities Sold

Consideration

Fountainhead Capital Management Limited

January 11, 2010

Common Stock

531,376,500

Debenture Exchange

Jodi Yeager

January 11, 2010

Common Stock

4,000,000

Debenture Conv.

Panamerica Capital Group, Inc.

January 11, 2010

Common Stock

8,787,600

Debenture Conv.

Hyperlink Media, LLC

January 11, 2010

Common Stock

9,187,600

Debenture Conv.

Karen Ginder

January 11, 2010

Common Stock

10,320,000

Debenture Conv.

Accessible Development Corp.

January 11, 2010

Common Stock

4,000,000

Debenture Conv.

Altitude Group, LLC

January 11, 2010

Common Stock

16,000,000

Debenture Conv.

Mario Zachariou

January 11, 2010

Common Stock

6,000,000

Debenture Conv.

Anthony Cantor

January 11, 2010

Common Stock

6,000,000

Debenture Conv.

SLJ Consulting Corp

January 12, 2010

Series B. Pref.

80,000

$80,000

Name of Purchaser

Date of Sale

Title of Security

Amount of Securities Sold

Consideration

Joseph Simone

January 12, 2010

Series B. Pref.

80,000

$35,000

Steven Girgenti

February 23, 2010

Common Stock

800,000

Professional services

Kenneth D. Watkins

March 11, 2010

Series B. Pref.

25,000

$25,000

Jane G. Ellis

April, 2010

Common Stock

6,666,667

$100,000

Gregory Sichenzia

April 2010

Common Stock

934,986

Professional Services

Joe Simone

April 2010

Common Stock

750,000

Professional services

Myles F. Wittenstein

May 2010

Common Stock

3,300,000

$49,500

Guri Dauti

May 2010

Common Stock

2,333,333

$35,000

Stanley Katz

May 2010

Common Stock

3,000,000

$45,000

Stanley Katz

May 2010

Common Stock

3,000,000

$45,000

Duane John Renfro

May 2010

Common Stock

3,333,333

$50,000

Glenn Fleischacker

May 2010

Common Stock

3,333,333

$50,000

Datavision Computer Video, Inc.

May 2010

Common Stock

1,666,667

$25,000

Thomas Ambrose

May 2010

Common Stock

3,333,333

$50,000

Jack Lens

May 2010

Common Stock

3,333,333

$50,000

IRA Services Trust Company

May 2010

Common Stock

13,333,333

$200,000

Falcon Partners BVBA

May 2010

Common Stock

3,333,333

$50,000

Konstantin Slavini

July 2010

Common Stock

262,500

Professional services

Ramon Rak

July 2010

Common Stock

300,000

Professional Services

Steven Girgenti

July 2010

Common Stock

250,000

Professional services

Sal & Kathryn DeMarco

July 2010

Common Stock

4,241,072

$76,250

Jarvis D & Molly Littlefield

August 2010

Common Stock

2,857,143

$50,000

Berardino Investment Group

August 2010

Common Stock

1,428,571

$25,000

Panayiotis Panayiotou

August 2010

Common Stock

571,429

$10,000

Simon Becker

August 2010

Common Stock

6,285,714

$110,000

Richard H. Lawson

September 2010

Common Stock

1,428,571

$25,000

SLJ Consulting

September 2010

Common Stock

6,548,515

Preferred Conversion

Joe Simone

September 2010

Common Stock

3,139,463

Preferred Conversion

Kenny Watkins

September 2010

Common Stock

2,080,219

Preferred Conversion

Sal & Kathryn DeMarco

October 2010

Common Stock

2,285,714

$40,000

Sal & Kathryn DeMarco

November 2010

Common Stock

1,714,286

$30,000

Steven Girgenti

November 2010

Common Stock

250,000

Professional services

Myles F. Wittenstein

November 2010

Common Stock

2,631,579

$50,000

Brunella Jacs LLC

November 2010

Common Stock

2,631,579

$50,000

Dr. Sam Fox

November 2010

Common Stock

2,631,579

$50,000

Neil A. Weiss

December 2010

Common Stock

5,263,158

$100,000

Stephen Nicholas Bunzl

December 2010

Common Stock

7,894,737

$150,000

Peter Lawrence

December 2010

Common Stock

2,631,579

$50,000

Stephen Rathkopf

January 2011

Common Stock

1,000,000

$19,000

Steven Girgenti

January 2011

Common Stock

250,000

Professional services

Datavision Computer Video, Inc.

February 2011

Common Stock

1,315,789

$25,000

Dr. Wayne Fleischacker

February 2011

Common Stock

5,263,158

$100,000

The securities issued in the abovementioned transactions were issued in connection with private placements exempt from the registration requirements of Section 5 of the Securities Act of 1933, as amended, pursuant to the terms of Section 4(2) of that Act and Rule 506 of Regulation D.

ITEM 6. SELECTED FINANCIAL DATA

				12/31/10 (as restated)			12/31/09 (as restated)			12/31/08
	Revenues		$	316,450		$	199,046		$	129,947
	Net loss		$	(1,983,822	)	$	(1,164,036	)	$	(2,381,295	)
	Net loss per share		$	(0.003	)	$	(0.040	)	$	(0.108	)
	Weighted average no. shares			663,168,900			29,183,482			21,977,954
	Stockholders' equity (deficit)		$	88,714		$	(1,245,940	)	$	(921,427	)
	Total assets		$	2,153,694		$	400,960		$	633,437
	Total liabilities		$	2,064,980		$	1,646,900		$	1,554,864

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

Restatement

With this amendment to our Annual Report on Form 10-K, we have restated the following previously filed consolidated financial statements, data and related disclosures:

(1) Our audited consolidated financial statements as of and for the years ended December 31, 2010 and 2009 in Part II, Item 8;

(2) Our selected financial data as of and for our fiscal years ended December 31, 2010 and 2009 in Part II, Item 6; and

(3) Our management's discussion and analysis of financial condition and results of operations as of and for our fiscal years ended December 31, 2010 and 2009 contained herein.

The Restatement results from our management's determination subsequent to the issuance of our financial statements for the year ended December 31, 2010 that we had not properly accounted for warrants issued in connection with certain service agreements and for the beneficial conversion feature of certain convertible debentures. Specifically, management, following discussions with the Company's independent registered public accounting firm, determined that the Company had previously not recognized the fair value of warrants issued in connection with certain consulting or other service agreements at the measurement date, and had previously recognized the expense ratably over the life of the warrant. The Company's management further determined that the proper accounting, following the guidance in ASC Topic 505, is to record the fair value of these warrants as a prepaid expense on the date of issuance, and recognize the expense ratably over the life of the underlying service agreement. In addition, the Company had, since December 2009, been determining the existence of a beneficial conversion feature of convertible debt based on the fair value of the conversion feature on the date of issuance, rather than using the intrinsic value of the conversion feature on the date of issuance, as required under ASC Topic 470.

The following discussion and analysis of our financial condition and results of operations incorporates the restated amounts. For this reason the data set forth in this section may not be comparable to discussions and data in our previously filed Annual Reports.

Critical Accounting Policies and Estimates

Uses of estimates in the preparation of financial statements

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the 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 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 share based compensation.

Going Concern

The Company's financial statements have been presented on a basis that contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and assumes the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of $1,983,822 for the year ended December 31, 2010, and the Company expects to continue to incur substantial additional losses in the future, including additional development costs, costs related to marketing and manufacturing expenses. The Company has incurred negative cash flows from operations since

inception. As of December 31, 2010 the Company had a stockholders' equity of $88,714 and cash and cash equivalents of $127,081. The Company believes it would not have enough cash to meet its various cash needs unless the Company is able to obtain additional cash from the issuance of debt or equity securities. There is no assurance that additional funds from the issuance of equity will be available for the Company to finance its operations on acceptable terms. If adequate funds are not available, the Company may have to delay development or commercialization of products or technologies that the Company would otherwise seek to commercialize, or cease operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The 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.

Under a previously disclosed agreement entered into with Fountainhead Capital Management Limited, Fountainhead agreed to fund or procure funding for Vycor Medical's monthly operating expenses through September 2010 subject to the Company meeting certain financial benchmarks. The Company entered into a new agreement on September 29, 2010 under which Fountainhead agreed to extend this commitment for Vycor Medical's operating expenses through August, 2011.

Research and Development

The Company expenses all research and development costs as incurred. For the years ended December 31, 2010 and 2009, the amounts charged to research and development expenses were $15,208 and $4,761, respectively.

Cash and cash equivalents

The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. Cash balances may at times exceed the FDIC insured limits. Cash also includes a US investment account in a money market backed by government securities up to 105% of the account balance. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash balances in Germany held at NovaVision AG at December 31, 2010 and 2009 includes $1,233 and $0, respectively.

Property and equipment

The Company records property and equipment at cost and calculates depreciation using the straight-line method over the estimated useful life of the assets, which is estimated to be between three and seven years. Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized.

Income taxes

The Company accounts for income taxes in accordance with the current authoritative guidance. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when it is more likely than not that such benefit will not be realized.

Patents and Other Intangible Assets

The Company capitalizes legal and related costs associated with the establishment and enhancement of patents for its products once patents have been applied for. Costs associated with the development of the patented item or processes are charged to research and development costs as incurred. The capitalized costs are amortized over the life of the patent. The Company reviews intangible assets on an annual basis using a present value, cash flow method based upon the authoritative guidance. Trademarks have an indefinite life and are reviewed annually by management for impairment in accordance with the authoritative guidance.

Revenue Recognition

Vycor Medical generates revenue from the sale of its surgical access system to hospitals and other medical professionals. Vycor Medical records revenue when a completed contract for the sale exists, the product is invoiced and shipped to the customer. Vycor Medical does provide for product returns or warranty costs.

NovaVision generates revenues from various programs, therapy services and other sources such as government grants. Therapy services revenues represent fees from NovaVision's vision restoration therapy software, diagnostic software, medical devices, clinic set up and training fees, and the professional and support services associated with the therapy. NovaVision recognizes revenue for providing the vision restoration therapy as the Company's work effort is expended. NovaVision provides

vision restoration therapy directly to patients. The typical vision restoration therapy consists of six modules, performed on average over 6 months in the U.S. and 10 months in Germany. A patient contract comprise 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.

Research grants and other subsidies represent revenue from certain German government agencies to cover certain patients within an insurance group and also to reimburse NovaVision AG for certain payroll and other costs. The Company recognizes grant revenue when services or costs have been incurred which would entitle the Company to use the German government funds, and the grant requirements have been satisfied.

Deferred revenue results from patients paying for the therapy in advance of receiving the therapy.

Accounts Receivable

The Company's accounts receivable are due from the hospitals and distributors in the case of Vycor Medical, and from patients directly therapy or physicians for diagnostic products in the case of NovaVision. Accounts receivable are due once products have been delivered or at the time the therapy is initiated; however, for NovaVision therapy patients sometimes credit is extended through various payment plans based on individual financial conditions, generally not to exceed the 9 or 10 month therapy period. The outstanding balances are stated net of an allowance for doubtful accounts. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, and the customer's ability to pay its obligations. The Company writes off accounts receivable when they become uncollectible.

Inventory

Inventories are comprised of Vycor Medical VBAS devices, components ancillary to NovaVision's medical device provided to patients and centers and diagnostic products, and are stated at the lower of cost or market, determined under the first-in, first-out method. The inventory is charged to cost of revenue at the time that a device is shipped to a customer or patient.

Foreign Currency

The Euro is the local currency of the country in which NovaVision AG conducts its operations and is considered the functional currency of this entity. All balance sheet amounts are translated to U.S. dollars using the U.S. exchange rate at the balance sheet date except for the equity section which is translated at historical rates. Operating statement amounts are translated using an average exchange rate for the period of operations. Foreign currency translation effects are accumulated as part of the accumulated other comprehensive income (loss) and are included in stockholders' equity (deficit) in the accompanying Consolidated Balance Sheets.

Educational marketing and advertising expenses

The Company may incur costs for the education of customers on the uses and benefits of its products. The Company will include education, marketing and advertising expense as a component of selling, general and administrative costs as such costs are incurred.

RESULTS OF OPERATIONS

Comparison of the Year Ended December 31, 2010 to the Year Ended December 31, 2009

Revenue and Gross Margin:

				2010 (as restated)			2009 (as restated)			% Change
	Revenue:
	Vycor Medical		$	307,582		$	199,046			55	%
	NovaVision		$	8,868		$	-			NM
			$	316,450		$	199,046			59	%
	Cost of Revenue:
	Vycor Medical		$	(47,607	)	$	(22,482	)		114	%
	NovaVision		$	(1,130	)	$	-			NM
			$	(48,737	)	$	(22,482	)		100	%

				2010 (as restated)			2009 (as restated)			% Change
	Gross Profit
	Vycor Medical		$	259,975		$	176,564			49	%
	NovaVision		$	7,738		$	-			NM
			$	267,713		$	176,564			54	%

Vycor Medical recorded revenue of $307,582 from the sale of its products in 2010, an increase of 55% over 2009. The increase in sales was attributable to greater penetration and usage of our product in hospitals in the United States both direct and through distributors, and increased sales internationally. Gross margin of 85% was achieved in 2010 compared to 89% for 2009. Gross margin is mostly a product of sale mix between US sales through distributors, US sales direct and international sales.

NovaVision recorded revenues of $8,868 for the period from November 30, 2010, the date of the acquisition of NovaVision, and gross margin of 87%. These revenues were all attributable to Germany.

Research and Development Expense:

Research and development expenses were $15,208 in 2010 compared to $4,761 for 2009.

Stock Compensation Expense:

Stock Compensation expense is a non-cash charge for share based compensation as the result of amortizing shares, warrants and options which have been issued by the Company over various periods. The charge in 2010 was $381,718, a decrease of $33,742 over $415,460 in 2009.

General and Administrative Expenses:

General and administrative expenses increased by $851,749 to $1,537,456 for 2010 from $685,707 for 2009. Following the recapitalization transaction that closed on December 29, 2009 the board and management of Vycor has embarked on a period of heightened sales and marketing activity and engagement with distributors and hospital customers following a prolonged period of reduced activity in 2009 as a result of capital constraints. This has lead to an increase in the marketing-related costs of the Company. Vycor has also carried out a series of fundraisings since the closing of the recapitalization, which has resulted in additional cash and non-cash expenses.

The increases for 2010 over 2009 are attributable to an increased level of: sales and marketing activity; personnel costs; fundraising fees and related costs and higher levels of professional and regulatory cost, as follows:

	Total G&A expenses for the year ended December 31, 2009					$	685,707
	Increase in marketing expenditure and travel costs						249,182
	Increase in personnel costs						228,599
	Increase in fundraising costs						72,500
	Increase in accrued consulting fees						90,768
	Increase in professional and regulatory costs						127,910
	Increase in other operating expenses						82,790
	Total G&A expenses year ended December 31, 2010					$	1,537,456

Interest Expense:

Interest expense comprises: interest expense on the Company's debt; and the amortization of the Beneficial Conversion Feature (BCF) recorded on certain of the Company's convertible debt. Net interest expense for 2010 was reduced by $202,528 to $45,874 from $248,402 for 2009, as a result of the extinguishment of certain debt and related BCF balances. The amortization of BCF was $0 in 2010, as compared to $145,302 in 2009.

Costs Associated with the Acquisition of NovaVision:

On November 30, 2010 Vycor acquired substantially all the assets of the former NovaVision, Inc., including the shares of NovaVision AG, out of bankruptcy, for total proceeds of $900,000. As required under ASC 805 the Company commissioned an independent appraisal of the assets acquired and has entered the assets into its consolidated accounts on the basis of this valuation. As a result, the Company generated goodwill on acquisition of $58,027 which has been written off as incurred.

The expenses of the transaction, which primarily comprised legal fees and audit fees in connection with the Form 8-K/A filed on February 14, 2010 amounted to $154,203.

Liquidity and Capital Resources

Liquidity

The following table shows cash flow and liquidity data for the periods ended December 31, 2010 and December 31, 2009:

				December 31, 2010 (Restated)			December 31, 2009 (Restated)			$ Change
	Cash		$	127,081		$	12,771		$	114,310
	Accounts receivable, inventory and other current assets			774,122			94,084			680,038
	Total current liabilities			(2,064,980	)		(1,646,900	)		(418,080	)
	Working capital (deficit)		$	(1,163,777	)	$	(1,540,045	)	$	376,268
	Cash provided by financing activities		$	2,489,500		$	422,552		$	2,066,948

As of December 31, 2010 we had $127,081 cash, a working capital deficit of $1,163,777 and an accumulated deficit of $6,883,163. The Stockholders' equity at December 31, 2010 was $88,714, an improvement from a deficit of $1,245,940 at December 31, 2009. Debt at December 31, 2010 was $1,400,381, a change from $1,245,052 at December 31, 2009. Of this change, $794,019 was debt to finance the acquisition of NovaVision, resulting in a net debt reduction excluding the NovaVision acquisition of $638,690.

Our operating activities used $1,450,270 in cash for the year ended December 31, 2010. Aside from the increased operating expenses discussed above, the Company has significantly reduced Vycor Medical's accounts payable, from $336,942 in December 2009 to $80,906 in December 2010, acquired NovaVision for $900,000 and increased operating assets. This is accounted for as follows:

	Net cash loss adjusted for non-cash operating expenses and change in accrued interest					$	(1,446,086	)
	Reduction in Vycor Medical accounts payable						(242,011	)
	Increase in accounts receivable and inventory						(36,124	)
	Increase in accrued liabilities						294,306
	Net Change in other assets and liabilities						(20,355	)
						$	(1,450,270	)

Under a previously disclosed agreement entered into with Fountainhead Capital Management Limited, Fountainhead agreed to fund or procure funding for Vycor Medical's monthly operating expenses through September 2010 subject to the Company meeting certain financial benchmarks. The Company entered into a new agreement on September 29, 2010 under which Fountainhead agreed to extend this commitment for Vycor Medical's operating expenses through August, 2011.

Off-Balance Sheet Arrangements

As of December 31, 2010, we had no off-balance sheet arrangements.

Seasonality

Our operating results are not affected by seasonality.

Inflation

Our business and operating results are not affected in any material way by inflation.

Critical Accounting Policies

The Securities and Exchange Commission issued Financial Reporting Release No. 60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies" suggesting that companies provide additional disclosure and commentary on their most critical accounting policies. In Financial Reporting Release No. 60, the Securities and Exchange Commission has defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. See "Uses of estimates in the preparation of financial statements" above.

Contractual Obligations

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

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial information required by Item 8 begins on the following page.

	Paritz & Company, P.A.			15 Warren Street, Suite 25 Hackensack, New Jersey 07601 (201)342-7753 Fax: (201) 342-7598 E-Mail: paritz @paritz.com
	Certified Public Accountants

REPORT OF INDEPENDENT REGISTERED ACCOUNTING FIRM

Board of Directors

Vycor Medical Inc. and Subsidiaries

Boca Raton, Florida

We have audited the accompanying restated consolidated balance sheets of Vycor Medical Inc. and Subsidiaries as of December 31, 2010 and 2009 and the related restated consolidated statements of operations, changes in stockholders' deficit and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the restated consolidated financial statements referred to above present fairly, in all material respects, the financial position of Vycor Medical Inc. and Subsidiaries as of December 31, 2010 and 2009 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

As described in Note 5 to the financial statements, the financial statements as of and for the years ended December 31, 2010 and 2009 have been restated to recognize the fair value of warrants issues and to correct the amortization period of these warrants and to record the fair value of the warrants as a prepaid item at the date of issuance pursuant to ASC 505. Also a correction of an error was made in the recording of a beneficial conversion feature from the intrinsic method to the fair value pursuant to ASC 470.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred a loss since inception, has a net accumulated deficit and may be unable to raise further equity. These factors raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Paritz & Company, P.A.

Hackensack, New Jersey

March 22, 2011, except for Note 5 as to which the date is August 28, 2011

VYCOR MEDICAL, INC.
Consolidated Balance Sheets

				December 31, 2010 (restated)			December 31, 2009 (restated)
	ASSETS
	Current Assets
	Cash		$	127,081		$	12,771
	Accounts receivable			76,460			29,748
	Inventory			52,360			41,967
	Prepaid expenses			645,302			22,369
	Total Current Assets			901,203			106,855
	Fixed assets, net			773,188			191,009
	Intangible and Other assets:
	Trademarks			130,000			-
	Patents, net of accumulated amortization			333,072			93,704
	Website, net of accumulated amortization			3,932			7,042
	Security deposits			12,299			2,350
				479,303			103,096
	TOTAL ASSETS		$	2,153,694		$	400,960
	LIABILITIES AND STOCKHOLDERS' EQUITY
	Current Liabilities
	Accounts payable		$	114,447		$	336,942
	Accrued interest			36,992			2,904
	Accrued liabilities			406,998			62,002
	Other current liabilities			106,162			-
	Notes payable			1,400,381			1,245,052
	TOTAL LIABILITIES			2,064,980			1,646,900
	STOCKHOLDERS' EQUITY (DEFICIT)
	Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding			-			-
	Common Stock, $0.0001 par value, 1,500,000,000 shares authorized, 724,488,929 and 557,798,599 shares issued and outstanding at December31,2010 and 2009,respectively			72,449			55,780
	Additional Paid-in Capital			6,902,427			3,597,621
	Accumulated Deficit			(6,883,163	)		(4,899,341	)
	Accumulated Other Comprehensive Income			(2,999	)		-
				88,714			(1,245,940	)
	TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,153,694		$	400,960

See accompanying notes to financial statements

VYCOR MEDICAL, INC.
Consolidated Statement of Operations

				For the year ended December 31,
				2010						2009
				(restated)						(restated)
	Revenue		$	316,450					$	199,046
	Cost of Goods Sold			48,737						22,482
	Gross Profit			267,713						176,564
	Operating expenses:
	Research and development			15,208						4,761
	Depreciation and Amortization			56,801						36,995
	Stock Compensation			381,718						415,460
	General and administrative			1,537,456						685,707
	Total Operating expenses			1,991,183						1,142,923
	Operating loss			(1,723,470	)					(966,359	)
	Other income (expense)
	Interest income			8						257
	Interest expense			(45,882	)					(248,659	)
	Forgiveness of previously accrued salaries			-						50,725
	Goodwill on Acquisition of Subsidiary			(58,027	)					-
	Costs related to Acquisition of Subsidiary			(154,203	)
	Total Other Income (expense)			(258,104	)					(197,677	)
	Net Loss Before Taxes			(1,981,574	)					(1,164,036	)
	Taxes			(2,248	)					-
	Net Loss		$	(1,983,822	)				$	(1,164,036	)
	Loss Per Share
	Basic and diluted		$	(0.003	)				$	(0.040	)
	Weighted Average Number of Shares Outstanding			663,168,900						29,183,482

See accompanying notes to financial statements

VYCOR MEDICAL, INC.
Statement of Stockholders' Equity (Deficiency) (Restated)

							Common			Preferred Stock -			Additional Paid-in			Accumulated
				Shares			Stock			Series B			Capital			Deficit			Total
	Balance at January 1, 2009			25,463,455		$	25,463		$	-		$	2,788,415		$	(3,735,305	)	$	(921,427	)
	Common stock issued in conjunction with Altcar Investments note payable			866,867		$	867					$	105,758					$	106,625
	Issuance of stock for consulting fees			91,777			92						17,345						17,437
	Share-based compensation for consulting services												32,667						32,667
	Share-based compensation - employee options vesting												57,840						57,840
	Share-based compensation - Coviello and Vinas, in accordance with FHC recapitalization transaction												324,954						324,954
	Retroactive change to par value (see Note 10)						(23,780	)					23,780						-
	Retroactive reflection of conversion of Series A Preferred Shares in accordance with FHC recapitalization transaction (see Note 9)			531,376,500			53,138						246,862						300,000
	Net loss for twelve months ended December 31, 2009														$	(1,164,036	)		(1,164,036	)
	Balance at December 31, 2009			557,798,599		$	55,780		$	-		$	3,597,621		$	(4,899,341	)	$	(1,245,940	)
	Issuance of stock for consulting fees			2,612,500			261						40,364						40,625
	Share-based compensation for consulting services												823,693						823,693
	Share-based compensation - employee options vesting												57,840						57,840
	Purchases of equity - Series B preferred									14			139,986						140,000
	Common stock issuance for conversion of Series B preferred and interest			11,768,197			1,177			(14	)		5,939						7,102
	Common stock issuance for conversion of debt			64,295,200			6,430						797,260						803,690
	Purchases of equity - Common stock			87,079,447			8,708						1,425,792						1,434,500
	Common stock issuance for satisfaction of accounts payable			934,986			93						13,932						14,025
	Net loss for twelve months ended December 31, 2010														$	(1,983,822	)		(1,983,822	)
	Accumulated Comprehensive Loss																	$	(2,999	)
	Balance at December 31, 2010			724,488,929		$	72,449		$	-		$	6,902,427		$	(6,883,163	)	$	88,714

See accompanying notes to financial statements

VYCOR MEDICAL, INC.
Consolidated Statement of Cash Flows

				For the twelve months ended December 31
				2010 (restated)						2009 (restated)
	Cash flows from operating activities:
	Net loss		$	(1,983,822	)				$	(1,164,036	)
	Adjustments to reconcile net loss to cash used in operating activities:
	Amortization of intangible assets			21,539						14,046
	Depreciation of fixed assets			35,262						22,949
	Amortization of debt discount expense			-						145,302
	Share based compensation			342,864						415,462
	Shares issued for consulting services			38,854						17,437
	Interest satisfied with stock conversion			7,102						6,625
	Goodwill written off on acquisition of subsidiary			58,027						-
	Changes in assets and liabilities:
	Accounts receivable			(40,032	)					60,017
	Inventory			3,908						29,560
	Prepaid expenses			(39,262	)					(15,329	)
	Security deposit			(9,949	)					-
	Accounts payable			(247,163	)					23,331
	Accounts payable satisfied with common stock			14,025						-
	Accrued interest			34,088						(85,684	)
	Accrued liabilities			294,306						(13,466	)
	Other current liabilities			19,983						-
	Cash used in operating activities			(1,450,270	)					(543,786	)
	Cash flows used in investing activities:
	Acquisition of subsidiary, net of cash acquired			(898,017	)					-
	Purchase of fixed assets			(21,521	)					-
	Acquisition of patents			(8,575	)					(62,133	)
	Cash used in investing activities			(928,113	)					(62,133	)
	Cash flows from financing activities:
	Proceeds from sale of equity - Common stock			1,434,500						300,000
	Proceeds from sale of equity - Series B preferred			140,000						-
	Proceeds from short term Notes Payable			1,276,500						1,449,052
	Repayment of short term Notes Payable			(361,500	)					(1,326,500	)
	Cash provided by financing activities			2,489,500						422,552
	Foreign currency translation adjustment			3,193						-
	Net increase (decrease) in cash			114,310						(183,367	)
	Cash at beginning of period			12,771						196,138
	Cash at end of period		$	127,081					$	12,771
	Supplemental Disclosures of Cash Flow information:
	Interest paid:		$	-					$	-
	Taxes paid		$	2,248					$	-
	Non-Cash Transactions:
	Warrants, options and common stock issued for debt financing		$	803,690					$	400,000
	See accompanying notes to financial statements

1.   FORMATION AND BUSINESS OF THE COMPANY

Business Description

Vycor Medical, LLC, (the "Company") was formed in June 17, 2005 under the laws of the State of New York. The Company converted its entity form on August 14, 2007 from a New York Limited Liability Company to a Delaware Corporation with 16,048 of common stock exchange for each partnership unit with 1122 units outstanding at date of conversion. The assets, liabilities and operations of the Company did not change pursuant to this reorganization, and the accompanying financial statements are presented as if the change occurred on the first day of the earliest period presented; thus all are references to number of shares prior to the date of conversion are based upon the common stock equivalent of the units. The Company designs, develops and markets neurological medical devices and therapies and operates through two divisions: Vycor Medical - brain surgical access system for sale to hospitals and medical professionals; and NovaVision - neuro stimulation therapies and diagnostic devices for the treatment and screening of vision field loss.

2.   GOING CONCERN

The Company's financial statements have been presented on a basis that contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and assumes the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of $1,983,822 for the year ended December 31, 2010, and the Company expects to continue to incur substantial additional losses in the future, including additional development costs, costs related to marketing and manufacturing expenses. The Company has incurred negative cash flows from operations since inception. As of December 31, 2010 the Company had stockholders' equity of $88,714 and cash and cash equivalents of $127,081. The Company believes it would not have enough cash to meet its various cash needs unless the Company is able to obtain additional cash from the issuance of debt or equity securities. There is no assurance that additional funds from the issuance of equity will be available for the Company to finance its operations on acceptable terms. If adequate funds are not available, the Company may have to delay development or commercialization of products or technologies that the Company would otherwise seek to commercialize, or cease operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The 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.

Under a previously disclosed agreement entered into with Fountainhead Capital Management Limited, Fountainhead agreed to fund or procure funding for Vycor Medical's monthly operating expenses through September 2010 subject to the Company meeting certain financial benchmarks. The Company entered into a new agreement on September 29, 2010 under which Fountainhead agreed to extend this commitment for Vycor Medical's operating expenses through August, 2011.

3. BUSINESS ACQUISITION

On November 29, 2010, the Company completed its acquisition (the "Acquisition") of substantially all of the assets of NovaVision, Inc., a company that had been in the business of researching, developing and providing medical technologies to restore the vision of patients with neurological visual loss ("NovaVision"). The purchase price for the Acquisition was $900,000 in cash.

As required under ASC 805 the Company commissioned an independent appraisal of the assets acquired which was finalized in March 2011 and the assets entered into the Company's consolidated accounts on the basis of this valuation. As a result, the Company generated goodwill on acquisition of $58,027 which has been written off as incurred.

The expenses of the transaction, which primarily comprised legal fees and audit fees in connection with the Form 8-K/A filed on February 14, 2010 amounted to $154,203.

The following table represents the final purchase price allocation to the estimated fair value of the assets and liabilities assumed:

	As of November 30, 2010			Amount
	US
	Purchased Software			10,000
	Therapy Devices			31,000
	Internally Developed Software			540,000
	Inventory			9,179
	Trademarks			130,000
	Patents			250,000
	Germany
	Therapy Devices, Machinery and Office Equipment			14,378
	Current Assets			57,756
	Current Liabilities			(200,340	)
				841,973
	Goodwill on acquisition		$	58,027
	Purchase Price		$	900,000

Principles of Consolidation

Assuming the acquisition discussed above had occurred on January 1, 2010, for the year ended December 31, 2010, pro forma revenues, net loss and net loss per share for the Company would have been $680,982, $(2,916,434) and $(0.004), respectively.

Assuming the acquisition discussed above had occurred on January 1, 2009, for the year ended December 31, 2009, pro forma revenues, net loss and net loss per share for the Company would have been $1,120,081, $(8,765,364) and $(0.236), respectively.

The pro forma results are not necessarily indicative of the operating results that would have been obtained had the acquisitions occurred at the beginning of the periods presented, nor are they necessarily indicative of future operating results

4.   ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Vycor Medical, Inc., and its subsidiaries, NovaVision, Inc. (a U.S. corporation incorporated in Delaware) and NovaVision AG (German corporation), a wholly owned subsidiary of NovaVision, Inc. (individually and collectively referred to herein as the Company), which is headquartered in Boca Raton, FL. The operations of NovaVision, Inc have been consolidated from November 30, 2010, the date of the acquisition of substantially all the assets of the former NovaVision, Inc. All material inter-company accounts, transactions, and profits have been eliminated in consolidation.

Research and Development

The Company expenses all research and development costs as incurred. For the years ended December 31, 2010 and 2009, the amounts charged to research and development expenses were $15,208 and $4,761, respectively.

Software Development Costs For Internal Use

The authoritative guidance requires software development costs to be capitalized upon completion of the preliminary project stage. Accordingly, direct internal and external costs associated with the development of the features and functionality of the Company's software for internal use, incurred during the application development stage, are capitalized and amortized using the straight-line method of the estimated life of five years. The Company acquired internally developed software valued at $540,000 as part of the acquisition of the assets of NovaVision, Inc.

Concentration of Credit Risk

The Company maintains cash balances at various financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $250,000. Cash balances may at times exceed the FDIC insured limits. Cash also includes a US investment account in a money market backed by government securities up to 105% of the account balance. The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash balances in Germany held at NovaVision AG at December 31, 2010 and 2009 includes $1,233 and $0, respectively.

Property and equipment

The Company records property and equipment at cost and calculates depreciation using the straight-line method over the estimated useful life of the assets, which is estimated to be between three and ten years. Maintenance, repairs and minor renewals are charged to expense when incurred. Replacements and major renewals are capitalized.

Patents and Other Intangible Assets

The Company capitalizes legal and related costs associated with the establishment and enhancement of patents for its products once patents have been applied for. Costs associated with the development of the patented item or processes are charged to research and development costs as incurred. The capitalized costs are amortized over the life of the patent.

The Company reviews intangible assets on an annual basis using a present value, cash flow method based upon the authoritative guidance. Trademarks have an indefinite life and are reviewed annually by management for impairment in accordance with the authoritative guidance

Income taxes

The Company accounts for income taxes in accordance with the current authoritative guidance. Deferred income tax assets and liabilities are determined based upon differences between financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established, when it is more likely than not that such benefit will not be realized.

Uses of estimates in the preparation of financial statements

The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the 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 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 share based compensation.

Revenue Recognition

Vycor Medical generates revenue from the sale of its surgical access system to hospitals and other medical professionals. Vycor Medical records revenue when a completed contract for the sale exists, the product is invoiced and shipped to the customer. Vycor Medical does provide for product returns or warranty costs.

NovaVision generates revenues from various programs, therapy services and other sources such as government grants. Therapy services revenues represent fees from NovaVision's vision restoration therapy software, diagnostic software, medical devices, clinic set up and training fees, and the professional and support services associated with the therapy. NovaVision recognizes revenue for providing the vision restoration therapy as the Company's work effort is expended. NovaVision provides vision restoration therapy directly to patients. The typical vision restoration therapy consists of six modules, performed on average over 6 months in the U.S. and 10 months in Germany. A patient contract comprise 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.

Research grants and other subsidies represent revenue from certain German government agencies to cover certain patients within an insurance group and also to reimburse NovaVision AG for certain payroll and other costs. The Company recognizes grant revenue when services or costs have been incurred which would entitle the Company to use the German government funds, and the grant requirements have been satisfied.

Deferred revenue results from patients paying for the therapy in advance of receiving the therapy.

Accounts Receivable

The Company's accounts receivable are due from the hospitals and distributors in the case of Vycor Medical, and from patients directly therapy or physicians for diagnostic products in the case of NovaVision. Accounts receivable are due once products have been delivered or at the time the therapy is initiated; however, for NovaVision therapy patients sometimes credit is extended through various payment plans based on individual financial conditions, generally not to exceed the 9 or 10 month therapy period. The outstanding balances are stated net of an allowance for doubtful accounts. The Company determines its allowance by considering a number of factors, including the length of time accounts receivable are past due, and the customer's ability to pay its obligations. The Company writes off accounts receivable when they become uncollectible.

Inventory

Inventories are comprised of Vycor Medical VBAS devices, components ancillary to NovaVision's medical device provided to patients and centers and diagnostic products, and are stated at the lower of cost or market, determined under the first-in, first-out method. The inventory is charged to cost of revenue at the time that a device is shipped to a customer or patient.

Foreign Currency

The Euro is the local currency of the country in which NovaVision AG conducts its operations and is considered the functional currency of this entity. All balance sheet amounts are translated to U.S. dollars using the U.S. exchange rate at the balance sheet date except for the equity section which is translated at historical rates. Operating statement amounts are translated using an average exchange rate for the period of operations. Foreign currency translation effects are accumulated as part of the accumulated other comprehensive income (loss) and included in shareholders' (deficit) in the accompanying Consolidated Balance Sheet.

Educational marketing and advertising expenses

The Company may incur costs for the education of customers on the uses and benefits of its products. The Company will include education, marketing and advertising expense as a component of selling, general and administrative costs as such costs are incurred.

Website Costs

The Company capitalizes the costs associated with the acquisition of hardware and development tools as well as the creation of database tools in connection with the Company's website pursuant to authoritative guidance. Other costs including the development of functionality and identification of software tools are expensed as incurred.

Stock-Based Compensation

The Company accounts for stock based compensation awards to employees using a fair-value-based method, for costs related to all share-based payments including stock options. These standards require companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model.

Fair Values of Assets and Liabilities

Effective January 1, 2008, the relevant FASB standards define the fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. These standards require that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. These standards also established a fair value hierarchy, which prioritizes the valuation inputs into three broad levels.

There are three general valuation techniques that may be used to measure fair value, as described below:

a) Market approach - Uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. Prices may be indicated by pricing guides, sale transactions, market trades, or other sources;

b) Cost approach - Based on the amount that currently would be required to replace the service capacity of an asset (replacement cost); and

c) Income approach - Uses valuation techniques to convert future amounts to a single present amount based on current market expectations about the future amounts (includes present value techniques and option-pricing models). Net present value is an income approach where a stream of expected cash flows is discounted at an appropriate market interest rate.

Financial assets and liabilities are valued using either level 1 inputs based on unadjusted quoted market prices within active markets or using level 2 inputs based primarily on quoted prices for similar assets or liabilities in active or inactive markets.  For certain long-term debt, fair value is based on present value techniques using inputs derived principally or corroborated from market data. Using level 3 inputs uses management's assessment about the assumptions market participants would utilize in pricing the asset or liability. In the Company's case this entailed assumptions used in pricing models for attached warrant calculations. Valuation techniques utilized to determine fair value are consistently applied.

The Company has no items that are subject to these standards as of December 30, 2010.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is based on the weighted-average common shares outstanding during the period plus dilutive potential common shares calculated using the treasury stock method.  Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. The Company's potential dilutive shares, which include outstanding common stock options, convertible notes payable and warrants, have not been included in the computation of diluted net loss per share for all periods as the result 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 because to do so would be anti-dilutive as of the end of each period presented:

				December 31,						December 31,
				2010						2009
	Stock options outstanding			833,333						1,050,000
	Warrants to purchase common stock			90,191,077						38,510,584
	Debentures convertible into common stock			47,414,223						99,604,160
	Total			138,438,633						139,164,744

Recent Accounting Pronouncements

In December 2009, FASB issued ASU No. 2009-16, Accounting for Transfers of Financial Assets. This Accounting Standards Update amends the FASB Accounting Standards Codification for the issuance of FASB Statement No. 166, Accounting for Transfers of Financial Assets—an amendment of FASB Statement No. 140. The amendments in this Accounting Standards Update improve financial reporting by eliminating the exceptions for qualifying special-purpose entities from the consolidation guidance and the exception that permitted sale accounting for certain mortgage securitizations when a transferor has not surrendered control over the transferred financial assets. In addition, the amendments require enhanced disclosures about the risks that a transferor continues to be exposed to because of its continuing involvement in transferred financial assets. Comparability and consistency in accounting for transferred financial assets will also be improved through clarifications of the requirements for isolation and limitations on portions of financial assets that are eligible for sale accounting. The adoption of this ASU did not have a material impact on our consolidated financial statements.

In January 2010, FASB issued ASU No. 2010-06 - Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value

measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In February 2010, FASB issued ASU No. 2010-9 -Amendments to Certain Recognition and Disclosure Requirements. This update addresses certain implementation issues related to an entity's requirement to perform and disclose subsequent-events procedures, removes the requirement that public companies disclose the date of their financial statements in both issued and revised financial statements. According to the FASB, the revised statements include those that have been changed to correct an error or conform to a retrospective application of U.S. GAAP. The adoption of this ASU did not have a material impact on our consolidated financial statements.

In March 2010, FASB issued ASU No. 2010-11 -Scope Exception Related to Embedded Credit Derivatives. Embedded credit-derivative features related only to the transfer of credit risk in the form of subordination of one financial instrument to another are not subject to potential bifurcation and separate accounting as clarified by recently issued FASB guidance. Other embedded credit-derivative features are required to be analyzed to determine whether they must be accounted for separately. This update provides guidance on whether embedded credit-derivative features in financial instruments issued by structures such as collateralized debt obligations (CDOs) and synthetic CDOs are subject to bifurcation and separate accounting. The guidance is effective at the beginning of a company's first fiscal quarter beginning after June 15, 2010. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

In April 2010, the FASB issued ASU No. 2010-13, Compensation - Stock Compensation: Effect of Denominating the Exercise Price of a Share-Based Payment Award in the Currency of the Market in Which the Underlying Equity Security Trades. ASU 2010-13 clarifies that a share-based payment award with an exercise price denominated in the currency of a market in which a substantial portion of the entity's equity securities trades should not be considered to contain a condition that is not a market, performance, or service condition. Therefore, such an award should not be classified as a liability if it otherwise qualifies as equity. ASU 2010-13 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2010, with early adoption permitted. We are currently evaluating the potential impact of this ASU; however, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.  

The Company does not believe that any other recently issued, but not yet effective accounting standards will have a material effect on the Company's consolidated financial position, results of operations or cash flows.

5.   RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

On August 15, 2011, the Company filed with the Securities and Exchange Commission ("SEC") a Current Report on Form 8-K, to report management's determination that the Company's financial statements for the year ended December 31, 2010, included in its Annual Report on Form 10-K filed with the SEC on March 31, 2011 (the "2010 Form 10-K"), should no longer be relied upon due to incorrect accounting in such financial statements with respect to warrants issued in connection with service agreements and for the beneficial conversion feature of certain convertible debentures.  The Company determined that the historical financial statements for the year ended December 31, 2010 included in the Company's 2010 Form 10-K require restatement to properly record these warrants and beneficial conversion features.

The Current Report on Form 8-K which the Company filed with the SEC on August 15, 2011 also reported management's determination that the Company's following financial statements should no longer be relied upon due to incorrect accounting in such financial statements with respect warrants issued in connection with service agreements and for the beneficial conversion feature of certain convertible debentures:

	(i)			for the year ended December 31, 2009, included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2010;
	(ii)			for the three months ended March 31, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 12, 2010;
	(iii)			for the three and six months ended June 30, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 16, 2010;
	(iv)			for the three and nine months ended September 30, 2010 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2010; and
	(v)			for the three months ended March 31, 2011 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 14, 2010

The Company's management re-evaluated certain of its accounting policies and procedures in connection with the preparation of the Company's financial statements for the periods ended June 30, 2011, and determined that it had not properly accounted for warrants issued in connection with service agreements and for the beneficial conversion feature of certain convertible debentures. The Company had previously not recognized the fair value of warrants issued in connection with consulting or other service agreements at the measurement date, and has previously recognized the expense ratably over the life of the warrant. The Company's management has determined that the proper accounting, following the guidance in ASC Topic 505, is to record the fair value of these warrants as a prepaid expense on the date of issuance, and recognize the expense ratably over the life of the underlying service agreement. The Company has, since December 2009, been determining the existence of a beneficial conversion feature of convertible debt based on the fair value of the conversion feature on the date of issuance, rather than using the intrinsic value of the conversion feature on the date of issuance, as required under ASC Topic 470.

The Company's board of directors and management has discussed the matters set forth herein with Paritz & Co., P.A., the Company's registered independent public accounting firm. Paritz & Co. was the Company's independent public accounting firm for each of the periods being restated as set forth above.

The tables below show the effects of the restatements on (i) the Company's consolidated balance sheets as of December 31, 2010 and 2009, (ii) the consolidated statements of operations for the years ended December 31, 2010 and 2009, and (iii) the consolidated statements of cash flows for the years ended December 31, 2010 and 2009. These adjustments are non-cash items and do not impact the Company's operating activities or cash flows from operations in any way.

				Vycor Medical, Inc. Consolidated Balance Sheets
				December 31, 2010															December 31, 2009
				As Reported			Adjustment						Restated						As Reported			Adjustment						Restated
	Prepaid Expenses			106,782			538,520			a			645,302						22,369			-			a			22,369
	Total Current Assets			362,683			538,520						901,203						106,855			-						106,855
	Total Assets			1,615,174			538,520						2,153,694						400,960			-						400,960
	Notes Payable			1,344,300			56,081			b			1,400,381						1,111,053			133,999			b			1,245,052
	Total Liabilities			2,008,899			56,081						2,064,980						1,512,901			133,999						1,646,900
	Additional Paid-in Capital			6,375,175			527,252			a,b			6,902,427						3,708,967			(111,346	)		a,b,e			3,597,621
	Accumulated Deficit			(6,838,350	)		(44,813	)		c,d			(6,883,163	)					(4,876,688	)		(22,653	)		d,e			(4,899,341	)
	Total Stockholders' Equity (Deficit)			(393,725	)		482,439						88,714						(1,111,941	)		(133,999	)					(1,245,940	)
	Total Liabilities and Stockholders' Equity			1,615,174			538,520						2,153,694						400,960			-						400,960

				Vycor Medical, Inc. Consolidated Statements of Operations For the Years Ended
				December 31, 2010															December 31, 2009
				As Reported			Adjustment						Restated						As Reported			Adjustment						Restated
	Stock Compensation			152,069			229,649			c			381,718						391,704			23,756			e			415,460
	General and administrative			1,576,158			(38,702	)		c			1,537,456						685,707			-						685,707
	Total Operating Expenses			1,800,236			190,947						1,991,183						1,119,167			23,756						1,142,923
	Total Operating Loss			(1,532,523	)		(190,947	)					(1,723,470	)					(942,603	)		(23,756	)					(966,359	)
	Interest Expense			(214,661	)		168,787			d			(45,874	)					(249,505	)		(1,103	)		d			(248,402	)
	Total Other Income (Expense)			(426,891	)		168,787						(258,104	)					(198,780	)		1,103						(197,677	)
	Net Loss			(1,961,662	)		(22,160	)					(1,983,822	)					(1,141,383	)		(22,653	)					(1,164,036	)
	Net Loss per share			(0.003	)		(0.000	)					(0.003	)					(0.039	)		(0.001	)					(0.040	)

				Vycor Medical, Inc. Consolidated Statements of Cash Flows For the Years Ended
				December 31, 2010															December 31, 2009
				As Reported			Adjustment						Restated						As Reported			Adjustment						Restated
	Net Loss			(1,961,662	)		(22,160	)					(1,983,822	)					(1,141,383	)		(22,653	)					(1,164,036	)
	Amortization of Debt Discount Expense			168,785			(168,785	)		d			-						146,405			(1,103	)		d			145,302
	Share-based compensation			152,069			190,795			c			342,864						391,706			23,756			e			415,462
	Shares issued for consulting services			40,625			(1,771	)					38,854						17,437			-						17,437
	Changes in Accrued liabilities			292,385			1,921						294,306						(13,466	)		-						(13,466	)
	Cash used in operating activities			(1,450,270	)		-						(1,450,270	)					(543,786	)		-						(543,786	)
	Cash used in investing activities			(928,113	)		-						(928,113	)					(62,133	)		-						(62,133	)
	Cash provided by financing activities			2,489,500			-						2,489,500						422,552			-						422,552
	Foreign currency translation adjustments			3,193			-						3,193						-			-						-
	Net Increase (Decrease) in Cash			114,310			(0	)					114,310						(183,367	)		-						(183,367	)

	Notes:
	a			Grant date fair value of warrants issued for consulting services
	b			Elimination debt discount where no Beneficial Conversion Feature exists
	c			Net change in expense from converting amortization period from life of warrant to life of service agreement
	d			Reversal of BCF amortization where no Beneficial Conversion Feature exists
	e			Write-off of unamortized balance of share-based consulting fees for terminated agreements

6.   NOTES PAYABLE

 As of December 31, 2010 and December 31, 2009, Notes Payable consists of:

 

				December 31, 2010			December 31, 2009
	On December 29, 2009, in conjunction with a debt restructuring, the Company issued a convertible debenture in the amount of $70,000 payable to Fountainhead Capital Management Limited ("Fountainhead"). This debenture accrues interest rate of 6% per annum, is due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On May 14, 2010, this loan was repaid			-			70,000
	On December 29, 2009, in conjunction with a debt restructuring, the Company issued a convertible debenture in the amount of $371,362 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, was due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On May 14, 2010, the due date for satisfaction was extended to March 30, 2011 and on March 28, 2011 this was further extended to August 31, 2011.			371,362			371,362
	On December 29, 2009, the Company issued a convertible debenture in the amount of $350,000 payable Regent Private Capital, LLC ("Regent"). This debenture accrues interest rate of 6% per annum, is due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On December 29, 2009, this debenture was amended to provide for automatic conversion, subject to the Company authorizing sufficient shares to convert this, and other existing instruments, and transferred to three parties. On January 11, 2010 (see Note 10), these notes were satisfied in accordance with the automatic conversion clause.			-			350,000
	On December 29, 2009, the Company issued a convertible debenture in the amount of $453,690 payable Regent Private Capital, LLC ("Regent"). This debenture accrues interest rate of 6% per annum, is due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On December 29, 2009, this debenture was amended to provide for automatic conversion, subject to the Company authorizing sufficient shares to convert this, and other existing instruments, and transferred to five parties. On January 11, 2010, these notes were satisfied in accordance with the automatic conversion clause.			-			453,690

				December 31, 2010			December 31, 2009
	On February 3, 2010, the Company issued a convertible debenture in the amount of $70,000 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, was due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On May 14, 2010, the due date for satisfaction was extended to March 30, 2011 and on March 28, 2011 this was further extended to August 31, 2011.			70,000			-
	On September 30, 2010, the Company issued a convertible debenture in the amount of $85,000 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due August 31, 2011, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0175 per share, subject to adjustment and does not require bifurcation.			85,000			-
	On October 14, 2010, the Company issued a convertible debenture in the amount of $90,000 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due August 31, 2011, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0175 per share, subject to adjustment and does not require bifurcation.			90,000			-
	On October 26, 2010, the Company issued a debenture in the amount of $77,500 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due on the earlier of August 31, 2011 or the date of receipt by the Company of cash from fundraisings in excess of a cumulative $3 million from October 26, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions.			77,500			-
	On November 15, 2010, the Company issued a debenture in the amount of $322,500 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due on the earlier of August 31, 2011 or the date of receipt by the Company of cash from fundraisings in excess of a cumulative $3 million from October 26, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions.			322,500			-

				December 31, 2010			December 31, 2009
	On November 15, 2010, the Company issued a convertible debenture in the amount of $350,000 payable to Peter Zachariou, a Director of the Company. This debenture accrues interest rate of 6% per annum, is due on the earlier of August 31, 2011 or the date of receipt by the Company of cash from fundraisings in excess of a cumulative $3 million from October 26, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.019 per share, subject to adjustment and does not require bifurcation. On December 20, the Company repaid $50,000 of this debenture and removed the convertible rights.			300,000			-
	On December 3, 2010, the Company issued a debenture in the amount of $40,000 payable to Berardino Investment Group. This debenture accrues interest rate of 6% per annum, is due June 30, 2011, is secured by a first priority security interest in all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.019 per share, subject to adjustment and does not require bifurcation.			40,000			-
	€33,000 unsecured, non-interest bearing loan from the chief executive of NovaVision AG, advanced a total of to NovaVision AG, which is being repaid in monthly installments to December 31, 2011			44,019			-
	Total Notes Payable:		$	1,400,381		$	1,245,052

The following is a schedule of future minimum loan payments:

	Twelve months ending December 31,			Amount
	2011		$	1,400,381
	2012			-
	2013			-
	2014			-
	2015			-
	Thereafter			-
			$	1,400,381

As of December 31, 2010, $1,356,362 of the Company's notes payable is secured by a first security interest in all of the assets of the Company. The Company determines the existence of a beneficial conversion feature of its convertible debt under the guidance of ASC Topic 470 by assessing the intrinsic value of such conversion feature at the time of issuance. For each of the convertible debt instruments set out above, the fair value of the stock on the date of issue was either the same or less than the conversion price, and so there was no value attributable to any beneficial conversion feature.

7.   SEGMENT REPORTING, GEOGRAPHICAL INFORMATION

(a) Business segments

The Company operates in two business segments: Vycor Medical, devices for neurosurgery; and NovaVision, neuro stimulation therapies and diagnostic devices for the treatment and screening of vision field loss. Set out below are the revenues, gross profits and total assets for each segment.

				December 31,
				2010			2009
	Revenue:
	Vycor Medical		$	307,582		$	199,046
	NovaVision			8,868			-
	Total Revenue		$	316,450		$	199,046
	Gross Profit:
	Vycor Medical			259,975			176,564
	NovaVision			7,738			-
	Total Gross Profit		$	267,713		$	176,564
	Total Assets:			(restated)			(restated)
	Vycor Medical			1,085,680			400,960
	NovaVision			1,068,014			-
	Total Assets		$	2,153,694		$	400,960

(b) Geographic information. The Company operates in two geographic segments, the United States and Germany. Set out below are the revenues, gross profits and total assets for each segment.

				December 31,
				2010			2009
	Revenue:
	United States		$	307,582		$	199,046
	Germany			8,868			-
	Total Revenue		$	316,450		$	199,046
	Gross Profit:
	United States			259,975			176,564
	Germany			7,738			-
	Total Gross Profit		$	267,713		$	176,564
	Total Assets:			(restated)			(restated)
	United States			2,084,029			400,960
	Germany			69,665			-
	Total Assets		$	2,153,694		$	400,960

8.  PROPERTY AND EQUIPMENT

As of December 31, 2010 and 2009, Property and Equipment and the estimated lives used in the computation of depreciation is as follows:

				2010			2009
	Machinery and equipment		$	93,764		$	9,125
	Purchased Software			10,000			-
	Molds and Tooling			230,830			211,240
	Furniture and fixtures			18,288			-
	Therapy Devices			44,412			-
	Internally Developed Software			540,000			-
				937,294			220,365
	Less: Accumulated depreciation and amortization			(164,106	)		(29,356	)

				2010			2009
	Property and Equipment, net		$	773,188		$	191,009

Estimated useful lives of property and equipment are as follows:

				Therapy devices			3 years
				Computer equipment and software			3 years
				Furniture and fixtures			7 years
				Machinery and office equipment			5 years
				Internally Developed Software			5 years

9.   INTANGIBLE ASSETS

As of December 31, 2010 and 2009, Intangible Assets consists of:

				December 31,
				2009			2008
	Amortized intangible assets: Patent (8 years useful life)
	Gross carrying Amount		$	381,740		$	123,166
	Accumulated Amortization			(48,668	)		(29,462	)
			$	333,072		$	93,704
	Intangible assets not subject to amortization
	Trademarks			130,000			-

Amortization expense for the periods ended December 31, 2010 and 2009 was $21,539 and $14,046, respectively.

10.   EQUITY 

Certain Equity Transactions

On January 11, 2010, in accordance with the terms prescribed in Vycor Preferred Stock - Series A Convertible Preferred Stock ("New Preferred Shares"), a total of 531,376,500 New Preferred Shares held by Fountainhead were automatically converted into the same number of common shares. The New Preferred Shares had been issued to Fountainhead on conversion of $300,000 debentures in connection with a debt restructuring effective December 29, 2009.

On January 11, 2010, in accordance with the terms prescribed in debentures totaling $803,690, the Company issued 64,295,200 common shares to automatically convert said debentures at the rate of $0.0125 per share.

In accordance with the previously filed Certificate of Designation, the Company sold 140,000 shares of Series B Preferred Stock during the current fiscal year for $140,000. These shares were converted on September 11 2010, along with accrued interest, into 11,768,197 shares of the Company's Common Stock at a multiple of 80 common shares per Series B share.

On February 23, 2010, in consideration for services provided to the Board of (valued at $10,000), the Company issued 800,000 shares of its common stock.

In accordance with an agreement with Joe Simone for consulting services relating to identifying sales and marketing opportunities, increasing investor awareness of the Company, identifying potential new investors who might have an interest in investing in the Company, and other activities in the furtherance of the above, the Company issued 750,000 shares of its Common Stock valued at $9,375.

On April 14, 2010, by written consent of the Board of Directors, the Company developed the 2010 Professional/Consultant Stock Compensation Plan. It was further resolved that these shares be issued to Gregory Sichenzia for services provided to the Company by Sichenzia Ross Friedman Ference LLP, valued at $14,025.