##### 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 March 31, 2011
 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
(State or other jurisdiction of 
incorporation or organization)
    
    20-2903491
(I.R.S. Employer
Identification No.)2300 NW Corporate Boulevard, Suite 123, Boca Raton,
Florida
(Address of principal executive office)
    
    33431
(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 March 31, 2011
  TABLE OF CONTENTS 
 PagePART I  Financial InformationItem 1. Condensed Consolidated Financial Statements:Condensed Consolidated Balance Sheets as of December 31, 2010 and March 31, 2011 (unaudited)
    
    3Condensed Consolidated Statements of Operations for the three months ended March 31, 2010
and 2011 and the period from August 4, 2000 (inception) through March 31, 2011 (unaudited)
    
    4Condensed Consolidated Statement of Changes in Net Capital Deficiency for the three months
ended March 31, 2011 (unaudited)
    
    5Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2010
and March 31, 2011 and the period from August 4, 2000 (inception) through March 31, 2011
(unaudited)
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    16Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    21Item 4. Controls and Procedures
    
    21PART II  Other InformationItem 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
    
    22Item 6. Exhibits
    
    22Signatures
    
    23EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



Vicor Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Balance Sheets
December 31, 2010 and March 31, 2011
(Unaudited)
 December 31,2010
    
    
    March 31, 2011ASSETSCurrent assets:Cash
    
    $
    1,119,000
    
    
    $
    121,000Accounts receivable
    
    
    58,000
    
    
    
    123,000Inventory
    
    
    58,000
    
    
    
    34,000Prepaid expenses
    
    
    411,000
    
    
    
    521,000Total current assets
    
    
    1,646,000
    
    
    
    799,000Property and equipment:Equipment
    
    
    213,000
    
    
    
    235,000Furniture and fixtures
    
    
    24,000
    
    
    
    24,000Less accumulated depreciation
    
    
    (82,000
    )
    
    
    (104,000
    )Net property and equipment
    
    
    155,000
    
    
    
    155,000Other assets:Deposits
    
    
    18,000
    
    
    
    18,000Deferred financing costs
    
    
    8,076,000
    
    
    
    7,067,000Intellectual property, net of accumulated amortization of $260,000 and
$272,000 at December 31, 2010 and March 31, 2011, respectively
    
    
    192,000
    
    
    
    205,000$
    10,087,000
    
    
    $
    8,244,000LIABILITIES AND NET CAPITAL DEFICIENCYCurrent liabilities:Accounts payable and accrued expenses
    
    $
    1,166,000
    
    
    $
    1,654,000Current debt
    
    
    360,000
    
    
    
    560,000Due to related party
    
    
    88,000
    
    
    
    113,000Total current liabilities
    
    
    1,614,000
    
    
    
    2,327,000Long-term liabilities:Long-term debt
    
    
    8,277,000
    
    
    
    8,077,000Accrued dividends
    
    
    932,000
    
    
    
    1,047,000Derivative financial instruments payable in shares of common stock
    
    
    7,692,000
    
    
    
    4,481,000Total long-term liabilities
    
    
    16,901,000
    
    
    
    13,605,000Commitments and contingenciesNet capital deficiency:Preferred stock, $.0001 par value; 25,000,000 shares
authorized: Series B Voting Junior Convertible Cumulative, 5,185,101 shares issued and
outstanding at December 31, 2010 and March 31,2011; preference in liquidation
of $5,795,000 and $5,902,000 at December 31, 2010 and March 31, 2011,
respectively
    
    
    
    
    
    
    Common stock, $.0001 par value; 150,000,000 shares authorized; 46,799,324 and 47,038,864
shares issued and outstanding at December 31, 2010 and March 31, 2011, respectively
    
    
    5,000
    
    
    
    5,000Additional paid-in capital
    
    
    51,275,000
    
    
    
    51,692,000Deficit accumulated during the development stage
    
    
    (59,708,000
    )
    
    
    (59,385,000
    )Net capital deficiency
    
    
    (8,428,000
    )
    
    
    (7,688,000
    )$
    10,087,000
    
    
    $
    8,244,000
  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 March 31, 2010 and 2011 and
For the period from August 4, 2000 (inception) to March 31, 2011
(Unaudited)
 Period fromAugust 4,Three
    
    
    Three
    
    
    2000months
    
    
    months
    
    
    (Inception) toended March
    
    
    ended March
    
    
    March 31,31, 2010
    
    
    31, 2011
    
    
    2011Revenue:Sales
    
    $
    100,000
    
    
    $
    159,000
    
    
    $
    344,000Leases
    
    
    
    
    
    
    9,000
    
    
    
    13,000Grants and other
    
    
    
    
    
    
    
    
    
    
    844,000100,000
    
    
    
    168,000
    
    
    
    1,201,000Cost of revenue
    
    
    85,000
    
    
    
    84,000
    
    
    
    215,000Gross profit
    
    
    15,000
    
    
    
    84,000
    
    
    
    986,000Operating expenses:Research and development
    
    
    157,000
    
    
    
    122,000
    
    
    
    15,787,000Selling, general and administrative
    
    
    1,369,000
    
    
    
    1,455,000
    
    
    
    36,493,000Interest
    
    
    445,000
    
    
    
    1,031,000
    
    
    
    11,432,000Loss from extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    1,266,000Total operating expenses
    
    
    1,971,000
    
    
    
    2,608,000
    
    
    
    64,978,000(1,956,000
    )
    
    
    (2,524,000
    )
    
    
    (63,992,000
    )Gain (loss) on derivative financial instruments:Realized
    
    
    111,000
    
    
    
    
    
    
    
    1,401,000Unrealized
    
    
    (228,000
    )
    
    
    3,211,000
    
    
    
    7,958,000(117,000
    )
    
    
    3,211,000
    
    
    
    9,359,000Net income (loss)
    
    
    (2,073,000
    )
    
    
    687,000
    
    
    
    (54,633,000
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    480,000Dividends for the benefit of preferred stockholders:Payable on Series A and Series B preferred stock
    
    
    (126,000
    )
    
    
    (115,000
    )
    
    
    (1,464,000
    )Amortization of derivative discount on Series B
preferred stock
    
    
    (249,000
    )
    
    
    (249,000
    )
    
    
    (2,232,000
    )Value of warrants issued in connection with sales of Series B preferred stock
    
    
    
    
    
    
    
    
    
    
    (1,536,000
    )Total dividends for the benefit of preferred stockholders
    
    
    (375,000
    )
    
    
    (364,000
    )
    
    
    (5,232,000
    )Net income (loss) applicable to common stock
    
    $
    (2,448,000
    )
    
    $
    323,000
    
    
    $
    (59,385,000
    )Net income (loss) per common share  basic and diluted
    
    $
    (0.06
    )
    
    $
    0.01Weighted average number of shares of common shares outstanding
    
    
    42,425,945
    
    
    
    46,957,274
  4




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##### Table of Contents



Vicor Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statement of Changes in Net Capital Deficiency
For the three months ended March 31, 2011
(Unaudited)
 Common Stock
    
    
    Preferred Stock  Class B
    
    
    Additional
    
    
    AccumulatedShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Paid-In Capital
    
    
    Deficit
    
    
    TotalBalance at December 31, 2010
    
    
    46,799,324
    
    
    
    5,000
    
    
    
    5,185,101
    
    
    
    
    
    
    
    51,275,000
    
    
    
    (59,708,000
    )
    
    
    (8,428,000
    )Accrued dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (115,000
    )
    
    
    (115,000
    )Issuance of stock for interest payments
    
    
    728
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of stock for consulting
    
    
    1,786
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,000
    
    
    
    
    
    
    
    1,000Equity-based compensation
    
    
    237,026
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    153,000
    
    
    
    
    
    
    
    153,000Issuance of warrants for consulting
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,000
    
    
    
    
    
    
    
    14,000Amortization of derivative discounts on Series B
preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    249,000
    
    
    
    (249,000
    )
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    687,000
    
    
    
    687,000Balance at March 31, 2011
    
    
    47,038,864
    
    
    $
    5,000
    
    
    
    5,185,101
    
    
    $
    
    
    
    $
    51,692,000
    
    
    $
    (59,385,000
    )
    
    $
    (7,688,000
    )
  5




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##### Table of Contents



Vicor Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2010 and 2011 and
For the period from August 4, 2000 (inception) to March 31, 2011
(Unaudited)
 Period fromAugust 4, 2000Three months
    
    
    Three months
    
    
    (Inception) toended March
    
    
    ended March
    
    
    March 31,31, 2010
    
    
    31, 2011
    
    
    2011Cash flows from operating activities:Net income (loss)
    
    $
    (2,073,000
    )
    
    $
    687,000
    
    
    $
    (54,633,000
    )Adjustments to reconcile net loss to net cash used in operating
activities:Depreciation and amortization
    
    
    15,000
    
    
    
    34,000
    
    
    
    438,000Noncash interest imputed upon conversion of debt
to equity
    
    
    
    
    
    
    
    
    
    
    5,620,000Noncash interest and amortization of deferred financing costs
    
    
    371,000
    
    
    
    1,009,000
    
    
    
    5,095,000Loss (gain) on derivative financial instruments
    
    
    117,000
    
    
    
    (3,211,000
    )
    
    
    (9,359,000
    )Loss from sale of assets
    
    
    
    
    
    
    
    
    
    
    48,000Securities issued for services
    
    
    29,000
    
    
    
    15,000
    
    
    
    1,959,000Beneficial conversion feature of notes payable
    
    
    10,000
    
    
    
    
    
    
    
    303,000Contributed research and development services
    
    
    
    
    
    
    
    
    
    
    95,000Merger-related costs
    
    
    
    
    
    
    
    
    
    
    523,000Shares in lieu of interest payments
    
    
    1,000
    
    
    
    
    
    
    
    387,000Equity-based compensation
    
    
    286,000
    
    
    
    153,000
    
    
    
    19,502,000Changes in assets and liabilities:Accounts receivable
    
    
    (92,000
    )
    
    
    (65,000
    )
    
    
    (123,000
    )Inventory
    
    
    (40,000
    )
    
    
    24,000
    
    
    
    (34,000
    )Prepaid expenses and other assets
    
    
    (11,000
    )
    
    
    (110,000
    )
    
    
    (2,008,000
    )Accounts payable and accrued expenses
    
    
    274,000
    
    
    
    488,000
    
    
    
    3,389,000Accrued royalties due to related party
    
    
    
    
    
    
    43,000
    
    
    
    43,000Net cash used in operating activities
    
    
    (1,113,000
    )
    
    
    (933,000
    )
    
    
    (28,755,000
    )Cash flows from investing activities:Purchase of intellectual property
    
    
    
    
    
    
    (25,000
    )
    
    
    (262,000
    )Net proceeds from sale of equipment
    
    
    
    
    
    
    
    
    
    
    59,000Purchase of property and equipment
    
    
    (93,000
    )
    
    
    (22,000
    )
    
    
    (377,000
    )Net cash used in investing activities
    
    
    (93,000
    )
    
    
    (47,000
    )
    
    
    (580,000
    )Cash flows from financing activities:Advances from (payments to) related parties
    
    
    
    
    
    
    (18,000
    )
    
    
    82,000Proceeds from bank loans
    
    
    
    
    
    
    
    
    
    
    300,000Proceeds from sale of preferred stock
    
    
    
    
    
    
    
    
    
    
    2,915,000Proceeds from sale of common stock
    
    
    
    
    
    
    
    
    
    
    11,268,000Repayment of notes
    
    
    
    
    
    
    
    
    
    
    (1,005,000
    )Proceeds from bridge loan
    
    
    
    
    
    
    
    
    
    
    300,000Proceeds from sale of notes
    
    
    970,000
    
    
    
    
    
    
    
    15,402,000Proceeds for stock to be issued
    
    
    
    
    
    
    
    
    
    
    16,000Contributed capital
    
    
    
    
    
    
    
    
    
    
    178,000Net cash provided by (used in) financing activities
    
    
    970,000
    
    
    
    (18,000
    )
    
    
    29,456,000Net increase (decrease) in cash
    
    
    (236,000
    )
    
    
    (998,000
    )
    
    
    121,000Cash at beginning of period
    
    
    544,000
    
    
    
    1,119,000
    
    
    
    Cash at end of period
    
    $
    308,000
    
    
    $
    121,000
    
    
    $
    121,000
  6




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##### Table of Contents



Vicor Technologies, Inc.
(A Development Stage Company)
Condensed Consolidated Statements of Cash Flows
For the three months ended March 31, 2010 and 2011 and
For the period from August 4, 2000 (inception) to March 31, 2011
(Unaudited)
 Period fromAugust 4, 2000Three months
    
    
    Three months
    
    
    (Inception) toended March
    
    
    ended March
    
    
    March 31,31, 2010
    
    
    31, 2011
    
    
    2011Supplemental cash flow information:Issuance of previously-subscribed common stock
    
    $
    
    
    
    $
    
    
    
    $
    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
    
    
    
    
    
    
    
    674,000Exercise of warrants to purchase common stock
    
    
    
    
    
    
    
    
    
    
    1,000Cash paid for interest expense
    
    
    18,000
    
    
    
    15,000
    
    
    
    1,044,000Accrued equity-based compensation
    
    
    
    
    
    
    
    
    
    
    41,000Accrued dividends
    
    
    126,000
    
    
    
    115,000
    
    
    
    2,935,000Interest 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
    
    
    404,000
    
    
    
    
    
    
    
    5,815,000Accrued expenses paid with notes
    
    
    
    
    
    
    
    
    
    
    703,000Accrued expenses paid with preferred stock
    
    
    
    
    
    
    
    
    
    
    108,000Accrued expenses paid with common stock
    
    
    
    
    
    
    
    
    
    
    772,000Fair value of equity-based derivative financial instruments issued
    
    
    
    
    
    
    
    
    
    
    816,000Fair value of debt-based derivative financial instruments issued
    
    
    
    
    
    
    
    
    
    
    8,316,000Deferred costs paid with common stock
    
    
    
    
    
    
    
    
    
    
    358,000Amortization of derivative discounts
    
    
    
    
    
    
    249,000
    
    
    
    1,594,000Conversion of Series A preferred stock and accrued dividends to
common stock
    
    
    
    
    
    
    
    
    
    
    335,000Conversion of Series B preferred stock and accrued dividends to
common stock
    
    
    
    
    
    
    
    
    
    
    91,000
  7




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##### Table of Contents



NOTE 1 ORGANIZATION AND NATURE OF BUSINESS
 Organization
   Nature of the business
 ® ® ® ® tm tm PD2i-VS tm ®
 Risks
    NOTE 2  LIQUIDITY AND GOING CONCERN
  8




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##### Table of Contents



NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION
 Basis of Presentation
    Receivables
  Intellectual Property
  December 31,
    
    
    March 31,2010
    
    
    2011Patents
    
    $
    252,000
    
    
    $
    252,000Purchased software
    
    
    200,000
    
    
    
    225,000452,000
    
    
    
    477,000Less accumulated amortization
    
    
    (260,000
    )
    
    
    (272,000
    )Net intellectual property
    
    $
    192,000
    
    
    $
    205,000
 9




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##### Table of Contents



Financial Instruments
        NOTE 4  CURRENT DEBT
  December 31,
    
    
    March 31,2010
    
    
    20112004 Notes, 12%
    
    $
    250,000
    
    
    $
    250,00012% Convertible Promissory Notes
    
    
    110,000
    
    
    
    110,000Bank loan, unsecured, 3.45%, due February 2012
    
    
    
    
    
    
    200,000$
    360,000
    
    
    $
    560,000
  10




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##### Table of Contents



NOTE 5  LONG-TERM DEBT
  December 31,
    
    
    March 31,2010
    
    
    20118% Subordinated Convertible Notes
    
    $
    5,273,000
    
    
    $
    5,273,00010% Convertible Promissory Notes
    
    
    2,804,000
    
    
    
    2,804,000Bank loan, unsecured, 3.45%
    
    
    200,000
    
    
    
    $
    8,277,000
    
    
    $
    8,077,000
 8% Subordinated Convertible Notes
    10% Convertible Promissory Notes
       11




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##### Table of Contents



Bank Loan
   NOTE 6  WARRANTS
  Shares Under
    
    
    Weighted-AverageWarrants
    
    
    Exercise PriceExercisable at December 31, 2010
    
    
    24,466,460
    
    
    $
    0.95Granted
    
    
    75,000
    
    
    $
    0.60Expired
    
    
    (90,000
    )
    
    $
    2.50Exercised
    
    
    
    
    
    $
    Exercisable at March 31, 2011
    
    
    24,451,460
    
    
    $
    0.94
   AverageYear of
    
    
    
    
    
    exerciseexpiration
    
    Quantity
    
    price2011
    
    
    490,414
    
    
    $
    1.942013
    
    
    9,028,463
    
    
    $
    0.962014
    
    
    9,223,081
    
    
    $
    0.852015
    
    
    5,180,752
    
    
    $
    1.002016
    
    
    153,750
    
    
    $
    0.382017
    
    
    375,000
    
    
    $
    1.00
 NOTE 7  STOCK OPTION PLANS
 2008 Stock Incentive Plan
  12




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##### Table of Contents



Weighted-
 
    
    
  
    
    Weighted-Average
 
    
    
  
    
    AverageNumber of
    
    
    Exercise
 
    
    Options
  
    
    ExerciseShares
    
    
    Price
 
    
    Exercisable
  
    
    PriceOutstanding at December 31, 2010
    
    
    3,817,500
    
    
    $
    0.73
    
    
    $
    2,983,750
    
    
    $
    0.76Granted or vested
    
    
    200,000
    
    
    $
    0.55
    
    
    
    39,250
    
    
    $
    0.73Canceled
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    Outstanding at March 31, 2011
    
    
    4,017,500
    
    
    $
    0.72
    
    
    $
    3,023,000
    
    
    $
    0.76Reserved for future option grants at
March 31, 201
    
    
    982,500
  WeightedaverageNumber of
    
    
    grant-dateShares
    
    
    fair valueOutstanding at December 31, 2010
    
    
    833,750
    
    
    $
    332,000Granted
    
    
    200,000
    
    
    
    32,000Vested or canceled
    
    
    (39,250
    )
    
    
    (25,000
    )994,500
    
    
    $
    339,000
    NOTE 8  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 options 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.
  13




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##### Table of Contents



Recurring Fair Value Measurement Valuation Techniques
  Derivative Financial Instruments
  Beneficial
    
    BeneficialConversion 
    
    Conversion Warrants
    
    Preferred Stock
    
    Convertible NotesYear ended December 31, 2010:Risk-free interest rate
    
    
    1.27% - 2.55
    %
    
    
    1.27% - 2.55
    %
    
    
    0.64% - 1.43
    %Expected volatility
    
    
    63
    %
    
    
    63
    %
    
    
    63
    %Expected life (in years)
    
    
    2.25 - 4.50
    
    
    
    2.25 - 4.50
    
    
    
    1.50 - 3.00Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Quarter ended March 31, 2011:Risk-free interest rate
    
    
    1.29% - 2.24
    %
    
    
    2.24
    %
    
    
    0.80% - 1.29
    %Expected volatility
    
    
    63
    %
    
    
    63
    %
    
    
    63
    %Expected life (in years)
    
    
    1.50 - 3.25
    
    
    
    1.75 - 3.50
    
    
    
    1.50 - 1.59Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
  Level 3 Assets and Liabilities
  14




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##### Table of Contents



Quoted prices in
    
    
    Significant
    
    
    Significantactive markets for
    
    
    other observ-
    
    
    unobservableidentical labilities
    
    
    able inputs
    
    
    inputsFair Value
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Liabilities:Derivative financial instruments 
December 31, 2010
    
    $
    7,692,000
    
    
    $
    
    
    
    $
    
    
    
    $
    7,692,000Derivative financial instruments
 March
31, 2011
    
    $
    4,481,000
    
    
    $
    
    
    
    $
    
    
    
    $
    4,481,000
  Beneficial
    
    
    BeneficialConversion 
    
    
    Conversion Preferred
    
    
    ConvertibleWarrants
    
    
    Stock
    
    
    notes
    
    
    TotalBalance, December 31, 2010
    
    $
    2,956,000
    
    
    $
    1,256,000
    
    
    $
    3,480,000
    
    
    $
    7,692,000Included in earnings:Realized loss (gain)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unrealized loss (gain)
    
    
    (1,501,000
    )
    
    
    (382,000
    )
    
    
    (1,328,000
    )
    
    
    (3,211,000
    )Purchases, sales and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Settlements and issuances  net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2011
    
    $
    1,455,000
    
    
    $
    874,000
    
    
    $
    2,152,000
    
    
    $
    4,481,000
 NOTE 9  RELATED PARTY TRANSACTIONS
    15




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##### Table of Contents



NOTE 10  COMMITMENTS AND CONTINGENCIES
  NOTE 11  SUBSEQUENT EVENTS
    
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Forward-Looking Statements
  Plan of Operations
  ® ®
 16




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##### 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.
  Critical Accounting Estimates
  Research and Development Costs
  Intellectual Property
  Revenue Recognition
   17




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##### Table of Contents



Accounting for Stock-Based Compensation
   Accounting for Derivative Financial Instruments
  Fair Value of Financial Instruments
   Results of Operations
  Revenues and cost of sales
 Three months ended March 31,2010
    
    
    2011Revenue:Sales
    
    $
    100,000
    
    
    
    100.0
    %
    
    $
    159,000
    
    
    
    94.6
    %Leases
    
    
    
    
    
    
    0.0
    %
    
    
    9,000
    
    
    
    5.4
    %100,000
    
    
    
    100.0
    %
    
    
    168,000
    
    
    
    100.0
    %Cost of revenue
    
    
    85,000
    
    
    
    85.0
    %
    
    
    84,000
    
    
    
    50.0
    %Gross profit
    
    $
    15,000
    
    
    
    15.0
    %
    
    $
    84,000
    
    
    
    50.0
    %
  18




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##### Table of Contents



Operating expenses
 Three months ended March 31,2010
    
    
    2011Operating expenses:Research and development
    
    $
    157,000
    
    
    
    8.0
    %
    
    $
    122,000
    
    
    
    4.7
    %Selling, general and administrative
    
    
    1,369,000
    
    
    
    69.5
    %
    
    
    1,455,000
    
    
    
    55.8
    %Interest
    
    
    445,000
    
    
    
    22.5
    %
    
    
    1,031,000
    
    
    
    39.5
    %Total operating expenses
    
    $
    1,971,000
    
    
    
    100.0
    %
    
    $
    2,608,000
    
    
    
    100.0
    %
 Research and Development
  Selling, General and Administrative Expenses
  
    
    Payroll and related costs were affected by a decrease of $291,000 in equity-based
compensation expense. There were numerous management-level hires in 2010 with stock and
stock option incentives.Recurring payroll costs increased due to overall higher staffing levels in 2011 compared
to 2010 with related benefits.
    
    Equity-based consulting expense increased $84,000 in 2011. This was caused by
increased compensation  of the Scientific Advisory Board, and especially its new
Chairman, in recognition of the increased level of activity on behalf of Vicor, increase
in expense recognized for independent members of the Board of Directors to reflect
changes in vesting of stock options and warrants issued to a consultant as payment for
services.
    
    The amortization of certain deferred financing costs began in the second quarter of
2010 and increased 2011 expense by $81,000.
    
    Legal and accounting expense increased $44,000. This increase is primarily
attributable to the services by our outside law firm which serves as general counsel and
independent accountants to assist management and the Board of Directors in matters
related to the involvement of independent counsel in a special investigation authorized
by the Board of Directors.
 Interest Expense
  Gain (loss) on derivative financial instruments
  Liquidity and Capital Resources
  19




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Going Concern
  20




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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.
     21




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
    
    Issued 239,540 shares of common stock to employees and consultants for services rendered.
    
    Issued 200,000 options to an employee at an exercise price of $0.55 per share for a term
of 7 years, vesting over two years, pursuant to the 2008 Stock Option Plan and 75,000
immediately exercisable warrants that expire February 2018 to a consultant at an exercise
price of $0.60 per share.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Reserved and removed.
  
 Item 5. Other Information.
  
 Item 6. Exhibits
 Exhibit No.
    
    Description31.1
    
    Certification of David H. Fater, Chief Executive Officer and President, pursuant to
Rule 13a-14(a) of the Securities Exchange Act of 1934.*31.2
    
    Certification of Thomas J. Bohannon, Chief Financial Officer, pursuant to Rule
13a-14(a) of the Securities Exchange Act of 1934.*32.1
    
    Certification of David H. Fater, Chief Executive Officer and President of Vicor
Technologies, Inc., pursuant to 18 U.S.C. 1350.*32.2
    
    Certification of Thomas J. Bohannon, Chief Financial Officer of Vicor Technologies,
Inc., pursuant to 18 U.S.C. 1350.*
 
 *
    
    Filed herewith 22




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##### Table of Contents



SIGNATURES
  Dated: May 16, 2011
    Vicor Technologies, Inc.By:
    /s/ David H. FaterDavid H. FaterChief Executive Officer and PresidentBy:
    /s/ Thomas J. BohannonName:
    Thomas J. BohannonTitle:
    Chief Financial Officer 23