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 March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from          to
 Commission File Number: 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
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
 APPLICABLE ONLY TO CORPORATE ISSUERS
  o þ




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##### 



VICOR TECHNOLOGIES, INC.
Quarterly Report on Form 10-Q for the Period Ended March 31, 2010
  TABLE OF CONTENTS 
 PagePART I  Financial InformationItem 1. Condensed Consolidated Financial Statements:Condensed Consolidated Balance Sheets as of December 31, 2009 and March 31, 2010 (unaudited)
    
    
    3Condensed Consolidated Statements of Operations for the three months ending March 31, 2009
and 2010 and the period from August 4, 2000 (inception) through March 31, 2010 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the three months ending March 31, 2009
and 2010 and the period from August 4, 2000 (inception) through March 31, 2010 (unaudited)
    
    
    5Condensed Consolidated Statement of Changes in Net Capital Deficiency for the three months
ending March 31, 2010 (unaudited)
    
    
    7Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    21Item 4T. Controls and Procedures
    
    
    22PART II  Other Information
    
    
    22Item 1. Legal Proceedings
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. Removed and Reserved
    
    
    22Item 5. Other Information
    
    
    23Item 6. Exhibits
    
    
    23Signatures
    
    
    23
  2




---



##### 



Vicor Technologies, Inc.
(A Development Stage Company)
 
 Condensed Consolidated Balance Sheets
As of December 31, 2009 and March 31, 2010
(Unaudited)
 March 31,December 31, 2009
    
    
    2010ASSETSCurrent assets:Cash
    
    $
    544,000
    
    
    $
    308,000Accounts receivable
    
    
    
    
    
    
    92,000Inventory
    
    
    
    
    
    
    40,000Prepaid expenses
    
    
    74,000
    
    
    
    81,000Total current assets
    
    
    618,000
    
    
    
    521,000Property and equipment:Equipment
    
    
    35,000
    
    
    
    129,000Furniture and fixtures
    
    
    24,000
    
    
    
    24,000Less accumulated depreciation
    
    
    (38,000
    )
    
    
    (42,000
    )Net property and equipment
    
    
    21,000
    
    
    
    111,000Other assetsDeposits
    
    
    12,000
    
    
    
    16,000Deferred charges
    
    
    168,000
    
    
    
    80,000Intellectual property, net of accumulated amortization of $223,000
and $234,000 at December 31, 2009 and March 31, 2010, respectively
    
    
    229,000
    
    
    
    218,000$
    1,048,000
    
    
    $
    946,000LIABILITIES AND NET CAPITAL DEFICIENCYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    600,000
    
    
    $
    874,000Current debt
    
    
    460,000
    
    
    
    660,000Due to related parties
    
    
    100,000
    
    
    
    100,000Total current liabilities
    
    
    1,160,000
    
    
    
    1,634,000Long-term liabilities:Long-term debt
    
    
    1,251,000
    
    
    
    1,172,000Accrued dividends
    
    
    833,000
    
    
    
    959,000Derivative financial instruments payable in shares of common stock
    
    
    4,414,000
    
    
    
    5,135,000Total long-term liabilities
    
    
    6,498,000
    
    
    
    7,266,000Commitments 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 March 31, 2010, respectively
    
    
    
    
    
    
    Series B Voting Junior Convertible Cumulative, 5,210,101 shares
issued and outstanding at December 31, 2009
and March 31, 2010, respectively
    
    
    
    
    
    
    Common stock, $.0001 par value; 100,000,000 shares authorized;
41,813,959 and 42,933,973 shares issued and outstanding at
December 31, 2009 and March 31, 2010, respectively
    
    
    4,000
    
    
    
    4,000Additional paid-in capital
    
    
    46,848,000
    
    
    
    47,952,000Deficit accumulated during the development stage
    
    
    (53,462,000
    )
    
    
    (55,910,000
    )Net capital deficiency
    
    
    (6,610,000
    )
    
    
    (7,954,000
    )$
    1,048,000
    
    
    $
    946,000
  3




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##### 



Vicor Technologies, Inc.
(A Development Stage Company)
 
 Condensed Consolidated Statements of Operations
For the three months ended March 31, 2009 and 2010 and
For the period from August 4, 2000 (inception) to March 31, 2010
(Unaudited)
 Period fromAugust 4, 2000Three months ended
    
    
    Three months ended
    
    
    (Inception) toMarch 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2010
    
    
    2010Revenues
    
    $
    
    
    
    $
    100,000
    
    
    $
    944,000Operating expenses:Cost of sales
    
    
    
    
    
    
    85,000
    
    
    
    85,000Research and development
    
    
    199,000
    
    
    
    157,000
    
    
    
    15,184,000Selling, general and administrative expenses
    
    
    590,000
    
    
    
    1,457,000
    
    
    
    31,259,000Interest expense
    
    
    63,000
    
    
    
    357,000
    
    
    
    9,043,000Total operating expenses
    
    
    852,000
    
    
    
    2,056,000
    
    
    
    55,571,000Gain
(loss) on derivative
financial instruments
    
    
    (294,000
    )
    
    
    (117,000
    )
    
    
    2,040,000Net loss
    
    
    (1,146,000
    )
    
    
    (2,073,000
    )
    
    
    (52,587,000
    )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
    
    
    (101,000
    )
    
    
    (126,000
    )
    
    
    (1,039,000
    )Amortization of derivative discount on Series B
preferred stock
    
    
    (228,000
    )
    
    
    (249,000
    )
    
    
    (1,228,000
    )Value of warrants issued in connection with sales of
Series B preferred stock
    
    
    
    
    
    
    
    
    
    
    (1,536,000
    )Total dividends for the benefit of preferred stockholders
    
    
    (329,000
    )
    
    
    (375,000
    )
    
    
    (3,803,000
    )Net loss applicable to common stock
    
    $
    (1,475,000
    )
    
    $
    (2,448,000
    )
    
    $
    (55,910,000
    )Net loss per common share  basic and diluted
    
    $
    (0.04
    )
    
    $
    (0.06
    )Weighted average number of shares of common shares outstanding
    
    
    35,010,142
    
    
    
    42,425,945
  4




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##### 



Vicor Technologies, Inc.
(A Development Stage Company)
 
 Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2009 and 2010 and
For the period from August 4, 2000 (inception) to March 31, 2010
(Unaudited)
 Period fromThree months
    
    
    Three months
    
    
    August 4, 2000ended
    
    
    ended
    
    
    (Inception) toMarch 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    2010
    
    
    2010Cash flows from operating activities:Net loss
    
    $
    (1,146,000
    )
    
    $
    (2,073,000
    )
    
    $
    (52,587,000
    )Adjustment to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    12,000
    
    
    
    15,000
    
    
    
    338,000Noncash interest imputed upon conversion of debt
to equity
    
    
    32,000
    
    
    
    
    
    
    
    5,620,000Noncash interest from deferred financing costs and
debt-based derivative liabilities
    
    
    
    
    
    
    371,000
    
    
    
    2,692,000Gain (loss) on derivative financial instruments
    
    
    294,000
    
    
    
    117,000
    
    
    
    (2,040,000
    )Loss from sale of assets
    
    
    
    
    
    
    
    
    
    
    48,000Securities issued for services
    
    
    7,000
    
    
    
    29,000
    
    
    
    1,170,000Beneficial conversion feature of notes payable
    
    
    
    
    
    
    10,000
    
    
    
    211,000Contributed research and development services
    
    
    
    
    
    
    
    
    
    
    95,000Merger-related costs
    
    
    
    
    
    
    
    
    
    
    523,000Shares in lieu of interest payments
    
    
    6,000
    
    
    
    1,000
    
    
    
    381,000Equity-based compensation
    
    
    142,000
    
    
    
    286,000
    
    
    
    18,951,000Changes in assets and liabilities:Accounts receivable
    
    
    
    
    
    
    (92,000
    )
    
    
    (92,000
    )Inventory
    
    
    
    
    
    
    (40,000
    )
    
    
    (40,000
    )Prepaid expenses and other assets
    
    
    (20,000
    )
    
    
    (11,000
    )
    
    
    (434,000
    )Accounts payable and accrued expenses
    
    
    170,000
    
    
    
    274,000
    
    
    
    1,847,000Net cash used in operating activities
    
    
    (503,000
    )
    
    
    (1,113,000
    )
    
    
    (23,317,000
    )Cash flows from investing activities:Purchase of intellectual property
    
    
    
    
    
    
    
    
    
    
    (237,000
    )Net proceeds from sale of equipment
    
    
    
    
    
    
    
    
    
    
    59,000Purchase of property and equipment
    
    
    
    
    
    
    (93,000
    )
    
    
    (270,000
    )Net cash used in investing activities
    
    
    
    
    
    
    (93,000
    )
    
    
    (448,000
    )Cash flows from financing activities:Due to related parties
    
    
    
    
    
    
    
    
    
    
    100,000Proceeds from bank loans
    
    
    
    
    
    
    
    
    
    
    300,000Proceeds from sale of preferred stock
    
    
    261,000
    
    
    
    
    
    
    
    2,915,000Proceeds from sale of common stock
    
    
    128,000
    
    
    
    
    
    
    
    11,268,000Repayment of notes
    
    
    
    
    
    
    
    
    
    
    (905,000
    )Proceeds from bridge loan
    
    
    200,000
    
    
    
    
    
    
    
    300,000Proceeds from sale of notes
    
    
    
    
    
    
    970,000
    
    
    
    9,901,000Proceeds for stock to be issued
    
    
    
    
    
    
    
    
    
    
    16,000Contributed capital
    
    
    
    
    
    
    
    
    
    
    178,000Net cash provided by financing activities
    
    
    589,000
    
    
    
    970,000
    
    
    
    24,073,000Net increase (decrease) in cash
    
    
    86,000
    
    
    
    (236,000
    )
    
    
    308,000Cash at beginning of period
    
    
    182,000
    
    
    
    544,000
    
    
    
    Cash at end of period
    
    $
    268,000
    
    
    $
    308,000
    
    
    $
    308,000
  5




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##### 



Vicor Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2009 and 2010 and
From August 4, 2000 (inception) to March 31, 2010
(Unaudited)
 Period fromThree months
    
    
    Three months
    
    
    August 4, 2000ended
    
    
    ended
    
    
    (Inception) toMarch 31,
    
    
    March 31,
    
    
    March 31,2009
    
    
    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
    
    
    
    
    
    
    134,000
    
    
    
    251,000Cash paid for interest expense
    
    
    23,000
    
    
    
    18,000
    
    
    
    977,000Accrued equity-based compensation
    
    
    
    
    
    
    
    
    
    
    41,000Accrued dividends
    
    
    101,000
    
    
    
    126,000
    
    
    
    2,509,000Interest 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
    
    
    40,000
    
    
    
    404,000
    
    
    
    5,013,000Accrued 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
    
    
    366,000
    
    
    
    
    
    
    
    816,000Fair value of debt-based derivative financial instruments issued
    
    
    
    
    
    
    
    
    
    
    1,046,000Deferred costs paid with common stock
    
    
    
    
    
    
    
    
    
    
    358,000Derivative discount on Series B preferred stock
    
    
    
    
    
    
    
    
    
    
    341,000Conversion of Series B preferred stock and accrued dividends to common stock
    
    
    
    
    
    
    
    
    
    
    82,000
  6




---



##### 



Vicor Technologies, Inc.  (A Development Stage Company)
 
 Condensed Consolidated Statements of Changes in Net Capital Deficiency
For the three months ended March 31, 2010
(Unaudited)
 StockPreferred Stock
    
    
    Additional
    
    
    Subscrip-Common Stock
    
    
    Class A
    
    
    Class B
    
    
    Paid-in
    
    
    tions in
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Process
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (126,000
    )
    
    
    (126,000
    )Issuance of stock for interest payments
    
    
    1,092
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    
    
    
    
    1,000Issuance of stock for services
    
    
    193,998
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    136,000
    
    
    
    
    
    
    
    
    
    
    
    136,000Issuance of stock options for services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179,000
    
    
    
    
    
    
    
    
    
    
    
    179,000Issuance of stock for conversion of
notes payable
    
    
    899,924
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    404,000
    
    
    
    
    
    
    
    
    
    
    
    404,000Warrants issued related to notes
payable transactions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,000
    
    
    
    
    
    
    
    
    
    
    
    135,000Issuance of common stock for exercise
of warrants
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of discounts related to
derivative financial instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249,000
    
    
    
    
    
    
    
    (249,000
    )
    
    
    Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,073,000
    )
    
    
    (2,073,000
    )Balance at March 31,2010
    
    
    42,933,973
    
    
    $
    4,000
    
    
    
    157,592
    
    
    $
    
    
    
    
    5,210,101
    
    
    $
    
    
    
    $
    47,952,000
    
    
    $
    
    
    
    $
    (55,910,000
    )
    
    $
    (7,954,000
    )
  7




---



##### 



NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
 Organization
   Nature of the business
 ® ® ® ® ®
   Risks
  8




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##### 



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
  9




---



##### 



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION,
CONTINUED
    Cumulative Effect of a Change in Accounting Principle
   Concentration of Credit Risk
  10




---



##### 



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION, CONTINUED
  Inventory
  Property and Equipment
  Research and Development Costs
  Revenue Recognition
    Cash and Cash Equivalents
  Intellectual Property
  11




---



##### 



NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION, CONTINUED
 December 31,
    
    
    March 31,2009
    
    
    2010Patents
    
    $
    252,000
    
    
    $
    252,000Purchased software
    
    
    200,000
    
    
    
    200,000452,000
    
    
    
    452,000Less accumulated amortization
    
    
    (223,000
    )
    
    
    (234,000
    )Net intellectual property
    
    $
    229,000
    
    
    $
    218,000
  Use of Estimates
  Accounting for Stock-Based Compensation
   Financial Instruments
  Long-Lived Assets
  Recent
Accounting Pronouncements
  12




---



##### 



NOTE 4 CURRENT DEBT
  December 31,
    
    
    March 31,2009
    
    
    20102004 Notes
    
    $
    250,000
    
    
    $
    250,00012% Convertible Promissory Notes
    
    
    110,000
    
    
    
    110,000Bank loans
    
    
    100,000
    
    
    
    300,000$
    460,000
    
    
    $
    660,000
 2004 Notes
  12% Convertible Promissory Notes
  Bank Loans
  NOTE 5 LONG-TERM DEBT
  December 31,
    
    
    March 31,2009
    
    
    20108% Convertible Notes
    
    $
    773,000
    
    
    $
    560,0008% Subordinated Convertible  Notes
    
    
    278,000
    
    
    
    612,000Bank loans
    
    
    200,000
    
    
    
    Balance
    
    $
    1,251,000
    
    
    $
    1,172,000
 8% Convertible Notes
   13




---



##### 



NOTE 5 LONG-TERM DEBT, CONTINUED
 December 31,
    
    
    March 31,2009
    
    
    20108% Notes sold
    
    $
    2,671,000
    
    
    $
    2,671,0008% Notes converted
    
    
    (1,574,000
    )
    
    
    (1,978,000
    )1,097,000
    
    
    
    693,000Unamortized discount
    
    
    (324,000
    )
    
    
    (133,000
    )Balance
    
    $
    773,000
    
    
    $
    560,000
 8% Subordinated Convertible  Notes
    December 31,
    
    
    March 31,2009
    
    
    20108% Subordinated Notes sold
    
    $
    903,000
    
    
    $
    1,873,000Unamortized discount
    
    
    (625,000
    )
    
    
    (1,261,000
    )Balance
    
    $
    278,000
    
    
    $
    612,000
 NOTE 6  OUTSTANDING COMMON STOCK PURCHASE WARRANTS AND OPTIONS
   
    
    25,000 shares of common stock were issued upon the exercise of 25,000 warrants at an
exercise price of $0.01 per share.
    
    475,000 options were issued to employees and consultants at exercise prices ranging
from $.65 per share to $.71 per share pursuant to the 2008 Stock Option Plan. The options
vest ratably over a 12-month period and expire 7 years after the grant date.
    
    1,462,500 warrants to purchase common stock were issued in connection with the sale of
8% Subordinated Notes. The warrants are immediately exercisable at $1.00 per share and have
a five-year term.
 14




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##### 



NOTE 7  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
  15




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##### 



NOTE 7  FAIR VALUE OF FINANCIAL INSTRUMENTS, CONTINUED
 December 31, 2009
    
    March 31, 2010Conversion feature:Risk-free interest rate
    
    
    1.4% - 3.0
    %
    
    
    0.84% - 2.55
    %Expected volatility
    
    
    63
    %
    
    
    63
    %Expected life (in years)
    
    
    2 - 5
    
    
    
    2 - 5Expected dividend yield
    
    
    0
    %
    
    
    0
    %Warrants:Risk-free interest rate
    
    
    1.4% - 3.0
    %
    
    
    2.55
    %Expected volatility
    
    
    63
    %
    
    
    63
    %Expected life (in years)
    
    
    5
    
    
    
    5Expected dividend yield
    
    
    0
    %
    
    
    0
    %Fair value:Conversion feature
    
    $
    2,550,000
    
    
    $
    3,093,000Warrants
    
    $
    1,864,000
    
    
    $
    2,042,000
  Level 3 Assets and Liabilities
   Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableLiabilities
    
    
    Inputs
    
    
    InputsFair Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Liabilities:Derivative financial instruments
    
    $
    5,135,000
    
    
    $
    
    
    
    $
    
    
    
    $
    5,135,000
  Balance, January 1, 2010
    
    $
    (4,414,000
    )Included in earnings as gain (loss) (1):Realized
    
    
    112,000Unrealized (2)
    
    
    (229,000
    )Purchases, sales, and other
    
    
    (604,000
    )Settlements and issuances  net
    
    
    Net transfers in and/or out of Level 3
    
    
    Balance, March 31, 2010
    
    $
    (5,135,000
    )
 
 (1)
    
    Gain included in earnings is reported as gain (loss) on derivative financial
instruments.(2)
    
    Total unrealized loss related to Level 3 instruments held at March 31, 2010. 16




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##### 



NOTE 8  RELATED PARTY TRANSACTIONS
    NOTE 9  RETIREMENT PLAN
  NOTE 10 SUBSEQUENT EVENTS
   17




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Forward-Looking Statements
  Plan of Operations
   1.
    
    Continued and increased sales of the PD2i Analyzer to physicians in the United States
through the use of independent distributors 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) submission(s) 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
  18




---



##### 



Intellectual Property
  Revenue Recognition
  Accounting for Stock-Based Compensation
  Accounting for Derivative Financial Instruments
  Fair Value of Financial Instruments
   19




---



##### 



Results of Operations
  Three months ended March 31,
    
    
    
    
    
    
    Inception to March 312009
    
    
    
    
    
    
    2010
    
    
    
    
    
    
    2010(UNAUDITED)
    
    
    
    
    
    
    (UNAUDITED)Revenues
    
    $
    
    
    
    
    0.0
    %
    
    $
    100,000
    
    
    
    4.9
    %
    
    $
    944,000
    
    
    
    1.7
    %Operating expenses:Cost of sales
    
    
    
    
    
    
    0.0
    %
    
    
    85,000
    
    
    
    4.1
    %
    
    
    85,000.00
    
    
    
    0.2
    %Research and development
    
    
    199,000
    
    
    
    23.4
    %
    
    
    157,000
    
    
    
    7.6
    %
    
    
    15,184,000
    
    
    
    27.3
    %General and administrative expenses
    
    
    590,000
    
    
    
    69.2
    %
    
    
    1,457,000
    
    
    
    70.9
    %
    
    
    31,259,000
    
    
    
    56.2
    %Interest expense
    
    
    63,000
    
    
    
    7.4
    %
    
    
    357,000
    
    
    
    17.4
    %
    
    
    9,043,000
    
    
    
    16.3
    %Total operating expenses
    
    
    852,000
    
    
    
    100.0
    %
    
    
    2,056,000
    
    
    
    100.0
    %
    
    
    55,571,000
    
    
    
    100.0
    %Unrealized gain (loss) on derivative financial instruments
    
    
    (294,000
    )
    
    
    -34.5
    %
    
    
    (117,000
    )
    
    
    -5.7
    %
    
    
    2,040,000
    
    
    
    3.7
    %Net loss
    
    
    (1,146,000
    )
    
    
    -134.5
    %
    
    
    (2,073,000
    )
    
    
    -100.8
    %
    
    
    (52,587,000
    )
    
    
    -94.6
    %Cumulative effect of change in accounting principal
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    480,000
    
    
    
    0.9
    %Dividends for the benefit of preferred stockholders:Payable on Series A and Series B preferred stock
    
    
    (101,000
    )
    
    
    -11.9
    %
    
    
    (126,000
    )
    
    
    -6.1
    %
    
    
    (1,039,000
    )
    
    
    -1.9
    %Amortization of derivative discount on Series B
preferred stock
    
    
    (228,000
    )
    
    
    -26.8
    %
    
    
    (249,000
    )
    
    
    -12.1
    %
    
    
    (249,000
    )
    
    
    -0.4
    %Value of warrants issued in connection with sales of
Series B preferred stock
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    (1,536,000
    )
    
    
    -2.8
    %Total dividends for the benefit of preferred stock holders
    
    
    (329,000
    )
    
    
    -38.7
    %
    
    
    (375,000
    )
    
    
    -18.2
    %
    
    
    (3,803,000
    )
    
    
    -5.1
    %Net loss applicable to common stock
    
    $
    (1,475,000
    )
    
    
    -173.2
    %
    
    $
    (2,448,000
    )
    
    
    -119.0
    %
    
    $
    (55,910,000
    )
    
    
    -98.8
    %Net loss per common share  basic and diluted
    
    $
    (0.04
    )
    
    
    
    
    
    $
    (0.06
    )Weighted average number of shares of common shares outstanding
    
    
    35,010,142
    
    
    
    
    
    
    
    42,425,945
 Three months ended March 31, 2010 compared to the three months ended March 31, 2009
 Revenues
  Cost
of  Sales
  Research and Development
  Selling, General and Administrative Expenses
  20




---



##### 



Interest Expense
  Liquidity and Capital Resources
     Going Concern
    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.
  21




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##### 



Item 4T. Controls and Procedures.
     
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
    
    Issued 295,753 shares of common stock valued at $207,015 to employees and consultants
for services rendered.
    
    Issued 475,000 options to employees and consultants at exercise prices ranging from
$.65 per share to $.71 per share pursuant to the 2008 Stock Option Plan. The options vest
ratably over a 12-month period and expire 7 years after the grant date.
    
    Issued 25,000 shares of common stock upon the exercise of 25,000 warrants at an
exercise price of $0.01 per share.
    
    Issued 899,924 shares of common stock related to the conversion of $404,194 principal
amount of 8% Notes.
    
    Sold 970,000 units consisting of $970,000 principal amount of 8% Subordinated Notes
with 1,462,500 warrants to purchase common stock. The warrants are immediately exercisable
at $1.00 per share and have a five-year term.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Removed and Reserved.
  22




---



##### 



Item 5. Other Information.
  
 Item 6. Exhibits
 Exhibit No.
    
    Description10.1
    
    Form of 8% Subordinated Convertible Note*10.2
    
    Employment Agreement dated January 1, 2009 between Vicor Technologies, Inc. and Jerry Anchin*10.3
    
    Employment agreement dated January 1, 2009 between Victor Technologies, Inc. and James Skinner*31.1
    
    Certification of David H. Fater, Chief Executive Officer, President and Chief Financial Officerpursuant 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) ofthe Securities Exchange Act of 1934.*32.1
    
    Certification of David H. Fater, Chief Executive Officer, President and Chief Financial Officerand Thomas J. Bohannon, Chief Accounting Officer, of Vicor Technologies, Inc., pursuant to 18U.S.C. 1350.*
 
 *
    
    Filed herewith 
 SIGNATURES
  Dated: May 11, 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 23