Vycor Medical 10Q/A 2011 Q1 Quarterly report (amended)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal quarter ended March 31, 2011

o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from to

VYCOR MEDICAL, INC.

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

Delaware

333-149782

20-3369218

(State of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

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

Issuer's telephone number: (561) 558-2000
Securities registered under Section 12(g) of the Exchange Act:

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. Yesx No o

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

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


				Large accelerated filero			Accelerated filero
				Non-accelerated filero (Do not check if a smaller reporting company)			Smaller reporting companyx

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

There were 741,206,784 shares outstanding of registrant's common stock, par value $0.0001 per share, as of May 6, 2010.

Transitional Small Business Disclosure Format (check one): Yeso No x

TABLE OF CONTENTS


PART I
Item 1.	Financial Statements	5
	Consolidated Balance Sheets as of March 31, 2011 (unaudited) and December 31, 2010	5
	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2011 and March 31, 2010	6
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operation	23
Item 3	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4	Controls and Procedures	33
PART II
Item 1	Legal Proceedings	35
Item 1A	Risk Factors	35
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3	Defaults Upon Senior Securities	35
Item 4.	(Removed and Reserved)	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

SIGNATURES		36

Forward-looking Statements

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

EXPLANATORY NOTE

Vycor Medical, Inc. is filing this Amendment No. 1 on Form 10-Q/A (the "Amendment") to its Quarterly Report on Form 10-Q for the period ended March 31, 2011, originally filed May 13, 2011 (the "Original Filing") to amend and restate the following previously-filed consolidated financial statements and related disclosures (the "Restatement"): (1) our unaudited consolidated financial statements as of and for the periods ended March 31, 2011 and March 31, 2010 and the notes thereto contained in Part I, Item 1 of this Amendment (including our audited balance sheet for the period ended December 31, 2010 included in such financial statements); (2) management's discussion and analysis of financial condition and results of operations as of and for the quarters ended March 31, 2011 and 2010 contained in Part I, Item 2 of this Amendment.

Financial information related to the quarters ended March 31, 2011 and 2010 and the fiscal year ended December 31, 2010 included in the report on Form 10-Q previously filed by us and all related earnings press releases and similar communications issued by us during these periods, should not be relied upon. In the event there are discrepancies between this Amendment and previous reports, press releases and similar communications, the information in this Amendment shall control.

Background of the Restatement

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

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

Restatement of Other Financial Statements

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

(i)for the year ended December 31, 2009 included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2010;

(ii)for the three months ended March 31, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 12, 2010;

(iii)for the three and six months ended June 30, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 16, 2010;

(iv)for the three and nine months ended September 30, 2010 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2010; and

(v)for the year ended December 31, 2010, included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2011.

Total Impact from the Foregoing Adjustments

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

Internal Control Deficiencies

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

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

Part I:

Item 1: Financial Statements;

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations;

Item 4: Controls and Procedures

Part II:

Item 6: Exhibits

We have not modified or updated disclosures presented in our original quarterly report on Form 10-Q, except as required to reflect the effects of this Restatement. Accordingly, this Form 10-Q/A does not reflect events occurring after the Original Filing and does not modify or update those disclosures affected by subsequent events, except as specifically referenced herein. Information not affected by the Restatement is unchanged and reflects the disclosures made at the time of the Original Filing on May 13, 2011. References to the quarterly report on Form 10-Q herein shall refer to the quarterly report on Form 10-Q originally filed on May 13, 2011.

PART I

ITEM 1. FINANCIAL STATEMENTS

VYCOR MEDICAL, INC.
Consolidated Balance Sheets (Restated)


		March 31, 2011 (unaudited)			December 31, 2010 (audited)
ASSETS

Current Assets

Cash	$	188,344		$	127,081
Accounts receivable		84,187			76,460
Inventory		54,622			52,360
Prepaid expenses		491,966			645,302
Total Current Assets		819,119			901,203

Fixed assets, net		736,809			773,188

Intangible and Other assets:
Trademarks		130,000			130,000
Patents, net of accumulated amortization		326,853			333,072
Website, net of accumulated amortization		3,155			3,932
Security deposits		13,399			12,299
		473,407			479,303

TOTAL ASSETS	$	2,029,335		$	2,153,694

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities
Accounts payable	$	210,260		$	114,447
Accrued interest		59,978			36,992
Accrued liabilities		388,996			406,998
Other current liabilities		148,215			106,162
Notes payable		1,894,574			1,400,381

TOTAL LIABILITIES		2,702,023			2,064,980

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, none issued and outstanding		-			-
Common Stock, $0.0001 par value, 1,500,000,000 shares authorized, 732,317,876 and 724,488,929 shares issued and outstanding at March 31, 2011 and December 31, 2010 respectively		73,232			72,449
Additional Paid-in Capital		7,085,323			6,902,427
Accumulated Deficit		(7,818,863	)		(6,883,163	)
Accumulated Other Comprehensive Income		(12,380	)		(2,999	)

		(672,688	)		88,714

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,029,335		$	2,153,694

See accompanying notes to financial statements

VYCOR MEDICAL, INC.
Consolidated Statement of Operations (Restated)


		For the three months ended March 31,
		2011			2010
		(unaudited)			(unaudited)

Revenue	$	145,122		$	64,285

Cost of Goods Sold		22,373			12,588

Gross Profit		122,749			51,697

Operating expenses:
Research and development		23,852			4,886
Depreciation and Amortization		49,405			9,773
Stock Compensation		208,219			87,790
General and administrative		752,510			276,184

Total Operating expenses		1,033,986			378,633

Operating loss		(911,237	)		(326,936	)

Other expense
Interest expense		(23,921	)		(12,605	)
Total Other expense		(23,921	)		(12,605	)


Net Loss Before Taxes		(935,158	)		(339,541	)

Taxes		(542	)		(2,078	)

Net Loss	$	(935,700	)	$	(341,619	)

Loss Per Share
Basic and diluted	$	(0.001	)	$	(0.001	)

Weighted Average Number of Shares Outstanding		726,735,567			614,555,497

See accompanying notes to financial statements

VYCOR MEDICAL, INC.
Consolidated Statement of Cash Flows (Restated)


		For the three months ended March 31
		2011 (unaudited)			2010 (unaudited)
Cash flows from operating activities:
Net loss	$	(935,700	)	$	(341,619	)
Adjustments to reconcile net loss to cash used in operating activities:
Amortization of intangible assets		14,047			4,036
Depreciation of fixed assets		39,087			5,737
Amortization of debt discount expense		325			-
Share based compensation		208,219			87,790

Changes in assets and liabilities:
Accounts receivable		(7,728	)		(21,940	)
Inventory		(2,263	)		(17,312	)
Prepaid expenses		(20,087	)		(40,875	)
Security deposit		(1,100	)		(1,283	)
Accounts payable		95,814			(46,392	)
Accrued interest		22,986			9,271
Accrued liabilities		(18,002	)		30,780
Other current liabilities		42,053			-

Cash used in operating activities		(562,349	)		(331,807	)
Cash flows used in investing activities:
Purchase of fixed assets		(1,208	)		(1,931	)
Acquisition of patents		(7,828	)		(12,272	)
Cash used in investing activities		(9,036	)		(14,203	)
Cash flows from financing activities:
Proceeds from sale of equity - Common stock		144,000			-
Proceeds from sale of equity - Series B preferred		-			140,000
Proceeds from short term Notes Payable		504,000			246,500
Repayment of short term Notes Payable		(5,249	)		-
Cash provided by financing activities		642,751			386,500
Foreign currency translation adjustment		(10,103	)		-
Net increase in cash		61,263			40,490
Cash at beginning of period		127,081			12,771
Cash at end of period	$	188,344		$	53,261
Supplemental Disclosures of Cash Flow information:
Interest paid:	$	-		$	-
Taxes paid	$	542		$	2,078
Non-Cash Transactions:
Warrants, options and common stock issued for debt financing	$	4,143		$	803,690

See accompanying notes to financial statements

VYCOR MEDICAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2011

1. BASIS OF PRESENTATION

The condensed consolidated balance sheet as of December 31, 2010, which has been derived from restated audited financial statements, and the accompanying unaudited condensed financial statements have been prepared by Vycor Medical, Inc. (together with its consolidated subsidiaries, the "Company" or "Vycor") in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to the quarterly report on Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation, have been included. Operating results for the three months ended March 31, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. These financial statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's annual report on Form 10-K/A for the year ended December 31, 2010, as amended and restated. Certain prior period amounts have been reclassified to conform to the current presentation. All financial information included in these Notes relating to the Company's financial position as of December 31, 2010 and results of operations for the interim periods ended March 31, 2011 and 2010 have been restated to give effect to the accounting corrections discussed in Note 5

2. FORMATION AND BUSINESS OF THE COMPANY

Business Description

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

3. GOING CONCERN

The Company's financial statements have been presented on a basis that contemplates the realization of assets and the satisfaction of liabilities in the normal course of business and assumes the Company will continue as a going concern. The Company has incurred losses since its inception, including a net loss of $935,700 for the three months ended March 31, 2011, and the Company expects to continue to incur substantial additional losses in the future, including additional development costs, costs related to marketing and manufacturing expenses. The Company has incurred negative cash flows from operations since inception. As of March 31, 2011 the Company had a stockholders' deficiency of $672,688 and cash and cash equivalents of $188,344. The Company believes it would not have enough cash to meet its various cash needs unless the Company is able to obtain additional cash from the issuance of debt or equity securities. There is no assurance that additional funds from the issuance of equity will be available for the Company to finance its operations on acceptable terms. If adequate funds are not available, the Company may have to delay development or commercialization of products or technologies that the Company would otherwise seek to commercialize, or cease operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

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

4. ACCOUNTING POLICIES

Principles of Consolidation

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

Research and Development

The Company expenses all research and development costs as incurred. For the three months ended March 31, 2011 and 2010 the amounts charged to research and development expenses were $23,852 and $4,886, respectively.

Software Development Costs For Internal Use

The authoritative guidance requires software development costs to be capitalized upon completion of the preliminary project stage. Accordingly, direct internal and external costs associated with the development of the features and functionality of the Company's software for internal use, incurred during the application development stage, are capitalized and amortized using the straight-line method of the estimated life of five years. The Company acquired internally developed software valued at $540,000 as part of the acquisition of the assets of NovaVision, Inc. on November 30, 2010. For the three months ended March 31, 2011 and 2010 there was no capitalization of software development costs.

Uses of estimates in the preparation of financial statements

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

Fair Values of Assets and Liabilities

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

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

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

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

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

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

The Company has no items that are subject to these standards as of March 31, 2011.

Net Loss Per Share

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

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented:


	March 31,	March 31,
	2011	2010
Stock options outstanding	833,333	1,000,000
Warrants to purchase common stock	131,665,306	74,364,268
Debentures convertible into common stock	57,414,223	49,068,960
Total	197,412,862	124,433,228

Recent Accounting Pronouncements

From time to time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies that may have an impact on the Company's accounting and reporting. The Company believes that 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.

5. RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

On August 15, 2011, the Company filed with the SEC a Current Report on Form 8-K, to report management's determination that the Company's financial statements for the quarter ended March 31, 2011, included in its Quarterly Report on Form 10-Q filed with the SEC on May 14, 2011 (the "2011 Form 10-Q"), should no longer be relied upon due to incorrect accounting in such financial statements with respect to warrants issued in connection with service agreements and for the beneficial conversion feature of certain convertible debentures. The Company determined that the historical financial statements for the quarter ended March 31, 2011 included in the Company's 2011 Form 10-Q require restatement to properly record these warrants and beneficial conversion features.

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

(i)for the year ended December 31, 2009, included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2010;

(ii)for the three months ended March 31, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on May 12, 2010;

(iii)for the three and six months ended June 30, 2010, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on August 16, 2010;

(iv)for the three and nine months ended September 30, 2010 included in the Company's Quarterly Report on Form 10-Q filed with the SEC on November 15, 2010; and

(v)for the year ended December 31, 2010, included in the Company's Annual Report on Form 10-K filed with the SEC on March 31, 2011.

The Company's management re-evaluated certain of its accounting policies and procedures in connection with the preparation of the Company's financial statements for the periods ended June 30, 2011, and determined that it had not properly accounted for warrants issued in connection with service agreements and for the beneficial conversion feature of certain convertible

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

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

The tables below show the effects of the restatements on (i) the Company's consolidated balance sheets as of March 31, 2011 and December 31, 2010, (ii) the consolidated statements of operations for the three months ended March 31, 2011 and 2010, and (iii) the consolidated statements of cash flows for the three months ended March 31, 2011 and 2010. These adjustments are non-cash items and do not impact the Company's operating activities or cash flows from operations in any way.


						Vycor Medical, Inc. Consolidated Balance Sheets
	March 31, 2011								December 31, 2010
	As Reported		Adjustment				Restated		As Reported		Adjustment			Restated
Prepaid Expenses	124,948		367,018		a		491,966		106,782		538,520		a	645,302
Total Current Assets	452,101		367,018				819,119		362,683		538,520			901,203
Total Assets	1,662,317		367,018				2,029,335		1,615,174		538,520			2,153,694
Notes Payable	1,865,069		29,505		b		1,894,574		1,344,300		56,081		b	1,400,381
Total Liabilities	2,672,518		29,505				2,702,023		2,008,899		56,081			2,064,980
Additional Paid-in Capital	6,595,926		489,397		a,b		7,085,323		6,375,175		527,252		a,b	6,902,427
Accumulated Deficit	(7,666,979	)	(151,884	)	c,d		(7,818,863	)	(6,838,350	)	(44,813	)	c,d	(6,883,163	)
Total Stockholders' Equity (Deficit)	(1,010,201	)	337,513				(672,688	)	(393,725	)	482,439			88,714
Total Liabilities and Stockholders' Equity	1,662,317		367,018				2,029,335		1,615,174		538,520			2,153,694


	Vycor Medical, Inc. Consolidated Statements of Operations For the Three Months Ended
	March 31, 2011							March 31, 2010
	As Reported		Adjustment			Restated		As Reported		Adjustment			Restated
Stock Compensation	79,455		128,764		c	208,219		60,068		27,722		c	87,790
General and administrative	752,510		-		c	752,510		281,756		(5,572	)	c	276,184
Total Operating Expenses	905,222		128,764			1,033,986		358,651		22,150			380,801
Total Operating Loss	(782,473	)	(128,764	)		(911,237	)	(306,864	)	(22,150	)		(329,014	)
Interest Expense	(45,614	)	(21,693	)	d	(23,921	)	(69,137	)	(56,532	)	d	(12,605	)
Total Other Income (Expense)	(45,614	)	21,693			(23,921	)	(69,137	)	56,532			(12,605	)
Net Loss	(828,629	)	(107,071	)		(935,700	)	(376,001	)	34,382			(341,619	)
Net Loss per share	(0.001	)	(0.000	)		(0.001	)	(0.001	)	0.000			(0.001	)


	Vycor Medical, Inc. Consolidated Statements of Cash Flows For the Three Months Ended
	March 31, 2011							March 31, 2010
	As Reported		Adjustment			Restated		As Reported		Adjustment			Restated
Net Loss	(828,629	)	(107,071	)		(935,700	)	(376,001	)	34,382			(341,619	)
Amortization of Debt Discount Expense	22,018		(21,693	)	d	327		56,532		(56,532	)	d	(0	)
Share-based compensation	79,455		128,764		c	208,219		70,068		17,722		c	87,790
Changes in Accrued liabilities	(18,002	)	-			(18,002	)	26,352		4,428			30,780
Cash used in operating activities	(562,349	)	-			(562,349	)	(331,807	)	-			(331,807	)


	Vycor Medical, Inc. Consolidated Statements of Cash Flows For the Three Months Ended
	March 31, 2011					March 31, 2010
	As Reported		Adjustment	Restated		As Reported		Adjustment	Restated
Cash used in investing activities	(9,036	)	-	(9,036	)	(14,203	)	-	(14,203	)
Cash provided by financing activities	642,751		-	642,751		386,500		-	386,500
Foreign currency translation adjustments	(10,103	)	-	(10,103	)	-		-
Net Increase in Cash	61,263		-	61,263		40,490		-	40,490

Notes:

Grant date fair value of warrants issued for consulting services

Elimination debt discount where no Beneficial Conversion Feature exists

Net change in expense from converting amortization period from life of warrant to life of service agreement

Reversal of BCF amortization where no Beneficial Conversion Feature exists

6. NOTES PAYABLE

As of March 31, 2011 and December 31, 2010 Notes Payable consists of:


	March 31, 2011	December 31, 2010
On December 29, 2009, in conjunction with a debt restructuring, the Company issued a convertible debenture in the amount of $371,362 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, was due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passuwith, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On May 14, 2010, the due date for satisfaction was extended to March 30, 2011 and on March 28, 2011 this was further extended to August 31, 2011.	371,362	371,362

On February 3, 2010 the Company issued a convertible debenture in the amount of $70,000 payable Fountainhead. This debenture accrues interest rate of 6% per annum, is due August 31, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0125 per share, subject to adjustment and does not require bifurcation. On May 14, 2010, the due date for satisfaction was extended to March 30, 2011 and on March 28, 2011 this was further extended to August 31, 2011.	70,000	70,000

On September 30, 2010, the Company issued a convertible debenture in the amount of $85,000 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due August 31, 2011, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0175 per share, subject to adjustment and does not require bifurcation.	85,000	85,000


	March 31, 2011	December 31, 2010
On October 14, 2010, the Company issued a convertible debenture in the amount of $90,000 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due August 31, 2011, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.0175 per share, subject to adjustment and does not require bifurcation.	90,000	90,000

On October 26, 2010, the Company issued a debenture in the amount of $77,500 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due on the earlier of August 31, 2011 or the date of receipt by the Company of cash from fundraisings in excess of a cumulative $3 million from October 26, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions.	77,500	77,500

On November 15, 2010, the Company issued a debenture in the amount of $322,500 payable to Fountainhead. This debenture accrues interest rate of 6% per annum, is due on the earlier of August 31, 2011 or the date of receipt by the Company of cash from fundraisings in excess of a cumulative $3 million from October 26, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions.	322,500	322,500

On November 15, 2010, the Company issued a convertible debenture in the amount of $350,000 payable to Peter Zachariou, a Director of the Company. This debenture accrues interest rate of 6% per annum, is due on the earlier of August 31, 2011 or the date of receipt by the Company of cash from fundraisings in excess of a cumulative $3 million from October 26, 2010, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.019 per share, subject to adjustment and does not require bifurcation. On December 20, 2011, the Company repaid $50,000 of this debenture and removed the convertible rights.	300,000	300,000

On December 3, 2010, the Company issued a debenture in the amount of $40,000 payable to Berardino Investment Group. This debenture accrues interest rate of 6% per annum, is due June 30, 2011, is secured by a first priority security interest in all of the assets of the Company, and is senior to orpari passu with, all other obligations of the Company, subject to certain conditions. The Holder is entitled to convert all or any amount of the principal face amount of the debenture then outstanding into shares of common stock of the Company at the conversion price of $0.019 per share, subject to adjustment and does not require bifurcation.	40,000	40,000

In January, February and March 2011 the Company issued short term, unsecured notes in the amount of $15,000, $64,000 and $20,000 respectively, payable to Fountainhead. The notes accrue interest rate of 6% per annum, are due May 30, 2011 and are junior to the secured convertible and non-convertible debentures of the Company.	99,000	-


		March 31, 2011		December 31, 2010
In January and February 2011 the Company issued short term, unsecured notes in the amount of $15,000 and $40,000 respectively, payable to Peter Zachariou, a Director of the Company. The notes accrue interest rate of 6% per annum, are due May 30, 2011 and are junior to the secured convertible and non-convertible debentures of the Company.		55,000		-

In February 2011 the Company issued short term, unsecured notes in the amount of $10,000 payable to David Cantor, a Director of the Company. The notes accrue interest rate of 6% per annum, are due May 30, 2011 and are junior to the secured convertible and non-convertible debentures of the Company.		10,000		-

In February and March 2011 the Company issued short term, unsecured notes in the amount of $10,000 and $30,000 respectively, payable to Craig Kirsch. The notes accrue interest rate of 6% per annum, are due May 30, 2011 and are junior to the secured convertible and non-convertible debentures of the Company. These notes were repaid on April 12, 2011.		40,000		-

On March 25, 2011 the Company issued a term note for $300,000 to EuroAmerican Investment Corp. The term note bears interest at 16% per annum and is due June 25, 2011. In connection with the loan the company also issued warrants to purchase 400,000 shares of Company common stock at an exercise price of $0.03 per share for a period of three (3) years.		300,000		-

Unsecured, non-interest bearing loan from the chief executive of NovaVision AG, who advanced a total of €33,000 to NovaVision AG, which is being repaid in monthly installments to December 31, 2011. As of March 31, and December 31, 2010 the remaining balance is €27,500 and €33,000, respectively.		38,770		44,019

Total Notes Payable:	$	1,899,132	$	1,400,381

The following is a schedule of future minimum loan payments:


Twelve months ending March 31,		Amount
2011	$	1,899,132
2012		-
2013		-
2014		-
2015		-
Thereafter		-
Total	$	1,899,132

As of March 31, 2011, $1,356,362 of Company's notes payable are secured by a first security interest in all of the assets of the Company. The Company determines the existence of a beneficial conversion feature of its convertible debt under the guidance of ASC Topic 470 by assessing the intrinsic value of such conversion feature at the time of issuance. For each of the convertible debt instruments set out above, the fair value of the stock on the date of issue was either the same or less than the conversion price, and so there was no value attributable to any beneficial conversion feature.

7. SEGMENT REPORTING, GEOGRAPHICAL INFORMATION

(a) Business segments

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


		Three months ended March 31,
		2011 (restated)		2010 (restated)
Revenue:
Vycor Medical	$	99,842	$	64,285
NovaVision		45,280		-
Total Revenue	$	145,122	$	64,285
Gross Profit:
Vycor Medical		92,724		51,697
NovaVision		30,025		-
Total Gross Profit	$	122,749	$	51,697


		March 31,		December 31,
		2011 (restated)		2010 (restated)
Total Assets:
Vycor Medical		1,014,064		1,085,680
NovaVision		1,015,271		1,068,014
Total Assets	$	2,029,335	$	2,153,694

(b) Geographic information

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


		Three months ended March 31,
		2011 (restated)		2010 (restated)
Revenue:
United States	$	104,009	$	64,285
Germany		41,113		-
Total Revenue	$	145,122	$	64,285
Gross Profit:
United States		93,892		51,697
Germany		28,867		-
Total Gross Profit	$	122,749	$	51,697

		March 31,			December 31,
		2011 (restated)			2010 (restated)
Total Assets:
United States		1,981,195		2,084,029
Germany		48,140		69,665
Total Assets	$	2,029,335	$	2,153,694

8. PROPERTY AND EQUIPMENT

As of March 31, 2011 and December 31, 2010, Property and Equipment and the estimated lives used in the computation of depreciation is as follows:


			March 31,			December 31,
		2011				2010

Machinery and equipment	$	98,470			$	93,764
Purchased Software		11,208				10,000
Molds and Tooling		230,830				230,830
Furniture and fixtures		19,328				18,288
Therapy Devices		45,175				44,412
Internally Developed Software		540,000				540,000
		945,011				937,294

Less: Accumulated depreciation and amortization		(208,202		)		(164,106	)

Property and Equipment, net	$	736,809			$	773,188

Estimated useful lives of property and equipment are as follows:


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

9. INTANGIBLE ASSETS

As of March 31, 2011 and December 31, 2010, Intangible Assets consists of:


		March 31,			December 31,
		2011			2010
Amortized intangible assets: Patent (8 years useful life)
Gross carrying Amount	$	389,568		$	381,740
Accumulated Amortization		(62,715	)		(48,668	)
	$	326,853		$	333,072

Intangible assets not subject to amortization
Trademarks		130,000			130,000

Amortization expense for the periods ended March 31, 2011 and December 31, 2010 was $14,047 and $21,539, respectively.

10. EQUITY

Certain Equity Transactions

In January and February 2011, the Company issued an aggregate of 7,578,947 shares of Company common stock to three investors at a price of $0.019 per share for aggregate gross proceeds of $144,000.

On February 5, 2011, in consideration for services provided to the Board of Directors (valued at $5,000), the Company issued 250,000 shares of its common stock to Steven Girgenti.

On March 2, 2011, the Company issued warrants to seven parties to purchase 14,710,530 shares of the Company's common stock at a price of $0.03 per share. The warrants are exercisable over a period of three years from the date of issuance.

On March 25, 2011, in connection with the issuance by the Company of a term note for $300,000 to EuroAmerican Investment Corp, the Company issued warrants to purchase 400,000 shares of Company common stock at an exercise price of $0.03 per share for a period of three years from the date of issuance. This warrant was fair valued under the Black-Scholes Model and amortized over the term of the loan as financing costs starting April 1, 2011

10. 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" (formerly referred to as SFAS No. 123(R)). 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.

Stock Option Plan

The Company adopted the Vycor Medical, Inc Employee, Director, and Consultant Stock Plan as of February 13, 2008, that includes both incentive stock options and nonqualified stock options to be granted to employees, officers, and consultants, independent contractors, directors and affiliates of the Company. The board of directors establishes the terms and conditions of all stock options grants, subject to the Plan and applicable provisions of the Internal Revenue Code. Incentive stock options must be granted at an exercise price not less than the fair market value of the common stock on the grant date. The options granted to participants owning more than 10% of the Company's outstanding voting stock must be granted at an exercise price not less than 110% of the fair market value of the common stock on the grant date. The options expire on the date determined by the board of directors, but may not extend mare than 10 years from the grant date, while incentive stock options granted

to participants owning more than 10% of the Company's outstanding voting stock expire five years from the grant date. The vesting period for employees is generally over three years. The vesting Period for nonemployees is determined based on the services being provided.

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. No employee stock options were granted for the three months ended March 31, 2011 and 2010.

Initial grants totaling 500,000 shares each were issued on February 13, 2008 to Kenneth T. Coviello, Chief Executive Officer and Heather N. Vinas, President at an exercise price of $0.135 per share. The options vest 33 1/3 % on each of the first, second, and third anniversary of the grant and expire February 12, 2018. Following Heather Vinas' resignation as President of the Company in May 2010, 166,667 options were cancelled. Accordingly, for the three months ended March 31, 2011, the Company recognized share-based compensation of $28,920 only for the grant to Kenneth T. Coviello.

The maximum number of shares of stock which maybe delivered under the plan shall automatically increase by a number sufficient to cause the number of shares covered by the plan to equal 10% of the total number of shares of stock then outstanding on a fully diluted basis.

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 March 31, 2010 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.

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


STOCK WARRANTS:
	Number of shares			Weighted average exercise price per share

Outstanding at January 1, 2010	35,493,172		$	0.030
Granted	90,191,077			0.015
Exercised	-			-
Cancelled or expired	(9,079,473	)		0.015
Outstanding at January 1, 2011	116,604,776		$	0.019
Granted	15,110,530			0.030
Exercised	-			-
Cancelled or expired	(50,000	)		0.500
Outstanding at March 31, 2011	131,665,306		$	0.020

STOCK OPTIONS:
	Number of shares			Weighted average exercise price per share
Outstanding at January 1, 2010	1,000,000		$	0.14
Granted
Exercised
Cancelled or expired	(166,667	)		0.14
Outstanding at January 1, 2011	833,333		$	0.14
Granted	-			-
Exercised	-			-
Cancelled or expired	-			-


	Number of shares		Weighted average exercise price per share
Outstanding at March 31, 2011	833,333	$	0.14

The weighted-average remaining contractual life of outstanding warrants and options is 1.86 and 7.88 years, respectively.

Non-Employee Stock Based Compensation

Under the terms of a consulting agreement dated February 2010, the Company issued warrants to Fountainhead Capital Management to purchase up to 39,063,670 shares of the Company's common stock at $0.0125 per share. The warrants are valid from February 10, 2010 for a period of five years. This warrant was fair valued under the Black-Scholes Model and amortized over the two-year life of the consultancy agreement. For the three months ended March 31, 2011, $44,774 was recognized as share-based compensation in connection with this agreement.

During the three months ended March 30, 2011, the Company issued 250,000 shares of common stock to Steven Girgenti for services rendered to the board of directors. For the three months ended March 30, 2011, $5,000 was recognized as share-based compensation for the issuance of these shares

Under the terms of a twelve month sales and marketing consulting agreement dated March 2010, the Company issued 750,000 shares of its Common Stock to Joe Simone, valued at $9,375. For the three months ended March 31, 2011, $1,771 was recognized as share-based compensation in connection with this agreement.

Under the terms of an Extension of Funding Commitment agreement dated September 2010, the Company issued warrants to Fountainhead Capital Management to purchase up to 50,627,407 shares of the Company's common stock at $0.0175 per share. The warrants are valid from September 29, 2010 for a period of five years. This warrant was fair valued under the Black-Scholes Model and amortized over the life of the agreement to August 30, 2011. For the three months ended March 31, 2011, $126,043 was recognized as share-based compensation in connection with this agreement.

Under the terms of a consulting agreement dated December 6, 2010, the Company issued a warrant to Market Media Connect, LLC to purchase up to 500,000 shares of the Company's common stock at $0.07 per share. The warrant is valid from December 1, 2010 for a period of three years. This warrant was fair valued under the Black-Scholes Model and amortized over the life of the consulting agreement. For the three months ended March 31, 2011, $835 was recognized as share-based compensation in connection with this agreement.

In March 2011 the Company entered into a one year consultancy agreement with Mr. Jerold Ginder, a sales executive of Stryker Corporation, effective April 1, 2011. Mr. Ginder has extensive experience in sales and marketing and the development of medical device products, and has contacts which will be of use to the Company. Under the terms of the one year agreement, which the Company has the right to terminate with 30 days notice, Mr. Ginder will receive $5,000 a month and 18,000,000 restricted shares of common stock of the Company. The stock has been valued by the Company at $360,000 and will be amortized over the life of the agreement as share-based compensation expense.

Stock-based compensation expense charged to operations on employee options and on stock and warrants granted to the above non-employees for the three months ended March 31, 2011 is $178,423. As of March 31, 2011, there was approximately $367,018 of total unrecognized compensation costs related to non-vested option, warrant and stock awards, which are expected to be recognized over a weighted average period of approximately 0.61 years.

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 following assumptions were used in calculations of the Black-Scholes option pricing model in the periods ended March 31, 2011 and 2010:


	Three months ended March 31,
	2011	2010
Risk-free interest rates	1.26 %	2.39 %
Expected life	3 years	3 years
Expected dividends	0%	0%
Expected volatility	96%	96%
Vycor Common Stock fair value	$0.010-$0.020	$0.0125

12. INCOME TAXES

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

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.

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, the Company has provided a valuation allowance against the gross deferred tax assets as follows:


	March 31, 2011			December 31, 2010
Gross deferred tax assets		1,780,000			1,573,000
Valuation allowance		(1,780,000	)		(1,573,000	)
Net deferred tax asset		—			—

As of March 31, 2011 and December 31, 2010, the Company has U.S. federal net operating loss carryforwards of approximately $5,110,000 and $4,493,000, respectively. The federal net operating loss carryforwards expire in the tax years 2027 through 2031.

Federal tax laws impose significant restrictions on the utilization of net operating loss carryforwards and research and development credits 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 carryforwards and research and development credits may be subject to the above limitations.

At March 31, 2011 and December 31, 2010 the Company has available for carryforward German net operating losses of approximately $200,000, to be applied against future German taxable income which may be subject to certain restrictions and limitations. Such carryforwards are subject to certain restrictions and limitations in the event of changes in the NovaVision AG's ownership.

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. Management has determined that a 100% valuation allowance is appropriate at March 31, 2011 and December 31, 2010.

13. COMMITMENTS AND CONTINGENCIES

Lease

The Company executed a lease agreement for administrative office space at its current location of 3651 FAU Boulevard, Boca Raton, Florida. The lease term is 12 months from December 1, 2010. The Company vacated its premises at 80 Orville Drive, Bohemia, NY in February, 2011. Rental expense for the three months ended March 31, 2011 and 2011 was $40,734 and $7,751, respectively.

14. CONSULTING AND OTHER AGREEMENTS

In March 2011 the Company entered into a consultancy agreement with Mr. Jerold Ginder, a sales executive of Stryker Corporation. Mr. Ginder has extensive experience in sales and marketing and the development of medical device products, and has contacts which will be of use to the Company. Under the terms of the one year agreement, which the Company has the right to terminate with 30 days notice, Mr. Ginder will receive $5,000 a month and 18,000,000 restricted shares of common stock of the Company.

15. RELATED PARTY TRANSACTIONS

In January, February and March 2011 the Company issued unsecured, subordinated loan notes to Fountainhead for a total of $99,000. The loan notes are subordinated to the Company's secured debentures, bear interest at a rate of 6% and are due May 30, 2011

In January and February 2011 the Company issued unsecured, subordinated loan notes to Peter Zachariou, a director of the Company for a total of $55,000. The loan notes are subordinated to the Company's secured debentures, bear interest at a rate of 6% and are due May 30, 2011

In February 2011 the Company issued an unsecured, subordinated loan note to David Cantor, a director of the Company for $10,000. The loan notes are subordinated to the Company's secured debentures, bear interest at a rate of 6% and are due May 30, 2011.

On May 12, 2011, the Company entered into a Supplement to a prior Consulting Agreement with Fountainhead entered into on February 10, 2010 (amended September 29, 2010) to recognize Fountainhead's expanded responsibilities as a result of the acquisition by the Company of the assets of NovaVision, Inc. Under the terms of the Supplement, commencing January 1, 2011 the Company will pay to Fountainhead an additional monthly retainer of $29,000. This additional monthly retainer shall be accrued and paid out to Fountainhead at the option of Fountainhead as follows: (i) in Vycor stock at any time at $0.0225 per share; or (ii) in cash following the closing of a fundraising of no less than $2.5 million or on the sale of the Company or a substantial part of the assets thereof at any time after June 30, 2011. Notwithstanding, Fountainhead shall have the option to receive up to $5,000 of the additional monthly retainer in cash each month, commencing April 1, 2011. Other than as supplemented, the Consulting Agreement remains in full force and effect according to its terms.

16. SUBSEQUENT EVENTS

Common Stock Subscriptions

In April 2011, the Company issued Units aggregating 24,444,442 shares of Company common stock together with Warrants to purchase 12,222,221 shares of Company common stock at an exercise price of $0.03 per share for a period of three years at a price of $0.0225 per Unit to seven investors for aggregate gross proceeds of $550,000.

In May 2011, the Company issued Units aggregating 3,333,333 shares of Company common stock together with Warrants to purchase 1,666,667 shares of Company common stock at an exercise price of $0.03 per shares for a period of three years at a price of $0.0225 per Unit to two investors for aggregate gross proceeds of $75,000.

In May, 2011, in consideration for services provided to the Board of Directors (valued at $5,000), the Company issued 222,222 shares of its common stock to Steven Girgenti.

Loan Note Repayment

In April 2011, the unsecured, subordinated loan notes due to Craig Kirsch totaling $40,000 were repaid.

Consulting Agreement

receive up to $5,000 of the additional monthly retainer in cash each month, commencing April 1, 2011. Other than as supplemented, the Consulting Agreement remains in full force and effect according to its terms.

Placement Agent Agreement

On April 25, 2011, the Company engaged a placement agent in connection with the issuance and sale of Units comprising shares of the Company's Series C Convertible Preferred Stock (the "Series C Preferred") and warrants to purchase shares of the Company's common stock (collectively, the "Units") up to a total of $1.75 million gross proceeds through a transaction or transactions exempt from registration under the Securities Act of 1933, as amended, and in compliance with the applicable securities laws and regulations (the "Financing"). At the same time, the Company is directly selling to investors additional Units with gross proceeds of up to an additional $1.25 million. If fully subscribed, the Company would receive gross proceeds of approximately $3.0 million.

Each Unit is priced at $50,000.00 and will comprise one share of Series C Preferred convertible (at the Holder's option or mandatorily upon the occurrence of certain events) into 2,222,222 shares of the Company's Common Stock ($0.0225 per share) and a Warrant to purchase 1,111,111 shares of the Company's Common Stock at $0.03 per share (subject to adjustments) for a period of three (3) years. The proceeds of the Offering would be used for working capital and general corporate purposes. The Offering is being undertaken on a "best efforts" basis and is not subject to any "firm commitment" as to the sale of the Units. Normal placement agent fees will be payable. The Company is looking to complete the Offering during the second quarter.

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

Forward Looking Statements

This Form 10-Q 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 "Description of Business," as well as in this Form 10-Q generally. In particular, these include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, and financial results.

Any or all of our forward-looking statements in this report may turn out to be inaccurate. They can be affected by inaccurate assumptions we might make or by known or unknown risks or uncertainties. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially as a result of various factors, including, without limitation, the risks outlined under "Risk Factors" and matters described in this Form 10-Q generally. In light of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in this filing will in fact occur. You should not place undue reliance on these forward-looking statements.

The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, we undertake no obligation to publicly update any forward-looking statements, whether as the result of new information, future events, or otherwise.

Restatement

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

(1) our unaudited consolidated financial statements as of and for the periods ended March 31, 2011 and March 31, 2010 and the notes thereto contained in Part I, Item 1 of this Amendment (including our audited balance sheet for the period ended December 31, 2010 included in such financial statements);

(2) management's discussion and analysis of financial condition and results of operations as of and for the quarters ended March 31, 2011 and 2010 contained in Part I, Item 2 of this Amendment.

The Restatement results from our management's determination subsequent to the issuance of our financial statements for the quarter ended March 31, 2011 that we had not properly accounted for warrants issued in connection with certain service agreements and for the beneficial conversion feature of certain convertible debentures. Specifically, management, following discussions with the Company's independent registered public accounting firm, determined that the Company had previously not recognized the fair value of warrants issued in connection with certain consulting or other service agreements at the measurement date, and had previously recognized the expense ratably over the life of the warrant. The Company's management further determined that the proper accounting, following the guidance in ASC Topic 505, is to record the fair value of these warrants as a prepaid expense on the date of issuance, and recognize the expense ratably over the life of the underlying service agreement. In addition, the Company had, since December 2009, been determining the existence of a beneficial conversion feature of convertible debt based on the fair value of the conversion feature on the date of issuance, rather than using the intrinsic value of the conversion feature on the date of issuance, as required under ASC Topic 470.

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

1. Organizational History

We were formed as a limited liability company under the laws of the State of New York on June 17, 2005 as "Vycor Medical LLC". On August 14, 2007, we converted into a Delaware corporation and changed our name to "Vycor Medical, Inc." ("Vycor" or the "Company"). The Company's listing went effective on February 2009 and on November 29, 2010, Vycor completed an

acquisition of substantially all of the assets of NovaVision, Inc., a company that had been in the business of researching, developing and providing medical technologies to restore the vision of patients with neurological visual loss predominantly resulting from Stroke or Traumatic Brain Injury.

2. Overview of Business

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

Vycor Medical, Inc.

Introduction

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

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

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

Vycor Medical's Products

Viewsite Brain Access System (VBAS)

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

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

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

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


	•			Gently separate delicate tissue by utilizing a tapered forward edge;
	•			Minimize venous pressure caused by pulling tissue in one direction in the brain;
	•			To allow direct surgical visualization of the brain tissue via optically transparent construction;
	•			Reduce "target shift" to allow the surgeon to reach the site accurately;
	•			Minimize healthy tissue damage while reaching the target site;
	•			Allow for accurate neuronavigational image guidance systems ("IGS") performance;
	•			Integrate in due course with the leading surgical IGS systems such as Medtronic® and BrainLab®, Stryker and GE;


	•			Improve surgical outcomes (reducing potential surgeon and hospital liability), for example, decreased insertion tissue trauma, less need for readjustment during surgery and minimum interface surface pressures;
	•			Reduce damage to healthy brain tissue potentially leading to shorter post-op recovery and reduced hospital stay

The extent to which we are successful in achieving the above objectives will be judged by the acceptance of the devices in the market.

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

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

IGS Opportunity for the Brain Access System

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

• Target Shifting

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

• Real-Time Retractor Positioning Data

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

Vycor Medical Product Pipeline

Brain Access and Related Products

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

Cervical Access Products

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

Sales and Marketing

Domestic Sales Strategy

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

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

International Sales

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

Reference Hospitals Program

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

VBAS Market and the Hospital Adoption Process

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

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

Manufacturing

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

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

Market

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

Competition

Competitive manufacturers of brain retractors include:


	•			Cardinal Health (V. Mueller line)
	•			Aesculap
	•			Integra Life Science
	•			Codman (Division of Johnson & Johnson)

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

Customers

Vycor Medical sells to stocking regional distributors and direct to hospitals through independent representatives. The Company believes that its products currently are being evaluated or utilized in approximately 80 hospitals in the United States. In addition, in three months ended March 31, 201 international sales accounted for approximately 11% of revenues.

Intellectual Property

Patent Applications

Vycor Medical has two granted, but not issued, patents in China and Russia and numerous patent applications pending in various countries with respect to its technology.

Trademarks

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

NovaVision, Inc.

Introduction

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

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

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

Platform Technology

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

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

Clinical Data Relating to VRT

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

•A large retrospective VRT study indicated that 88% of patients experience an improvement in at least one of their daily life activities

•75% of patients experience and improvement in their mobility which is regarded as the most important functional task

•Time since injury does not seem to matter so historical backlog of patients can be treated

•Results do not appear to be not age or gender dependent

Market

NovaVision markets its therapy through physicians and direct to patients, who it refers to physicians for consultation, prescription and diagnosis prior to undergoing therapy. Its screening and diagnostic products are marketed to physicians, medical and rehabilitation centers and academic institutions. The Company is in the process of finalizing a significantly enhanced marketing strategy which will entail increased sales and marketing expenditure.

Pipeline Products Utilizing NovaVision's Platform Technology

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

Regulatory Matters

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

Intellectual Property

Patents

NovaVision maintains a portfolio of patent protection on its methods and apparatus in the form of issued patents and applications, both domestically and internationally. In the U.S., the Company has a total of 8 issued patents and 3 pending applications. The international patent portfolio includes 6 issued patent and more than 16 pending applications.

Trademarks

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

Manufacturing and Operations

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

3. Other Matters

Product Liability Insurance

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

Government Regulations

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

ISO 13485:2003 Medical Devices — Quality Management Systems

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

Vycor Medical has the following certification/licensing:

•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

•HPB Licensing for Canada

Employees

We currently have 14 full-time employees.

Comparison of the Three Months Ended March 31, 2011 to the Three Months Ended March 31, 2010

Revenue and Gross Margin:


		2011			2010		% Change
Revenue:
Vycor Medical	$	99,842		$	64,285		55	%
NovaVision	$	45,280		$	-		NM
	$	145,122		$	64,285		126	%
Cost of Revenue:
Vycor Medical	$	(7,117	)	$	(12,588	)	-43	%
NovaVision	$	(15,256	)	$	-		NM
	$	(22,373	)	$	(12,588	)	79	%
Gross Profit
Vycor Medical	$	92,724		$	51,697		79	%
NovaVision	$	30,025		$	-		NM
	$	122,749		$	51,697		137	%

Vycor Medical recorded revenue of $99,842 from the sale of its products in the three months ended March 31, 2011, an increase of 55% over the same period in 2010. The increase in sales was attributable to greater penetration and usage of our product in hospitals in the United States both direct and through distributors, and increased sales internationally. Gross margin of 93% was achieved compared to 81% for the same period in 2010. Gross margin is mostly a product of sale mix between US sales through distributors, US sales direct and international sales, and reflects one-off validation and product life extension costs in the three months ended March 31, 2010 as well as inventory credits in the three months ended March 31, 2011.

NovaVision recorded revenues of $45,280 in the three months ended March 31, 2011 and gross margin of 66%. The majority of these revenues were attributable to Germany.

Research and Development Expense:
Research and development expenses were $23,852 in the three months ended March 31, 2011 compared to $4,886 for the same period in 2010.

Stock Compensation Expense:

Stock Compensation expense is a non-cash charge for share based compensation as the result of amortizing shares, warrants and options which have been issued by the Company over various periods. The charge in the three months ended March 31, 2011 was $208,219, an increase of $120,429 over $87,790 in the same period in 2010.

General and Administrative Expenses:

General and administrative expenses increased by $476,325 to $752,509 in the three months ended March 31, 2011 from $276,184 for the same period in 2010. This reflects the additional expenses for NovaVision as well as higher levels of marketing activities in Vycor, as follows:


Total G&A expenses for the three months ended March 31, 2011	$	276,184
Increase in marketing expenditure and travel costs		81,265
Increase in personnel costs		159,951
Increase in non-cash consulting fees		76,903
Increase in professional and regulatory costs		41,741
Increase in premises costs		58,077
Increase in other operating expenses		58,389

Total G&A expenses for the three months ended March 31, 2011	$	752,510

Interest Expense:

Interest expense comprises interest expense on the Company's debt and insurance policy financing. Interest expense in the three months ended March 31, 2011 increased by $11,316 to $23,921 from $12,605 for the same period in 2010.

Liquidity and Capital Resources

Liquidity

The following table shows cash flow and liquidity data for the periods ended March 31, 2011 and December 31, 2010:


		March 31, 2011			December 31, 2010			$ Change
Cash	$	188,344		$	127,081		$	61,263
Accounts receivable, inventory and other current assets		630,775			774,122			(143,347	)
Total current liabilities		(2,702,023	)		(2,064,980	)		(637,043	)
Working capital (deficit)	$	(1,882,904	)	$	(1,163,777	)	$	(719,127	)
Cash provided by financing activities	$	642,751		$	386,500		$	(256,251	)

As of March 31, 2011 we had $188,344 cash, a working capital deficit of $1,882,904 and an accumulated deficit of $7,818,863. The Stockholders' deficit at March 31, 2011 was $672,688. Debt at March 31, 2011, included in the working capital deficit above, was $1,899,130, a change of $498,751 from $1,400,381 at December 31, 2010.

Our operating activities used $562,349 in cash for the three months ended March 31, 2011. Aside from the increased operating expenses discussed above, the Company has reduced accounts payable and accrued payables, and increased operating assets. This is accounted for as follows:


Net cash loss adjusted for change in accrued interest	$	(651,036	)
Increase in inventory and inventory order deposits		(35,614	)
Increase in accounts payable		95,814
Net change in other assets and liabilities		28,487
	$	(562,349	)

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

Uses of estimates in the preparation of financial statements

accompanying consolidated financial statements include management's estimate of the allowance for uncollectible accounts receivable, amortization of intangible assets, and the fair values of options and warrant included in the determination of debt discounts and share based compensation.

Going Concern

Research and Development

The Company expenses all research and development costs as incurred.

Cash and cash equivalents

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

Property and equipment

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

Income taxes

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

Patents and Other Intangible Assets

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

Revenue Recognition

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

NovaVision generates revenues from various programs, therapy services and other sources such as government grants. Therapy services revenues represent fees from NovaVision's vision restoration therapy software, diagnostic software, medical devices, clinic set up and training fees, and the professional and support services associated with the therapy. NovaVision recognizes revenue for providing the vision restoration therapy as the Company's work effort is expended. NovaVision provides vision restoration therapy directly to patients. The typical vision restoration therapy consists of six modules, performed on average over 6 months in the U.S. and 10 months in Germany. A patient contract comprise set-up fees and monthly therapy fees. Set-up fees are recognized at the outset of the contract and therapy revenue is recognized ratably over the therapy period. Patient therapy is restricted to being completed by a patient within a specified time frame.

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

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

Accounts Receivable

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

Inventory

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

Foreign Currency

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

Educational marketing and advertising expenses

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

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES (As Revised)

Management's Report on Internal Control over Financial Reporting (as revised)

(a) Disclosure Controls and Procedures

We are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such

information is accumulated and communicated to our management, including our chief executive officer (also our principal executive officer) and our chief financial officer (also our principal financial and accounting officer) to allow for timely decisions regarding required disclosure.

On August 12, 2011, the Board of Directors concluded that the Company had not properly accounted for warrants issued in connection with consulting or other service agreements and for the beneficial conversion feature of certain convertible debentures. The Company had previously not recognized the fair value of warrants issued in connection with consulting or other service agreements at the measurement date, and has previously recognized the expense ratably over the life of the warrant. The Company's management has determined that the proper accounting, following the guidance in ASC Topic 505, is to record the fair value of these warrants as a prepaid expense on the date of issuance, and recognize the expense ratably over the life of the underlying service agreement. The Company has, since December 2009, been determining the existence of a beneficial conversion feature of convertible debt based on the fair value of the conversion feature on the date of issuance, rather than using the intrinsic value of the conversion feature on the date of issuance, as required under ASC Topic 470. These items had a material effect on our previously issued consolidated financial statements for the years ended December 31, 2009 and 2010 and for each of the quarters for the year ended December 31, 2010 and the quarter ended March 31, 2011, requiring us to restate the financial statements for such periods.

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 ("Exchange Act"), the Company carried out an evaluation, with the participation of the Company's management, including the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") (the Company's principal financial and accounting officer), of 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, and taking the matters described above into account, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2011 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.

(b) Changes in Internal Controls

There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) under the Exchange Act) during the fiscal period to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. In light of the matters described above with respect to accounting for warrants issued under consulting or other service agreements and the beneficial conversion feature of certain convertible debt, the Company intends to re-evaluate its internal control over financial reporting and to implement such changes as it may deem appropriate in light of such re-evaluation.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met and 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 the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. The Company's disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, and the Principal Executive Officer and the Principal Financial Officer have concluded that these controls and procedures are effective at the "reasonable assurance" level.

PART II

ITEM 1. LEGAL PROCEEDINGS

We are subject from time to time to litigation, claims and suits arising in the ordinary course of business. As of March 31, 2011, we were not a party to any material litigation, claim or suit whose outcome could have a material effect on our financial statements.

ITEM 1A. RISK FACTORS.

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

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

In January and February 2011, the Company issued an aggregate of 7,578,947 shares of Company common stock to three investors at a price of $0.019 per share for aggregate gross proceeds of $144,000.

On February 5, 2011, in consideration for services provided to the Board of Directors (valued at $5,000), the Company issued 250,000 shares of its common stock to Steven Girgenti.

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED)

None.

ITEM 5. OTHER INFORMATION

Subsequent events

Common Stock Subscriptions

In May, 2011, in consideration for services provided to the Board of Directors (valued at $5,000), the Company issued 222,222 shares of its common stock to Steven Girgenti.

Loan Note Repayment

In April 2011, the unsecured, subordinated loan notes due to Craig Kirsch totaling $40,000 were repaid.

Consulting Agreement

On May 12, 2011, the Company entered into a Supplement to a prior Consulting Agreement with Fountainhead Capital Management Limited ("Fountainhead") entered into on February 10, 2010 (amended September 29, 2010) to recognize Fountainhead's expanded responsibilities as a result of the acquisition by the Company of the assets of NovaVision, Inc. Under the terms of the Supplement, commencing January 1, 2011 the Company will pay to Fountainhead an additional monthly retainer of $29,000. This additional monthly retainer shall be accrued and paid out to Fountainhead at the option of Fountainhead as follows: (i) in Vycor stock at any time at $0.0225 per share; or (ii) in cash following the closing of a fundraising of no less

than $2.5 million or on the sale of the Company or a substantial part of the assets thereof at any time after June 30, 2011. Notwithstanding, Fountainhead shall have the option to receive up to $5,000 of the additional monthly retainer in cash each month, commencing April 1, 2011. Other than as supplemented, the Consulting Agreement remains in full force and effect according to its terms.

Placement Agent Agreement

ITEM 6. EXHIBITS
Index to Exhibits


	31.1			Certification of Chief Financial Officer under Rule 13(a) - 14(a) of the Exchange Act.
	31.2			Certification of Chief Executive Officer under Rule 13(a) - 14(a) of the Exchange Act.
	32.1			Certification of CEO under 18 U.S.C. Section 1350
	32.2			Certification of CFO under 18 U.S.C. Section 1350

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on September 2, 2011.



				VYCOR MEDICAL, INC.

				By:			/s/Kenneth T. Coviello
							Kenneth T. Coviello
							Chief Executive and
							Director (Principal Executive Officer)

				By:			/s/Adrian C. Liddell
							Adrian C. Liddell
							Chairman of the Board and
							Director (Principal Financial Officer)

Vycor Medical (VYCO) 10-Q/A2011 Q1 Quarterly report (amended)