~~[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

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

~~6401 Congress Ave.,~~951 Broken Sound Boulevard, Suite, ~~140,~~320 Boca Raton, FL 33487

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.[ ]Yes[ ]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.[ ]Yes[ ]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.[ ]Yes[ ]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 thisForm 10-K or any amendment to this Form 10-K.[ ]

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):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).[ ]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. ~~$3,820,606~~$3,140,851 (assuming ~~$0.59~~$0.30 per share)

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. ~~17,415,800~~20,071,988 shares of common stock par value $0.0001 as of March ~~27, 2017~~23, 2018

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.

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

Vycor is dedicated to providing the medical community with innovative and superior surgical and therapeutic solutions and operates two distinct business units within the medical device industry. Vycor Medical designs, develops and markets medical devices for use in neurosurgery. NovaVision provides non-invasive rehabilitation therapies for those who have vision disorders resulting from neurological brain damage such as that caused by a stroke. Both businesses adopt a minimally or non-invasive approach. Both technologies have strong sales growth potential, address large potential markets and have the requisite regulatory approvals. The Company has 5766 issued or allowed patents and a further 1713 pending. The Company leverages joint resources across the divisions to operate in a cost-efficient manner.

The Company periodically engages in discussions with potential strategic partners for or purchasers of each or both of our operating divisions.

Vycor Medical designs, develops and markets medical devices for use in neurosurgery. Vycor Medical’s ViewSite Brain Access System (“VBAS”) is a next generation retraction and access system that was fully commercialized in early 2010 and is the first significant technological change to brain tissue retraction in over 50 years in contrast to significant development in most other neuro-surgical technologies. Vycor Medical is ISO 13485:2003 compliant, and VBAS has U.S. FDA 510(k) clearance and CE Marking for Europe (Class III) for brain and spine surgeries, and regulatory approvals in Australia, Brazil, Canada, China, Korea, Japan, Russia and Taiwan.

We believe VBAS offers several advantages over other brain retractor systems, commonly known as ribbon or blade retractors that are metallic, including having the potential to significantly reduce brain tissue trauma that arises from excessive pressure at the edges of the blade. The design of VBAS can minimize the size of the brain entry access necessary for surgical procedures and is believed to significantly reduce the pressure and hence trauma on the surrounding brain tissue.

NovaVision provides non-invasive, computer-based rehabilitation targeted at a substantial and largely un-addressed market of people who have lost their sight as a result of stroke or other brain injury. ~~NovaVision addresses a significant target market, estimated at approximately $2 billion in each of the U.S. and the EU and over $13 billion globally.~~

NovaVision has a family of therapies that both restore and compensate for lost vision:

VRT and NeuroEyeCoach are therefore highly complementary and are provided in an Internet-delivered suite to ensure broad benefits to NovaVision’s patients. NeET is provided on its own in the UK for those just seeking restoration therapy.

NovaVision also has professional models of VRT and NeuroEyeCoach for physicians and ~~rehabilitation clinics, as well as~~a clinic-based model comprising NeuroEyeCoach and VIDIT, a diagnostic program that enables therapists to perform high-resolution visual field tests in less than ten minutes.

NovaVision’s VRT is the only medical device aimed at the restoration of vision lost as a result of neurological damage which has FDA 510(k) clearance to be marketed in the U.S; and NeuroEyeCoach is registered in the US as a Class I 510(k) exempt device. VRT, NEC and NeET have CE Marking for the EU. NovaVision has 4145 granted and 21 pending patents worldwide.

The VBAS device is both a brain access system and a retractor and is therefore unique with no direct competitors. Competitive manufacturers of brain retractors include Cardinal Health (V. Mueller line), Aesculap, Integra Life Science and Codman (Division of Johnson & Johnson). Nico Corporation has a brain access device specifically designed to work with its Myriad resection and suction product.

NovaVision provides restoration therapies (VRT and NeET) and compensation or saccadic therapies (NeuroEyeCoach) for those suffering vision loss as a result of neurological trauma. The other therapy type for this condition is substitution (optical aids such as prisms) and is not considered by NovaVision as competition.

In restoration, competition has been reduced through NovaVision’s acquisition of Sight Science and there are a few very small companies or entities offering some form of vision rehabilitation product in Germany. Within compensation there are no real direct competitors. Other companies in the general rehabilitation space include RevitalVision, PositScience and Dynavision. In the professional market, NovaVision competes with aggregator products or those that provide a range of non-specific therapies, such a Rehacom, Sanet Vision Integrator and Bioness BITS. NovaVision’s products are dedicated to vision.

VBAS is used for craniotomy procedures. Based on statistics from the American Association of Neurological Surgeons (AANS), management estimates 700,000 such procedures are performed in the US annually. Of this, management believe approximately 225,000 (32 percent) are addressable by the current VBAS ~~range currently, with another 100,000 (total of 325,000 or 46 percent) addressable by an expanded future~~ range. Management estimates, for the global market, there exists a current addressable market of approximately 1,100,000 ~~procedures with another 500,000 addressable by an expanded VBAS range.~~procedures.

The market for NovaVision’s therapies comprises those suffering from vision loss resulting from neurological trauma such as stroke or other brain injury. ~~The U.S. Centers for Disease Control (CDC)~~Based on American Heart Association estimates, there are approximately 8 million Americans who have previously had a stroke incident, with 795,000 additional strokes occurring annually; adjusting for repeat strokes and deaths, there are 481,000 new stroke survivors each year. Additionally, approximately 5.3 million Americans live with the long-term effects of a TBI, with a further 275,000 hospitalizations each year. The most recent scientific research estimates that approximately 28.5% experience some visual impediment and 20.5% of these patients experience a permanent visual field deficit, reducing mobility and other activities of daily living. The target market for VRT and NeET is this ~~20.5%~~ subset of patients who have suffered a permanent visual field deficit; NeuroEyeCoach ~~addresses all~~was developed to address up to the 28.5% of patients who experience visual impediments. Management estimates that the addressable target market for its therapies on the basis of these statistics is approximately 2.9 million people in the US ~~approximately~~and a further 2.8 million people in ~~Europe and approximately 12.9 million people throughout the rest of the world.~~Europe.

1. Increasing U.S. market penetration through broader hospital coverage and targeted direct physician marketing. Vycor Medical’s sales and marketing strategy is to penetrate a well-defined US target market of 4,500 neurosurgeons. Vycor markets direct to surgeons as well as marketing and distributing through independent distributors, with a focus both on adding new hospitals and expanding to additional surgeons in hospitals where VBAS is already approved, and to expand usage to a broader range of procedures. In order to expand its direct marketing and deepening its penetration, Vycor is exploring the creation of a Centers of Excellence medical education campaign and to that end has developed new surgeon education and training materials including detailed videos produced with surgeons at Weill Cornell. Vycor is pursuing a policy of continually evaluating and upgrading its distributors as well as adding additional distributors in regions where it has little to no presence.

2. Provision of more Clinical and Scientific Data supporting the products superiority over the current standard-of-care blade retractors and to demonstrate VBAS’ potential for cost savings. Clinical and scientific data (in the form of peer reviewed articles, clinical studies and other reports and case studies) are critical in driving adoption, and in turn revenues, further and faster by demonstrating VBAS’ superiority as a minimally invasive access system that helps VBAS move further up the hospital cost/benefit curve. To date the Company has already had 1012 Peer Reviewed studies and 46 other clinical papers ~~and anticipates further studies to be published.~~published or presented.

Vycor Medical utilizes select medical device distributors with experience in neurosurgical devices in their countries or regions. VBAS has ~~full~~ regulatory approvals in Australia, Brazil, Canada, China, Europe (EU – Class III), Korea, Mexico, Japan, ~~and Taiwan and is seeking or has partial regulatory approvals in India,~~ Russia and ~~Vietnam.~~Taiwan. Vycor Medical is actively pursuing new distribution agreements in the countries where it does not have any market presence.

New Product Development is targeted at both driving the use of its existing VBAS product range through ancillary products and modalities that will facilitate the product’s use and through new product extensions to broaden VBAS applicability to procedures currently not addressed by the existing product line.

Vycor is modifying its existing VBAS product suite to make it ~~more easy~~easier to integrate with Image Guidance Systems (IGS) by re-engineering its VBAS product range so that the entire range of 12 devices, excluding the VBASmini, will be able to more easily accommodate pointers from ~~a range~~the leading IGS system providers. The first phase of ~~IGS manufacturers.~~this was completed in September 2017 and the final phase will be completed during 2018 and then subject to regulatory approval in the US and internationally. Increasingly, all major neuro centers have image guidance systems, and where this is in place management believes over 90% of surgeries are carried out using IGS and management strongly believes that the existing VBAS rigid structure lends itself well to being incorporated into this increasing trend.

While speech, physical, and occupational therapies are the long-standing treatment standards for stroke and ~~TBI~~brain injury survivors, ~~VRT is the first and only FDA-cleared clinical component of~~ vision ~~restoration to physically enhance the visual field after a stroke or brain injury.~~has been largely unaddressed. Increasingly the healthcare community, partly driven by strong lobbying by stroke associations worldwide, are recognizing that vision is not only a significant issue post stroke or brain injury, but that visual field loss can have a significant impact on the success of other rehabilitation modalities and the patient’s quality of life. VRT is the first and only FDA-cleared clinical-supported vision restoration therapy that can physically enhance the visual field after a stroke or brain injury.

~~Our strategic vision for~~

NovaVision ~~has been~~is now able to ~~develop and~~ provide a clinically supported, ~~affordable~~cost-effective and scalable visual therapy ~~solution~~solutions offering ~~that provides~~ broad benefits to ~~those~~patients suffering from visual ~~impairment~~impairments following neurological brain damage; and a highly flexible range of products and licensing options for medical professionals.

NovaVisions’s potential customers often tend to ~~offer solutions~~have other medical issues associated with their neurological condition making this a hard target universe. Rehabilitation therapies of this type are a time and effort commitment for ~~both~~ patients, who therefore need to be in a condition to carry them out and medical professionals alike. Following a prolonged development program, aimed at broadening patient benefits, significantly reducing cost and making our therapies affordable and scalable, NovaVision was able to ~~launch its Internet-delivered therapy suite~~be motivated to rehabilitate their vision disorder. The market is also very diverse; stroke patients pass through the rehabilitation system in the ~~US in June 2015~~first weeks after stroke, and ~~in Europe in December 2015.~~unless they are acute patients are then sent home for recovery. At this point they may see physiotherapists, occupational therapists, eye-care professionals and other physicians, as well as stroke support groups. NovaVision’s challenge, has been to continue to drive awareness amongst patients understanding that they are subject to a diverse range of other influencers.

NovaVision taking the aforementioned issue into consideration has chosen to target four routes-to-market aimed at patients and professionals, comprising: direct-to-patient; optometrists and other eye-care professionals, rehabilitation centers and clinics; stroke associations and support groups; and other physicians. ~~Given the company’s limited resources~~ NovaVision ishas initially ~~focusing~~focused on direct-to-patient, with a website lead-driven inbound and outbound marketing strategy targeted at prospective patients and relatives. ~~Website metrics – particularly for~~Given the UScompany’s resources, size and ~~more recently Germany – are positive, although below management’s expectations, showing good growth in traffic and rankings, and have been effective in generating leads. Our analysis~~diversity of the campaign metrics in the US (including Google Ads) during 2016 highlighted some key improvements that needed to be implemented which we are carrying out and which we believe could have a material impact on our lead generation.

Following the pilot launch of our NovaVision Center Model, comprising the Vision Diagnostics program and the NeuroEyeCoach training program, we are substantially broadening the delivery and licensing model in response to feedback from clinics. The new Center Model has a complete suite for the professional market, ~~including options for software download, CD Rom, Cloud based and Hardware~~NovaVision believes the best route to market here is by partnering with entities who already have the capability of delivery ~~with flexible and cost-effective pricing options,~~to the various professional target markets. NovaVision is identifying and is ~~now being offered~~ in ~~both~~dialogue with such qualified entities; the ~~US and Europe.~~range of alternatives could comprise distribution partnerships, merger, sale and/or restructuring of its activities.

Vycor Medical uses a sub-contract manufacturer to manufacture, package, label and sterilize its VBAS products. The Company has migrated all its VBAS manufacturing to Life Science Outsourcing, Inc. in Brea, California that is FDA-registered and meets ISO standards and certifications.

Vycor Medical maintains a portfolio of patent protection on its methods and apparatus for its Brain and Spine products and technology in the form of issued patents and applications, both domestically and internationally, with a total of 1621 granted/allowed and 1512 pending 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 4145 granted and 21 pending patents (including Sight Science).

VYCOR MEDICAL is a registered trademark andVIEWSITE is a common law trademark.

NovaVision maintains a portfolio of registered trademarks forNOVAVISION, NOVAVISION VRT,VRT VISION RESTORATION THERAPY and NEUROEYECOACH, amongst others, along with relevant logos, both in the US and internationally.

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

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

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’s products have been classified as Class II products by the FDA and cleared for marketing through the 510(k) process. NovaVision’s VRT product has been cleared as a Class U product through the 510(k) while its NeuroEyeCoach is registered as an exempt Class 1 device.

After a device is placed on the market, numerous regulatory requirements apply. Failure to comply with applicable regulatory requirements, and failure to respond to requested corrective actions on an ongoing basis, can result in enforcement action by the FDA.

Medical device laws are also in effect in many of the countries outside of the United States in which we do business. These laws range from comprehensive device approval and quality system requirements for some or all of our medical device products to simple requests for product data or certifications. The number and scope of these requirements are increasing. In June 1998, the European Union Medical Device Directive became effective, and all medical devices must meet the Medical Device Directive standards and receive CE mark certification. CE mark certification involves a comprehensive Quality System program, and submission of data on a product to the Notified Body in Europe.

Vycor Medical has obtained the CE marking approval to allow for distribution of its VBAS products in Europe as a Class III device and has received HPB licensing approval for distribution in Canada as a Class II device. VBAS also has full regulatory or partial approvals in Australia, Brazil, China, Korea, Japan and Russia. NovaVison’s VRT, NeuroEyeCoach and Sight Science’s NeET have CE mark registrations as Class I devices in Europe.

The Company operates websites at www.vycormedical.com, www.novavision.com, www.novavision.de and www.sightscience.com

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

The Company ~~leases approximately 10,000 sq. ft~~leased office space located at 6401 Congress Ave., Suite 140, Boca Raton, FL 33487 from Catexor Limited Partnership for a gross rent of $14,260 plus sales tax per month. The term of the lease iswas 5 years and 6 months ~~terminating~~and terminated July 30, 2017. Effective August 1, 2017 the Company leased office space located at 951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487 from WPT Land 2L.P., for a gross rent of approximately $5,700 plus sales tax per month. The lease terminates September 30, 2020. The Company’s subsidiaries in Germany and the UK occupy properties on short-term lease agreements.

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

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

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 for fiscal years ~~2015~~2016 and ~~2016.~~2017. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

The market price of our common stock, like that of other ~~technology~~early stage medical device 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.

As of March ~~27, 2017~~23, 2018 there were ~~17,415,800~~20,071,988 shares of common stock outstanding and approximately ~~157~~154 stockholders of record.

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

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. The Company’s Series D Convertible Preferred Stock bears a 7% per annum dividend payable in cash or Series D Preferred Stock at the option of the Company.

Below is a list of securities sold by us from January 1, ~~2016~~2017 through March ~~27, 2017~~23, 2018 which were not registered under the Securities Act

The securities issued in the above mentioned 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 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

Comparison of the Year Ended December 31, ~~2016~~2017 to the Year Ended December 31, ~~2015~~2016

Vycor Medical recorded revenue of ~~$1,260,949~~$1,178,063 from the sale of its products for the year ended December 31, ~~2016, an increase~~2017, a decrease of ~~$375,468~~$82,886 or ~~42%~~7% over ~~2015.This reflected increased sales~~2016. Vycor has been in the USprocess, during 2017, of modifying its existing VBAS product suite to make it easier to integrate with Imaging Guided Systems. The Company experienced manufacturing delays in connection with this re-engineering during the first half of 2017 and ~~internationally.~~ as a result was unable to fulfill shipments of certain models, particularly for some large international orders. These delays were resolved and back orders were filled during the third and fourth quarters.

Gross margin of ~~87%~~85% was recorded for the year ended December 31, ~~2016~~2017 compared to ~~88%~~87% in ~~2015~~2016. Following the release of the enhanced VBAS model at the end of September, Vycor took the decision in February 2018, based on surgeon feedback, to accelerate the roll-out of the enhanced model and cease shipment of the previous model. As a result, the Company took a special provision against obsolete inventory of $39,675, in addition to the monthly provision totaling $5,088, for theyear ended December 31, 2017. Excluding this provision, gross margin would have been 86% for the year

NovaVision recorded revenues of ~~$191,765~~$206,908 for the year ended December 31, ~~2016, a decrease~~2017, an increase of ~~$61,388~~$15,143 from ~~2015~~,2016, and gross margin of ~~91%~~89%, compared to ~~78%~~91% for 2015. The decrease was mainly accounted for by Europe, where the Internet-delivered model was launched 6 months later than the U.S. Since the launch in the U.S., NovaVision has achieved a reduction in price to patients of 65%, from $2,500 for a six-month course of VRT alone to $900 for VRT and NeuroEyeCoach together. Given the price reduction, the company anticipated an initial decrease in revenues as volumes ramp up due to the new affordable and scalable therapy suite, and revenue for the therapies is recognized over a 7-month period, which leads to a further lag in book revenues. New VRT/NeuroEyeCoach therapy suite patient starts in the U.S. for 2016 increased by 23% over 2015, which included six months of the Internet-delivered model. The Internet-delivered therapy suite was launched in Europe in December 2015, where similar price reductions have been achieved. New VRT/NeuroEyeCoach therapy suite patient starts in Europe 2016 increased by 39% over 20152016.

Research and development expenses were ~~$4,739~~$3,015 in ~~2016~~2017 compared to ~~$71,512~~$4,739 for ~~2015.~~2016. Capitalized software development costs in NovaVision for the year ended December 31, 2017 and 2016 were $2,745 and ~~2015 were~~ $12,679, ~~and $32,843,~~ respectively. ~~During the year ended December 31, 2016 the Company’s NeET and Center Model were completed.~~

General and administrative expenses ~~increased~~decreased by ~~$63,402~~$405,117 to $2,191,969 in 2017 from $2,597,086 in ~~2016 from $2,533,684 in 2015.~~2016. Included within General and Administrative Expenses are non-cash charges for ~~share based~~share-based compensation as the result of amortizing employee and non-employee shares, warrants and options which have been issued by the Company over various periods. The charge for 2017 was $559,972, a decrease of $169,637 from $729,609 in 2016, ~~was $729,609, an increase~~primarily as a result of ~~$455,107 from $274,502 in 2015.~~the changed compensation structure for management and Fountainhead. Also included within General and Administrative Expenses are Sales Commissions, which increased by ~~$27,893~~$892 to ~~$195,440; which related to the increase in sales in 2016.~~$196,332. The remaining General and Administrative expenses decreased by ~~$419,598~~$235,480 from ~~$2,091,636~~$1,672,038 to ~~$1,672,038.~~$1,436,558. An analysis of the change in cash and non-cash G&A is shown in the table below:

Interest comprises expense on the Company’s debt and insurance policy financing. Related Party Interest expense for ~~2016 increased~~2017 decreased following the ~~issuance~~conversion of ~~new~~Related Party debt ~~to $12,161 from $0~~into the Offering in ~~2015.~~January 2017. Other Interest expense for ~~2016 increased~~2017 decreased by ~~$1,175~~$362 to $48,523 from $48,885 ~~from $47,710~~ for ~~2015.~~2016.

The following table shows cash flow and liquidity data for the periods ended December 31, ~~2016~~2017 and December 31, ~~2015:~~2016:

On January 11, and February 23, 2017 (the “Closings”) the Company completed the sale of $1,274,717 in shares of Common Stock and Warrants to accredited investors. Included in these gross proceeds is the conversion of $248,000 of debt on the balance sheet at December 31, 2016, so that proceeds net of debt conversion were $1,026,717. The Closings raised net cash proceeds, after debt conversion and expenses, of ~~$941,889.~~$943,873, of which $842,873 was received during 2017.

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

The following table shows the ~~principle~~principal components of cash used in operating activities during the ~~nine months~~year ended December 31, ~~2016~~2017 and ~~2015,~~2016, with a commentary of changes during the periods and known or anticipated changes:

The adjustments to reconcile net loss to cash used of ~~$1,007,924~~$1,014,018 in the period have no impact on Liquidity. The reduction in net loss (as adjusted for non-cash items) by $181,829 to $463,027 was primarily due to a reduction in cash operating expenses during the period. The net change in accounts receivable, accounts payable and accrued liabilities ~~reflect~~is primarily the ~~normal course~~result of ~~business~~the payment during the first quarter of $69,314 of accounts payable deferred at the end of December 2016, offset by collections of accounts receivable. The Company is in the process of modifying the VBAS product suite to make it easier to integrate with IGS. During the period the Company completed the first phase of this project and ~~change between periods mainly~~ as a result of larger than normal orders from customers or larger than normal expenditures. The net reduction in use of cash in operating activities in 2016 over 2015 of $673,592 was primarily a result of the reduction in net loss (as adjustedpurchased VBAS inventory for ~~non-cash items), of $716,966. The net increase in use of cash in working capital in 2016 over 2015 largely reflects changes in~~$85,748 and will be purchasing additional inventory and the impact on prepaid expenses of Vycor’s manufacturing program, as well as the deferral of certain accounts payable at December 31, 2016. Vycor’s normal inventory manufacturing purchasing cycle is to build up inventory in the fourth and first quarters. During 2016 the sale of purchased inventory was a net source of cash; inventory purchases were deferred in the fourth quarter of 2016 and this will reverse in the first three quarters of 2017 with inventory being purchased. The impact on cash flow during 2015 was impacted by the booking of molds and other manufacturing costs related to the migration process to prepaids in 2014, and then bringing the molds into service during 2015. The reversal of the deferred accounts payable will have an impact on net cash flows in the first quarter of ~~2017.~~2018 of approximately $11,000. The Company anticipates completing the second phase of this project during 2018 and as a result will purchase additional new inventory of approximately $45,000.

Investing Activities.Cash used in investing activities for the year ended December 31, ~~2016~~2017 was ~~$57,451,~~$183,258, of which $166,154 reflected ~~additional~~ expenditure on molds for Vycor Medical and IT infrastructure. Vycor Medical is engaged in the final stage of migrating and consolidating its manufacturing and also making certain improvements to the molds for its VBAS product. This will entail significantly increased expenditure during the first ~~half~~phase of ~~2017, which will have an impact on liquidity and cash flow, in particular in~~modifying the ~~first quarter~~VBAS product suite to make it easier to integrate with IGS. The Company anticipates expenditure for the second phase of ~~2017.~~this project during 2018 of approximately $100,000.

~~During~~On January 11, and February 23, 2017 the ~~period Vycor’s largest shareholder, Fountainhead, had provided~~Company completed the sale of $1,274,717 in shares of Common Stock and Warrants to accredited investors (the “Private Placement”). Included in these gross proceeds is the conversion of $248,000 of ~~funding~~debt on the balance sheet at December 31, 2016, so that proceeds net of debt conversion were $1,026,717. The Private Placement raised net cash proceeds, after debt conversion and expenses, of $943,873. $101,000 of these proceeds were reflected in the ~~form of notes payable. Fountainhead also advanced $101,000 during~~in the ~~period in respect of the Private Placement referred to above. This amount was held in escrow~~balance sheet at December 31, 2016 and ~~represented part of~~so the net increase in liquidity during the period from the Private Placement ~~Initial Closing.~~was $842,873.

~~During~~The Company has incurred losses since its inception, including a net loss of $1,477,045 and $1,652,280 for the ~~year ended~~years ending December 31, 2017 and 2016 ~~we reduced our Cash used in operations, adjusted for net insurance repayments, to $579,209 from $1,252,800 for year ended December 31, 2015. Cash~~respectively and has not generated cash flows from ~~operating activities and investing activities, taken together, were $636,660. Average monthly operating and investing cash usage was therefore approximately $55,000.~~

~~The balance of cash~~operations. As at December 31, ~~2016, adjusted for~~2017 the ~~net proceeds~~Company had stockholder’s equity of ~~the Private Placement detailed above received after December 31, 2016, is $904,798. Management has evaluated the effects~~$81,442,cash of ~~the Private Placement on the Company’s financial condition, as well as the continued revenue growth coupled with improved margins~~$206,213 and ~~control~~a working capital deficiency of ~~expenses. Management is~~ $197,297, excluding related party liabilities,of the opinion that any potential going concern uncertainty that previously existed has been remediated, and that its existing cash and cash equivalents following the Private Placement, together with the continued reduction in losses$562,210. As a result, these conditions raise substantial doubt regarding our ability to continue as a ~~result of initiatives outlined below, will be sufficient to meet its anticipated cash requirements through at least March 31, 2018.~~going concern.

As described earlier in this ITEM 2 “Our Growth Strategy”, the Company is executing on a plan to achieve a growth in revenues for both the Vycor Medical and NovaVision divisions ~~and~~as well as reduction in costs, thereby further ~~reduce~~reducing its cash operating usage. For Vycor Medical this includes in particular: increasing penetration in the US market through targeted marketing and a potential new medical education program; increased international market growth; and new product development centered around the modification of its existing VBAS product range to make it more easy to ~~integrate~~use with the most common IGS ~~systems.~~systems, the first phase of which was completed in September 2017. For NovaVision, after a prolonged and now complete period of re-development, the Company is focusing its resources on direct-to-patient marketing through a website lead-driven inbound and outbound marketing strategy. ~~In addition,~~Given the company’s resources, and the size and diversity of the professional market, NovaVision believes the best route to the professional market for its products is by partnering with entities who already have established distribution channels and expertise in the various professional target markets. The Company is identifying and is in dialogue with such qualified entities; the range of alternatives for NovaVision could comprise distribution partnerships, merger, sale and/or restructuring of its activities.

However, the Company believes it may not have sufficient cash to meet its various cash needs through March 31, 2019 unless the Company is ~~now starting~~able to ~~market~~obtain additional cash from the issuance of debt or equity securities. Fountainhead, the Company’s largest shareholder, is currently providing working capital funding to the Company on an as-needed basis, although there is no guarantee that this will continue to be the case. The Company may consider seeking additional equity or debt funding, although there is no assurance that this would be available on acceptable terms or at all. If adequate funds are not available, the Company may have to delay or curtail development or commercialization of products, or cease some of its ~~NovaVision Center Model~~operations. These conditions raise substantial doubt about the Company’s ability to ~~medical professionals, with~~continue as a ~~broad~~going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and ~~flexible range~~classification of ~~delivery~~assets or the amounts and ~~licensing options.~~classification of liabilities that may result from the outcome of this uncertainty.

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

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.

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. Included within cash are deposits paid by patients, held by the Company until the patient returns the VRT device or chinrest at the end of therapy. At December 31, ~~2016~~2017 and ~~2015~~2016 patient deposits amounted to ~~$33,351~~$41,172 and ~~$27,183,~~$33,351, respectively, and are included in other current liabilities.

The Company records fixed assets 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~~

The Company has accounted for the 34,723 Series A Warrants issued in connection with the 2014 Offering (all as defined in Note 10), the holders of which had not waived their anti-dilution rights (as detailed further in Note 10) in accordance with the guidance contained in ASC 815-40-15-7D, whereby under that provision, because they had anti-dilution rights, they did not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classified the warrant instrument as a liability at its fair value and adjusted the instrument to fair value at each reporting period. This liability was subject to re-measurement at each balance sheet date until exercised or until the anti-dilution provisions contained within the warrant agreements expired, and was classified in the balance sheet as a current liability. Any change in fair value of the warrant liability was recognized in the Company’s statement of operations as other income (loss). The anti-dilution provisions expired on June 11, 2015 and accordingly the liability has been extinguished.

We use the asset and liability method of accounting for income taxes in accordance with ASC Topic 740, “Income Taxes.” Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year and (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity’s financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized.

ASC Topic 740.10.30 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic 740.10.40 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. We have no material uncertain tax positions for any of the reporting periods presented.

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 in accordance with the authoritative guidance. Trademarks have an indefinite life and are reviewed annually by management for impairment in accordance with the authoritative guidance.

The authoritative accounting 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, incurred during the application development stage, are capitalized and amortized using the straight-line method over the estimated life of five years.

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 not provide for product returns or warranty costs.

NovaVision generates revenues from various programs, therapy services and other sources such as license sales. Therapy services revenues represent fees from NovaVision’s vision restoration therapy software, eye movement training software, diagnostic software, clinic set up and training fees, and the professional and support services associated with the therapy. NovaVision provides vision restoration therapy directly to patients. The typical vision restoration therapy consists of six modules, performed on average over 6 months in the U.S. and U.K. and 10 months in Germany. A patient contract comprises set-up fees and monthly therapy fees. Set-up fees are recognized at the outset of the contract and therapy revenue is recognized ratably over the therapy period. Patient therapy is restricted to being completed by a patient within a specified time frame. NovaVision’s saccadic training software is generally completed within 2-4 weeks and revenue is therefore recognized fully at commencement.

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

The Company’s accounts receivable are due from the hospitals and distributors in the case of Vycor Medical, and from patients directly for 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.

Inventories are stated at the weighted average cost method. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. The provision for inventory for the years ended December 31, 2017 and 2016 was $44,760 and ~~2015 was~~ $10,174, ~~and $29,923, respectively.~~respectively, of which $39,672 is a special provision related to the introduction of the enhanced VBAS discussed above. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales.

The Euro is the local currency of the country in which NovaVision GmbH conducts its operations and is considered the functional currency of this entity; the GB Pound is the local currency of the country in which Sight Science Limited 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.

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.

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

Board of ~~directors~~Directors and
Stockholders of Vycor Medical Inc. ~~and Subsidiaries~~

We have audited the accompanying consolidated balance sheets of Vycor Medical, ~~Inc. and Subsidiaries (“the Company”)~~Inc (the Company) as of December 31, ~~2016~~2017 and ~~2015,~~2016, and the related consolidated statements of comprehensive loss, stockholders’ ~~(deficit)~~ equity (deficiency), and cash flows for each of the years in the ~~two year~~two-year period ended December 31, ~~2016. The~~2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the Company’s ~~management is responsible for these financial statements.~~management. Our responsibility is to express an opinion on ~~these~~the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States).~~PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material ~~misstatement.~~misstatement, whether due to error or fraud. The ~~company~~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~~As part of our audits, we are required to obtain an understanding 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~~Company’s internal control over financial reporting. Accordingly, we express no such opinion. ~~An audit also includes~~

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence ~~supporting~~regarding the amounts and disclosures in the financial ~~statements, assessing~~statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial ~~statement presentation.~~statements. We believe that our audits provide a reasonable basis for our opinion.

~~In our opinion,~~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, ~~referred to above present fairly, in all material respects,~~ the ~~financial position~~Company has incurred a net loss since inception, including a net loss of ~~Vycor Medical, Inc.~~$1,477,045 and ~~Subsidiaries as~~$1,652,280 for the year ended December 31, 2017 and 2016, respectively, and has not generated cash flows from operations. As of December 31, ~~2016 and 2015, and~~2017, the ~~results~~Company had working capital deficiency of ~~its operations and its cash flows for each~~$197,297, excluding related party liabilities of $562,210. These factors, among others, raise substantial doubt regarding the ~~years~~Company’s ability to continue as a going concern. Management’s plans in regards to these matters are described in Note 1 to the ~~two year period ended December 31, 2016, in conformity with accounting principles generally accepted in~~financial statements. The accompanying financial statements do not include any adjustments that might result from the ~~United States~~outcome of ~~America.~~this uncertainty

Vycor Medical, Inc. (the “Company”) designs, develops and markets neurological medical devices and therapies through two operating divisions: Vycor Medical and NovaVision. Vycor Medical focuses on brain and cervical surgical access systems for sale to hospitals and medical professionals; NovaVision focuses on neuro-stimulation therapies and diagnostic devices for the treatment and screening of vision field loss resulting from neurological damage.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of ~~$1,652,280~~$1,477,045 and ~~$2,082,643~~$1,652,280 for the years ending December 31, 2017 and 2016 respectively and ~~2015 respectively.~~has not generated cash flows from operations. As at December 31, ~~2016~~2017 the Company had ~~stockholder’s~~a working capital deficiency of ~~$26,483 and cash~~$197,297, excluding related party liabilities of ~~$56,859.~~$562,210. As a result, these conditions ~~had raised~~raise substantial doubt regarding our ability to continue as a going concern.

~~However, On January 11,~~The Company is executing on a plan to achieve growth in revenues for both the Vycor Medical and February 23, 2017 the Company completed the sale of $1,274,717 in shares of Common Stock and Warrants to accredited investors. Included in these gross proceeds is the conversion of $248,000 of debt on the balance sheet at December 31, 2016, so that proceeds net of debt conversion were $1,026,717. The Private Placement raised net cash proceeds, after debt conversion and expenses, of $941,889. Management has evaluated the effects of the Private Placement on the Company’s financial condition,NovaVision divisions as well as the continued revenue growth coupled with improved margins and control of expenses. Management is of the opinion that any potential going concern uncertainty that previously existed has been remediated, and that its existing cash and cash equivalents following the Private Placement, together with the continueda reduction in ~~losses as a result of initiatives outlined in “Liquidity and Plan of Operations” in Item 7. will be~~costs, thereby reducing its cash operating usage. However, the Company believes it may not have sufficient cash to meet its ~~anticipated~~various cash ~~requirements~~needs through ~~at least~~ March 31, ~~2018.~~2019 unless the Company is able to obtain additional cash from the issuance of debt or equity securities. Fountainhead, the Company’s largest shareholder, is currently providing working capital funding to the Company on an as-needed basis, although there is no guarantee that this will continue to be the case. The Company may consider seeking additional equity or debt funding, although there is no assurance that this would be available on acceptable terms or at all. If adequate funds are not available, the Company may have to delay or curtail development or commercialization of products, or cease some of its operations. 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.

The consolidated financial statements include the accounts of Vycor Medical, Inc., and its wholly-owned subsidiaries, NovaVision, Inc. (a Delaware corporation), NovaVision GmbH (a German corporation) and Sight Science Limited (a UK corporation), both wholly owned subsidiaries of NovaVision, Inc. The Company is headquartered in Boca Raton, FL. All material inter-company accounts, transactions, and balances have been eliminated in consolidation. Certain reclassifications and format changes have been made to prior year amounts to conform to the current year presentation.

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, price is fixed or determinable, the product is invoiced and shipped to the ~~customer.~~customer and collectability is reasonably assured. Vycor Medical does not provide for product returns or warranty costs.

NovaVision generates revenues from various programs, therapy services and other sources such as software license sales. Therapy services revenues represent fees from NovaVision’s vision restoration therapy software, eye movement training software, diagnostic software, clinic set up and training fees, and the professional and support services associated with the therapy. NovaVision provides vision restoration therapy directly to patients. The typical vision restoration therapy consists of six modules, performed on average over 6 months in the U.S. and U.K. and 10 months in Germany. A patient contract comprises set-up fees and monthly therapy fees. Set-up fees are recognized at the outset of the contract and therapy revenue is recognized ratably over the therapy period. Patient therapy is restricted to being completed by a patient within a specified time frame. NovaVision’s saccadic training software is generally completed within 2-4 weeks and revenue is therefore recognized fully at commencement.

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

The Company maintains cash balances at various financial institutions. Accounts at each institution in the U.S. 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. Included within cash are deposits paid by patients, held by the Company until the patient returns the VRT device or chinrest at the end of therapy. At December 31, ~~2016~~2017 and ~~2015~~2016 patient deposits amounted to ~~$33,351~~$41,172 and ~~$27,183,~~$33,351, respectively, and are included in Accrued Liabilities.

We have a policy of reserving for uncollectible accounts based on our best estimate of the amount of probable credit losses in our existing accounts receivable. We extend credit to our customers based on an evaluation of their financial condition and other factors. We generally do not require collateral or other security to support accounts receivable. We perform ongoing credit evaluations of our customers and maintain an allowance for potential bad debts if required. We determine whether an allowance for doubtful accounts is required by evaluating specific accounts where information indicates the customers may have an inability to meet financial obligations. In these cases, we use assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. The amounts calculated are analyzed to determine the total amount of the allowance. We may also record a general allowance as necessary. Direct write-offs are taken in the period when we have exhausted our efforts to collect overdue and unpaid receivables or otherwise evaluate other circumstances that indicate that we should abandon such efforts.

Inventories consist of raw materials, work in process and finished goods that are stated at the lower of cost determined using the weighted average cost method or market. Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete and dispose of the product. If the Company identifies excess, obsolete or unsalable items, its inventories are written down to their realizable value in the period in which the impairment is first identified. The provision for inventory obsolescence for the years ended December 31, 2017 and 2016 was $44,760 and ~~2015 was~~ $10,174, ~~and $29,923, respectively.~~respectively, of which $39,672 is a special provision related to the introduction of the enhanced VBAS. Shipping and handling costs incurred for inventory purchases and product shipments are recorded in cost of sales in the Company’s consolidated statements of operations.

The Euro is the local currency of the country in which NovaVision GmbH conducts its operations and is considered the functional currency of this entity; the GB Pound is the local currency of the country in which Sight Science Limited 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 stockholders’ equity in the accompanying Consolidated Balance Sheet.

Fixed assets are stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. Expenditures for additions and improvements are capitalized; repairs and maintenance are expensed as incurred.

Long-lived assets are reviewed for impairment when circumstances indicate the carrying value of an asset may not be recoverable. For assets that are to be held and used, impairment is recognized when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying value. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value or estimated net realizable value.

The Company expenses all research and development costs as incurred. For the years ended December 31, ~~2016~~2017 and ~~2015,~~2016, the amounts charged to research and development expenses were ~~$4,739~~$3,015 and ~~$71,512,~~$4,739, respectively.

The Company accounts for software development costs in accordance with ASC 350-40, whereby all costs incurred during the preliminary stage of a development project should be charged to expense as incurred. Capitalization of costs begins after the preliminary stage has been completed, management commits to funding the project, it is probable that the project will be completed, and the software will be used for its intended function. All post-implementation costs are charged to expense as incurred. Accordingly, direct internal and external costs associated with the development of the features and functionality of the Company’s software, incurred during the application development stage, are capitalized and amortized using the straight-line method of the estimated life of five years. For the years ended December 31, ~~2016~~2017 and ~~2015,~~2016, the amounts capitalized for software development were ~~$12,679~~$2,745 and ~~$32,843~~$12,679 respectively, for the Company’s VRT 7.0 and NeuroEyeCoach programs.

The preparation of consolidated financial statements in conformity with GAAP 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~~provision for inventory obsolescence, useful life of intangible assets, and the fair values of options and warrants included in the determination of debt discounts and share based compensation.

The Company recognizes the cost of all share-based payments under the relevant authoritative accounting guidance. Share-based payments include any remuneration paid by the Company in shares of the Company’s common stock or financial instruments that grant the recipient the right to acquire shares of the Company’s common stock. For share-based payments to employees, which consist only of awards made under the stock option plan described below, the Company accounts for the payments in accordance with the provisions of ASC Topic 718, “Stock Compensation”. Share-based payments to consultants, service providers and other non-employees are accounted for under in accordance with ASC Topic 718, ASC Topic 505, “Equity Payments to Non-Employees” or other applicable authoritative guidance.

We evaluate and account for conversion options embedded in convertible instruments in accordance with ASC 815 “Derivatives and Hedging Activities”.

Applicable GAAP requires companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments according to certain criteria. The criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under other GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument.

We account for convertible instruments (when we have determined that the embedded conversion options should not be bifurcated from their host instruments) as follows: We record when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt to their stated date of redemption. The embedded conversion option in connection with our convertible debt could not be exercised unless and until we completed a Qualifying Financing transaction. Accordingly, we determined based on authoritative guidance that the embedded conversion option is deemed to be a contingent conversion rather than active conversion option that did not require accounting recognition at the commitment dates of the issuances of the Notes.

We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40 (“Contracts in Entity’s Own Equity”). We classify as assets or liabilities any contracts that require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside our control) or give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). We assess classification of our common stock purchase warrants and other ~~free standing~~free-standing derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required.

We adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. The carrying amounts of our short and ~~long term~~long-term credit obligations approximate fair value because the effective yields on these obligations, which include contractual interest rates taken together with other features such as concurrent issuances of warrants and/or embedded conversion options, are comparable to rates of returns for instruments of similar credit risk.

ASC 820 defines 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. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The Company has no Financial instruments measured at Fair value on a recurring basis.

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

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

In August 2014, the FASB issued ASU No. 2014-15 —Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued and if management’s plans will alleviate that doubt. Management will be required to make this evaluation for both annual and interim reporting periods. The Company adopted this guidance for the fiscal year ended December 31, ~~2016.~~2017. This adoption did not have a material impact on the Company’s consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU supersedes most of the existing guidance on revenue recognition in Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and establishes a broad principle that would require an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this principle, an entity identifies the contract with a customer, identifies the separate performance obligations in the contract, determines the transaction price, allocates the transaction price to the separate performance obligations and recognizes revenue when each separate performance obligation is satisfied. The FASB has subsequently issued additional ASUs to clarify certain elements of the new revenue recognition guidance. The guidance is effective for fiscal years beginning after December 15, 2017, and is to be applied retrospectively using one of two transition methods at the entity's election. The full retrospective method requires companies to recast each prior reporting period presented as if the new guidance had always existed. Under the modified retrospective method, companies would recognize the cumulative effect of initially applying the standard as an adjustment to opening retained earnings at the date of initial application. Early adoption is permitted for fiscal years beginning after December 15, 2016.

In May 2016, FASB issued ASU 2016-12, "Revenue from Contracts with Customers (Topic 606) - Narrow-Scope Improvements and Practical Expedients". The update is to address certain issues identified by the FASB/IASB Joint Transition Resource Group for Revenue Recognition (TRG) in the guidance on assessing collectability, presentation of sales taxes, noncash consideration, and completed contracts and contract modifications at transition, the Board decided to add a project to its technical agenda to improve Topic 606, Revenue from Contracts with Customers, by reducing: 1) The potential for diversity in practice at initial application 2) The cost and complexity of applying Topic 606 both at transition and on an ongoing basis. The amendments in this Update affect entities with transactions included within the scope of Topic 606. The scope of that Topic includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity's ordinary activities) in exchange for consideration. The amendments to the recognition and measurement provisions of Topic 606 also affect entities with transactions included within the scope of Topic 610, Other Income. The amendments in this Update affect the guidance in Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements for Topic 606 (and any other Topic amended by Update 2014-09). Accounting Standards Update No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the potential impact of adopting this new standard on its consolidated statements and related disclosures.

In December 2017, the Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (the “Bulletin”), which provides accounting guidance regarding accounting for income taxes for the reporting period that includes the enactment of the Tax Act. The Bulletin provides guidance in those situations where the accounting for certain income tax effects of the Tax Act will be incomplete by the time financial statements are issued for the reporting period that includes the enactment date. For those elements of the Tax Act that cannot be reasonably estimated, no effect will be recorded.

The SEC has provided in the Bulletin that in situations where the accounting is incomplete for certain effects of the Tax Act, a measurement period which begins in the reporting period that includes the enactment of the Tax Act and ends when the entity has obtained, prepared and analyzed the information is needed in order to complete the accounting requirements. The measurement period shall not exceed one year from enactment.

In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This guidance is effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. The amendments in ASU 2018-02 should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act is recognized. The Company is currently evaluating the potential impact of adopting this new standard on its consolidated statements and related disclosures.

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

	~~December 31, 2016~~		~~December 31, 2015~~
The Company issued promissory notes to Fountainhead Capital Management Limited for $248,000. The notes bear interest at 10% per annum and are payable on the earlier of one year or five days following the delivery of written demand for payment by the Payee.		~~248,000~~		-

~~Total Related Party Notes Payable~~		~~248,000~~		-27

On January 24, 2018 the Company entered into an amendment agreement (the “Amendment”) with EuroAmerican Investments (“EuroAmerican”) regarding its $300,000 loan note (the “Note”). Under the Amendment, the Note was extended until December 31, 2018 and the conversion terms of the Note reduced to $0.21, the same as the offering price of the 2018 Offering. Conversion of the Note and accrued interest would result in the issuance of 2,308,405 shares of Common Stock. Notwithstanding, EuroAmerican agreed that the Note could not be converted without first offering the Company the right to redeem the Note at principal and accrued interest, and secondly Fountainhead the right to purchase the Note, which cannot be converted prior to such offer and the failure of the Company and Fountainhead to exercise such option in accordance with the amendment terms. In addition, the Company agreed to issue warrants to purchase the same number of shares of Common Stock at $0.27, the same terms as the 2018 Offering, exercisable for three years from January 1, 2018, if and when the conversion option is exercised. The amendment was recognized as a modification, based on the guidance in ASC 470-50.

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

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

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

As of December 31, ~~2016~~2017 and ~~2015,~~2016, Fixed Assets and the estimated lives used in the computation of depreciation are as follows:

Depreciation expense for the years ended December 31, 2017 and 2016 was $127,899 and ~~2015 was~~ $178,339 ~~and $269,672~~ respectively, including ~~$9,914~~$14,558 and ~~$8,629~~$9,914 respectively for Therapy Devices which is allocated to Cost of Sales.

Intangible asset amortization expense for the periods ended December 31, 2017 and 2016 was $162,076 and ~~2015 was~~ $89,157, ~~and $99,291,~~ respectively.

From January to December 2017, the Company granted 334,048 shares of Common Stock (valued at $84,000) to non-employee Directors. Under the terms of the Directors Deferred Compensation Plan, the receipt of these shares is deferred until January 15th of the year following termination of their services as a director. As of December 31, 2017 these shares have yet to be issued.

From January to December 2017, the Company issued 106,451 shares of Common Stock (valued at $25,314) to members of the NovaVision, Inc. Scientific Advisory Board as compensation for their services.

From January to December 2017, the Company issued 644,286 shares of Common Stock (valued at $135,300) to Fountainhead under the terms of a Consulting Agreement and 1,571,429 shares of Common Stock (valued at $330,000) to Fountainhead following the achievement of certain enumerated milestones.

From January to December 2017, the Company issued 21,718 shares of Common Stock (valued at $6,251) to Techmed, Inc. in accordance with the terms of a consulting agreement.

During January to December 2016, the Company granted 176,479 shares of Common Stock (valued at $78,000) to non-employee Directors. Under the terms of the Directors Deferred Compensation Plan, the receipt of these shares is deferred until the January 15^th following the termination of their services as a director. As of December 30, 2016 these shares have yet to be issued.

During January to December 2016, the Company issued 78,915 shares of Common Stock (valued at $36,875) to members of the NovaVision, Inc. Scientific Advisory Board in respect of their services.

During January to December 2016, the Company issued 212,478 shares of Common Stock (valued at $120,000) to Fountainhead in accordance with the terms of a Consulting Agreement.

During April to December 2016, the Company issued 15,404 shares of Common Stock (valued at $8,334) to Techmed, Inc. in accordance with the terms of a consulting agreement.

During May to December 2016, the Company issued 100,000 share of Common Stock (valued at $40,700) to Valeo Consulting in accordance with the terms of a consulting agreement.

During January to December 31, 2016, the Company paid an aggregate of 17,971 shares of Preferred D Stock, valued at $179,727, representing preferred stock dividends. The Preferred D shares are convertible on their terms at $2.15 per share of Common Stock into 83,586 shares. An aggregate of 17,142 shares of Preferred D Stock dividends were in respect of related parties.

From January to December the Company issued 72,002 shares of common stock (valued at $19,441) pursuant to exercise of warrants related to the offering in 2017.

On January 11 and February 23, 2017, the Company completed the sale of $1,274,717 in shares of Vycor Common Stock (each a “Share”) and Warrants (together with the Shares, the “Securities”) to accredited investors (the “Investors”). The Shares were issued in a private placement (the “Private Placement”) pursuant to the terms of Stock Purchase Agreements between the Company and each of the Investors, and was limited to current shareholders of the Company as of November 9, 2016 (the “Record Date”).

Included in these gross proceeds is the conversion of $248,000 of debt on the balance sheet at December 31, 2016 and $101,000 funds held in escrow on the balance sheet at December 31, 2016. The Private Placement raised net cash proceeds, after debt conversion and expenses, of $943,207, of which $842,207 was received during the period.

The Securities comprised one Share at a purchase price $0.21 per share and a Warrant to purchase one Share at an exercise price of $0.27, exercisable over a period of three (3) years. A total of 6,070,078 Shares and Warrants to purchase 6,070,078 Shares were issued in the Private Placement.

In August 2014, Fountainhead, Peter Zachariou (“the Related Party Noteholders”) and Craig Kirsch (collectively, the “Noteholders”) agreed, pursuant to a Securities Exchange Agreement (“Exchange Agreement”), to exchange their outstanding debt from the Company into shares of Company Series D Convertible Preferred Stock. Pursuant to the Exchange Agreement, on August 5, 2017 (the 3rd anniversary of the exchange) the Noteholders were issued warrants exercisable into 628,619 shares of Common Stock, at a price of $0.30 per share, of which the Related Party Noteholders were issued warrants exercisable into 599,651 shares of Common Stock. The warrants expire on August 4, 2020 and were valued at $120,788 (of which $115,222 related to the Related Party Noteholders) and included in Other Income/Expense, Warrant Issuance Expense for the three months ending September 30, 2017.

The details of the outstanding rights, options and warrants and value of such rights, options and warrants are as follows:

As of December 31, ~~2016,~~2017, the weighted-average remaining contractual life of outstanding warrants and options is ~~0.25~~2.11 and ~~2.96~~1.21 years, respectively. Options to purchase 5,557 shares of Company Common Stock expired on February 12, 2018.

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

~~For the years ended December 31, 2016 and 2015, the Company recognized share-based compensation of $198,200 and $25,011, respectively for the issuance of stock options.~~

Stock appreciation rights may be granted either on a stand alone basis or in conjunction with all or part of any other stock options granted under the plan. As of December 31, 2016 there were no awards of any stock appreciation rights.

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

For the years ended December 31, 2017 and 2016, the Company recognized share-based compensation of $1,609 and $198,200, respectively for the issuance of stock options to management and employees.

Stock appreciation rights may be granted either on a stand-alone basis or in conjunction with all or part of any other stock options granted under the plan. As of December 31, 2017 there were no awards of any stock appreciation rights.

Aggregate stock-based compensation expense charged to operations for stock and warrants granted to ~~the above~~ non-employees for the ~~year~~twelve months ended December 31, 2017 and 2016 was ~~$283,910. In addition,~~$558,363 and $531,409, respectively, of which $249,363 and $205,909, respectively, related to stock issued during the ~~Company~~periods. The expense related to stock not issued during the periods comprise: $84,000 and $78,000, respectively, related to stock granted but not issued to directors under the Directors Deferred Compensation Plan; and $225,000 and $247,500, respectively of fees payable in stock to Fountainhead that were accrued ~~$247,500 in non-employee stock compensation to be paid in common shares.~~but not issued during the period. As of December 31, ~~2016,~~2017, there was $0 of total unrecognized compensation costs related to warrant and stock awards and non-vested options.

During the twelve months ended December 31, 2017 options with a value of $86,754 were granted to Fountainhead with performance vesting conditions (see Note 12); the value of these options will not be recognized as share-based compensation unless or until the Company concludes that it is probable the performance conditions will be achieved.

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

The stock compensation expensed during the year ended December 31, ~~2016~~2017 resulted ~~only~~ from the issuance of Common Stock valued on the date of ~~issuance.~~issuance and options. The following assumptions were used in calculations of the Black-Scholes option pricing model for ~~warrant-based~~option-based stock compensation in year ended December 31, 2016:

The Company has adopted ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period. The adoption of ASC 820 did not have an impact on the Company’s financial position or results of operations.

Under the terms of the Offering, during the period January 2 to April 25, 2014, in five separate closings, a total of 2,397,631 Series A Warrants and Placement Agent Warrants were issued as part of the Offering, which carried anti-dilution rights. Effective May 15, 2014 these anti-dilution rights were waived for all but 34,723 of the Series A Warrants and for all of the Placement Agent Warrants. The Company accounts for the Series A Warrants in accordance with the guidance contained in ASC 815-40-15-7D, whereby under that provision, because they have anti-dilution rights, they do not meet the criteria for equity treatment and must be recorded as a liability. Accordingly, the Company classifies the warrant instrument as a liability at its fair value and adjusts the instrument to fair value at each reporting period. The anti-dilution provisions expired on June 11, 2015 and accordingly the liability has been extinguished.

The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis (the Series A Warrants described above) as of September 30, 2014 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the liability, and includes situations where there is little, if any, market activity for the liability:

The reconciliation of income tax expense at the U.S. statutory rate of 35% ~~in 2016 and 2015,~~, to the Company’s effective tax rate is as follows:

The Company has incurred net operating losses since inception. The Company has not reflected any tax benefit related to such net operating losses in the financial statements. Prior to August 15, 2007 the Company was a limited liability company and losses were passed through to the individual members, therefore the Company only has potential tax benefits from the date it became a ‘C’ corporation.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company and its subsidiaries’ deferred tax assets at December 31, ~~2016~~2017 and December 31, ~~2015~~2016 are as follows:

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income.

The authoritative guidance requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Based on the level of historical taxable losses and projections of future taxable income (losses) over the periods in which the deferred tax assets can be realized, management currently believes that it is more likely than not that the Company will not realize the benefits of these deductible differences. Accordingly, management has determined that a 100% valuation allowance is appropriate at December 31, ~~2015~~2017 and December 31, ~~2014.~~2016.

The U.S. Tax Cuts and Jobs Act (Tax Act) was enacted on December 22, 2017 and introduces significant changes to U.S. income tax law. Effective in 2018, the Tax Act reduces the U.S. statutory tax rate from 35% to 21% and creates new taxes on certain foreign-sourced earnings and certain related-party payments, which are referred to as the global intangible low-taxed income tax and the base erosion tax, respectively. The Tax Act requires us to pay U.S. income taxes on accumulated foreign subsidiary earnings not previously subject to U.S. income tax at a rate of 15.5% to the extent of foreign cash and certain other net current assets and 8% on the remaining earnings. Due to the timing of the enactment and the complexity involved in applying the provisions of the Tax Act, the Company has not recorded any adjustments according to Tax Act. As we collect and prepare necessary data, and interpret the Tax Act and any additional guidance issued by the U.S. Treasury Department, the IRS, and other standard-setting bodies, we may make adjustments to the provisional amounts. Those adjustments may materially impact our provision for income taxes and effective tax rate in the period in which the adjustments are made. The accounting for the tax effects of the Tax Act will be completed in 2018.

As of December 31, ~~2016~~2017 and ~~2015,~~2016, the Company had U.S. accumulated losses for tax purposes of approximately ~~$17,400,000~~$17,700,000 and ~~$16,000,000~~$17,300,000 respectively, which may be carried forward and offset against U.S. taxable income, and which expire during the tax years 2027 through 2032.

Federal tax laws impose significant restrictions on the utilization of net operating loss carry-forwards and in the event of a change in ownership of the Company, as defined by the Internal Revenue Code Section 382. The Company’s net operating loss carry-forwards may be subject to the above limitations.

As of December 31, ~~2016~~2017 and ~~2015,~~2016, the Company had German accumulated losses for tax purposes of approximately ~~$1,012,000~~$1,633,000 and ~~$837,000~~$1,012,000 respectively, which may be carried forward and offset against German taxable income subject to certain restrictions and limitations. Such carry-forwards are subject to certain restrictions and limitations in the event of changes in the NovaVision GmbH’s ownership.

As of December 31, ~~2016~~2017 and ~~2015,~~2016, the Company had UK accumulated losses for tax purposes of approximately ~~$198,000~~$249,000 and ~~$199,000~~$198,000 respectively, which may be carried forward and offset against UK taxable income subject to certain restrictions and limitations.

The applicable US income tax rate for the Company for both of the years ended December 31, ~~2016~~2017 and ~~2015~~2016 was 35%. Non-US subsidiaries are taxed according to the tax laws in their respective country of residence. The German applicable rate for both of the years ended December 31, ~~2015~~2017 and ~~2014~~2016 was 31.58%; the UK applicable rate for both the years ended December 31, ~~2016~~2017 and ~~2015~~2016 was 20%.

US income taxes and foreign withholding taxes were not provided for on undistributed earnings of the Company’s foreign subsidiaries. The Company intends to reinvest these earnings indefinitely in its foreign subsidiaries. If these earnings were distributed to US in the form of dividends or otherwise, after the repayment of intercompany debt, the Company would be subject to additional US income taxes (subject to an adjustment for foreign tax credits) and foreign withholding taxes.

The Company has recorded no liability for income taxes associated with unrecognized tax benefits at the date of adoption and has not recorded any liability associated with unrecognized tax benefits during ~~2015~~2017 and ~~2014.~~2016. Accordingly, the Company has not recorded any interest or penalty in regard to any unrecognized benefit.

The Company ~~leases approximately 10,000 sq. ft.~~leased office space located at 6401 Congress Ave., Suite 140, Boca Raton, FL 33487 from Catexor Limited Partnership for a gross rent of approximately $14,260 plus sales tax per month. The term of the lease iswas 5 years and 6 months ~~terminating~~and terminated July 30, 2017. Effective August 1, 2017 the Company leased office space located at 951 Broken Sound Parkway, Suite 320, Boca Raton, FL 33487 from WPT Land 2L.P., for a gross rent of approximately $5,700 plus sales tax per month. The lease terminates September 30, 2020. The Company’s ~~subsidiaries~~subsidiary in Germany ~~and the UK occupy properties~~occupies premises on ~~short term~~a short-term lease ~~agreements.~~agreement. Rent expense for the year ended December 31, 2017 and 2016 was $158,278 and ~~2015 was~~ $212,054 ~~and $204,445~~ respectively.

In June 2012 the Company’s German subsidiary received a preliminary assessment for Magdeburg City trade tax of approximately €75,000 (approximately $94,000). This assessment is for the 2010 fiscal year and relates to the Company’s acquisition of the assets of the former NovaVision, Inc. An initial assessment for corporate tax for the same period has been preliminarily reduced to zero. The Company has not accepted this trade tax assessment and is in discussion with the relevant tax authorities with a view to its reduction. The tax authorities agreed to suspend the assessment pending the outcome of certain court hearings and proposed legal amendments, and the Company agreed to make limited monthly payments on ~~account.~~account, which were completed in October 2016. Accordingly, the Company has made no provision for this liability for years ended December 31 ~~2016~~2017 and ~~2015~~2016 respectively, other than recording the monthly payments as an expense.

The Company was made aware in 2012 that a competitor had been granted a patent for related technology, and appeared to be entering the market with products that infringe the Company’s own issued patent. Following investigation, the Company initiated an invalidation of the competitor’s patent; in March 2014 the Patent Re-examination Board issued an Examination Decision invalidating all the claims of the competitor’s patent. The competitor appealed the decision, but the Company has contested the appeal. A final decision on the appeal is pending. The Company has, in the interim, also prepared to enforce its own patent against this competitor, however this competitor appears to have abandoned its product offering, making an enforcement action moot for the time being. The Company has also been made aware that a second competitor has filed a patent application for related technology and also may be producing a product that potentially infringes the Company’s patent, and has filed documents with the State Intellectual Property Office opposing grant of the patent application. As a general rule the Company intends to take all necessary action to protect its patent portfolio. As with all patent infringement actions, there is some risk that the accused infringer will not be found to infringe the claims, and an additional risk that the accused infringer will successfully challenge the validity of the asserted claims.

The following agreements were entered into or remained in force during the year ended December 31, ~~2016:~~2017:

~~Effective as~~During the year ended December 31, 2017, following the achievement of ~~January 2, 2014,~~certain milestones established in the March 2016 Compensation Plan, the Company ~~and Fountainhead amended their Consulting Agreement to extend~~accrued deferred compensation of $82,500. This together with the ~~term~~balance of the ~~Consulting Agreement to January 2, 2015, such Agreement being automatically extended on~~deferred compensation accrued during the ~~same terms unless terminated by either party. During fiscal~~ year ~~2015, a monthly fee~~ended December 31, 2016, was ~~payable~~paid to Fountainhead inby the ~~amount~~issuance of ~~$10,000 per month, payable $5,000 in cash and the remainder payable in Company~~1,571,429 shares of Common Stock ~~deliverable~~(valued at $330,000) during the ~~end of each fiscal quarter. Effective September 2015, Fountainhead agreed to receive all of the fees in Common Stock.~~year ended December 31, 2017.

In March 2017 and effective April 1, 2017, as part of a streamlining of compensation arrangements with executive management, the Company established the March 2017 Compensation Plan. Under this Plan, the Company amended the Fountainhead Consulting Agreement (“the Amendment”) to increase the annual fees payable to Fountainhead by $330,000 to a total of $37,500 per ~~month; at the same time,~~month. Concurrently, annual compensation payable to executive management under the March 2016 Compensation Plan was reduced by $330,000 to $0. These changes ~~therefore have~~had no financial impact on the Company. The other terms of the Consulting Agreement ~~remain~~remained the same, including the ability of Fountainhead at its option to receive $5,000 per month in cash and the remainder payable in Company Common Stock issued at the ~~recent~~higher of the Private Placement price ($0.21) and the average price for the 30 days prior to issuance, and deliverable at the end of each fiscal quarter. The Consulting Agreement also contains provisions for Fountainhead to receive a higher proportion of its fees in cash subject to certain future liquidity events and ~~subject to~~ Board approval. Under the Amendment, Fountainhead was granted options pursuant to the Vycor Medical, Inc. 2008 Stock Option Plan, to purchase 660,000 shares of Company Common Stock at the same $0.27 exercise price as that of the warrants issued in the Private Placement. Vesting of these options is subject to the achievement of certain milestones by March 31, 2018. In March 2018 the Company extended the time period for the achievement of these milestones to June 30, 2018. These options are ~~equivalent to a grant~~consistent with the options granted to executive management inunder the March 2016 Compensation Plan.

During the ~~change being made~~year ended December 31, 2017, under the terms of this amended Consulting Agreement, Fountainhead received total fees of $367,500, of which $135,300 was paid through the issuance of 644,286 shares of Company Common Stock during the period, $7,200 was paid in cash and $225,000 was accrued and recorded as ~~part~~payable, of which $92,500 was paid after the ~~same streamlining.~~year end through the issuance of 250,000 shares of Company Common Stock.

In March 2018 Fountainhead was granted options pursuant to the Vycor Medical, Inc. 2018 Stock Option Plan, to purchase 660,000 shares of Company Common Stock at an exercise price of $0.46 (the average closing price for the 5 trading days before the grant). Vesting of these options is subject to the achievement of certain milestones by March 31, 2019.

Peter Zachariou, ~~CEO and director~~ and David Cantor, ~~President and director~~directors of the Company, are investment managers of Fountainhead ~~Capital Management~~ which ~~is a related party due to~~owned, at December 31, 2017, 46% of the ~~size~~Company’s Common Stock and 95% of ~~its shareholding.~~the Company’s Preferred D Stock. Adrian Liddell, Chairman ~~and CFO~~ is a consultant for Fountainhead.

As referred to in Note 4, on January 24, 2018 the Company entered into the Amendment with EuroAmerican. regarding its $300,000 Note. Under the Amendment, EuroAmerican granted a right of first refusal prior to converting or selling or the Note a) first to Vycor to redeem the Note and accrued interest at face value and b) if not exercised second to Fountainhead ~~Capital Management.~~to purchase the Note and accrued interest at face value on the same terms.

During the year ended December 31, 2017, following the achievement of certain milestones established in the March 2016 Compensation Plan, the Company accrued deferred compensation of $82,500. This together with the balance of the deferred compensation accrued during the year ended December 31, 2016, was paid to Fountainhead through the issuance 1,571,429 shares of Common Stock (valued at $330,000) during the period ended September 30, 2017.

During the year ended December 31, 2017, under the terms of this amended Consulting Agreement referred to in Note 12, Fountainhead received total fees of $367,500, of which $135,300 was paid through the issuance of 644,286 shares of Company Common Stock, $7,200 was paid in cash and $225,000 was accrued but not yet paid.

On January 11, and February 23, 2017 the Company completed the sale of $1,274,717 in shares of Common Stock and Warrants to accredited investors (the “Private Placement”). Fountainhead purchased a total of $477,939 of shares in the Private Placement of which approximately $248,000 represented amounts that Fountainhead had already advanced to the Company and was held by the Company in the form of notes. As a result, Fountainhead was issued 2,275,901 shares of Common Stock and three-year Warrants to purchase 2,275,901 shares of Common Stock at an exercise price of $0.27.

During the year ended December 31, 2017 $225,000 of fees payable in stock were accrued; however these shares were not issued.

Pursuant to the Exchange Agreement, on August 5, 2017 (the 3rd anniversary of the exchange) the Related Party Noteholders were issued warrants exercisable into 599,651 shares of Common Stock, at a price of $0.30 per share. The warrants expire on August 2, 2020 and were valued at $115,222 (see Note 8).

During the year ended December 31, 2016, in accordance with the terms of the Consulting Agreement, the Company issued 212,478 shares of Common Stock (valued at $120,000) to Fountainhead.

During the year ended December 31, 2016, the Company paid an aggregate of 17,971 shares of Preferred D Stock, valued at $179,727, representing preferred stock dividends. The Preferred D shares are convertible on their terms at $2.15 per share of Common Stock into 83,586 shares. An aggregate of 17,142 shares of Preferred D Stock dividends were in respect of related parties.

During the year ended December 31, 2016, 2016, the Company issued unsecured loan notes to Fountainhead for a total of $248,000. The loan notes ~~bear~~bore interest at a rate of 10% and ~~are~~were due on demand or by their one-year anniversary. The notes were converted into Common Stock in the Offering during 2017.

At December 31, 2016 the Company was holding $101,000 cash in escrow from Fountainhead in respect of the Private Placement Initial Closing that occurred on January 11, 2017.

There were no other related party transactions during the ~~year~~years ended December 31, 2017 and 2016.

Vycor sells its neurosurgical devices in the US primarily direct to hospitals, and internationally through distributors who in turn sell to hospitals. The sales to one international distributor represented 16% and 14%, respectively, of total sales for the years ended December 31, 2017 and 2016.

On ~~January 11 and~~ February ~~23, 2017,~~09, 2018, the Board of Directors of the Company ~~completed~~unanimously adopted a resolution seeking stockholder approval to (a) amend the ~~sale~~Company’s Certificate of ~~$1,274,717 in shares~~Incorporation to increase the number of authorized Company Common Shares from 25,000,000 to 55,000,000 and (b) to adopt the Company’s 2018 Stock (each a “Share”) and Warrants (together with the Shares, the “Securities”) to accredited investors (the “Investors”). The Shares were issued in a private placement (the “Private Placement”)Incentive Plan. Thereafter, on February 09, 2018, pursuant to the ~~terms~~By-Laws of ~~Stock Purchase Agreements between~~ the Company and ~~each~~applicable Delaware law, stockholders holding in excess of fifty percent (50%) of the ~~Investors,~~votes entitled to be cast on the aforementioned two matters (identified in the section entitled “Voting Securities and ~~was limited~~Principal Holders Thereof”) adopted a resolution to ~~current shareholders~~authorize the Board of Directors, in its sole discretion, to increase the number of authorized shares of Company Common Stock from 25,000,000 to 55,000,000 and adopt the Company’s 2018 Stock Incentive Plan . As of the date of this Report, the increase in authorized capital the Company’s 2018 Stock Incentive Plan have yet to become effective and the Company asexpects that they will become effective during the Company’s second fiscal quarter of ~~November 9, 2016 (the “Record Date”).~~2018.

During March 2018 the Company issued unsecured loan notes to Fountainhead for a total of $30,000. The ~~Securities comprised one Share~~loan notes bear interest at a ~~purchase price $0.21 per share~~rate of 10% and ~~a Warrant~~are due on demand or by their one-year anniversary.

Other than the foregoing, the Company has evaluated the existence of events and transactions subsequent to ~~purchase one Share at an exercise price of $0.27, exercisable over a period of three (3) years. A total of 6,070,079 Shares and Warrants to purchase 6,070,079 Shares~~the balance sheet date through the date the consolidated financial statements were issued and has determined that there were no significant subsequent events or transactions which would require recognition or disclosure in the Private Placement. Fountainhead subscribed $477,939 of shares in the Private Placement of which approximately $248,000 represented amounts that Fountainhead had already advanced to the Company as detailed above Under the terms of a prior placement agent agreement (as amended) with Garden State Capital, Inc. (“GSS”) for the Company’s previous 2014 Offering, GSS received Warrants to purchase 202,691 Shares in respect of investment in the Private Placement by investors introduced to Vycor by GSS in connection with the 2014 Offering. GSS did not act as placement agent for the Company in the Private Placement.financial statements.

The Private Placement was undertaken as a private placement offering under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”) and Rule 506(b) of Regulation D promulgated under the Act since, among other things, the transaction did not involve a public offering and the securities were acquired for investment purposes only and not with a view to or for sale in connection with any distribution thereof. The net proceeds will be used for the further development of both the Vycor VBAS and NovaVision divisions, as well as for general working capital.

~~There were no other material subsequent events.~~

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

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

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company’s management, including the Company’s Chief Executive Officer (“CEO”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s principal financial and accounting officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of December 31, ~~2016~~2017 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

We carried out an assessment, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of the design and operation of our internal controls over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as of December 31, ~~2016.~~2017. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission inInternal Control — Integrated Framework (2013). Based on that assessment and on those criteria, our CEO and CFO concluded that our internal control over financial reporting was effective as of December 31, ~~2016~~2017..

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only the management’s report in this annual report.

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

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

~~None.~~On February 09, 2018, the Board of Directors of the Company unanimously adopted a resolution seeking stockholder approval to (a) amend the Company’s Certificate of Incorporation to increase the number of authorized Company Common Shares from 25,000,000 to 55,000,000 and (b) to adopt the Company’s 2018 Stock Incentive Plan. Thereafter, on February 09, 2018, pursuant to the By-Laws of the Company and applicable Delaware law, stockholders holding in excess of fifty percent (50%) of the votes entitled to be cast on the aforementioned two matters (identified in the section entitled “Voting Securities and Principal Holders Thereof”) adopted a resolution to authorize the Board of Directors, in its sole discretion, to increase the number of authorized shares of Company Common Stock from 25,000,000 to 55,000,000 and adopt the Company’s 2018 Stock Incentive Plan . As of the date of this Report, the increase in authorized capital the Company’s 2018 Stock Incentive Plan have yet to become effective and the Company expects that they will become effective during the Company’s second fiscal quarter of 2018.

Set forth below is certain biographical information concerning our current executive officers and directors. We currently have two executive officers as described below.

Peter C. Zachariou~~55,~~ was appointed a Director of the Company in May 2010, Executive Vice President in September 2010 and Chief Executive Officer on January 2, 2014. He is an investment manager for Fountainhead Capital Management Limited, an investment company based in Jersey, Channel Islands, which invests in, raises capital for and provides strategic advice to growth companies in healthcare and other sectors. For the past 20 years, Mr. Zachariou has been an active investor in a variety of companies and industries, both public and private, specializing in workouts and capital formation. Mr. Zachariou’s investments and activities have predominantly been in U.S. emerging and growth companies across a broad range of industry sectors. He has also been proprietor and operator of several businesses in the U.K. and U.S. in the manufacturing, retail and leisure industries.

David Marc Cantor ~~50,~~ has been President of the Company since September 2010 and a Director since January 2010. He is an investment manager of Fountainhead Capital Management Limited, an investment company based in Jersey, Channel Islands, which invests in, raises capital for and provides strategic advice to growth companies across a broad range of sectors. Mr. Cantor has over 22 years experience in Investment Banking with a focus on Mergers and Acquisitions and Equity Capital Raisings. Prior to Fountainhead from 2001 – 2005 he was at Citigroup Capital Markets where he was Co-head of its European Business Development Group and subsequently European Head of its Diversified Industrials and Aerospace activities. Prior to Citigroup he was a Managing Director in M&A at Donaldson Lufkin & Jenrette and worked at Lehman Brothers both in New York and London in both the Equity Capital and M&A groups. Mr. Cantor has a BSc with Honours from City Business School, London.

Adrian Christopher Liddell ~~55,~~ has been Chairman of the Board and a Director of the Company since January 2010, and serves as the Company’s CFO. He is an advisor to Fountainhead Capital Management Limited, an investment company based in Jersey, Channel Islands, which invests in, raises capital for and provides strategic advice to growth companies in healthcare and other sectors. Mr. Liddell has over 30 years of strategic, corporate and financial advisory and company investment experience. From 2003-2006, Mr. Liddell was an investment advisor at Phoenix Equity Partners, a European private equity fund. From 1998 to 2003, Mr. Liddell served as Managing Director, Mergers & Acquisitions at Donaldson Lufkin & Jenrette and then Citigroup in London. From 1984 to 1998, Mr. Liddell held various positions at Samuel Montagu & Co, and Lehman Brothers in London. Mr. Liddell qualified as a Chartered Accountant in 1984 and holds an MA from Christ’s College, University of Cambridge.

Steven Girgenti~~, 71,~~ has been a Vycor Medical director since November 2008 and is Chairman of the Nominating and Governance Committee and of the Compensation Committee. He is presently the Managing Partner of Medi-Pharm Consulting, LLC providing strategic services to a number of medical device, pharmaceutical and diagnostic businesses. Steve was formerly ~~President,~~ CEO ~~Director~~ and ~~Co-Founder~~co-founder of DermWorx Incorporated a specialty pharmaceutical company dedicated to solutions for dermatological conditions. Steve was also the Worldwide Chairman and CEO of Ogilvy Healthworld, a leading global healthcare communications network with 55 offices in 36 countries. The network has more than 1,000 brand assignments from nearly 200 clients worldwide, providing strategic marketing and communications services to many of the world’s leading healthcare companies. Mr. Girgenti founded Healthworld in 1986 and, under his leadership, the company made numerous acquisitions to expand and diversify the business. Healthworld went public in 1997. In 1998, and again in 1999, Business Week named Healthworld one of the “Best Small Corporations in America”. In 1999, Forbes listed Healthworld as one of the “200 Best Small Companies”. Mr. Girgenti was recognized as “Entrepreneur of the Year” by NASDAQ in 1999, and was named Med Ad News’ first “Medical Advertising Man of the Year” in 2000. In 2010 he was inducted into the Medical Advertising Hall of Fame. In addition, ~~to Vycor Medical,~~ Mr. Girgenti is a presently Executive Chairman of BioAffinity Technologies, Inc. ~~(formerly known as Biomoda, Inc.)~~ and ~~has served~~serves as a Director of ~~Burren Pharmaceuticals and Pharmacon International.~~Hancock Jaffe Laboratories, Inc. (NASDAQ:HJLI). He is also Vice Chairman of the Board of Governors for the Mt. Sinai Hospital Prostate Disease and Research Center in New York City, and is on the Board of Directors for Jack Martin Fund, a Mt. Sinai Hospital affiliated charitable organization devoted to pediatric oncology research. He graduated from Columbia University and has worked in the pharmaceutical industry since 1968 for companies such as Bristol-Myers Squibb, Carter Wallace and DuPont, as well as advertising agencies that specialize in healthcare. During his career, Steve has held positions in marketing research, product management, new product planning and commercial development.

Oscar Bronsther, M.D., F.A.C.S~~64,~~ has been a director since November 2011. Dr. Bronsther is Chief Executive Officer of ERAD Therapeutics, LLC, a pre-clinical Orphan Drug company focusing on treating Cystic Fibrosis and Gaucher disease since 2016. He was formerly Chief Executive Officer of MetaStat, Inc. (OTCBB: MTST), a development stage life sciences company that develops and commercializes diagnostic products for the early and reliable prediction and treatment of systemic metastasisis. Dr Bronsther is also currently Clinical Professor at George Washington University, Washington, DC and has served in that capacity since 2002. He had previously served as an Associate Professor at the University of Rochester, Rochester, NY (1994-2001), University of Pittsburgh, Pittsburgh, PA (1989-1994) and University of California San Diego (1984), and Chairman, Section of General Surgery at Inova Fairfax Hospital. Since 2002, he has served as a Board Member, National Board Member and Director of Transplant Services of Kaiser Permanente Medical Group. Dr. Bronsther is a graduate of the University of Rochester (B.A. 1973) and Downstate Medical Center, Brooklyn, N.Y. (M.D. 1978). He did post-graduate work at Downstate Medical Center (Research Assistant 1975; Kidney Transplant Fellowship 1983-1984), Mount Sinai Medical Center, New York, N.Y (Residency 1978-1983) and Children’s Hospital Medical Center, Boston, MA (Research Fellowship 1980-1981). He resides in Potomac, MD.

Lowell Rush~~, 60,~~ was appointed a Director in April 2013 and is Chairman of the Audit Committee. Mr. Rush has extensive experience in financial management and operational development, and since ~~December 2013~~April 2017 has been Chief Financial Officer of Coral Gables - based The Revenue Optimization Companies (T-ROC), a leading provider of retail services. Previously, he was Chief Financial Officer of Ft. Lauderdale-based Paybox Corp. (OTCQB:PBOX) (2013-2017), ~~a leading provider of cloud-based e-invoicing solutions. Previously, he was~~and held positions as: Chief Operating Officer of Miami-based Cosmetic Dermatology, Inc., ~~and held positions as:~~ CFO of Bijoux Terner, LLC (2008-2010); CFO of Little Switzerland, Inc. (2006-2008); and VP Sales Operations of Rewards Network, Inc. He is a CPA with an MBA in International Business, who has also held financial management roles at multi-national companies Sunglass Hut International, Burger King Corporation and Knight-Ridder, Inc. He began his career with the accounting firms Ernst & Young and Deloitte & Touche.

All of our directors hold office until the next annual meeting of stockholders and until their respective successors have been elected or qualified. Officers serve at the discretion of the board of directors. There are no family relationships among our directors or executive officers. There is no arrangement or understanding between or among our officers and directors pursuant to which any director or officer was or is to be selected as a director or officer, and there is no arrangement, plan or understanding as to whether non-management stockholders will exercise their voting rights to continue to elect the current board of directors.

Our Company has three committees of its Board of Directors—(a) a Nominating and Governance Committee (b) a Management Compensation Committee and (c) an Audit Committee. The Board of Directors has approved charters for each committee. Steven Girgenti is Chairman of the Nominating and Governance Committee and the Management Compensation Committee, and Lowell Rush is a member. Lowell Rush is Chairman of the Audit Committee and Steven Girgenti and Adrian Liddell are members. The Board has determined that Lowell Rush qualifies as an Audit Committee financial expert, as that term is defined in applicable regulations of the SEC. The Committees are intended to operate consistent with applicable NASDAQ governance requirements.

None of our executive officers serves as a member of the Board of Directors or compensation committee of any other entity that has one or more of its executive officers serving as a member of our Board of Directors.

Pursuant to Section 16(a) of the Exchange Act and the rules thereunder, the Company’s executive officers and directors and persons who own more than 10% of a registered class of the Company’s equity securities are required to file with the SEC reports of their ownership of, and transactions in, the Company’s common stock.

The following is a summary of the compensation we paid for each of the last two years ended December 31, ~~2016~~2017 and ~~2015,~~2016, respectively (i) to the persons who acted as our principal executive officer during our fiscal year ended December 31, ~~2016~~2017 and (ii) to the person who acted as our next most highly compensated executive officer other than our principal executive officer who was serving as an executive officer as of the end of our last fiscal year.

~~Name and Principal Position~~	~~Year~~		~~Salary($)~~	~~Bonus($)~~	~~StockAwards($)~~	~~OptionAwards($)~~	~~Non-~~ ~~EquityIncentive~~ ~~PlanCompensation~~	~~Non-Qualified~~ ~~DeferredCompensation~~ ~~Earnings($)~~	~~All~~ ~~other~~ ~~Compensation($)~~	~~Total($)~~
~~Peter Zachariou~~	~~2014~~	$	—	—	—	—	—	—	—	—
~~CEO~~	~~2015~~	$	—	—	—	—	—	—	—	—
~~David Cantor~~	~~2014~~	$	—	—	—	—	—	—	—	—
~~President~~	~~2015~~	$	—	—	—	—	—	—	—	—42

(1) As of December 31, ~~2016~~2017. Excludes 5,557 Options which expired February 13, 2018

Effective September 30, 2010, the Company entered into virtually identical employment agreements with David Cantor to serve as the Company’s Interim President and Peter C. Zachariou to serve as the Company’s Interim Chief Executive Officer. Each employment agreement continued until August 30, 2011 and was then automatically extended unless terminated by either party, and provided that the executives receive no compensation for services rendered under the agreements.

Effective January 2, 2014, the Company entered into: amended employment agreements with Peter Zachariou and David Cantor to serve as the Company’s Chief Executive Officer and President respectively; and an employment agreement with Adrian Liddell to serve as the Company’s Chief Financial Officer. Each agreement continues for a period of twelve months ~~from the date of the Initial Closing~~ and is then automatically extended unless terminated by either party. The agreements ~~provide~~provided for no monthly compensation to be payable, but a deferred compensation payable of $110,000 for each individual, subject to certain conditions and milestones being met. The compensation ~~will be~~was payable in cash or Restricted Shares of the Company’s Common Stock. In March 2017 the Company amended the employment agreement such that no compensation ~~will~~would be payable under the agreements. The same level of compensation ~~will~~would instead be payable to Fountainhead under an amended consulting agreement. These changes ~~have~~had no financial impact on the Company but streamlines the shareholding structure.

In March 2016 the Board of Directors approved the issuance of options to purchase 220,000 shares of Company Common Stock pursuant to the Vycor Medical, Inc. 2008 Stock Option Plan to each of Peter C. Zachariou, David Cantor and Adrian Liddell, such options to vest immediately upon issuance. The ~~exercise price of the options is based upon 110% of the closing price of the Company’s Common Stock the day prior to issuance, The~~ options are exercisable for a period of three years from issuance at an exercise price of $0.78.

During the period January 1, ~~2016~~2017 through ~~March 25~~December 31 2017, we granted Steven Girgenti, Oscar Bronsther, M.D. and Lowell Rush a total of ~~71,801, 62,945~~112,878, 110,585 and ~~62,945~~110,585 shares of the Company’s Common Stock respectively for their service to the Board of Directors under the Company’s Deferred Compensation Plan. Under this Plan, the directors may defer their director’s compensation to the January 15th following the termination of their service as a director. All of the ~~above mentioned~~above-mentioned Stock was granted under the Plan. Each of Mr. Girgenti, Dr. Bronsther and Mr. Rush are entitled to receive $7,000 in cash or stock at the option of the company per quarter. No other directors of the Company receive compensation for their service to the Company other than as disclosed underEmployment Agreementsabove.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information with respect to the beneficial ownership of our voting securities by (i) any person or group owning more than 5% of any class of voting securities, (ii) each director, (iii) our chief executive officer and president and (iv) all executive officers and directors as a group as of April 4, 2014. Unless noted, the address for the following beneficial owners and management is ~~6401 Congress Ave.,~~951 Broken Sound Parkway, Suite ~~140,~~320, Boca Raton, FL 33487.

(1) In determining beneficial ownership of our Common Stock and Series D Preferred Stock, the number of shares shown includes shares which the beneficial owner may acquire upon exercise of debentures, warrants and options which may be acquired within 60 days. In the case of directors, the number of shares includes shares granted but not issued under the director’s Deferred Compensation Plan. In determining the percent of Common Stock or Series D Preferred Stock owned by a person or entity on March ~~27,~~23, 2017, (a) the numerator is the number of shares of the class beneficially owned by such person or entity, including shares which the beneficial ownership may acquire within 60 days of exercise of debentures, warrants and options, and the issuance of shares granted but not issued under the director’s Deferred Compensation Plan; and (b) the denominator is the sum of (i) the total shares of that class outstanding on March ~~27,~~23, 2017 ~~(17,415,800~~(20,071,988 shares of Common Stock and 270,307 shares of Series D Preferred Stock) and (ii) the total number of shares that the beneficial owner may acquire upon exercise of the debentures, warrants and options or that can be issued under the director’s Deferred Compensation Plan. Unless otherwise stated, each beneficial owner has sole power to vote and dispose of its shares

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Please refer to Financial Statement, Note ~~14,~~12, which is incorporated in its entirety by this reference.

As of March ~~25, 2017,~~30, 2018, of our six (6) directors, Steven Girgenti, Oscar Bronsther and Lowell Rush are considered “independent” in accordance with Rule 4200(a)(15) of the NASDAQ Marketplace Rules. The remaining three (3) directors are not considered “independent”.

The aggregate fees billed by our principal accountant for the audit of our annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal years ended December 31, ~~2016~~2017 and December 31, ~~2015,~~2016, respectively, were approximately ~~$48,500~~$49,500 and ~~$46,500.~~$48,500.

The fees billed for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning for the fiscal years ended December 31, 2017 and 2016 ~~and 2015~~ were ~~$2,000~~$1,500 and $2,000 respectively.

There were no fees billed for other products or services provided by our principal accountant for ~~2016~~2017 or ~~2015.~~2016.

The following documents are filed in Part II, Item 8 of this annual report on Form 10-K:

All financial statement schedules have been omitted as they are not required, not applicable, or the required information is otherwise included.

The exhibits listed below are filed as part of or incorporated by reference in this report.

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the registrant and in the capacity and on the date indicated.

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

Large Accelerated Filer[ ]		Accelerated Filer[ ]

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

		Page
	PART I
Item 1.	Business	3
Item 1A	Risk Factors	69
Item 1B	Unresolved Staff Comments	69
Item 2.	Properties	69
Item 3.	Legal Proceedings	69
Item 4.	Mine Safety Disclosures	69

	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities	79
Item 6	Selected Financial Data	710
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	811
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	1216
Item 8.	Financial Statements and Supplementary Data	1216
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	2838
Item 9A.	Controls and Procedures	2838
Item 9B.	Other Information	2940

	PART III
Item 10.	Directors, Executive Officers, Promoters and Corporate Governance	2940
Item 11.	Executive Compensation	3142
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	3244
Item 13.	Certain Relationships and Related Transactions, and Director Independence	3245
Item 14.	Principal Accountant Fees and Services	3345

	PART IV
Item 15.	Exhibits, Financial Statement Schedules	3345

SIGNATURES		3447

	●	Restoration of vision: NovaVision’s VRT and Sight Science’s Neuro-Eye Therapy (NeET), aim to improve visual sensitivity in a person’s blind area. VRT delivers a series of light stimuli along the border of the patient’s visual field loss. These programmed light sequences stimulate the border zone between the “seeing” and “blind” visual fields, repetitively challenging the visual cortex in the border zone with a large number of stimuli over the course of time. NeET targets deep within the blind area by repeated stimulation, allowing patients to detect objects within the blind field.

	●	Compensation and re-training: Normal eye movements are also affected after brain injury adding to the problems of blindness. NeuroEyeCoach provides a complementary therapy to VRT and NeET, which re-trains a patient to move their eyes, re-integrate left and right vision and to make the most of their remaining visual field.

	●	Fully Quality Assurance System Directive 93/42/EEC for Medical Devices, Annex II (3)

	●	EC Design-Examination Certificate Directive 93/42/EEC for Medical Devices, Annex II (4)

	●	ISO 13485.2003

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

For the fiscal year ended December 31, 2017

Or

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

	●	quality system regulation, which requires manufacturers to follow design, testing, control, documentation and other quality assurance procedures during the manufacturing process;

	●	labeling regulations, which prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; and

	●	medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if it were to recur.

Period	High		Low		High		Low
January 1, 2015-March 31, 2015	$	2.10	$	1.46
April 1, 2015-June 30, 2015	$	1.91	$	1.32
July 1, 2015-September 30, 2015	$	1.70	$	1.06
October 1, 2015-December 31, 2015	$	1.50	$	0.61
January 1, 2016-March 31, 2016	$	0.94	$	0.53	$	0.94	$	0.53
April 1, 2016-June 30, 2016	$	0.70	$	0.36	$	0.70	$	0.36
July 1, 2016-September 30, 2016	$	0.59	$	0.26	$	0.59	$	0.26
October 1, 2016-December 31, 2016	$	0.45	$	0.24	$	0.45	$	0.24
January 1, 2017-March 31, 2017					$	0.34	$	0.12
April 1, 2017-June 30, 2017					$	0.30	$	0.12
July 1, 2017-September 30, 2017					$	0.35	$	0.15
October 1, 2017-December 31, 2017					$	0.60	$	0.19

Issuance Type	Security			Shares
~~Fountainhead Consulting~~FHC Management Fees		Common		~~212,478~~	2,465,715
Advisory Board Fees		Common		~~78,915~~	106,451
~~Preferred Stock Dividends~~Outside Consultants	~~Series D. Preferred~~		~~18,420~~
~~Consulting Fees~~	Common		~~115,404~~	21,718
Private ~~Placement: Fountainhead~~Placement Offering FHC		Common			2,275,901
Private ~~Placement:~~Placement Offering Others		Common			3,794,178
Issue of shares pursuant to exercise of warrants		Common			72,002

	12/31/2016			12/31/2015			12/31/2014
Revenues	$	1,452,714		$	1,138,634		$	1,250,292
Net loss	$	(1,652,280	)	$	(2,082,643	)	$	(4,049,712	)
Net loss per share	$	(0.15	)	$	(0.20	)	$	(0.39	)
Weighted average no. shares		11,066,217			10,839,335			10,270,657
Stockholders’ equity (deficit)	$	(26,438	)	$	1,145,722		$	2,888,902
Total assets	$	1,485,250		$	2,022,731		$	3,813,743
Total liabilities	$	1,511,688		$	877,009		$	924,841

	Segment Information
	(unaudited)
	Twelve months ended
	December 31,
	2016			2015			% Change
Revenue:
Vycor Medical	$	1,260,949		$	885,481			42	%
NovaVision	$	191,765		$	253,153			-24	%
	$	1,452,714		$	1,138,634			28	%
Cost of Revenue:
Vycor Medical	$	(167,894	)	$	(107,528	)		-56	%
NovaVision	$	(16,791	)	$	(56,590	)		70	%
	$	(184,685	)	$	(164,118	)		-13	%
Gross Profit
Vycor Medical	$	1,093,055		$	777,953			41	%
NovaVision	$	174,974		$	196,563			-11	%
	$	1,268,029		$	974,516			30	%

	Cash G&A			Non-Cash G&A			Cash G&A			Non-Cash G&A
Payroll								(122,653	)		(3,288	)
Other (travel/regulatory/premises)								(54,454	)		-
Investor relations and road show costs		(125,366	)		(23,794	)		(50,437	)		(40,700	)
Other (travel/regulatory/premises)		(103,322	)		-
Payroll		(102,917	)		(20,114	)
Legal, professional and other consulting								(28,446	)		-
Commission expense								892			-
Sales, marketing and travel								8,059			-
Board, financial and scientific advisory		(86,387	)		499,015			11,559			(125,649	)
Sales, marketing and travel		(19,581	)		-
Legal, professional and other consulting		17,975			-
Total change		(419,598	)		455,107			(235,480	)		(169,637	)

	31-Dec-16			31-Dec-15			$ Change			December 31, 2017			December 31, 2016			$ Change
Cash	$	56,859		$	347,477		$	(290,618	)	$	206,213		$	56,859		$	149,354
Accounts receivable, inventory and other current assets	$	480,230		$	511,216		$	(30,986	)	$	402,295		$	480,230		$	(77,935	)
Total current liabilities	$	(1,511,688	)	$	(877,009	)	$	(634,679	)	$	(1,368,015	)	$	(1,511,688	)	$	143,673
Working capital	$	(974,599	)	$	(18,316	)	$	(956,283	)	$	(759,507	)	$	(974,599	)	$	215,092
Cash provided by (used in) financing activities	$	266,710		$	(85,300	)	$	352,010
Cash provided by financing activities										$	863,851		$	266,710		$	597,141

	December 31, 2016			December 31, 2015			$ Change
										December 31, 2017			December 31, 2016			$ Change
Net loss	$	(1,652,280	)	$	(2,082,643	)	$	430,363		$	(1,477,045	)	$	(1,652,280	)	$	175,235

Adjustments to reconcile net loss to cash used in operating activities:
Amortization and depreciation of assets	$	267,496		$	368,963		$	(101,467	)	$	289,975		$	267,496		$	22,479
Share based compensation	$	482,110		$	274,502		$	207,608		$	334,972		$	482,110		$	(147,138	)
Accrued share based compensation	$	247,500			-		$	247,500		$	225,000		$	247,500		$	(22,500	)
Changes in value of derivative liability and gain or loss on foreign exchange	$	144		$	43,919		$	43,775
Warrant issuance expense										$	120,788			-		$	120,788
Gain or loss on foreign exchange										$	(1,477	)	$	144		$	(1,621	)
Other	$	10,174		$	33,437		$	(23,263	)	$	44,760		$	10,174		$	34,586
	$	1,007,924		$	720,821		$	286,603		$	1,014,018		$	1,007,424		$	6,594

Net loss adjusted for non-cash items	$	(644,856	)	$	(1,361,822	)	$	716,966		$	(463,027	)	$	(644,856	)	$	181,829

Changes in working capital
Accounts receivable, accounts payable and accrued liabilities (adjusted for accrued share based compensation)	$	(65,664	)	$	(52,529	)	$	(13,135	)
Accounts receivable, accounts payable and accrued liabilities										$	(108,397	)	$	(65,664	)	$	(42,733	)
Inventory	$	78,292		$	10,046		$	68,246		$	(54,573	)	$	78,292		$	(132,865	)
Prepaid expenses and net insurance financing repayments	$	(13,939	)	$	99,426		$	(113,365	)	$	18,162		$	(13,939	)	$	32,101
Accrued interest (not paid in cash)	$	60,293		$	48,000		$	12,293		$	48,680		$	60,293		$	(11,613	)
Other	$	6,666		$	4,079		$	2,587		$	33,254		$	6,666		$	26,588
	$	65,648		$	109,022		$	(43,374	)	$	(62,874	)	$	65,648		$	(128,522	)

Cash used in operating activities, adjusted for net insurance repayments	$	(579,208	)	$	(1,252,800	)	$	673,592		$	(525,901	)	$	(579,208	)	$	53,307

~~/s/ Paritz & Company, P.A.~~
~~Hackensack, New Jersey~~
~~March 30, 2017~~17

	For the year ended December 31,						For the year ended December 31,
	2016			2015			2017			2016

Revenue	$	1,452,714		$	1,138,634		$	1,384,971		$	1,452,714
Cost of Goods Sold		184,685			164,118			227,134			184,685
Gross Profit		1,268,029			974,516			1,157,837			1,268,029

Operating expenses:
Research and development		4,739			71,512			3,015			4,739
Depreciation and Amortization		257,582			360,334			275,416			257,582
General and administrative		2,597,086			2,533,684
Selling, general and administrative								2,191,969			2,597,086
Total Operating expenses		2,859,407			2,965,530			2,470,400			2,859,407
Operating loss		(1,591,378	)		(1,991,014	)		(1,312,563	)		(1,591,378	)

Other income (expense)
Interest expense: Other		(48,885	)		(47,710	)		(48,522	)		(48,885	)
Interest expense: Related Party		(12,161	)		-			(680	)		(12,161	)
Gain (loss) on foreign currency exchange		144			(63,711	)		1,477			144
Change in fair value derivative liability		-			19,792
Otherincome and expense								4,031			-
Warrant issuance expense								(120,788	)		-
Total Other Income (expense)		(60,902	)		(91,629	)		(164,482	)		(60,902	)

Loss Before Credit for Income Taxes		(1,652,280	)		(2,082,643	)		(1,477,045	)		(1,652,280	)
Credit for income taxes		-			-			-			-
Net Loss		(1,652,280	)		(2,082,643	)		(1,477,045	)		(1,652,280	)
Preferred stock dividends		(179,727	)		(167,777	)		(324,370	)		(179,727	)
Net Loss available to common shareholders		(1,832,007	)		(2,250,420	)
Net Loss available to common stockholders								(1,801,415	)		(1,832,007	)
Comprehensive Loss
Foreign Currency Translation Adjustment		1,989			(64,959	)		5,278			1,989
Comprehensive Loss		(1,650,290	)		(2,147,602	)		(1,471,766	)		(1,650,291	)

Net Loss Per Share
Basic and diluted	$	(0.15	)	$	(0.20	)	$	(0.10	)	$	(0.17	)

Weighted Average Number of Shares Outstanding – Basic and Diluted		11,066,217			10,839,335			18,373,355			11,066,217

	Common Stock				Preferred Stock - Series C				Preferred Stock - Series D				Treasury Stock					Additional Paid-in		Accumulated			Accum			Total			Common Stock				Preferred C				Preferred D				Treasury Stock						Additional Paid-in		Accumulated			Accum OCI
	Number		Amount		Number		Amount		Number		Amount		Number		Amount			Capital		Deficit			OCI (Loss)						Number		Amount		Number		Amount		Number		Amount		Number			Amount			Capital		Deficit			(Loss)			Total
Balance at December 31, 2014		10,879,899	$	1,088		1	$	-		235,559	$	24		-103,334	($	1,033	)	$	23,903,793	($	21,082,118	)	$	67,148		$	2,888,902
Issuance of stock for board and consulting fees		152,661		15		-		-		-		-		-		-			244,985		-			-			245,000
Share-based compensation for consulting service		-		-		-		-		-		-		-		-			4,492		-			-			4,492
Share based compensation issued to employees						-		-		-		-		-		-			25,011		-			-			25,011
Preferred stock dividends		-		-						16,777		1							167,776		-			-			167,777
Accumulated Comprehensive Loss		-		-		-		-		-		-		-		-			-		-			64,960			64,960
Net loss for year ended December 31, 2015																					(2,250,420	)					(2,250,420	)
Balance at December 31, 2015		11,032,560	$	1,103		1	$	-		252,336	$	25		-103,334	($	1,033	)	$	24,346,057	($	23,332,538	)	$	132,108		$	1,145,722			11,032,560	$	1,103		1	$	0		252,336	$	25		(103,334	)	$	(1,033	)	$	24,346,057	$	(23,332,538	)	$	132,108		$	1,145,722
Issuance of stock for board and consulting fees		291,393		29		-		-		-		-		-		-			156,847		-			-			156,876			291,393		29		-		-		-		-		-			-			156,847		-			-			156,876
Share-based compensation for consulting service		115,404		12		-		-		-		-		-		-			49,022		-			-			49,034			115,404		12		-		-		-		-		-			-			49,022		-			-			49,034
Deferred compensation for board																			78,000								78,000																					78,000								78,000
Share based compensation issued to management/employees						-		-		-		-		-		-			198,200		-			-			198,200							-		-		-		-		-			-			198,200		-			-			198,200
Preferred stock dividends		-		-						17,970		2							179,724		-			-			179,726			-		-						17,970		2								179,724		-			-			179,726
Accumulated Comprehensive Loss		-		-		-		-		-		-		-		-			-		-			(1,989	)		(1,989	)		-		-		-		-		-		-		-			-			-		-			(1,989	)		(1,989	)
Net loss for year ended December 31, 2016																					(1,832,007	)					(1,832,007	)																						(1,832,007	)					(1,832,007	)

Balance at December 31, 2016		11,439,357	$	1,144		1	$	-		270,306	$	27		-103,334	($	1,033	)	$	25,007,850	($	25,164,545	)	$	130,119		($	26,438	)		11,439,357	$	1,144		1	$	0		270,306	$	27		(103,334	)	$	(1,033	)	$	25,007,850	$	(25,164,545	)	$	130,119		$	(26,438	)
Issuance of stock for board and consulting fees																														2,343,885		235																496,637								496,872
Issuance of warrants related to 2014 Debt Preferred exchange agreement																														-		-																120,788								120,788
Directors deferred compensation granted																																																84,000								84,000
Share based compensation issued to management/employees																																																1,609								1,609
Issuance of shares and warrants pursuant to offering, net																														6,070,078		607																1,191,256								1,191,863
Issuance of shares pursuant to exercise of warrants																														72,002		7																19,434								19,441
Accumulated Comprehensive Loss																																																					(5,278	)		(5,278	)
Net loss for year ended December 31, 2017																																																		(1,801,415	)					(1,801,415	)
Balance at December 31, 2017																														19,925,322	$	1,993		1	$	0		270,306	$	27		(103,334	)	$	(1,033	)	$	26,921,574	$	(26,965,960	)	$	124,841		$	81,442

	For the year ended
	December 31,						For the year ended December 31,
	2015			2014			2017			2016
Cash flows from operating activities:
Net loss		(1,652,280	)		(2,082,643	)	$	(1,477,045	)	$	(1,652,280	)
Adjustments to reconcile net loss to cash used in operating activities:
Amortization of intangible assets		89,157			99,291			162,076			89,157
Depreciation of fixed assets		178,339			269,672			127,899			178,339
Inventory provision		10,174			12,633
Inventory write-off		-			20,804
Inventory provision and write-off								44,760			10,174
Share based compensation		482,110			274,502			334,972			482,110
Loss on foreign exchange		144			63,711
Unrealized gain on change in fair value of derivative liability		-			(19,792	)

(Gain) loss on foreign exchange								(1,477	)		144
Warrant issuance expense								120,788			-
Accrued liabilities - Related party								225,000			247,500
Changes in assets and liabilities:
Accounts receivable		(42,445	)		17,475			38,362			(42,445	)
Inventory		78,292			10,046			(54,573	)		78,292
Prepaid expenses		68,351			184,726			16,625			68,351
Accrued interest to related party		12,161			-			680			12,161
Accrued interest other		48,132			48,000			48,000			48,132
Accounts payable		(418	)		28,665			(108,630	)		(418	)
Accrued liabilities		224,699			(98,669	)
Accrued liabilities – Other								(38,129	)		(22,801	)
Security Deposit		6,666			4,079			33,254			6,666
Cash used in operating activities		(496,918	)		(1,167,500	)		(527,438	)		(496,918	)
Cash flows from investing activities:
Purchase of fixed assets		(57,451	)		(210,023	)		(183,258	)		(57,451	)
Purchase of website		-			(18,010	)
Acquisition of patents		-			(66,276	)
Cash used in investing activities		(57,451	)		(294,309	)		(183,258	)		(57,451	)
Cash flows from financing activities:
Net proceeds from issuance of common stock, net								842,873			-
Issuance of shares pursuant to exercise of warrants								19,441			-
Proceeds from issuance of Notes Payable: Related Party		248,000			-			-			248,000
Monies in Escrow Related Party – Private Placement		101,000
Repayment of Notes Payable - Other		(82,290	)		(85,300	)
Cash provided by (used in) financing activities		266,710			(85,300	)
Monies in Escrow Related Party - Offering								-			101,000
Proceeds, net of repayment of Notes Payable - Other								1,537			(82,290	)
Cash provided by financing activities								863,851			(266,710	)
Effect of exchange rate changes on cash		(2,959	)		2,928			(3,801	)		(2,959	)
Net decrease in cash		(290,618	)		(1,544,181	)		149,354			(290,618	)
Cash at beginning of year		347,477			1,891,658			56,859			347,477
Cash at end of year		56,859			347,477		$	206,213		$	56,859

Supplemental Disclosures of Cash Flow information:
Non-Cash Transactions:
Preferred stock dividends satisfied in new preferred stock	$	179,727		$	167,777		$	-		$	179,727
Conversion into Common Stock of Notes Payable: Related Party							$	(248,000	)	$	-
Proceeds from monies in Escrow Related Party - Offering							$	(101,000	)	$	-

					December 31,		December 31,
	December 31,2016		December 31,2015		2017		2016
Stock options outstanding		705,557		25,557		725,557		705,557
Warrants to purchase common stock		6,007,048		6,007,048		6,929,386		6,007,048
Debentures convertible into common stock		242,647		215,908		2,308,405		242,647
Preferred shares convertible into common stock		1,272,052		1,188,471		1,272,052		1,272,052
Directors Deferred Compensation Plan		176,479		-		510,527		176,479
Total		8,403,783		7,436,984		11,745,927		8,403,783

	December 31, 2017		December 31, 2016

Raw materials and work in process		80,139		67,936
Finished goods		133,744		136,135
Total Inventory		213,883		204,071

	December 31, 2016		December 31, 2015
On March 25, 2011 the Company issued a term note for $300,000 to EuroAmerican Investment Corp. (“EuroAmerican”). The term note bears interest at 16% per annum and was due June 25, 2011. In connection with the loan the Company also issued EuroAmerican warrants to purchase 400,000 shares of the Company’s common stock at an exercise price of $4.50 per share for a period of three (3) years. On June 25, 2011 the due date for this note was extended to September 25, 2011 and the Holder was granted the right to convert all or any amount of the principal face amount of the debenture then outstanding and accrued interest into shares of common stock of the Company an adjusted conversion price of $1.80 per share, subject to adjustment and does not require bifurcation. The due date for this note has been extended to May 31, 2017.		300,000		300,000
Insurance policy finance agreements. During the period ended December 31, 2016 the Company made payments of $82,290. The notes are due over the next twelve months.		16,856		15,750
Total Other Notes Payable		316,856		315,750

	Twelve Months Ended December 31,				Twelve Months Ended December 31,
	2016		2015		2017		2016
Revenue:
Vycor Medical	$	1,260,949	$	885,481	$	1,178,063	$	1,260,949
NovaVision	$	191,765	$	253,153	$	206,908	$	191,765
	$	1,452,714	$	1,138,634	$	1,384,971	$	1,452,714
Gross Profit
Vycor Medical	$	1,093,055	$	777,953	$	973,883	$	1,093,055
NovaVision	$	174,974	$	196,563	$	183,954	$	174,974
	$	1,268,029	$	974,516	$	1,157,837	$	1,268,029

	December 31, 2016		December 31, 2015
Total Assets:
Vycor Medical	$	805,716	$	1,150,291
NovaVision		679,534		872,440
Total Assets	$	1,485,250	$	2,022,731

	December 31, 2017		December 31,2016
Total Assets:
United States	$	977,145	$	1,258,624
Europe		472,312		226,626
Total Assets	$	1,449,457	$	1,485,250

	Estimated Useful Lives	December 31, 2016			December 31,2015			Estimated Useful Lives	December 31, 2017			December 31, 2016

Machinery and equipment	3 years	$	137,453		$	132,452		3 years	$	138,258		$	137,453
Leasehold Improvements	5 years		6,206			6,206		3years		8,881			6,206
Purchased Software	3 years		27,706			27,706		3 years		27,706			27,706
Molds and Tooling	5 years		409,784			381,397		5 years		608,699			409,784
Furniture and fixtures	7 years		25,844			26,028		7 years		26,120			25,844
Therapy Devices	3 years		112,857			99,324		3 years		123,739			112,857
Internally Developed Software	5 years		1,187,591			1,174,912		5 years		1,190,336			1,187,591
			1,907,441			1,652,068				2,123,739			1,907,441
Less: Accumulated depreciation and amortization			(1,506,390	)		(1,326,920	)			(1,634,569	)		(1,506,390	)
Property and Equipment, net		$	401,051		$	521,105			$	489,170		$	401,051

				Weighted average					Weighted average
				exercise price					exercise price
	Number of shares			per share		Number of shares			per share
Outstanding at December 31, 2014		5,911,715		$	2.57
Granted		100,000		$	2.56
Exercised		-			-
Cancelled or expired		(4,667	)		-
Outstanding at December 31, 2015		6,007,048		$	2.57		6,007,048		$	2.57
Granted		-		$	2.56		-			-
Exercised		-			-		-			-
Cancelled or expired		-			-		-			-
Outstanding at December 31, 2016		6,007,048		$	2.57		6,007,048		$	2.57
Granted							6,901,388		$	0.27
Exercised							(72,002	)	$	0.27
Cancelled or expired							(5,907,048	)	$	1.88
Outstanding at December 31, 2017							6,929,386		$	0.31

	Year ended December 31,
	2016			2015
Risk-free interest rates		0.91	%		1.07	%
Expected life		1.5 years			3 years
Expected dividends		0	%		0	%
Expected volatility		95	%		101	%
Vycor Common Stock fair value	$	0.71		$	2.00

●	Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;

●	Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

●	Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Directors and Executive Officers	Position/Title	Age
Peter C. Zachariou	Chief Executive Officer and a Director	5556
David Marc Cantor	President and a Director	5051
Adrian Christopher Liddell	Chairman of the Board, Chief Financial Officer and a Director	5859
Steven Girgenti	Director	7172
Oscar Bronsther, M.D.	Director	6465
Lowell Rush	Director	6061

●	had any bankruptcy petition filed by or against any business of which he was a general partner or executive officer, either at the time of the bankruptcy or within two years prior to that time;

●	been convicted in a criminal proceeding and is not subject to a pending criminal proceeding;

●	been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities;

●	or been found by a court of competent jurisdiction (in a civil action), the Securities Exchange Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

Name and Principal Position	Year	Salary($)		Bonus($)		Stock Awards($)		Option Awards($)		Non- Equity Incentive Plan Compensation		Non-Qualified Deferred Compensation Earnings($)		All other Compensation($)		Total($)
Peter Zachariou	2016	$	—		—		—	$	64,435		—		—		—	$	64,435
CEO	2017	$	—		—		—		—		—		—		—		—
David Cantor	2016	$	—		—		—	$	64,435		—		—		—	$	64,435
President	2017	$	—		—		—		—		—		—		—		—

		Option Awards
Name	Grant Date	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Number of Securities Underlying Unexercised Options (#) Unexercisable (1)		Option Exercise Price($)		Option Expiration Date
Adrian Liddell	3/23/2016		-		220,000	$	0.78	3/22/2019
David Cantor	3/23/2016		-		220,000	$	0.78	3/22/2019
Peter C. Zachariou	3/23/2016		-		220,000	$	0.78	3/22/2019

Equity Compensation Plan Information	Equity Compensation Plan Information							Equity Compensation Plan Information
Plan category		Number of securities to be issued upon exercise of outstanding options, warrants and rights(a)		Weighted- average exercise price of outstanding options,warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)			Number of securities to be issued upon exercise of outstanding options, warrants and rights(1)		Weighted- average exercise price of outstanding options,warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (1)
Equity compensation plans approved by security holders			6,667	$	20.25		17,676			720,000	$	$0.81		1,978,532
Equity compensation plans not approved by security holders			3,333		28.50		–			-		-		-
Total			7,000	$	20.70		17,676			720,000	$	$0.81		1,978,532

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner (1)		Percent of Class (2)			Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner (1)		Percent of Class (2)
Common Stock	Steven Girgenti		121,601		*		Steven Girgenti		232,186		1.15	%
Common Stock	Oscar Bronsther, M.D		103,100		*		Oscar Bronsther, M.D		213,685		1.06	%
Common Stock	Lowell Rush		91,137		*		Lowell Rush		201,722		1.00	%
Common Stock	Adrian Christopher Liddell		220,000-		1.25	%	Adrian Christopher Liddell		220,000		1.08	%
Common Stock	Marc David Cantor		220,000-		1.25	%	Marc David Cantor		220,000		1.08	%
Common Stock	Peter C. Zachariou		431,239		2.42	%	Peter C. Zachariou		381,598		1.87	%
Series D Preferred Stock	Peter C. Zachariou		69,487		25.71	%	Peter C. Zachariou		69,487		25.71	%
Common Stock	All executive officers and directors as a group		1,187,077		6.43	%	All executive officers and directors as a group		1,469,191		6.86	%
Series D Preferred Stock	All executive officers and directors as a group		69,487		25.71	%	All executive officers and directors as a group		69,487		25.71	%
Common Stock	Fountainhead Capital Management Limited Portman House Hue Street, St. Helier, Jersey JB4 5RP		6,905,042		49.85	%	Fountainhead Capital Management Limited 17 Bond Street, St. Helier, Jersey JE2 3NP		9,120,757		53.04	%
Series D Preferred Stock	Fountainhead Capital Management Limited Portman House Hue Street, St. Helier, Jersey JB4 5RP		181,994		69.68	%	Fountainhead Capital Management Limited 17 Bond Street, St. Helier, Jersey JE2 3NP		188,363		95.4	%

	●	Report of Paritz & Co., P.C., Independent Registered Certified Public Accounting Firm

	●	Balance Sheets as of December 31, ~~2016~~2017 and ~~2015~~2016 (audited)

	●	Consolidated Statements of Comprehensive Loss for the years ended December 31, ~~2016~~2017 and ~~2015~~2016 (audited)

	●	Statements of Stockholders’ Deficit from January 1, ~~2015~~2016 to December 31, ~~2016~~2017 (audited)

	●	Statement of Cash Flows for the years ended December 31, ~~2016~~2017 and ~~2015~~2016 (audited)

	●	Notes to Financial Statements (audited)