##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Quarterly Period Ended September 30, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                to
 Commission File Number: 0-51475
 VICOR TECHNOLOGIES, INC.
  Delaware
    
    20-2903491(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)2300 NW Corporate Boulevard, Suite 123, Boca Raton, Florida
    
    33431(Address of principal executive office)
    
    (Zip Code)
 (561) 995-7313
 þ o
 o o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company þ o þ
 APPLICABLE ONLY TO CORPORATE ISSUERS
  o þ




---



##### 



VICOR TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q for the Period Ended September 30, 2010
  TABLE OF CONTENTS 
 PagePART I  Financial InformationItem 1. Condensed Consolidated Financial Statements:Condensed Consolidated Balance Sheets as of December 31, 2009 and September 30, 2010 (unaudited)
    
    3Condensed Consolidated Statements of Operations for the three and nine months ended September
30, 2009 and 2010 and the period from August 4, 2000 (inception) through September 30, 2010
(unaudited)
    
    4Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2009
and 2010 and the period from August 4, 2000 (inception) through September 30, 2010 (unaudited)
    
    6Condensed Consolidated Statement of Changes in Net Capital Deficiency for the nine months ended
September 30, 2010 (unaudited)
    
    8Notes to Condensed Consolidated Financial Statements
    
    9Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    26Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    32Item 4. Controls and Procedures
    
    32PART II  Other InformationItem 1. Legal Proceedings
    
    32Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    32Item 3. Defaults Upon Senior Securities
    
    33Item 4. Removed and reserved
    
    33Item 5. Other Information
    
    33Item 6. Exhibits
    
    33Signatures
    
    34
  2




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##### Table of Contents



Vicor
Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Balance Sheets
As of December 31, 2009 and September 30, 2010
(Unaudited)
 December 31, 2009
    
    
    September 30, 2010ASSETSCurrent assets:Cash
    
    $
    544,000
    
    
    $
    331,000Receivables
    
    
    
    
    
    
    58,000Inventory
    
    
    
    
    
    
    126,000Prepaid expenses
    
    
    74,000
    
    
    
    85,000Total current assets
    
    
    618,000
    
    
    
    600,000Property and equipment:Equipment
    
    
    35,000
    
    
    
    145,000Furniture and fixtures
    
    
    24,000
    
    
    
    24,000Less accumulated depreciation
    
    
    (38,000
    )
    
    
    (63,000
    )Net property and equipment
    
    
    21,000
    
    
    
    106,000Other assetsDeposits
    
    
    12,000
    
    
    
    18,000Deferred charges
    
    
    168,000
    
    
    
    650,000Intellectual property, net of accumulated amortization of $223,000 and
$251,000 at December 31, 2009 and September 30, 2010, respectively
    
    
    229,000
    
    
    
    201,000$
    1,048,000
    
    
    $
    1,575,000LIABILITIES AND NET CAPITAL DEFICIENCYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    600,000
    
    
    $
    1,068,000Deferred revenue
    
    
    
    
    
    
    15,000Current debt
    
    
    460,000
    
    
    
    660,000Due to related parties
    
    
    100,000
    
    
    
    89,000Total current liabilities
    
    
    1,160,000
    
    
    
    1,832,000Long-term liabilities:Long-term debt
    
    
    1,251,000
    
    
    
    2,226,000Accrued dividends
    
    
    833,000
    
    
    
    834,000Derivative financial instruments payable in shares of common stock
    
    
    4,414,000
    
    
    
    5,469,000Total long-term liabilities
    
    
    6,498,000
    
    
    
    8,529,000Commitments and contingenciesNet capital deficiency:Preferred stock, $.0001 par value; 10,000,000 shares authorized:Series A Convertible Cumulative, 157,592 shares issued and outstanding
at December 31, 2009 and none at September 30, 2010; preference in liquidation
of $751,000 and none at December 31, 2009 and September 30, 2010, respectively
    
    
    
    
    
    
    Series B Voting Junior Convertible Cumulative, 5,210,101 and 5,185,101 shares issued
and outstanding at December 31, 2009 and September 30, 2010, respectively;
preference in liquidation of $5,413,000 and $5,697,000 at December 31, 2009 and
September 30, 2010, respectively
    
    
    
    
    
    
    Common stock, $.0001 par value; 100,000,000 shares authorized;
41,813,959 and 46,184,165 shares issued and outstanding at
December 31, 2009 and September 30, 2010, respectively
    
    
    4,000
    
    
    
    5,000Additional paid-in capital
    
    
    46,848,000
    
    
    
    50,440,000Deficit accumulated during the development stage
    
    
    (53,462,000
    )
    
    
    (59,231,000
    )Net capital deficiency
    
    
    (6,610,000
    )
    
    
    (8,786,000
    )$
    1,048,000
    
    
    $
    1,575,000
  3




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##### Table of Contents



Vicor
Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Operations
For the three months ended September 30, 2009 and 2010
(Unaudited)
 Three months ended
    
    
    Three months endedSeptember 30,
    
    
    September 30,2009
    
    
    2010Revenues
    
    $
    
    
    
    $
    14,000Operating expenses:Cost of sales
    
    
    
    
    
    
    1,000Research and development
    
    
    141,000
    
    
    
    161,000Selling, general and administrative expenses
    
    
    1,418,000
    
    
    
    1,353,000Interest expense
    
    
    1,078,000
    
    
    
    458,000Loss from extinguishment of debt
    
    
    167,000
    
    
    
    Total operating expenses
    
    
    2,804,000
    
    
    
    1,973,000Gain (loss) on derivative financial instruments
    
    
    (1,452,000
    )
    
    
    1,142,000Net loss
    
    
    (4,256,000
    )
    
    
    (817,000
    )Dividends for the benefit of preferred stockholders:Payable on Series A and Series B preferred stock
    
    
    (115,000
    )
    
    
    (105,000
    )Amortization of derivative discount on Series B
preferred stock
    
    
    (408,000
    )
    
    
    (256,000
    )Total dividends for the
benefit of preferred
stockholders
    
    
    (523,000
    )
    
    
    (361,000
    )Net loss applicable to common stock
    
    $
    (4,779,000
    )
    
    $
    (1,178,000
    )Net loss per common share  basic and diluted
    
    $
    (0.12
    )
    
    $
    (0.03
    )Weighted average number of shares of common shares outstanding
    
    
    38,352,329
    
    
    
    45,696,110
  4




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##### Table of Contents



Vicor
Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Operations
For the nine months ended September 30, 2009 and 2010 and
For the period from August 4, 2000 (inception) to September 30, 2010
(Unaudited)
 Period fromAugust 4, 2000Nine months ended
    
    
    Nine months ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,
    
    
    September 30,2009
    
    
    2010
    
    
    2010Revenues
    
    $
    
    
    
    $
    122,000
    
    
    $
    966,000Operating expenses:Cost of sales
    
    
    
    
    
    
    88,000
    
    
    
    88,000Research and development
    
    
    611,000
    
    
    
    511,000
    
    
    
    15,538,000Selling, general and administrative expenses
    
    
    2,607,000
    
    
    
    4,210,000
    
    
    
    33,216,000Interest expense
    
    
    1,479,000
    
    
    
    1,461,000
    
    
    
    9,677,000Loss from extinguishment of debt
    
    
    167,000
    
    
    
    
    
    
    
    1,266,000Total operating expenses
    
    
    4,864,000
    
    
    
    6,270,000
    
    
    
    59,785,000Gain (loss) on derivative financial instruments
    
    
    (1,834,000
    )
    
    
    1,479,000
    
    
    
    3,636,000Net loss
    
    
    (6,698,000
    )
    
    
    (4,669,000
    )
    
    
    (55,183,000
    )Cumulative effect of a change in accounting principle
    
    
    
    
    
    
    
    
    
    
    480,000Dividends for the benefit of preferred stockholders:Payable on Series A and Series B preferred stock
    
    
    (319,000
    )
    
    
    (345,000
    )
    
    
    (1,258,000
    )Amortization of derivative discount on Series B
preferred stock
    
    
    (729,000
    )
    
    
    (755,000
    )
    
    
    (1,734,000
    )Value of warrants issued in connection with sales of
Series B preferred stock
    
    
    
    
    
    
    
    
    
    
    (1,536,000
    )Total dividends for the
benefit of preferred
stockholders
    
    
    (1,048,000
    )
    
    
    (1,100,000
    )
    
    
    (4,528,000
    )Net loss applicable to common stock
    
    $
    (7,746,000
    )
    
    $
    (5,769,000
    )
    
    $
    (59,231,000
    )Net loss per common share  basic and diluted
    
    $
    (0.21
    )
    
    $
    (0.13
    )Weighted average number of shares of common shares outstanding
    
    
    36,488,985
    
    
    
    44,338,061
  5




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##### Table of Contents



Vicor
Technologies, Inc.  (A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2009 and 2010 and
For the period from August 4, 2000 (inception) to September 30, 2010
(Unaudited)
 Period fromNine months
    
    
    Nine months
    
    
    August 4, 2000ended
    
    
    ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,
    
    
    September 30,2009
    
    
    2010
    
    
    2010Cash flows from operating activities:Net loss
    
    $
    (6,698,000
    )
    
    $
    (4,669,000
    )
    
    $
    (55,183,000
    )Adjustment to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    32,000
    
    
    
    53,000
    
    
    
    376,000Noncash interest imputed upon conversion of debt
to equity
    
    
    1,321,000
    
    
    
    
    
    
    
    5,620,000Noncash interest from deferred financing costs and
debt-based derivative liabilities
    
    
    313,000
    
    
    
    1,130,000
    
    
    
    3,279,000Loss (gain) on derivative financial instruments
    
    
    1,834,000
    
    
    
    (1,479,000
    )
    
    
    (3,636,000
    )Loss from sale of assets
    
    
    
    
    
    
    
    
    
    
    48,000Securities issued for services
    
    
    358,000
    
    
    
    230,000
    
    
    
    1,543,000Beneficial conversion feature of notes payable
    
    
    
    
    
    
    68,000
    
    
    
    269,000Contributed research and development services
    
    
    
    
    
    
    
    
    
    
    95,000Merger-related costs
    
    
    
    
    
    
    
    
    
    
    523,000Shares in lieu of interest payments
    
    
    22,000
    
    
    
    5,000
    
    
    
    385,000Warrants issued for consulting
    
    
    
    
    
    
    35,000
    
    
    
    35,000Equity-based compensation
    
    
    499,000
    
    
    
    460,000
    
    
    
    19,125,000Changes in assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (43,000
    )
    
    
    (43,000
    )Inventory
    
    
    
    
    
    
    (126,000
    )
    
    
    (126,000
    )Prepaid expenses and other assets
    
    
    (314,000
    )
    
    
    (667,000
    )
    
    
    (1,090,000
    )Accounts payable and accrued expenses
    
    
    (11,000
    )
    
    
    1,233,000
    
    
    
    2,806,000Net cash used in operating activities
    
    
    (2,644,000
    )
    
    
    (3,770,000
    )
    
    
    (25,974,000
    )Cash flows from investing activities:Purchase of intellectual property
    
    
    
    
    
    
    
    
    
    
    (237,000
    )Net proceeds from sale of equipment
    
    
    
    
    
    
    
    
    
    
    59,000Purchase of property and equipment
    
    
    (24,000
    )
    
    
    (110,000
    )
    
    
    (287,000
    )Net cash used in investing activities
    
    
    (24,000
    )
    
    
    (110,000
    )
    
    
    (465,000
    )Cash flows from financing activities:Due to related parties
    
    
    
    
    
    
    
    
    
    
    100,000Proceeds from bank loans
    
    
    
    
    
    
    
    
    
    
    300,000Proceeds from sale of preferred stock
    
    
    351,000
    
    
    
    
    
    
    
    2,915,000Proceeds from sale of common stock
    
    
    128,000
    
    
    
    
    
    
    
    11,268,000Repayment of notes
    
    
    (300,000
    )
    
    
    
    
    
    
    (905,000
    )Proceeds from bridge loan
    
    
    300,000
    
    
    
    
    
    
    
    300,000Proceeds from sale of notes
    
    
    2,660,000
    
    
    
    3,667,000
    
    
    
    12,598,000Proceeds for stock to be issued
    
    
    412,000
    
    
    
    
    
    
    
    16,000Contributed capital
    
    
    
    
    
    
    
    
    
    
    178,000Net cash provided by financing activities
    
    
    3,551,000
    
    
    
    3,667,000
    
    
    
    26,770,000Net increase (decrease) in cash
    
    
    883,000
    
    
    
    (213,000
    )
    
    
    331,000Cash at beginning of period
    
    
    182,000
    
    
    
    544,000
    
    
    
    Cash at end of period
    
    $
    1,065,000
    
    
    $
    331,000
    
    
    $
    331,000
  6




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##### Table of Contents



Vicor
Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2009 and 2010 and
From August 4, 2000 (inception) to September 30, 2010
(Unaudited)
 Period fromNine months
    
    
    Nine months
    
    
    August 4, 2000ended
    
    
    ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,
    
    
    September 30,2009
    
    
    2010
    
    
    2010Supplemental cash flow information:Issuance of previously-subscribed common stock
    
    $
    16,000
    
    
    $
    
    
    
    $
    16,000Conversion of accounts payable to note payable
    
    
    
    
    
    
    
    
    
    
    100,000Repurchase
of common stock for cancellation of subscription note receivable
    
    
    
    
    
    
    
    
    
    
    750,000Contributed research and development
    
    
    
    
    
    
    
    
    
    
    95,000Acquisition of intellectual property from related party
    
    
    
    
    
    
    
    
    
    
    200,000Beneficial conversion features for promissory notes
    
    
    
    
    
    
    
    
    
    
    912,000Warrants issued in connection with 15% promissory notes
    
    
    
    
    
    
    
    
    
    
    261,000Warrants
issued in connection with 8% Subordinated Convertible Notes
    
    
    
    
    
    
    557,000
    
    
    
    674,000Cash paid for interest expense
    
    
    69,000
    
    
    
    55,000
    
    
    
    1,014,000Accrued equity-based compensation
    
    
    
    
    
    
    
    
    
    
    41,000Accrued dividends
    
    
    310,000
    
    
    
    339,000
    
    
    
    2,722,000Interest on promissory notes paid in common stock
    
    
    
    
    
    
    
    
    
    
    520,000Related-party accrual converted to common stock
    
    
    
    
    
    
    
    
    
    
    561,000Conversion of debt to Series B Preferred Stock
    
    
    
    
    
    
    
    
    
    
    1,567,000Conversion of notes to common stock
    
    
    1,505,000
    
    
    
    1,206,000
    
    
    
    5,815,000Accrued expenses paid with notes
    
    
    
    
    
    
    703,000
    
    
    
    703,000Accrued expenses paid with preferred stock
    
    
    108,000
    
    
    
    
    
    
    
    108,000Accrued expenses paid with common stock
    
    
    772,000
    
    
    
    
    
    
    
    772,000Fair value of equity-based derivative financial instruments issued
    
    
    816,000
    
    
    
    
    
    
    
    816,000Fair value of debt-based derivative financial instruments issued
    
    
    479,000
    
    
    
    2,535,000
    
    
    
    3,581,000Deferred costs paid with common stock
    
    
    358,000
    
    
    
    
    
    
    
    358,000Amortization of derivative discounts
    
    
    341,000
    
    
    
    755,000
    
    
    
    1,096,000Conversion of Series A preferred stock and accrued dividends to
common stock
    
    
    
    
    
    
    335,000
    
    
    
    335,000Conversion of Series B preferred stock and accrued dividends to
common stock
    
    
    
    
    
    
    9,000
    
    
    
    91,000
  7




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##### Table of Contents



Vicor Technologies, Inc.

(A Development Stage Company)
Condensed Consolidated Statements of Changes in Net Capital
Deficiency
For the nine months ended
September 30, 2010
(Unaudited)
  Preferred Stock
    
    
    
    





    
    
    AdditionalCommon Stock
    
    
    Series A
    
    
    Series B

    
    
    Paid-In
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    TotalBalance at December 31, 2009
    
    
    41,813,959
    
    
    $
    4,000
    
    
    
    157,592
    
    
    $
    
    
    
    
    5,210,101
    
    
    $
    
    
    
    $
    46,848,000
    
    
    $
    (53,462,000
    )
    
    $
    (6,610,000
    )Accrued dividends on
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (345,000
    )
    
    
    (345,000
    )Conversion of Series A
preferred stock to common
    
    
    417,416
    
    
    
    
    
    
    
    (157,592
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    335,000
    
    
    
    
    
    
    
    335,000Conversion of Series B
preferred stock to common
    
    
    28,167
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (25,000
    )
    
    
    
    
    
    
    9,000
    
    
    
    
    
    
    
    9,000Issuance of stock for
interest payments
    
    
    7,644
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    5,000Issuance of stock for services
    
    
    573,464
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    389,000
    
    
    
    
    
    
    
    389,000Issuance of stock options for
services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    301,000
    
    
    
    
    
    
    
    301,000Issuance of stock for
conversion of notes payable
    
    
    3,318,515
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,206,000
    
    
    
    
    
    
    
    1,207,000Warrants issued related to
notes payable transactions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    557,000
    
    
    
    
    
    
    
    557,000Issuance of warrants for
consulting
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,000
    
    
    
    
    
    
    
    35,000Exercise of warrants
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of discounts
related to derivative
financial instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    755,000
    
    
    
    (755,000
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,669,000
    )
    
    
    (4,669,000
    )Balance at September 30, 2010
    
    
    46,184,165
    
    
    $
    5,000
    
    
    
    
    
    
    $
    
    
    
    
    5,185,101
    
    
    $
    
    
    
    $
    50,440,000
    
    
    $
    (59,231,000
    )
    
    $
    (8,786,000
    )
  8




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##### Table of Contents



NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
 Organization
   Nature of the business
 ® ® ® ® VS ®
   Risks
  9




---



##### Table of Contents



NOTE 1 ORGANIZATION AND NATURE OF BUSINESS (CONTINUED)
   NOTE 2 LIQUIDITY
    NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
 Basis of Presentation
   10




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##### Table of Contents



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (CONTINUED)
  Cumulative Effect of a Change in Accounting Principle
   Derivativefinancialinstrumentspayable inshares of
    
    
    Additional
    
    
    Accumu-common stock
    
    
    paid-in capital
    
    
    lated deficitAggregate fair value at issuance
    
    $
    (4,568,000
    )
    
    $
    4,568,000
    
    
    $
    2008 mark-to-market gain
    
    
    999,000
    
    
    
    
    
    
    
    (999,000
    )2008 preferred dividend for discount amortization
    
    
    
    
    
    
    (519,000
    )
    
    
    519,000As recorded on January 1, 2009
    
    $
    (3,569,000
    )
    
    $
    4,049,000
    
    
    $
    (480,000
    )
  Concentration of Credit Risk
   11




---



##### Table of Contents



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (CONTINUED)
 Receivables
  Inventory
  Property and Equipment
  Research and Development Costs
  Revenue Recognition
        12




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##### Table of Contents



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (CONTINUED)
 Cash and Cash Equivalents
  Intellectual Property
  December 31,
    
    
    September 30,2009
    
    
    2010Patents
    
    $
    252,000
    
    
    $
    252,000Purchased software
    
    
    200,000
    
    
    
    200,000452,000
    
    
    
    452,000Less accumulated amortization
    
    
    (223,000
    )
    
    
    (251,000
    )Net intellectual property
    
    $
    229,000
    
    
    $
    201,000
  Use of Estimates
  Accounting for Stock-Based Compensation
   Financial Instruments
    13




---



##### Table of Contents



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION (CONTINUED)
     Long-Lived Assets
  Reclassifications
  Recent Accounting Pronouncements
  NOTE 4 CURRENT DEBT
  December 31,
    
    
    September 30,2009
    
    
    20102004 Notes
    
    $
    250,000
    
    
    $
    250,00012% Convertible Promissory Notes
    
    
    110,000
    
    
    
    110,000Bank loans
    
    
    100,000
    
    
    
    300,000$
    460,000
    
    
    $
    660,000
 14




---



##### Table of Contents



NOTE 4 CURRENT DEBT (CONTINUED)
 2004 Notes
  12% Convertible Promissory Notes
  Bank Loans
  NOTE 5 LONG-TERM DEBT
  December 31,
    
    
    September 30,2009
    
    
    20108% Convertible Notes
    
    $
    773,000
    
    
    $
    8% Subordinated Convertible Promissory Notes
    
    
    278,000
    
    
    
    2,226,000Bank loans
    
    
    200,000
    
    
    
    Balance
    
    $
    1,251,000
    
    
    $
    2,226,000
 8% Convertible Notes
   December 31,
    
    
    September 30,2009
    
    
    20108% Notes sold
    
    $
    2,671,000
    
    
    $
    2,671,0008% Notes converted
    
    
    (1,574,000
    )
    
    
    (2,671,000
    )1,097,000
    
    
    
    Unamortized discount
    
    
    (324,000
    )
    
    
    Balance
    
    $
    773,000
    
    
    $
    
  15




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##### Table of Contents



NOTE 5 LONG-TERM DEBT (CONTINUED)
  8% Subordinated Convertible Notes
     December 31,
    
    
    September 30,2009
    
    
    20108% Subordinated Notes sold
    
    $
    903,000
    
    
    $
    5,273,000Unamortized discount
    
    
    (625,000
    )
    
    
    (3,047,000
    )Balance
    
    $
    278,000
    
    
    $
    2,226,000
  NOTE 6  PREFERRED STOCK
   16




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##### Table of Contents



NOTE 6  PREFERRED STOCK (CONTINUED)
       NOTE 7  STOCKHOLDERS EQUITY
   17




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##### Table of Contents



NOTE 7  STOCKHOLDERS EQUITY (CONTINUED)
   18




---



##### Table of Contents



NOTE 7  STOCKHOLDERS EQUITY (CONTINUED)
 Shares Under
    
    
    Weighted-AverageWarrants
    
    
    Exercise PriceBalance at inception
    
    
    
    
    
    $
    Granted in connection with stock sold
    
    
    148,000
    
    
    
    1.00Exercised
    
    
    
    
    
    
    Outstanding at December 31, 2000
    
    
    148,000
    
    
    
    1.00Granted to employees and others
    
    
    900,000
    
    
    
    0.67Exercised
    
    
    
    
    
    
    Exercisable at December 31, 2001
    
    
    1,048,000
    
    
    
    0.72Granted to employees and others
    
    
    1,270,252
    
    
    
    1.09Exercised
    
    
    (750
    )
    
    
    Exercisable at December 31, 2002
    
    
    2,317,502
    
    
    
    0.92Granted to employees and others
    
    
    1,520,332
    
    
    
    1.14Exercised
    
    
    (750
    )
    
    
    Exercisable at December 31, 2003
    
    
    3,837,084
    
    
    
    1.01Granted to employees and others
    
    
    126,200
    
    
    
    0.93Exercised
    
    
    
    
    
    
    Exercisable at December 31, 2004
    
    
    3,963,284
    
    
    
    1.01Granted to employees and others
    
    
    595,180
    
    
    
    1.21Exercised
    
    
    (101,750
    )
    
    
    Exercisable at December 31, 2005
    
    
    4,456,714
    
    
    
    1.06Granted to employees and others
    
    
    70,000
    
    
    
    2.50Exercised
    
    
    (398,000
    )
    
    
    Exercisable at December 31, 2006
    
    
    4,128,714
    
    
    
    1.09Granted to employees and others
    
    
    470,500
    
    
    
    1.00Exercised
    
    
    (3,469,908
    )
    
    
    Exercisable at December 31, 2007
    
    
    1,129,306
    
    
    
    1.96Granted to employees and others
    
    
    9,976,707
    
    
    
    0.85Exercised
    
    
    
    
    
    
    Exercisable at December 31, 2008
    
    
    11,106,013
    
    
    
    0.96Granted to employees and others
    
    
    1,941,823
    
    
    
    0.90Exercised
    
    
    (624,494
    )
    
    
    0.09Exercisable at December 31, 2009
    
    
    12,423,342
    
    
    
    0.98Granted to employees and others
    
    
    5,968,252
    
    
    
    1.00Expired
    
    
    (62,492
    )
    
    
    2.50Exercised
    
    
    (25,000
    )
    
    
    0.01Exercisable at September 30, 2010
    
    
    18,304,102
    
    
    
    0.98
  19




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##### Table of Contents



NOTE 7  STOCKHOLDERS EQUITY (CONTINUED)
  AverageYear of
    
    
    
    
    
    exerciseexpiration
    

Quantity
    

price2011
    
    
    580,414
    
    
    $
    2.442013
    
    
    9,128,463
    
    
    $
    0.952014
    
    
    2,991,973
    
    
    $
    0.952015
    
    
    5,218,252
    
    
    $
    1.002016
    
    
    10,000
    
    
    $
    1.252017
    
    
    375,000
    
    
    $
    1.00
 NOTE 8  STOCK OPTION PLANS
    20




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##### Table of Contents



NOTE 8  STOCK OPTION PLANS (CONTINUED)
  Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageNumber
    
    Exercise
    
    Options
    
    Exerciseof Shares
    
    Price
    
    Exercisable
    
    PriceOptions outstanding at inception
    
    
    Granted
    
    
    50,000
    
    
    $
    3.00Outstanding at December 31, 2002
    
    
    50,000
    
    
    
    
    
    
    
    10,000
    
    
    $
    3.00Granted
    
    
    Outstanding at December 31, 2003
    
    
    50,000
    
    
    
    
    
    
    
    30,000
    
    
    $
    3.00Granted
    
    
    1,000
    
    
    $
    3.25Outstanding at December 31, 2004
    
    
    51,000
    
    
    
    
    
    
    
    51,000
    
    
    $
    3.01Granted
    
    
    269,000
    
    
    $
    2.50Cancelled
    
    
    (25,000
    )
    
    $
    2.50Outstanding at December 31, 2005
    
    
    295,000
    
    
    
    
    
    
    
    295,000
    
    
    $
    2.59Granted
    
    
    80,000
    
    
    $
    2.50Cancelled
    
    
    (35,000
    )
    
    $
    2.50Outstanding at December 31, 2006
    
    
    340,000
    
    
    
    
    
    
    
    340,000
    
    
    $
    2.58Granted
    
    
    122,500
    
    
    $
    1.37
    
    
    
    
    
    
    $
    0.78Exercised in cashless exercise
March 30, 2007
    
    
    (340,000
    )
    
    $
    2.58Outstanding at September 30,2010
    
    
    122,500
    
    
    
    
    
    
    
    122,500
    
    
    $
    0.78Reserved for future option
grants at September 30, 2010
    
    
    477,500
   Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageNumber
    
    Exercise
    
    Options
    
    Exerciseof Shares
    
    Price
    
    Exercisable
    
    PriceOptions outstanding at inception
    
    
    Granted
    
    
    417,500
    
    
    $
    0.72
    
    
    
    417,500
    
    
    $
    0.72Outstanding at December 31, 2008
    
    
    417,500
    
    
    
    
    
    
    
    
    
    
    $
    0.72Granted
    
    
    2,150,000
    
    
    $
    0.78
    
    
    
    2,150,000
    
    
    $
    0.78Outstanding at December 31, 2009
    
    
    2,567,500
    
    
    
    
    
    
    
    
    
    
    $
    0.77Granted
    
    
    700,000
    
    
    $
    0.69
    
    
    
    316,667
    
    
    $
    0.70Outstanding at September 30, 2010
    
    
    3,267,500
    
    
    
    
    
    
    
    
    
    
    $
    0.75Reserved for future option
grants at September 30, 2010
    
    
    1,732,500
  21




---



##### Table of Contents



NOTE 8  STOCK OPTION PLANS (CONTINUED)
    NOTE 9  FAIR VALUE OF FINANCIAL INSTRUMENTS
   
    
    Level 1  Valuations for assets and liabilities traded in active exchange markets,
or interest in open-end mutual funds that allow a company to sell its ownership interest
back at net asset value (NAV) on a daily basis. Valuations are obtained from readily
available pricing sources for market transactions involving identical assets, liabilities
or funds.
    
    Level 2  Valuations for assets and liabilities traded in less active dealer, or
broker markets, such as quoted prices for similar assets or liabilities or quoted prices
in markets that are not active.
    
    Level 3  Valuations for assets and liabilities that are derived from other
valuation methodologies, such as option pricing models, discounted cash flow models and
similar techniques, and not based on market exchange, dealer, or broker traded
transactions. Level 3 valuations incorporate certain assumptions and projections in
determining the fair value assigned to such assets or liabilities.
  Recurring Fair Value Measurement Valuation Techniques
  Derivative Financial Instruments
  22




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##### Table of Contents



NOTE 9  FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
 Beneficial
    
    
    BeneficialConversion -
    
    
    Conversion -Warrants
    
    
    Preferred Stock
    
    
    Convertible NotesYear ended December 31, 2009:Risk-free interest rate
    
    
    1.87% - 3.02
    %
    
    
    1.87% - 3.02
    %
    
    
    1.30% - 3.02
    %Expected volatility
    
    
    63
    %
    
    
    63
    %
    
    
    63
    %Expected life (in years)
    
    
    3.25 - 5.00
    
    
    
    3.25 - 5.00
    
    
    
    1.50 - 3.00Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Quarter ended September 30, 2010:Risk-free interest rate
    
    
    1.27
    %
    
    
    1.27
    %
    
    
    0.64
    %Expected volatility
    
    
    63
    %
    
    
    63
    %
    
    
    63
    %Expected life (in years)
    
    
    2.25 - 4.00
    
    
    
    2.25 - 4.00
    
    
    
    2.00 - 2.09Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
  Level 3 Assets and Liabilities
   Quoted prices inactive markets for
    
    
    Significant other
    
    
    Significantidentical labilities
    
    
    observable
    
    
    unobservableFair Value
    
    
    (Level 1)
    
    
    inputs (Level 2)
    
    
    inputs (Level 3)Liabilities:Derivative
financial
instruments 
December 31, 2009
    
    $
    4,414,000
    
    
    $
    
    
    
    $
    
    
    
    $
    4,414,000Derivative
financial
instruments 
September 30, 2010
    
    $
    5,469,000
    
    
    $
    
    
    
    $
    
    
    
    $
    5,469,000
  23




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##### Table of Contents



NOTE 9  FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)
 Beneficial
    
    
    BeneficialConversion -
    
    
    Conversion -preferred
    
    
    convertibleWarrants
    
    
    stock
    
    
    notes
    
    
    TotalBalance, January 1, 2009
    
    $
    1,905,000
    
    
    $
    1,664,000
    
    
    $
    
    
    
    $
    3,569,000Included in earnings (1):Realized loss (gain)
    
    
    
    
    
    
    
    
    
    
    (37,000
    )
    
    
    (37,000
    )Unrealized loss (gain) (2)
    
    
    973,000
    
    
    
    901,000
    
    
    
    (3,000
    )
    
    
    1,871,000Purchases, sales and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements and issuances  net
    
    
    213,000
    
    
    
    233,000
    
    
    
    928,000
    
    
    
    1,374,000Net transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, September 30, 2009
    
    $
    3,091,000
    
    
    $
    2,798,000
    
    
    $
    888,000
    
    
    $
    6,777,000Balance, January 1, 2010
    
    $
    1,871,000
    
    
    $
    1,698,000
    
    
    $
    845,000
    
    
    $
    4,414,000Included in earnings (1):Realized loss (gain)
    
    
    
    
    
    
    (8,000
    )
    
    
    (311,000
    )
    
    
    (319,000
    )Unrealized loss (gain) (2)
    
    
    (234,000
    )
    
    
    (258,000
    )
    
    
    (668,000
    )
    
    
    (1,160,000
    )Purchases, sales and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements and issuances  net
    
    
    
    
    
    
    
    
    
    
    2,534,000
    
    
    
    2,534,000Net transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, September 30, 2010
    
    $
    1,637,000
    
    
    $
    1,432,000
    
    
    $
    2,400,000
    
    
    $
    5,469,000
 
 (1)
    
    Gain included in earnings is reported as gain (loss) on derivative financial instruments.(2)
    
    Total unrealized gain related to Level 3 instruments held. NOTE 10  RELATED PARTY TRANSACTIONS
    NOTE 11  COMMITMENTS AND CONTINGENCIES
  24




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##### Table of Contents



NOTE 12  SUBSEQUENT EVENTS
    25




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Forward-Looking Statements
  Plan of Operations
      26




---



##### Table of Contents



1.
    
    Increasing sales of the PD2i Analyzer to physicians and health care facilities in the
United States through the use of independent sales agents and direct sales personnel.2.
    
    Raising additional capital with which to expand the sales and administrative
infrastructure and fund ongoing operations until our operations generate positive cash flow.3.
    
    Completing various clinical trials and 510(k) submissions to secure additional marketing
claims for the PD2i Analyzer to enhance and accelerate marketing efforts.4.
    
    Initiating international sales of the PD2i Analyzer and PD2i-VS (Vital Sign), including
securing CE Mark Clearance, if required.
  Critical Accounting Estimates
  Research and Development Costs
  Intellectual Property
  Revenue Recognition
     27




---



##### Table of Contents



Accounting for Stock-Based Compensation
  Accounting for Derivative Financial Instruments
  Fair Value of Financial Instruments
   Results of Operations
  Three months ended September 30,2009

    
    2010(UNAUDITED)Revenues
    
    $
    
    
    
    
    0.0
    %
    
    $
    14,000
    
    
    
    -0.7
    %Operating expenses:Cost of sales
    
    
    
    
    
    
    0.0
    %
    
    
    1,000
    
    
    
    0.1
    %Research and development
    
    
    141,000
    
    
    
    5.0
    %
    
    
    161,000
    
    
    
    8.2
    %Selling, general and administrative expenses
    
    
    1,418,000
    
    
    
    50.6
    %
    
    
    1,353,000
    
    
    
    68.5
    %Interest expense
    
    
    1,078,000
    
    
    
    38.4
    %
    
    
    458,000
    
    
    
    23.2
    %Loss from extinguishment of debt
    
    
    167,000
    
    
    
    6.0
    %
    
    
    
    
    
    
    0.0
    %Total operating expenses
    
    
    2,804,000
    
    
    
    100.0
    %
    
    
    1,973,000
    
    
    
    100.0
    %Gain (loss) on derivative financial instruments
    
    
    (1,452,000
    )
    
    
    51.8
    %
    
    
    1,142,000
    
    
    
    -57.9
    %Net loss
    
    
    (4,256,000
    )
    
    
    151.8
    %
    
    
    (817,000
    )
    
    
    41.4
    %Dividends for the benefit of preferred stockholders:Payable on Series A and Series B preferred stock
    
    
    (115,000
    )
    
    
    4.1
    %
    
    
    (105,000
    )
    
    
    5.3
    %Amortization of derivative discount on Series B
preferred stock
    
    
    (408,000
    )
    
    
    14.6
    %
    
    
    (256,000
    )
    
    
    13.0
    %Total dividends for the benefit of preferred stockholders
    
    
    (523,000
    )
    
    
    18.7
    %
    
    
    (361,000
    )
    
    
    18.3
    %Net loss applicable to common stock
    
    $
    (4,779,000
    )
    
    
    170.5
    %
    
    $
    (1,178,000
    )
    
    
    59.7
    %Net loss per common share  basic and dilluted
    
    $
    (0.12
    )
    
    
    
    
    
    $
    (0.03
    )Weighted average number of shares of common shares outstanding
    
    
    38,352,329
    
    
    
    
    
    
    
    45,696,110
 28




---



##### Table of Contents



Nine months ended September 30,2009
    
    2010(UNAUDITED)Revenues
    
    $
    
    
    
    
    0.0
    %
    
    $
    122,000
    
    
    
    -1.9
    %Operating expenses:Cost of sales
    
    
    
    
    
    
    0.0
    %
    
    
    88,000
    
    
    
    1.4
    %Research and development
    
    
    611,000
    
    
    
    12.6
    %
    
    
    511,000
    
    
    
    8.2
    %Selling, general and administrative expenses
    
    
    2,607,000
    
    
    
    53.6
    %
    
    
    4,210,000
    
    
    
    67.1
    %Interest expense
    
    
    1,479,000
    
    
    
    30.4
    %
    
    
    1,461,000
    
    
    
    23.3
    %Loss from extinguishment of debt
    
    
    167,000
    
    
    
    3.4
    %
    
    
    
    
    
    
    0.0
    %Total operating expenses
    
    
    4,864,000
    
    
    
    100.0
    %
    
    
    6,270,000
    
    
    
    100.0
    %Gain (loss) on derivative financial instruments
    
    
    (1,834,000
    )
    
    
    37.7
    %
    
    
    1,479,000
    
    
    
    -23.6
    %Net loss
    
    
    (6,698,000
    )
    
    
    137.7
    %
    
    
    (4,669,000
    )
    
    
    74.5
    %Dividends for the benefit of preferred stockholders:Payable on Series A and Series B preferred stock
    
    
    (319,000
    )
    
    
    6.6
    %
    
    
    (345,000
    )
    
    
    5.5
    %Amortization of derivative discount on Series B
preferred stock
    
    
    (729,000
    )
    
    
    15.0
    %
    
    
    (755,000
    )
    
    
    12.0
    %Total dividends for the benefit of preferred stockholders
    
    
    (1,048,000
    )
    
    
    21.6
    %
    
    
    (1,100,000
    )
    
    
    17.5
    %Net loss applicable to common stock
    
    $
    (7,746,000
    )
    
    
    159.3
    %
    
    $
    (5,769,000
    )
    
    
    92.0
    %Net loss per common share  basic and dilluted
    
    $
    (0.21
    )
    
    
    
    
    
    $
    (0.13
    )Weighted average number of shares of common shares outstanding
    
    
    36,488,985
    
    
    
    
    
    
    
    44,338,061
 Three months ended September 30, 2010 compared to the three months ended September 30, 2009
 Revenues
   Cost of Sales
  Gain (loss) on derivative financial instruments
  Research and Development
 29




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##### Table of Contents



Selling, General and Administrative Expenses
  Interest Expense
  Loss from Extinguishment of Debt
  Nine months ended September 30, 2010 compared to the nine months ended September 30, 2009
 Revenues
   Cost of Sales
  Gain (loss) on derivative financial instruments
  Research and Development
  30




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##### Table of Contents



Selling, General and Administrative Expenses
  Interest Expense
  Liquidity and Capital Resources
     Going Concern
    31




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##### Table of Contents



Off-Balance Sheet Arrangements
  
    
    A retained or contingent interest in assets transferred to the unconsolidated entity or
similar arrangement that serves as credit;
    
    Liquidity or market risk support to such entity for such assets; or
    
    An obligation, including a contingent obligation, arising out of a variable interest in
an unconsolidated entity that is held by, and material to us, where such entity provides
financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging,
or research and development services with us.
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk.
  
 Item 4. Controls and Procedures.
     
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
    
    Issued 334,606 shares of common stock to employees and consultants for services
rendered.
    
    Issued 75,000 options to an employee at an exercise price of $0.61 per share
pursuant to the 2008 Stock Option Plan and 100,000 warrants to a consultant at an
exercise price of 0.60 per share.
    
    Issued 445,583 shares of common stock through the conversion of all the Series A
preferred stock and the conversion of 25,000 shares of Series B preferred stock.
  32




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##### Table of Contents



Item 3. Defaults Upon Senior Securities.
  
 Item 4. Reserved and removed.
  
 Item 5. Other Information.
  
 Item 6. Exhibits
 Exhibit No.
    
    Description3.1
    
    Second Amendment to the Companys Certificate of Designation for Series B Preferred Stock filed with the
Delaware Secretary of State on August 6, 2010 (incorporated by reference to Exhibit 3.2 in the Companys
Form 8-K filed with the SEC on August 11, 2010).31.1
    
    Certification of David H. Fater, Chief Executive Officer, President and Chief Financial Officer pursuant
to Rule 13a-14(a) of the Securities Exchange Act of 1934.*31.2
    
    Certification of Thomas J. Bohannon, Chief Accounting Officer, pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934.*32.1
    
    Certification of David H. Fater, Chief Executive Officer, President and Chief Financial Officer and Thomas
J. Bohannon, Chief Accounting Officer, of Vicor Technologies, Inc., pursuant to 18 U.S.C. 1350.*
 
 *
    
    Filed herewith 33




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##### Table of Contents



SIGNATURES
  Dated: November 12, 2010
    Vicor Technologies, Inc.By:
    /s/ David H. FaterDavid H. FaterChief Executive Officer, President and

Chief Financial OfficerBy:
    /s/ Thomas J. BohannonName:
    Thomas J. BohannonTitle:
    Chief Accounting Officer 34