U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q (Mark One)x  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
                     EXCHANGE ACT OF 1934 For the fiscal quarter endedSeptember 30, 2010 o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from                              to VYCOR MEDICAL, INC. (Exact name of small business issuer as specified in its charter) Delaware
                           
                           
                           
                           
                           
                           333-149782
                           
                           
                           
                           
                           
                           20-3369218(State of Incorporation)
                           
                           
                           
                           
                           
                           (Commission File Number)
                           
                           
                           
                           
                           
                           (IRS Employer Identification No.) 80 Orville Drive, Suite 100, Bohemia, New York 11716 (Address of principal executive offices) (Zip code) Issuer's telephone number: (631) 244 1435Securities registered under Section 12(g) of the Exchange Act: Indicate by check mark whether the registrant (1) has filed all
                     reports required to be filed by Section 13 or 15(d) of the Securities
                     Exchange Act of 1934 during the preceding 12 months (or for such
                     shorter period that the registrant was required to file such
                     reports), and (2) has been subject to such filing requirements for
                     the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted
                     electronically and posted on its corporate Web site, if any, every
                     Interactive Data File required to be submitted and posted pursuant to
                     Rule 405 of Regulation S-T during the preceding 12 months (or for
                     such shorter period that the registrant was required to submit and
                     post such files). Yes o No o Indicate by check mark whether the registrant is a large accelerated
                     filer, an accelerated filer, a non-accelerated filer, or a smaller
                     reporting company. See the definitions of "large accelerated filer,"
                     "accelerated filer" and "smaller reporting company" in Rule 12b-2 of
                     the Exchange Act. Large accelerated filer o
                           
                           
                           Accelerated filer oNon-accelerated filer o (Do not check if a smaller reporting company)
                           
                           
                           Smaller reporting company x Indicate by check mark whether the registrant is a shell company (as
                     defined in Rule 12b-2 of the Exchange Act). Yes o No x There were 696,554,718 shares outstanding of registrant's common
                     stock, par value $.0001 per share, as of October 31, 2010. Transitional Small Business Disclosure Format (check one): Yes o No x


TABLE OF CONTENTS PART IItem 1.
                           
                           
                           Financial Statements
                           
                           
                           
                           
                           
                           3Consolidated Balance Sheets as of September 30, 2010 (unaudited) and
                              December 31, 2009
                           
                           
                           3Unaudited Consolidated Statements of Operations for the three months
                              ended September 30, 2010 and September 30, 2009
                           
                           
                           4Unaudited Consolidated Statements of Operations for the nine months
                              ended September 30, 2010 and September 30, 2009
                           
                           
                           5Unaudited Consolidated Statements of Cash Flows for the nine months
                              ended September 30, 2010 and 2009
                           
                           
                           6Notes to Unaudited Consolidated Financial Statements
                           
                           
                           7Item 2.
                           
                           
                           Management's Discussion and Analysis of Financial Condition and
                              Results of Operation
                           
                           
                           21Item 3
                           
                           
                           Quantitative and Qualitative Disclosures About Market Risk
                           
                           
                           34Item 4A(T)
                           
                           
                           Controls and Procedures
                           
                           
                           
                           
                           
                           34PART IIItem 1
                           
                           
                           Legal Proceedings
                           
                           
                           
                           
                           
                           34Item 1A
                           
                           
                           Risk Factors
                           
                           
                           
                           
                           
                           35Item 2
                           
                           
                           Unregistered Sales of Equity Securities and Use of Proceeds
                           
                           
                           35Item 3
                           
                           
                           Defaults Upon Senior Securities
                           
                           
                           
                           
                           
                           36Item 4.
                           
                           
                           (Removed and Reserved)
                           
                           
                           
                           
                           
                           36Item 5.
                           
                           
                           Other Information
                           
                           
                           
                           
                           
                           36Item 6.
                           
                           
                           Exhibits
                           
                           
                           
                           
                           
                           36SIGNATURES
                           
                           
                           
                           
                           
                           36
 2


PART I ITEM 1. FINANCIAL STATEMENTS VYCOR MEDICAL, INC. Balance Sheets September 30,2010(unaudited)
                           
                           
                           
                           
                           
                           December 31,2009(audited)ASSETSCurrent AssetsCash
                           
                           $
                           44,142
                           
                           
                           
                           
                           $
                           12,771Accounts receivable
                           
                           
                           75,616
                           
                           
                           
                           
                           
                           29,748Inventory
                           
                           
                           41,265
                           
                           
                           
                           
                           
                           41,967Prepaid expenses
                           
                           
                           76,922
                           
                           
                           
                           
                           
                           22,369237,945
                           
                           
                           
                           
                           
                           106,855Fixed assets, net
                           
                           
                           175,535
                           
                           
                           
                           
                           
                           191,009Other assets:Patents, net of accumulated amortization
                           
                           
                           86,646
                           
                           
                           
                           
                           
                           93,704Website, net of accumulated amortization
                           
                           
                           4,710
                           
                           
                           
                           
                           
                           7,042Security deposits
                           
                           
                           3,633
                           
                           
                           
                           
                           
                           2,35094,989
                           
                           
                           
                           
                           
                           103,096TOTAL ASSETS
                           
                           $
                           508,469
                           
                           
                           
                           
                           $
                           400,960LIABILITIES AND STOCKHOLDERS' DEFICITCurrent LiabilitiesAccounts payable
                           
                           $
                           77,191
                           
                           
                           
                           
                           $
                           336,942Accrued interest
                           
                           
                           25,314
                           
                           
                           
                           
                           
                           2,904Accrued liabilities
                           
                           
                           136,471
                           
                           
                           
                           
                           
                           62,002Other current liabilities
                           
                           
                           21,158
                           
                           
                           
                           
                           
                           -Notes payable
                           
                           
                           496,215
                           
                           
                           
                           
                           
                           1,111,053TOTAL LIABILITIES
                           
                           
                           756,349
                           
                           
                           
                           
                           
                           1,512,901STOCKHOLDERS' DEFICITPreferred stock, $0.0001 par value, 10,000,000 shares authorized,
                              none issued and outstanding
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Common Stock, $0.0001 par value, 1,500,000,000 shares authorized,
                              696,554,718 and 557,798,599 shares issued and outstanding at
                              September 30, 2010 and December 31, 2009, respectively
                           
                           
                           69,655
                           
                           
                           
                           
                           
                           55,780Additional Paid-in Capital
                           
                           
                           5,768,369
                           
                           
                           
                           
                           
                           3,708,967Accumulated Deficit
                           
                           
                           (6,085,904
                           )
                           
                           
                           
                           
                           (4,876,688
                           )(247,880
                           )
                           
                           
                           
                           
                           (1.111,941
                           )TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT
                           
                           $
                           508,469
                           
                           
                           
                           
                           $
                           400,960See accompanying notes to financial statements
 3


VYCOR MEDICAL, INC. Statement of Operations For the three months ended September 30,2010(unaudited)
                           
                           
                           
                           
                           
                           2009(unaudited)Revenue
                           
                           $
                           71,205
                           
                           
                           
                           
                           $
                           44,198Cost of Goods Sold
                           
                           
                           11,859
                           
                           
                           
                           
                           
                           4,584Gross Profit
                           
                           
                           59,346
                           
                           
                           
                           
                           
                           39,614Operating expenses:Research and development
                           
                           
                           4,009
                           
                           
                           
                           
                           
                           -General and administrative
                           
                           
                           337,033
                           
                           
                           
                           
                           
                           159,158Total Operating expenses
                           
                           
                           341,042
                           
                           
                           
                           
                           
                           159,158Operating loss
                           
                           
                           (281,696
                           )
                           
                           
                           
                           
                           (119,544
                           )Interest expense
                           
                           
                           90,440
                           
                           
                           
                           
                           
                           33,477Net Loss
                           
                           $
                           (372,136
                           )
                           
                           
                           
                           $
                           (153,021
                           )Loss Per ShareBasic and diluted
                           
                           $
                           (0.001
                           )
                           
                           
                           
                           $
                           (0.006
                           )Weighted Average Number of Shares Outstanding
                           
                           
                           683,067,846
                           
                           
                           
                           
                           
                           26,411,189 See accompanying notes to financial statements
 4


VYCOR MEDICAL, INC. Statement of Operations For the nine months ended September 30,2010(unaudited)
                           
                           
                           
                           
                           
                           2009(unaudited)Revenue
                           
                           $
                           210,308
                           
                           
                           
                           
                           $
                           156,587Cost of Goods Sold
                           
                           
                           33,134
                           
                           
                           
                           
                           
                           19,417Gross Profit
                           
                           
                           177,174
                           
                           
                           
                           
                           
                           137,170Operating expenses:Research and development
                           
                           
                           9,657
                           
                           
                           
                           
                           
                           -General and administrative
                           
                           
                           1,190,109
                           
                           
                           
                           
                           
                           735,171Total Operating expenses
                           
                           
                           1,199,766
                           
                           
                           
                           
                           
                           735,171Operating loss
                           
                           
                           (1,022,592
                           )
                           
                           
                           
                           
                           (598,001
                           )Interest expense
                           
                           
                           186,624
                           
                           
                           
                           
                           
                           226,869Net Loss
                           
                           $
                           (1,209,216
                           )
                           
                           
                           
                           $
                           (824,870
                           )Loss Per ShareBasic and diluted
                           
                           $
                           (0.002
                           )
                           
                           
                           
                           $
                           (0.031
                           )Weighted Average Number of Shares Outstanding
                           
                           
                           650,384,814
                           
                           
                           
                           
                           
                           26,225,958 See accompanying notes to financial statements
 5


VYCOR MEDICAL, INC. Statement of Cash Flows For the nine months ended September 30,2010(unaudited)
                           
                           
                           
                           
                           
                           2009(unaudited)Cash flows from operating activities:Net loss
                           
                           $
                           (1,209,216
                           )
                           
                           
                           
                           $
                           (824,870
                           )Adjustments to reconcile net loss to cash used in operating activities:Amortization of intangible assets
                           
                           
                           13,172
                           
                           
                           
                           
                           
                           9,729Depreciation of fixed assets
                           
                           
                           17,405
                           
                           
                           
                           
                           
                           17,212Amortization of debt discount expense
                           
                           
                           152,864
                           
                           
                           
                           
                           
                           145,303Share based compensation
                           
                           
                           109,324
                           
                           
                           
                           
                           
                           64,524Shares issued for consulting services
                           
                           
                           35,625
                           
                           
                           
                           
                           
                           17,437Interest satisfied with stock conversion
                           
                           
                           7,102
                           
                           
                           
                           
                           
                           6,625Changes in assets and liabilities:Accounts receivable
                           
                           
                           (45,868
                           )
                           
                           
                           
                           
                           64,726Inventory
                           
                           
                           702
                           
                           
                           
                           
                           
                           27,125Prepaid expenses
                           
                           
                           (54,553
                           )
                           
                           
                           
                           
                           (10,471
                           )Security deposit
                           
                           
                           (1,283
                           )
                           
                           
                           
                           
                           -Accounts payable
                           
                           
                           (259,751
                           )
                           
                           
                           
                           
                           27,671Accounts payable satisfied with common stock
                           
                           
                           14,025
                           
                           
                           
                           
                           
                           -Accrued interest
                           
                           
                           22,410
                           
                           
                           
                           
                           
                           73,733Other current liabilities
                           
                           
                           21,158
                           
                           
                           
                           
                           
                           -Accrued liabilities
                           
                           
                           74,469
                           
                           
                           
                           
                           
                           159,066Cash used in operating activities
                           
                           
                           (1,102,415
                           )
                           
                           
                           
                           
                           (222,190
                           )Cash flows provided by / (used in) investing activities:Purchase of fixed assets
                           
                           
                           (1,931
                           )
                           
                           
                           
                           
                           -Reduction of / (Acquisition of) patents
                           
                           
                           (3,783
                           )
                           
                           
                           
                           
                           (64,432
                           )Cash provided by / (used in) investing activities
                           
                           
                           (5,714
                           )
                           
                           
                           
                           
                           (64,432
                           )Cash flows from financing activities:Proceeds from sale of equity - Common stock
                           
                           
                           914,500
                           
                           
                           
                           
                           
                           -Proceeds from sale of equity - Series B preferred
                           
                           
                           140,000
                           
                           
                           
                           
                           
                           -Proceeds from short term Notes Payable
                           
                           
                           376,500
                           
                           
                           
                           
                           
                           120,000Repayment of short term Notes Payable
                           
                           
                           (291,500
                           )
                           
                           
                           
                           
                           -Cash provided by financing activities
                           
                           
                           1,139,500
                           
                           
                           
                           
                           
                           120,000Net increase (decrease) in cash
                           
                           
                           31,371
                           
                           
                           
                           
                           
                           (166,622
                           )Cash at beginning of period
                           
                           
                           12,771
                           
                           
                           
                           
                           
                           196,138Cash at end of period
                           
                           $
                           44,142
                           
                           
                           
                           
                           $
                           29,516Supplemental Disclosures of Cash Flow information:Interest paid:
                           
                           $
                           -
                           
                           
                           
                           
                           $
                           -Taxes paid
                           
                           $
                           2,078
                           
                           
                           
                           
                           $
                           -Non-Cash Transactions:Warrants, options and common stock issued for debt financing
                           
                           $
                           803,690
                           
                           
                           
                           
                           $
                           100,000See accompanying notes to financial statements
 6


VYCOR MEDICAL, INC. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2010 1.  BASIS OF PRESENTATION The accompanying unaudited condensed financial statements have been
                     prepared in accordance with accounting principles generally accepted
                     in the United States of America for interim financial information and
                     with Article 10 of Regulation S-X. Accordingly, they do not include
                     all of the information and footnotes required by accounting
                     principles generally accepted in the United States of America for
                     annual financial statements. In the opinion of management, all
                     adjustments, consisting of normal recurring accruals considered
                     necessary for a fair presentation, have been included. Operating
                     results for the nine months ended September 30, 2010 are not
                     necessarily indicative of the results that may be expected for the
                     year ending December 31, 2010. For further information, refer to the
                     financial statements and footnotes thereto for the year ended
                     December 31, 2009. 2.  FORMATION AND BUSINESS OF THE COMPANY Business Description Vycor Medical, LLC, (the "Company") was formed in September 17, 2005
                     under the laws of the State of New York. The Company converted its
                     entity form on August 14, 2007 from a New York Limited Liability
                     Company to a Delaware Corporation with 16,048 of common stock
                     exchange for each partnership unit with 1122 units outstanding at
                     date of conversion. The assets, liabilities and operations of the
                     Company did not change pursuant to this reorganization, and the
                     accompanying financial statements are presented as if the change
                     occurred on the first day of the earliest period presented; thus all
                     are references to number of shares prior to the date of conversion
                     are based upon the common stock equivalent of the units. The
                     Company's business plan is to develop and market a commercially
                     feasible surgical access system for sale to hospitals and medical
                     professionals. 3.  ACCOUNTING POLICIES Research and Development The Company expenses all research and development costs as incurred.
                     For the nine months ended September 30, 2010 and 2009, the amounts
                     charged to research and development expenses were $9,657 and $0,
                     respectively. Concentration of Credit Risk The Company maintains cash balances at various financial
                     institutions. Accounts at each institution are insured by the Federal
                     Deposit Insurance Corporation up to $250,000. The Company's accounts
                     at these institutions may, at times, exceed the federally insured
                     limits. The Company has not experienced any losses in such accounts. Fair Values of Financial Instruments At September 30, 2010 and 2009, fair values of cash, accounts
                     receivable, accounts payable, and accrued expenses short term
                     promissory notes approximate their carrying amount due to the short
                     period of time to maturity. The fair value of the Company's long term
                     debt is based on the present value using a discount rate comparable
                     with borrowing rates available to the Company along with various fair
                     value model calculations used to value certain debt related
                     securities. Property and equipment The Company records property and equipment at cost and calculates
                     depreciation using the straight-line method over the estimated useful
                     life of the assets, which is estimated to be between three and
                     ten years. Income taxes Based upon relevant FASB standard, deferred tax assets and liability
                     account balances are determined based on differences between
                     financial reporting and tax bases of assets and liabilities and are
                     measured using the enacted tax rates and laws that will be in effect
                     when the differences are expected to reverse. The Company provides a
                     valuation allowance, if necessary, to reduce deferred tax assets to
                     their estimated realizable value. The Company has provided a full
                     valuation allowance against the gross deferred tax asset as of
                     September 30, 2010 as it is more likely that this deferred tax asset
                     will not be realized.
 7


Uses of estimates in the preparation of financial statements The preparation of financial statements in conformity with accounting
                     principles generally accepted in the United States ("GAAP") requires
                     management to make estimates and assumptions that affect the amounts
                     reported in the financial statements and accompanying notes. Critical
                     estimates include amortization of intangible assets, and the fair
                     values of options and warrant included in the determination of debt
                     discounts and share based compensation. Patents The Company capitalizes legal and related costs associated with the
                     establishment of patents for its products. Costs associated with the
                     development of the patented item or processes are charged to research
                     and development costs as incurred. The costs associated with the
                     establishment of the patents are amortized over the life of
                     the patent. The Company reviews existing patents as well as those in the approval
                     process for impairment on an annual basis using a present value, cash
                     flow method based upon relevant FASB standard. Since the Company's
                     patents are either very new or still in the process of approval, the
                     Company does not believe that any impairment of these amounts exists. Revenue Recognition The Company records revenue, based upon relevant FASB standard, when
                     a completed contract for the sale exists, title transfers to the
                     buyer and the product is invoiced and shipped to the customer. The
                     Company sells a surgical access system which has already cleared the
                     U.S. FDA 510(k) review process. It has been granted a 510(k) number
                     for marketing the system to hospitals and other medical
                     professionals. The Company does not expect the need to provide for
                     product returns or warranty costs but will review such potential
                     costs after the commencement of sales on an annual basis. Educational and marketing expenses The Company may incur costs for the education of customers on the
                     uses and benefits of its products. The Company will expense such
                     costs as a component of selling, general and administrative costs as
                     such costs are incurred. Website Costs The Company capitalizes the costs associated with the acquisition of
                     hardware and development tools as well as the creation of database
                     tools in connection with the Company's website pursuant to the
                     relevant FASB standard. Other costs including the development of
                     functionality and identification of software tools are expensed
                     as incurred. Stock-Based Compensation Prior to January 1, 2006, the Company accounted for stock-based
                     compensation based upon the relevant FASB standards, under which
                     compensation expense is based on the difference, if any, on the date
                     of the grant, between the fair value of the Company's stock and the
                     exercise price. Stock-based compensation determined under relevant
                     FASB standards is recognized over the option vesting period. Prior to the adoption of a stock option plan adopted on February 13,
                     2008, the Company only issued share based compensation to consultants
                     for goods or services. The Company accounted for these transactions
                     based upon the relevant FASB standards. Under these standards,
                     options, warrants, and stock are recorded at their fair value on the
                     measurement date. The Company remeasured the fair value of such
                     instruments granted at each reporting period until performance under
                     the consulting arrangements were completed and the measurement date
                     was reached. The Company records the expense of such services on the
                     estimate fair value of the equity instrument using the Black-Scholes
                     pricing model. The initial expense is recognized over the term of the
                     service agreement. For future awards to employees, the Company will adopt the relevant
                     FASB standard which requires the recognition of compensation expense
                     for future stock-based compensation awards to employees. Using a
                     fair-value-based method, for costs related to all share-based
                     payments including stock options. These standards require companies
                     to estimate the fair value of share-based payment awards on the date
                     of grant using an option-pricing model. All option grants valued
                     after January 1, 2006 are expensed on a straight-line basis over the
                     vesting period.
 8


Fair Values of Assets and Liabilities Effective January 1, 2008, the relevant FASB standards define the
                     fair value as the exchange price that would be received for an asset
                     or paid to transfer a liability (an exit price) in the principal or
                     most advantageous market for the asset or liability in an orderly
                     transaction between market participants on the measurement date.
                     These standards require that valuation techniques maximize the use of
                     observable inputs and minimize the use of unobservable inputs. These
                     standards also established a fair value hierarchy, which prioritizes
                     the valuation inputs into three broad levels. There are three general valuation techniques that may be used to
                     measure fair value, as described below: a)  Market approach - Uses prices and other relevant information
                     generated by market transactions involving identical or comparable
                     assets or liabilities. Prices may be indicated by pricing guides,
                     sale transactions, market trades, or other sources; b)   Cost approach - Based on the amount that currently would be
                     required to replace the service capacity of an asset (replacement
                     cost); and c)   Income approach - Uses valuation techniques to convert future
                     amounts to a single present amount based on current market
                     expectations about the future amounts (includes present value
                     techniques and option-pricing models). Net present value is an income
                     approach where a stream of expected cash flows is discounted at an
                     appropriate market interest rate. Financial assets and liabilities are valued using either level 1
                     inputs based on unadjusted quoted market prices within active markets
                     or using level 2 inputs based primarily on quoted prices for similar
                     assets or liabilities in active or inactive markets. For certain
                     long-term debt, fair value is based on present value techniques using
                     inputs derived principally or corroborated from market data. Using
                     level 3 inputs using management's assumptions about the assumptions
                     market participants would utilize in pricing the asset or liability.
                     In the Company's case this entailed assumptions used in pricing
                     models for attached warrant calculations. Valuation techniques
                     utilized to determine fair value are consistently applied. The Company's convertible debentures are the only items that are
                     subject to these standards as of September 30, 2010 as follows: Unobservable inputs (level 3)
                           
                           
                           $   496,215 Net Loss Per Share Basic net loss per share is computed by dividing net loss by the
                     weighted-average number of common shares outstanding during the
                     period. Diluted net loss per share is based on the weighted-average
                     common shares outstanding during the period plus dilutive potential
                     common shares calculated using the treasury stock method. Such
                     potentially dilutive shares are excluded when the effect would be to
                     reduce a net loss per share. The Company's potential dilutive shares,
                     which include outstanding common stock options, convertible notes
                     payable and warrants, have not been included in the computation of
                     diluted net loss per share for all periods as the result would be
                     anti-dilutive. The following table sets forth the potential shares of common stock
                     that are not included in the calculation of diluted net loss per
                     share because to do so would be anti-dilutive as of the end of each
                     period presented: September 30,2010
                           
                           
                           
                           
                           
                           December 31,2009Stock options outstanding
                           
                           
                           833,333
                           
                           
                           
                           
                           
                           1,000,000Warrants to purchase common stock
                           
                           
                           116,766,670
                           
                           
                           
                           
                           
                           35,493,172 Recent Accounting Pronouncements Effective July 1, 2009, the Company adopted the FASB ASC 105-10, Generally Accepted Accounting Principles - Overall("ASC 105-10"). ASC 105-10 establishes the FASB Accounting Standards Codification(the "Codification") as the source of authoritative accounting
                     principles recognized by the FASB to be applied by nongovernmental
                     entities in the preparation of financial statements in conformity
                     with GAAP. Rules and interpretive releases of the SEC under authority
                     of federal securities laws are also sources of authoritative U.S.
                     GAAP for SEC registrants. All guidance contained in the Codification
                     carries an equal level of authority. The Codification superseded all
                     existing non-SEC accounting and reporting standards. All other
                     non-grandfathered, non-SEC accounting literature not included in the
                     Codification is non-authoritative. The FASB will not issue new
                     standards in the form of Statements, FASB Staff Positions or Emerging
                     Issues Task Force Abstracts. Instead, it will issue Accounting
                     Standards Updates ("ASUs"). The FASB will not consider ASUs as
                     authoritative in their own right. ASUs will serve
 9


only to update the Codification, provide background information about
                     the guidance and provide the bases for conclusions on the change(s)
                     in the Codification. References made to FASB guidance throughout this
                     document have been updated for the Codification. Effective January 1, 2008, the Company adopted FASB ASC 820-10, Fair Value Measurements and Disclosures - Overall("ASC 820-10") with respect to its financial assets and liabilities.
                     In February 2008, the FASB issued updated guidance related to fair
                     value measurements, which is included in the Codification in ASC
                     820-10-55, Fair Value Measurements and Disclosures - Overall - Implementation
                        Guidance and Illustrations. The updated guidance provided a one year deferral of the effective
                     date of ASC 820-10 for non-financial assets and non-financial
                     liabilities, except those that are recognized or disclosed in the
                     financial statements at fair value at least annually. Therefore, the
                     Company adopted the provisions of ASC 820-10 for non-financial assets
                     and non-financial liabilities effective January 1, 2009, and such
                     adoption did not have a material impact on the Company's consolidated
                     results of operations, financial condition or liquidity. Effective January 1, 2009, the Company adopted FASB ASC 805, Business Combinations ("ASC 805"). ASC 805 establishes principles and requirements for how
                     the acquirer of a business recognizes and measures in its financial
                     statements the identifiable assets acquired, the liabilities assumed,
                     and any non-controlling interest in the acquiree. ASC 805 changes the
                     previous treatment of acquisition related costs, restructuring costs
                     related to an acquisition that the acquirer expects but is not
                     obligated to incur, contingent consideration associated with the
                     purchase price and pre-acquisition contingencies associated with
                     acquired assets and liabilities. Under ASC 805, acquisition costs
                     associated with business combinations will be expensed as incurred,
                     whereas, prior to the adoption of ASC 805, similar costs associated
                     with a successful acquisition were capitalized. ASC 805 applies to
                     business combinations for which the acquisition date is on or after
                     the adoption date, thus the adoption of ASC 805 will have no effect
                     on prior acquisitions. The effect of the adoption of ASC 805 will
                     depend upon the nature of any future business combinations. In April 2009, the FASB issued updated guidance relating to
                     intangible asset valuation, which is included in the Codification in
                     ASC 350-30-55, General Intangibles Other Than Goodwill - Implementation ("ASC 350-30-55"). ASC 350-30-55 amends ASC 350-30, Intangibles - Goodwill and Other, to identify the factors that should be considered in developing
                     renewal or extension assumptions used to determine the useful life of
                     a recognized intangible asset. ASC 350-30-55 is effective for fiscal
                     years beginning after December 31, 2008. The Company adopted the
                     amendment to ASC 350-30 effective January 1, 2009, and such amendment
                     did not have a material effect on the Company's results of
                     operations, financial position or liquidity. Effective April 1, 2009, the Company adopted FASB ASC 825-10-65, Financial Instruments - Overall - Transition and Open Effective Date Information ("ASC 825-10-65"). ASC 825-10-65 amends ASC 825-10 to require
                     disclosures about fair value of financial instruments in interim
                     financial statements as well as in annual financial statements and
                     also amends ASC 270-10, Presentation - Interim Reporting - Overall, to require those disclosures in all interim financial statements.
                     The adoption of ASC 825-10-65 did not have a material impact on the
                     Company's results of operations, financial position or liquidity. Effective April 1, 2009, the Company adopted FASB ASC 320-10-65, Investments - Debt and Equity Securities - Overall -Transition and
                        Open Effective Date Information ("ASC 320-10-65). ASC 320-10-65 amends the other-than-temporary
                     impairment guidance in U.S. GAAP to make the guidance more
                     operational and to improve the presentation of other-than-temporary
                     impairments in the financial statements. The adoption ASC 320-10-65
                     did not have a material impact on the Company's results of
                     operations, financial position or liquidity. Effective April 1, 2009, the Company adopted FASB ASC 855-10, Subsequent Events - Overall ("ASC 855-10"). ASC 855-10 establishes general standards of
                     accounting for and disclosure of events that occur after the balance
                     sheet date but before financial statements are issued or are
                     available to be issued. It required the disclosure of the date
                     through which an entity has evaluated subsequent events and the basis
                     for that date - that is, whether that date represents the date the
                     financial statements were issued or were available to be issued. This
                     disclosure should alert all users of financial statements that an
                     entity has not evaluated subsequent events after that date in the set
                     of financial statements being presented. In February 2010, the FASB
                     issued ASU 2010-09, Amendments to Certain Recognition and Disclosure Requirements ("ASU 2010-09"). ASU 2010-09 amended the guidance on subsequent
                     events to remove the requirement for SEC filers to disclose the date
                     through which an entity has evaluated subsequent events. Adoption of
                     ASC 855-10, as amended, did not have a material impact on the
                     Company's results of operations, financial position or liquidity. Effective July 1, 2009, the Company adopted FASB ASU No. 2009-05, Fair Value Measurements and Disclosures (Topic 820) ("ASU 2009-05"). ASU 2009-05 provided amendments to ASC 820-10, Fair Value Measurements and Disclosures -Overall, for the fair value measurement of liabilities. ASU 2009-05 provides
                     clarification that in circumstances in which a quoted price in an
                     active market for the identical liability is not available, a
                     reporting entity is required to measure fair value using certain
                     techniques. ASU 2009-05 also clarifies that when estimating the fair
                     value of a liability, a reporting entity is not required to include a
                     separate input or adjustment to other inputs relating to the
                     existence of a restriction that prevents the transfer of a
 10


liability. ASU 2009-05 also clarifies that both a quoted price in an
                     active market for the identical liability at the measurement date and
                     the quoted price for the identical liability when traded as an asset
                     in an active market when no adjustments to the quoted price of the
                     asset are required are Level 1 fair value measurements. Adoption of
                     ASU 2009-05 did not have a material impact on the Company's results
                     of operations, financial position or liquidity. The Company does not believe that any other recently issued, but not
                     yet effective accounting standards will have a material effect on the
                     Company's consolidated financial position, results of operations or
                     cash flows. Going Concern The Company's financial statements have been presented on a basis
                     that contemplates the realization of assets and the satisfaction of
                     liabilities in the normal course of business and assumes the Company
                     will continue as a going concern. The Company has incurred losses
                     since its inception, including a net loss of $1,209,216 for the nine
                     months ended September 30, 2010, and the Company expects to continue
                     to incur substantial additional losses in the future, including
                     additional development costs, costs related to marketing and
                     manufacturing expenses. The Company has incurred negative cash flows
                     from operations since inception. As of September 30, 2010 the Company
                     had a stockholders' deficiency of $247,880 and cash and cash
                     equivalents of $44,142. The Company believes it would not have enough
                     cash to meet its various cash needs unless the Company is able to
                     obtain additional cash from the issuance of debt or equity
                     securities. There is no assurance that additional funds from the
                     issuance of equity will be available for the Company to finance its
                     operations on acceptable terms. If adequate funds are not available,
                     the Company may have to delay development or commercialization of
                     products or technologies that the Company would otherwise seek to
                     commercialize, or cease operations. These conditions raise
                     substantial doubt about the Company's ability to continue as a going
                     concern. The financial statements do not include any adjustments to
                     reflect the possible future effects on the recoverability and
                     classification of assets or the amounts and classification of
                     liabilities that may result from the outcome of this uncertainty. Under a previously disclosed agreement entered into with Fountainhead
                     Capital Management Limited, Fountainhead agreed to fund or procure
                     funding for Vycor Medical's monthly operating expenses through
                     September 2010 subject to the Company meeting certain financial
                     benchmarks. The Company entered into a new agreement on September 29,
                     2010 under which Fountainhead agreed to extend this commitment for
                     Vycor Medical's operating expenses through August, 2011.
 11


4.   NOTES PAYABLE As of September 30, 2010 and December 31, 2009, Notes Payable consists of: September 30,2010
                           
                           
                           December 31,2009On December 29, 2009, in conjunction with a debt restructuring (see
                              Note 5) the Company issued a convertible debenture in the amount of
                              $70,000 payable to Fountainhead Capital Management Limited. This
                              debenture accrues interest rate of 6% per annum, is due August 31,
                              2010, is secured by a first priority security interest in all of the
                              assets of the Company, and is senior to or pari passuwith, all other obligations of the Company, subject to certain
                              conditions. The Holder is entitled to convert all or any amount of
                              the principal face amount of the debenture into shares of common
                              stock of the Company at the conversion price of $0.0125 per share,
                              subject to adjustment and does not require bifurcation. The Company
                              has computed a beneficial conversion feature debt discount of
                              $21,427, which was being amortized over the expected life of the
                              loan. As of December 31, 2009, the note reflects an unamortized
                              discount of $21,252. On May 14, 2010, this loan was satisfied.
                           
                           
                           -
                           
                           
                           48,748On December 29, 2009, in conjunction with a debt restructuring (see
                              Note 5), the Company issued a convertible debenture in the amount of
                              $371,362 payable to Fountainhead Capital Management Limited. This
                              debenture accrues interest rate of 6% per annum, is due August 31,
                              2010, is secured by a first priority security interest in all of the
                              assets of the Company, and is senior to or pari passuwith, all other obligations of the Company, subject to certain
                              conditions. The Holder is entitled to convert all or any amount of
                              the principal face amount of the debenture then outstanding into
                              shares of common stock of the Company at the conversion price of
                              $0.0125 per share, subject to adjustment and does not require
                              bifurcation. The Company has computed a beneficial conversion feature
                              debt discount of $113,675, which is being amortized over the expected
                              life of the loan to original maturity. On May 14, 2010, the due date
                              for satisfaction was extended to March 30, 2011. The note reflects an
                              unamortized discount of $0 and $112,747 as of September 30, 2010 and
                              December 31, 2009, respectively.
                           
                           
                           371,362
                           
                           
                           258,615On December 29, 2009, the Company issued a convertible debenture in
                              the amount of $350,000 payable Regent Private Capital, LLC
                              ("Regent"). This debenture accrues interest rate of 6% per annum, is
                              due August 31, 2010, is secured by a first priority security interest
                              in all of the assets of the Company, and is senior to or pari passuwith, all other obligations of the Company, subject to certain
                              conditions. The Holder is entitled to convert all or any amount of
                              the principal face amount of the debenture then outstanding into
                              shares of common stock of the Company at the conversion price of
                              $0.0125 per share, subject to adjustment and does not require
                              bifurcation. On December 29, 2009, this debenture was amended to
                              provide for automatic conversion, subject to the Company authorizing
                              sufficient shares to convert this, and other existing instruments,
                              and transferred to three parties. On January 11, 2010 (see Note 10),
                              these notes were satisfied in accordance with the automatic
                              conversion clause.
                           
                           
                           -
                           
                           
                           350,000On December 29, 2009, the Company issued a convertible debenture in
                              the amount of $453,690 payable Regent Private Capital, LLC
                              ("Regent"). This debenture accrues interest rate of 6% per annum, is
                              due August 31, 2010, is secured by a first priority security interest
                              in all of the assets of the Company, and is senior to or pari passuwith, all other obligations of the Company, subject to certain
                              conditions. The Holder is entitled to convert all or any amount of
                              the principal face amount of the debenture then outstanding into
                              shares of common stock of the Company at the conversion price of
                              $0.0125 per share, subject to adjustment and does not require
                              bifurcation. On December 29, 2009, this debenture was amended to
                              provide for automatic conversion, subject to the Company authorizing
                              sufficient shares to convert this, and other existing instruments,
                              and transferred to five parties. On January 11, 2010 (see Note 10),
                              these notes were satisfied in accordance with the automatic
                              conversion clause.
                           
                           
                           -
                           
                           
                           453,690
 12


September 30,2010
                        
                        
                        December 31,2009On February 3, 2010, the Company issued a convertible debenture in
                           the amount of $70,000 payable to Fountainhead Capital Management
                           Limited. This debenture accrues interest rate of 6% per annum, is due
                           August 31, 2010, is secured by a first priority security interest in
                           all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain
                           conditions. The Holder is entitled to convert all or any amount of
                           the principal face amount of the debenture then outstanding into
                           shares of common stock of the Company at the conversion price of
                           $0.0125 per share, subject to adjustment and does not require
                           bifurcation. The Company has computed a beneficial conversion feature
                           debt discount of $19,863, which is being amortized over the expected
                           life of the loan to original maturity. On May 14, 2010, the due date
                           for satisfaction was extended to March 30, 2011. The discount has
                           been fully amortized as of September 30, 2010.
                        
                        
                        70,000
                        
                        
                        -On September 30, 2010, the Company issued a convertible debenture in
                           the amount of $85,000 payable to Fountainhead Capital Management
                           Limited. This debenture accrues interest rate of 6% per annum, is due
                           August 31, 2011, is secured by a first priority security interest in
                           all of the assets of the Company, and is senior to or pari passu with, all other obligations of the Company, subject to certain
                           conditions. The Holder is entitled to convert all or any amount of
                           the principal face amount of the debenture then outstanding into
                           shares of common stock of the Company at the conversion price of
                           $0.0175 per share, subject to adjustment and does not require
                           bifurcation. The Company has computed a beneficial conversion feature
                           debt discount of $30,147, which is being amortized over the expected
                           life of the loan. The note reflects an unamortized discount of
                           $30,147 as of September 30, 2010.
                        
                        
                        54,853
                        
                        
                        -Total Notes Payable:
                        
                        $
                        496,215
                        
                        $
                        1,111,053
 13


The following is a schedule of future minimum loan payments: Twelve months ending September 30,
                           
                           
                           
                           
                           
                           Amount2011
                           
                           
                           
                           
                           $
                           526,3622012
                           
                           
                           
                           
                           
                           -2013
                           
                           
                           
                           
                           
                           -2014
                           
                           
                           
                           
                           
                           -2015
                           
                           
                           
                           
                           
                           -Thereafter
                           
                           
                           
                           
                           
                           -Total
                           
                           
                           
                           
                           $
                           526,362Less debt discount
                           
                           
                           
                           
                           
                           30,147$
                           496,215 As of September 30, 2010, the Company's entire notes payable is
                     secured by a first security interest in all of the assets of
                     the Company. 5.   EQUITY Certain Equity Transactions As prescribed in a previous agreement, in consideration for services
                     provided to the Board of Directors, the Company issued 800,000 shares
                     of its common stock to Steven Girgenti on February 23, 2010. On January 11, 2010, in accordance with the terms prescribed in
                     debentures totaling $803,690, the Company issued 64,295,200 common
                     shares to automatically convert said debentures at the rate of
                     $0.0125 per share. In accordance with the previously filed Certificate of Designation,
                     the Company has sold 140,000 shares of Series B Preferred Stock
                     during the current fiscal year for an aggregate amount of $140,000.
                     These were converted on September 11 2010, along with accrued
                     interest, into 11,768,197 shares of the Company's Common Stock at a
                     multiple of 80 common shares per Series B share. In accordance with an agreement with Joe Simone for consulting
                     services relating to identifying sales and marketing opportunities,
                     increasing investor awareness of the Company, identifying potential
                     new investors who might have an interest in investing in the Company,
                     and other activities in the furtherance of the above, the Company
                     issued 750,000 shares of its Common Stock valued at $9,375. On April 14, 2010, by action by written consent of the Board of
                     Directors, the Company developed the 2010 Professional/Consultant
                     Stock Compensation Plan. Further, a Form S-8 Registration Statement
                     was filed with the Securities and Exchange Commission on April 16,
                     2010, registering 934,986 shares for the Plan's use. It was further
                     resolved that these shares be issued to Gregory Sichenzia for
                     services provided to the Company by Sichenzia Ross Friedman Ference
                     LLP, valued at $14,025. From April 13, 2010 through May 10, 2010, the Company accepted
                     Subscription Agreements from eleven subscribers for the purchase of
                     its Common Stock. In accordance with these Agreements, 49,966,665
                     shares were purchased at $0.015 per share, totaling $749,500.
                     Approximately $72,500 of reimbursable out-of-pocket costs were
                     incurred by consultants in furtherance of these transactions. On August 11, 2010, in consideration for services provided to the
                     Board of Directors (valued at $5,000), the Company issued 250,000
                     shares of its common stock to Steven Girgenti. On August 11, 2010, in consideration for services provided to the
                     Board of Directors (valued at $6,000), the Company issued 300,000
                     shares of its common stock to Ramin Rak, M.D., P.C. On August 11, 2010, in consideration for services provided to the
                     Board of Directors (valued at $5,250), the Company issued 262,500
                     shares of its common stock to Konstantin V. Slavin. From July 20, 2010 through September, 2010, the Company accepted
                     Subscription Agreements from six subscribers for the purchase of its
                     Common Stock. In accordance with these Agreements, 9,428,571 shares
                     were purchased at $0.0175 per share, totaling $165,000
 14


6. AMENDMENTS TO ARTICLES OF INCORPORATION OR BY-LAWS Effective July 11, 2010, the Company amended its Certificate of
                     Incorporation to increase the Company's authorized capital to
                     1,510,000,000 shares comprising 1,500,000,000 shares of Common Stock
                     par value $.0001 per share and 10,000,000 shares of Preferred Stock
                     par value $0.0001 per share. 7.   SHARE-BASED COMPENSATION Under relevant FASB standard, options are recorded at their fair
                     value on the measurement date. The Company remeasured the fair value
                     of the options or warrants granted at each reporting period until
                     performance under the consulting agreement was completed and the
                     measurement date was reached. The Company expensed the fair value of
                     the instrument granted over the requisite service period which was
                     the term of the consulting agreement, or one year. For employee based awards which consist only of awards made under the
                     "Stock Option Plan" described below, the company follows relevant
                     FASB standards which require companies to estimate the fair value of
                     share-based payment awards on the date of grant using an
                     option-pricing model. Under these standards, compensation cost for
                     employee stock-based awards is based on the estimated grant-date fair
                     value and recognized over the vesting period of the applicable award
                     on a straight-line basis. There were no employee stock options
                     granted for the nine months ended September 30, 2010. Stock Option Plan The Company has adopted the Vycor Medical, Inc Employee, Director,
                     and Consultant Stock Plan as of February 13, 2008, that includes both
                     incentive stock options and nonqualified stock options to be granted
                     to employees, officers, and consultants, independent contractors,
                     directors and affiliates of the Company. The board of directors
                     establishes the terms and conditions of all stock options grants,
                     subject to the Plan and applicable provisions of the Internal Revenue
                     Code. Incentive stock options must be granted at an exercise price
                     not less than the fair market value of the common stock on the grant
                     date. The options granted to participants owning more than 10% of the
                     Company's outstanding voting stock must be granted at an exercise
                     price not less than 110% of the fair market value of the common stock
                     on the grant date. The options expire on the date determined by the
                     board of directors, but may not extend mare than 10 years from the
                     grant date, while incentive stock options granted to participants
                     owning more than 10% of the Company's outstanding voting stock expire
                     five years from the grant date. The vesting period for employees is
                     generally over three years. The vesting Period for nonemployees is
                     determined based on the services being provided. Initial grants totaling 500,000 shares each were issued on February
                     13, 2008 to Kenneth T. Coviello, Chief Executive Officer and Heather
                     N. Vinas, President at an exercise price of $.135 per share. The
                     options vest 33 1/3 % on each of the first, second, and third
                     anniversary of the grant and expire February 12, 2018. Accordingly,
                     for the nine months ended September 30, 2010, the Company recognized
                     share-based compensation amounts of $28,920 and $28,920, for each of
                     the respective grants. The maximum number of shares of stock which maybe delivered under the
                     plan shall automatically increase by a number sufficient to cause the
                     number of shares covered by the plan to equal 10% of the total number
                     of shares of stock then outstanding on a fully diluted basis. Stock appreciation rights may be granted either on a stand alone
                     basis or in conjunction with all or part of any other stock options
                     granted under the plan. As of September 30, 2010 there were no awards
                     of any stock appreciation rights.
 15


Outstanding Rights, Options, and Warrants The details of the outstanding rights, options and warrants and value
                     of such rights, options and warrants are as follows: STOCK WARRANTS: Number ofshares
                           
                           
                           
                           
                           
                           Weighted AverageExercise price per shareOutstanding at January 1, 2007
                           
                           
                           4,144,300
                           
                           
                           
                           
                           
                           0.43Granted
                           
                           
                           1,143,408
                           
                           
                           
                           
                           
                           0.32ExercisedCancelled or expiredOutstanding at December 31, 2007
                           
                           
                           5,287,708
                           
                           
                           
                           
                           
                           0.41Granted
                           
                           
                           1,365,788
                           
                           
                           
                           
                           
                           0.31ExercisedCancelled or expired
                           
                           
                           (192,576
                           )
                           
                           
                           
                           
                           0.24Outstanding at December 31, 2008
                           
                           
                           6,460,920
                           
                           
                           
                           
                           $
                           0.39Granted
                           
                           
                           32,900,132
                           
                           
                           
                           
                           
                           0.007ExercisedCancelled or expired
                           
                           
                           (3,867,880
                           )
                           
                           
                           
                           
                           0.399Outstanding at December 31, 2009
                           
                           
                           35,493,172
                           
                           
                           
                           
                           $
                           0.031Granted
                           
                           
                           89,691,077
                           
                           
                           
                           
                           
                           0.015ExercisedCancelled or expired
                           
                           
                           (8,417,579
                           )
                           
                           
                           
                           
                           0.007Outstanding at September 30, 2010
                           
                           
                           116,766,670
                           
                           
                           
                           
                           $
                           0.020
 16


STOCK OPTIONS: Number ofshares
                           
                           
                           
                           
                           
                           WeightedAverageExerciseprice pershareOutstanding at January 1, 2007
                           
                           
                           -
                           
                           
                           
                           
                           
                           -GrantedExercisedCancelled or expiredOutstanding at December 31, 2007
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Granted
                           
                           
                           1,050,000
                           
                           
                           
                           
                           
                           0.14ExercisedCancelled or expiredOutstanding at December 31, 2008
                           
                           
                           1,050,000
                           
                           
                           
                           
                           $
                           0.14GrantedExercisedCancelled or expired
                           
                           
                           (50,000
                           )
                           
                           
                           
                           
                           0.14Outstanding at December 31, 2009
                           
                           
                           1,000,000
                           
                           
                           
                           
                           $
                           0.14GrantedExercisedCancelled or expired
                           
                           
                           (166,667
                           )
                           
                           
                           
                           
                           0.14Outstanding at September 30, 2010
                           
                           
                           833,333
                           
                           
                           
                           
                           $
                           0.14
 17


In consideration for being the Company's strategic business advisor,
                     in 2007 the Company issued a warrant to Martin Magida to purchase up
                     to 160,480 shares of the Company's common stock at $.24 per share.
                     The warrant is valid from September 1, 2007 for a period of five
                     years. This warrant was fair valued under the Black-Scholes Model and
                     amortized over the life of the warrant agreement. For the nine months
                     ended September 30, 2010, $3,342 was recognized as share-based
                     compensation in connection with this agreement. In consideration for providing advisory services in 2007, the Company
                     issued a warrant to Robert Guinta to purchase up to 160,480 shares of
                     the Company's common stock at $.24 per share. The warrant is valid
                     from September 1, 2007 for a period of five years. This warrant was
                     fair valued under the Black-Scholes Model and amortized over the life
                     of the warrant agreement. For the year ended September 30, 2010,
                     $3,342 was recognized as share-based compensation in connection with
                     this agreement. Under the terms of a consulting agreement dated February 2010, the
                     Company issued warrants to Fountainhead Capital Management to
                     purchase up to 39,063,670 shares of the Company's common stock at
                     $.0125 per share. The warrants are valid from February 10, 2010 for a
                     period of five years. This warrant was fair valued under the
                     Black-Scholes Model and amortized over the life of the warrant
                     agreement. For the nine months ended September 30, 2010, $44,800 was
                     recognized as share-based compensation in connection with this
                     agreement. Under the terms of an Extension of Funding Commitment agreement dated
                     September 2010, the Company issued warrants to Fountainhead Capital
                     Management to purchase up to 50,627,407 shares of the Company's
                     common stock at $.0175 per share. The warrants are valid from
                     September 29, 2010 for a period of five years. This warrant was fair
                     valued under the Black-Scholes Model and amortized over the life of
                     the warrant agreement. For the nine months ended September 30, 2010,
                     $0 was recognized as share-based compensation in connection with this
                     agreement. Stock-based compensation expense charged to operations on options and
                     warrants granted to the above non-employees for the nine months ended
                     September 30, 2010 is $51,484. As of September 30, 2010, there was
                     approximately $807,000 of total unrecognized compensation costs
                     related to non-vested stock options awards, which are expected to be
                     recognized over a weighted average period of approximately 4.5 years. Stock-based compensation expenses related to stock options granted to
                     non-employees is recognized as the stock options are earned. The
                     Company believes that the fair value of the stock options is more
                     reliably measured than the fair value of the services received. The
                     fair value of the stock options granted is calculated at each
                     reporting date, using the Black-Scholes option-pricing model, until
                     the award vests or there is substantial disincentive for the
                     non-employee not to perform the required services. The following
                     assumptions were used in calculations of the Black Scholes option
                     pricing model: Risk-free interest rates
                           
                           
                           4 - 5%Expected life
                           
                           
                           3 yearsExpected dividends
                           
                           
                           0%Expected volatility
                           
                           
                           99% Expected Life. The expected life is based on the "simplified" method described in
                     the SEC Staff Accounting Bulletin, Topic 14: Share-Based Payment. Volatility. Since the Company was a private entity for most of 2007 with no
                     historical data regarding the volatility of its common stock, the
                     expected volatility used for 2006 and 2007 is based on volatility of
                     similar entities, referred to as "guideline" companies. In evaluation
                     similarity, the Company considered factors such as industry, stage of
                     life cycle and size. Risk-Free Interest Rate.The risk-free rate is based on rates approximating U.S. Treasury
                     zero-coupon issues with remaining terms similar to the expected term
                     on the options. Dividend Yield. The Company has never declared or paid any cash dividends and does
                     not plan to pay cash dividends in the foreseeable future, and
                     therefore, used an expected dividend yield of zero in the valuation
                     method. Forfeitures.The relevant FASB standards require the Company to estimate
                     forfeitures at the time of grant, and revise those estimates in
                     subsequent periods if actual forfeitures differ from those estimates.
                     The Company uses historical data, however limited to date, to
                     estimate pre-vesting options forfeitures and record stock-based
                     compensation expense only for those awards that are expected to vest.
                     All stock-based payment awards are amortized on a straight-line basis
                     over the requisite service periods of awards, which are generally the
                     vesting periods. If the Company's actual forfeiture rate is
                     materially different from its estimate, the stock-based compensation
                     expense could be significantly different from what the Company has
                     recorded in the current period. The weighted-average remaining contractual life of outstanding
                     warrants and options is 4.71 and 7.88 years, respectively.
 18


8.  INCOME TAXES The Company has incurred net operating losses since inception. The
                     Company has not reflected any benefit of such net operating loss
                     carry forward in the financial statements. Prior to August 15, 2007
                     the Company was a limited liability company and losses were flowed
                     through to the individual members, therefore the Company only has
                     potential tax benefits from the date it became a 'C' corporation. In assessing the realization of deferred tax assets, management
                     considers whether it is more likely than not that some portion or all
                     of the deferred tax assets will not be realized. The ultimate
                     realization of deferred tax assets is dependent upon the generation
                     of future taxable income. Based on the level of historical taxable losses and projections of
                     future taxable income (losses) over the periods in which the deferred
                     tax assets can be realized, management currently believes that it is
                     more likely than not that the Company will not realize the benefits
                     of these deductible differences. Accordingly, the Company has
                     provided a valuation allowance against the gross deferred tax assets
                     as follows: September 30, 2010
                           
                           
                           
                           
                           
                           December 31, 2009Gross deferred tax assets
                           
                           
                           1,417,500
                           
                           
                           
                           
                           
                           1,032,500Valuation allowance
                           
                           
                           (1,417,500
                           )
                           
                           
                           
                           
                           (1,032,500
                           )Net deferred tax asset
                           
                           
                           
                           
                           
                           
                           
                           
                            As of September 30, 2010 and December 31, 2009, the Company has U.S.
                     federal net operating loss carryforwards of approximately $4,050,000
                     and $2,950,000, respectively. The federal net operating loss
                     carryforwards expire in the tax years 2027 through 2030. Federal tax laws impose significant restrictions on the utilization
                     of net operating loss carryforwards and research and development
                     credits in the event of a change in ownership of the Company, as
                     defined by the Internal Revenue Code Section 382. The Company's net
                     operating loss carryforwards and research and development credits may
                     be subject to the above limitations. The relevant FASB standard resulted in no adjustments to the
                     Company's liability for unrecognized tax benefits. As of both the
                     date of adoption and as of September 30, 2010 there were no
                     unrecognizable tax benefits. Accordingly, a tabular reconciliation
                     from beginning to ending periods is not provided. The Company will
                     classify any future interest and penalties as a component of income
                     tax expense if incurred. To date, there have been no interest or
                     penalties charged or accrued in relation to unrecognized tax
                     benefits. The Company is subject to federal and state examinations
                     for the year 2006 forward. There are no tax examinations currently
                     in progress. 9.  COMMITMENTS AND CONTINGENCIES Lease The Company executed a lease agreement for administrative office
                     space at its current location at 80 Orville Drive, Bohemia, New York.
                     The lease term is four months ending February, 28 2011. Payments
                     under this lease include fixed amounts for occupancy, plus additional
                     charges for common area, phone equipment, phone usage, secure
                     inventory storage area, office services, and other consumables.
                     Rental expense for the nine months ended September 30, 2010 and 2009
                     were $26,465 and $16,905, respectively. 10.  SUBSEQUENT EVENTS Common Stock Subscriptions In October the Company received a subscription agreement from one
                     investor to purchase 2,285,714 shares of Company common stock at a
                     price of $0.0175 per share for gross proceeds of $40,000. In November 2010, the Company received subscription agreements from
                     three investors to purchase an aggregate of 6,666,666 shares of
                     Company common stock at a price of $0.0225 per share for aggregate
                     gross proceeds of $150,000. On November 12, 2010, in consideration for services provided to the
                     Board of Directors (valued at $5,000), the Company issued 250,000
                     shares of its common stock to Steven Girgenti.
 19


Fountainhead Capital Management Limited advances Under the terms of the Extension of Funding Commitment agreement
                     dated September 2010, Fountainhead advanced the Company $90,000 in
                     operating funds during October 2010, and the Company has issued a
                     convertible debenture for a like amount. This debenture bears an
                     interest rate of 6% per annum, is due August 31, 2011, and is
                     convertible into shares of the Company's Common Stock at the rate of
                     $0.0175 per share at Fountainhead's option. Entry into purchase agreement for the acquisition of the assets of
                        NovaVision, Inc. On November 5, 2010, the Company entered into an asset purchase
                     agreement (the "Purchase Agreement") with Michael R. Bakst, the
                     Chapter 7 trustee (the "Trustee") of NovaVision, Inc., a company that
                     had been in the business of researching, developing and providing
                     medical technologies to restore the vision of patients with
                     neurological visual loss ("NovaVision"). The Purchase Agreement
                     provides for the purchase by Vycor of the assets, including all
                     intellectual property, of NovaVision, (the "Acquisition"). A term
                     sheet and escrow agreement for the Acquisition had been entered into
                     by Fountainhead Capital Management Limited on October 14, 2010 under
                     which $77,500 had been paid by Fountainhead as a due diligence and
                     standstill deposit. This term sheet and escrow agreement were
                     assigned to Vycor on October 26, 2010, in return for a debenture for
                     $77,500. The purchase price for the Acquisition is $900,000 in cash,
                     including the $77,500 already paid formerly as a due diligence and
                     standstill deposit. Immediately upon the execution of the Purchase
                     Agreement, an additional $622,500 was placed into escrow by Vycor.
                     The remaining $200,000 will be added to escrow on November 16, 2010.
                     The closing of the Acquisition will occur on the business day
                     following the bankruptcy court's approval of the Acquisition, but no
                     earlier than November 16, 2010 and no later than December 8, 2010. In connection with the Acquisition, the Company received $750,000 in
                     funding from Fountainhead and parties affiliated to Fountainhead. The
                     Company received an aggregate $400,000 from Fountainhead and issued
                     debentures for a like amount, which bear an interest rate of 6% per
                     annum and are due August 31, 2011. The Company received $350,000 from
                     Peter Zachariou, who is a Director and Officer of Vycor, and issued a
                     convertible debenture for a like amount. This debenture bears an
                     interest rate of 6% per annum, is due August 31, 2011, and is
                     convertible into shares of the Company's Common Stock at the rate of
                     $0.0225 per share at Peter Zachariou's option.
 20


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                        AND RESULTS OF OPERATIONS. Forward Looking Statements This Form 10-Q contains some forward-looking statements.
                     Forward-looking statements give our current expectations or forecasts
                     of future events. You can identify these statements by the fact that
                     they do not relate strictly to historical or current facts.
                     Forward-looking statements involve risks and uncertainties.
                     Forward-looking statements include statements regarding, among other
                     things, (a) our projected sales, profitability, and cash flows, (b)
                     our growth strategies, (c) anticipated trends in our industries, (d)
                     our future financing plans and (e) our anticipated needs for working
                     capital. They are generally identifiable by use of the words "may,"
                     "will," "should," "anticipate," "estimate," "plans," "potential,"
                     "projects," "continuing," "ongoing," "expects," "management
                     believes," "we believe," "we intend" or the negative of these words
                     or other variations on these words or comparable terminology. These
                     statements may be found under "Management's Discussion and Analysis
                     of Financial Condition and Results of Operations" and "Description of
                     Business," as well as in this Form 10-Q generally. In particular,
                     these include statements relating to future actions, prospective
                     products or product approvals, future performance or results of
                     current and anticipated products, sales efforts, expenses, the
                     outcome of contingencies such as legal proceedings, and financial
                     results. Any or all of our forward-looking statements in this report may turn
                     out to be inaccurate. They can be affected by inaccurate assumptions
                     we might make or by known or unknown risks or uncertainties.
                     Consequently, no forward-looking statement can be guaranteed. Actual
                     future results may vary materially as a result of various factors,
                     including, without limitation, the risks outlined under "Risk
                     Factors" and matters described in this Form 10-Q generally. In light
                     of these risks and uncertainties, there can be no assurance that the
                     forward-looking statements contained in this filing will in fact
                     occur. You should not place undue reliance on these forward-looking
                     statements. The forward-looking statements speak only as of the date on which
                     they are made, and, except to the extent required by federal
                     securities laws, we undertake no obligation to publicly update any
                     forward-looking statements, whether as the result of new information,
                     future events, or otherwise. Organizational History We were formed as a limited liability company under the laws of the
                     State of New York on June 17, 2005 as "Vycor Medical LLC". On August
                     14, 2007, we converted into a Delaware corporation and changed our
                     name to "Vycor Medical, Inc." ("Delaware Corporation"). Our sole
                     reason for conversion to the Delaware Corporation was to facilitate
                     the raising of additional capital, as prospective investors had
                     expressed resistance to investing in the Company as the NY LLC. At
                     August 14, 2007, we had approximately 1,122 membership units of the
                     NY LLC issued and outstanding. The managing members of the NY LLC
                     determined, in their reasonable business judgment, that such units,
                     in the aggregate, should convert to an aggregate of 17,999,999 shares
                     of common stock of the Delaware Corporation. On this basis, we
                     adopted a conversion ratio of 16,048 shares of common stock of the
                     Delaware Corporation for each former unit of the NY LLC. Likewise,
                     all conversion rights, options, warrants and any other rights to
                     acquire units of the NY LLC (including but not limited to units
                     issuable pursuant to the terms of the Fountainhead Bridge Loan
                     Debenture, Fountainhead Warrant to purchase 50.22 units of the NY
                     LLC, the Company's Option Agreement with Fountainhead dated December
                     14, 2006), were converted to conversion rights, options, warrants and
                     rights to acquire common shares of the Delaware Corporation, based on
                     the same conversion ratio. The action authorizing the conversion was
                     adopted by the unanimous consent of the Managing Members of the NY
                     LLC pursuant to the terms of the NY LLC Operating Agreement. Overview of Business Vycor Medical Inc. is a medical device company headquartered in
                     Bohemia, NY that designs, develops and markets medical devices for
                     use in neurosurgery. The company is ISO 13485:2003 compliant, has
                     U.S. FDA 510(k) clearance for brain and spine surgeries, CE Marking
                     for Europe and Canadian HPB licensing for sale in Canada of its brain
                     retractors. The Company has developed its first product, the ViewSite
                     Brain Access System (VBAS), a next generation brain retractor system.
                     This is now commercialized and revenue generating. The VBAS addresses
                     a market that has not changed materially in over 50 years in contrast
                     to development in surgical technologies. The second product in our pipeline is the Cervical Access System,
                     which requires further prototyping and successful market testing and
                     commercialization launch. Like the Brain Access System, this product
                     is designed to assist the surgeon in cervical surgeries, allowing the
                     surgeon to gain access to the anterior cervical surgery site. We have received FDA 510(k) clearance for our products. Section
                     510(k) of the United States Food, Drug and Cosmetic Act requires
                     medical device manufacturers to register with the U.S. Food and Drug
                     Administration of their intent to market
 21


a medical device at least 90 days in advance. The 510(k) submission
                     allows the U.S. Food and Drug Administration to determine whether a
                     device is generally equivalent to similar one already on the market.
                     With the FDA 510(k) clearance, we are authorized to take our products
                     to market in the U.S. without further approvals. In addition to our existing products and products in development, we
                     actively seek acquisition, joint venture and in-licensing
                     opportunities which we believe will add shareholder value. Our ProductsViewsite Brain Access System (VBAS) The VBAS series is used by neurosurgeons to access the surgical site
                     in the brain. This is done by inserting the VBAS into the brain
                     tissue and then removing the VBAS introducer, leaving the remaining
                     hollow working channel in place to provide the surgeon with access to
                     the precise location desired for surgery. The VBAS is available in multiple sizes and is a single-use product.
                     We intend to add additional models in the future. We believe our Brain Access System offers several advantages over the
                     brain retractor systems, commonly known as ribbon or blade retractors
                     that are metallic. When designing the products, we felt that if we
                     can incorporate certain features into our products, the surgeon
                     reaction and acceptance would be favorable. We attempted to
                     incorporate the following features: 
                           
                           
                           Gently separate delicate tissue by utilizing a tapered forward edge;
                           
                           
                           Minimize venous pressure caused by pulling tissue in one direction in the brain;
                           
                           
                           To allow direct surgical visualization of the brain tissue via
                              optically transparent construction;
                           
                           
                           Reduce "target shift" to allow the surgeon to reach the site accurately;
                           
                           
                           Minimize healthy tissue damage while reaching the target site;
                           
                           
                           Allow for accurate neuronavigational image guidance systems ("IGS") performance;
                           
                           
                           Integrate in due course with the leading surgical IGS systems such as
                              Medtronic® and BrainLab®, Stryker and GE;
                           
                           
                           Improve surgical outcomes (reducing potential surgeon and hospital
                              liability), for example, decreased insertion tissue trauma, less need
                              for readjustment during surgery and minimum interface surface
                              pressures;
                           
                           
                           Reduce damage to healthy brain tissue potentially leading to shorter
                              post-op recovery and reduced hospital stay The extent to which we are successful in achieving the above
                     objectives will be judged by the acceptance of the devices in
                     the market. The Brain Access System products have the potential to significantly
                     reduce brain tissue trauma resulting from the currently used
                     retractors and standard access procedures. First, the unique design
                     of the product minimizes the size of the brain entry access necessary
                     for surgical procedures, and in turn the amount of brain tissue
                     exposed. For instance, a brain procedure involving the removal of a
                     7cm cystic astrocyctoma would result in an access site (corticotomy)
                     of approximately 20mm. However, the same procedure that was performed
                     utilizing the Company's Brain Access System product required a
                     corticotomy of only 2mm. Because our products are relatively new to the market, there is no
                     guarantee that any of the above mentioned features would prove
                     effective and be useful by the end user. Product shortcomings Our products have a few shortcomings: 
                           
                           
                           As compared to existing blade retractors our device diameter is fixed
                              as opposed to variable which might give the surgeon less flexibility
                              once he is at the desired location.
                           
                           
                           The diameters and lengths of our devices are set to specific
                              measurements, which may limit the surgeon to these specific sizes.
                           
                           
                           Depending on the case, usage of a disposable product may be viewed as
                              more costly and may not be accepted by our potential end users. IGS Opportunity for the Brain Access System The VBAS product has the potential to improve surgical use of IGS
                     (Image Guidance Systems) employed in many surgeries, by addressing
                     two substantial IGS-related problems of target shifting and the lack
                     of real-time retractor positioning data during procedures:
 22


     Target Shifting The normal surgical procedure utilizing standard retractors in brain
                     surgery require pulling away the healthy tissue to expose the
                     targeted region of the brain located underneath. However, in many
                     cases, the amount of pulling required causes the targeted area to
                     shift away from what is shown on the IGS system. This target shifting
                     then requires the surgeon to cause possible additional trauma to
                     healthy tissue and spend additional time as the shifted target area
                     is located and the retractor is repositioned. The VBAS system is
                     designed to minimize or eliminate target shift, as the elliptical
                     shape of the product distributes relatively uniform pressure on the
                     surrounding brain tissue.      Real-Time Retractor Positioning Data Current retractor technology (commonly known as ribbon or blade
                     retractors) is not well integrated with IGS systems. During
                     insertion, the surgeon typically does not have real-time data to
                     allow visualization of retractor insertion on the IGS monitor. The
                     VBAS product line has the potential to adapt to IGS systems, such
                     that the use of a Brain Access System unit will allow the surgeon to
                     see on the surgical monitor, in real-time, exactly where the
                     retractor is in relation to critical brain structures and underlying
                     pathologies. With the IGS enabled unit, the tip of the introducer is
                     literally the "pointer" on the IGS system. Brain Access System Product Models      TC-VBAS The series consists of twelve disposable products, offered in four
                     different port diameters of 17mm and 21mm, 12mm and 28 mm and a
                     choice of three lengths for each of 3, 5, and 7cm. Cervical Access Products Subject to the raising of additional capital (which cannot be
                     guaranteed), the Company will continue its preliminary work to design
                     Cervical Access System products which would be used by the surgeon to
                     access the anterior cervical surgical site (the uppermost vertebrae
                     located in the neck). While the Company has filed certain
                     intellectual property applications with respect to this technology,
                     such development is in an early stage. We plan to design the Cervical Access System to: 
                           
                           
                           reduce the possibility of surrounding anatomic tissue damage, which
                              include the trachea, esophagus, carotid artery, recurrent laryngeal
                              and sympathetic nerve;
                           
                           
                           minimize skin disruption with the utilization of tapered outward edges;
                           
                           
                           eliminate retractor induced electrocautery burn injuries because it
                              is made with surgical grade plastic materials;
                           
                           
                           enable stable fixation (directly to the spinal column) in order to
                              avoid accidental displacement and surrounding "tissue creep"; and
                           
                           
                           allows for direct visualization of underlying anatomic structures
                              using optically clear plastic. Because the Cervical Access System products have not yet been brought
                     to market, there is no guarantee that any of the abovementioned
                     features would prove effective and even so, be welcomed by the end
                     user. Further research and development is needed for a market-ready
                     product. New Products Brain Retractors Subject to the availability of additional financing, the Company's
                     future plans include developing additional Brain Access System
                     retractors that are designed for the requirements of specific
                     surgical applications like aneurisms, tumors and endoscopic work. Other In addition to our existing products and products in development, we
                     actively seek acquisition, joint venture and in-licensing
                     opportunities which we believe will add shareholder value.
 23


Additional Applications of Brain Access System and Cervical Access
                           System Technology We believe that our Brain Access System and Cervical Access System
                     technology can be adapted to advance retractor systems for use in
                     other areas of the body. We believe that the key cross-applicable
                     benefits of our technology are: 
                           
                           
                           Promotes minimally invasive procedures from smallest possible entry incision
                           
                           
                           Uniform pressure distribution minimizes collateral tissue damage due
                              to stress points
                           
                           
                           Eliminates "tissue creep" into the surgical field
                           
                           
                           Reduces the number of materials in the surgical field Sales and Marketing We are implementing an educational and marketing strategy to promote
                     product and brand awareness in our target markets including clinical
                     papers and attending trade shows. Domestic Sales Strategy VBAS was launched in November 2008 with a strategy of driving sales
                     through leading neurosurgeons. In this regard, the Company has
                     adopted a dual strategy of targeting both the leading neurosurgeons
                     and the leading neurosurgery hospitals. The Company believes that out
                     of the 4,500 neurosurgeons in the US approximately 1,500 focus
                     predominantly on craniotomies or cranial procedures that could
                     potentially benefit from the VBAS product. Management believes that
                     there are approximately 750-1,000 hospitals that represent the
                     majority of its target market. Teaching hospitals not only carry out more relevant procedures but
                     also provide a natural way to drive adoption through the conversion
                     of new surgeons. We focus our efforts initially on surgeons as the
                     principle proponent within the hospital, and Vycor has found that the
                     learning curve is only 1-2 cases for surgeons, who like the
                     simplicity of design and ease of use. However, Hospital
                     Administration is required to approve the purchase of a new product
                     and in many cases even the provision of trial samples once a surgeon
                     has expressed an interest in using the product. The focus for
                     Hospital Administration is: Clinical studies, papers and other peer reviews evidencing the
                        clinical benefits of the product
                     Leading hospital adoption, leading surgeon adoption
                     Cost/benefit analysis
                     Product simplicity of use, need for training Experience has been that approval process can take up to six months
                     for each hospital, and in some cases may even be longer. However,
                     this time reduces as more leading hospitals become approved and as
                     more clinical paper/studies and other peer reviews are published. We are currently using independent distributors who have existing
                     relationships with neurosurgeons and target hospitals. International Sales In Canada, the company has an exclusive agreement with a distributor
                     focused in neurosurgery. In Europe, the company has agreements with
                     five exclusive distributors who are also focused in neurosurgery. In
                     China, Vycor has entered into a distribution agreement, for its VBAS.
                     The Company has filed for but not yet received SFDA approval, which
                     is required to sell and market products in this country. Reference Hospitals Program The Company has developed a Reference Hospital Program to identify
                     centers of excellence and to provide neurosurgeons with evidence of
                     support for our products. Manufacturing We have executed agreements with Lacey Manufacturing Company of
                     Bridgeport, Connecticut ("Lacey") and C&J Industries, Meadville PA
                     ("C&J") to provide a full range of engineering, contract
                     manufacturing and logistical support for our products. Lacey and C&J are recognized leaders in the medical contract
                     manufacturing sector, providing vertically integrated full services.
                     They are U.S. Food and Drug Administration registered and meet ISO
                     standards and certifications. Lacey and C&J have shipped orders to
                     Vycor and have made production runs of all 12 sizes.
 24


Market The market for our Brain Access System product lines is the
                     neurosurgical community. The Company has analyzed and estimated the
                     market for its products from an analysis of available statistics,
                     discussion with surgeons, distributors and other market participants.
                     Vycor is currently focusing its attention for VBAS on the US, China
                     and Europe. Competition Competitive manufacturers of brain retractors include: 
                           
                           
                           Cardinal Health (V. Mueller line)
                           
                           
                           Aesculap
                           
                           
                           Integra Life Science
                           
                           
                           Codman (Division of Johnson & Johnson) Cervical Access System competitors include Medtronic, Asculap/B.
                     Braun, Cardinal and Nuvasive, Cloward Instruments, among others. In
                     addition to the standard "blade retractors" distributed by the
                     aforementioned companies. In addition companies such as Endius and
                     EBI have announced cervical retractor systems. Customers The Company sells to regional distributors and hospitals. The Company
                     believes that its products currently are being evaluated or utilized
                     in approximately 80 hospitals in the United States. In addition, in
                     the nine months ended September 30, 2010 international sales
                     accounted for approximately 17% of revenues.
 25


Intellectual Property Patent Applications Below is a table setting out the status and particulars of our patent
                     applications: Filing date
                           
                           
                           Application No.
                           
                           
                           Country
                           
                           
                           Title
                           
                           
                           Status22-Jun-2005
                           
                           
                           60/692,959
                           
                           
                           US - PROV
                           
                           
                           Surgical Access Instruments For Use With Spinal Or Orthopedic Surgery (Cervical)
                           
                           
                           Converted22-Jun-2006
                           
                           
                           PCT/US06/24243
                           
                           
                           PCT
                           
                           
                           Surgical Access Instruments For Use With Spinal Or Orthopedic Surgery (Cervical)
                           
                           
                           National Phase Completed27-Nov-2006
                           
                           
                           PCT/US06/61246
                           
                           
                           PCT
                           
                           
                           Surgical Access Instruments for use with Delicate Tissues (Brain)
                           
                           
                           National Phase Completed22-Jun-2006
                           
                           
                           2613323
                           
                           
                           Canada
                           
                           
                           Surgical Access Instruments for use with spinal or orthopedic surgery
                           
                           
                           Pending - annuity due 6/22/11; Deferred exam due 06/22/1122-Jun-2006
                           
                           
                           06785312.7
                           
                           
                           Europe
                           
                           
                           Surgical Access Instruments for use with spinal or orthopedic surgery
                           
                           
                           Pending - annuity due 6/22/1122-Jun-2006
                           
                           
                           299/KOLNP/2008
                           
                           
                           India
                           
                           
                           Surgical Access Instruments for use with spinal or orthopedic surgery
                           
                           
                           Pending22-Jun-2006
                           
                           
                           2008-518369
                           
                           
                           Japan
                           
                           
                           Surgical Access Instruments for use with spinal or orthopedic surgery
                           
                           
                           Published20-Dec-2007
                           
                           
                           11/993,280
                           
                           
                           US - UTIL
                           
                           
                           Surgical Access Instruments for use with spinal or orthopedic surgery
                           
                           
                           Published25-Jun-2008
                           
                           
                           08107050.4
                           
                           
                           Hong Kong
                           
                           
                           Surgical Access Instruments for use with spinal or orthopedic surgery
                           
                           
                           Pending18-Sep-2008
                           
                           
                           61/098041
                           
                           
                           US - PROV
                           
                           
                           Surgical Access Instruments for use with Delicate Tissues (Brain)
                           
                           
                           Converted25-May-2009
                           
                           
                           2670631
                           
                           
                           Canada
                           
                           
                           Surgical Access Instruments for use with Delicate Tissues (Brain)
                           
                           
                           Pending - annuity due 11/27/11; Request exam due 11/27/1127-Nov-2006
                           
                           
                           06840022.5
                           
                           
                           Europe
                           
                           
                           Surgical Access Instruments for use with Delicate Tissues (Brain)
                           
                           
                           Published - annuity due 11/30/1127-Nov-2006
                           
                           
                           1977/KOLNP/2009
                           
                           
                           India
                           
                           
                           Surgical Access Instruments for use with Delicate Tissues (Brain)
                           
                           
                           Pending
 26


Filing date
                        
                        
                        Application No.
                        
                        
                        Country
                        
                        
                        Title
                        
                        
                        Status27-Nov-2006
                        
                        
                        2009-539227
                        
                        
                        Japan
                        
                        
                        Surgical Access Instruments for use with Delicate Tissues (Brain)
                        
                        
                        Published27-Nov-2006
                        
                        
                        2009124446
                        
                        
                        Russia
                        
                        
                        Surgical Access Instruments for use with Delicate Tissues (Brain)
                        
                        
                        Pending27-Nov-2006
                        
                        
                        200680056889.9
                        
                        
                        China
                        
                        
                        Surgical Access Instruments for use with Delicate Tissues (Brain)
                        
                        
                        Published - Response due 12/02/1021-Aug-2009
                        
                        
                        12/545686
                        
                        
                        US - CON
                        
                        
                        Surgical Access Instruments for use with Delicate Tissues (Brain)
                        
                        
                        Published21-Aug-2009
                        
                        
                        12/545719
                        
                        
                        US - CON
                        
                        
                        Surgical Access Instruments for use with Delicate Tissues (Brain)
                           (apparatus claims)
                        
                        
                        Published20-Jun-2010
                        
                        
                        10106385.8
                        
                        
                        Hong Kong
                        
                        
                        Surgical Access Instruments for use with Delicate Tissues (Brain)
                        
                        
                        Pending The inventor on the above-indicated patent applications was Dr. John
                     Mangiardi, who assigned the rights to the Sawmill Trust on September
                     17, 2005 under the terms of an assignment agreement between the
                     parties. The Sawmill Trust then, in turn, assigned the same rights to
                     the Company on September 17, 2005 pursuant to an assignment agreement
                     between the Sawmill Trust and the Company dated the same date. Trademarks VYCOR MEDICAL is a registered trademark and VIEWSITE is pending
                     registration as a trademark with the United States Patent and
                     Trademark Office. Insurance We presently have Directors' and Officers' Liability Insurance and
                     Product Liability insurance. Government Regulations We are committed to an integrated total quality management system. We
                     have completed the necessary procedures and are certified to the ISO
                     standards expected of medical device manufacturers as follows: ISO 13485:2003 Medical Devices  Quality Management Systems The certification of a quality management system to ISO 13485,
                     specifically for medical devices, is advantageous and often essential
                     for medical companies to export their products to the global market,
                     as well as maintain and enter into certain agreements and business
                     growth opportunities within the U.S. For example, Canada requires
                     that medical device manufacturers marketing their products in Canada
                     must have a quality system certified to ISO 13485:2003. The
                     certification is also required for placement of branded devices into
                     the European Union. In November 2009, we successfully passed our re-certification audit
                     through Intertek. Recertification audits are required every 3 years
                     while surveillance audits occur annually in between. We have the following certification/licensing.  Fully Quality Assurance System Directive 93/42/EEC for Medical
                     Devices, Annex II (3)  EC Design-Examination Certificate Directive 93/42/EEC for Medical
                     Devices, Annex II (4)
 27


 ISO 13485.2003  HPB Licensing for Canada Continuing Regulatory Requirements Governmental regulation in the United States and other countries is a
                     significant factor affecting the research and development,
                     manufacture and marketing of medical devices, including our products.
                     In the United States, the FDA has broad authority under the Federal
                     Food, Drug and Cosmetic Act (the FD&C Act) to regulate the
                     development, distribution, manufacture, marketing and sale of medical
                     devices. Foreign sales of medical devices are subject to foreign
                     governmental regulation and restrictions that vary from country
                     to country. Medical devices intended for human use in the United States are
                     classified into one of three categories, depending upon the degree of
                     regulatory control to which they will be subject. Such devices are
                     classified by regulation into either Class I general controls, Class
                     II special standards or Class III pre-market approval (PMA),
                     depending upon the level of regulatory control required to provide
                     reasonable assurance of the safety and effectiveness of the device. Most Class I devices are exempt from pre-market notification (510(k))
                     or PMA. However Class I devices are subject to "general controls,"
                     including compliance with FDA manufacturing requirements (Quality
                     System Regulation (QSR), sometimes referred to as current good
                     manufacturing practices or CGMPs), adverse event reporting, labeling
                     and other requirements. Class II devices are subject to general
                     controls and to the pre-market notification requirements under
                     Section 510(k) of the FD&C Act. For a 510(k) to be cleared by the
                     FDA, the manufacturer must demonstrate to the FDA that a device is
                     substantially equivalent to another legally marketed device that was
                     either cleared through the 510(k) process or on the market prior to
                     1976. It generally takes four to twelve months from the date of
                     submission to obtain 510(k) clearance although it may take longer.
                     Class III is the most stringent regulatory category for devices.
                     Class III devices are those for which insufficient information exists
                     to assure safety and effectiveness solely through general or special
                     controls. Class III devices are usually those that support or sustain
                     human life, are of substantial importance in preventing impairment of
                     human health, or which present a potential, unreasonable risk of
                     illness or injury. Class III devices also include devices that are
                     not substantially equivalent to other legally marketed devices. To
                     obtain approval to market a Class III device, a manufacturer must
                     obtain FDA approval of a PMA application. The PMA process requires
                     more data, including ordinarily data from clinical studies testing
                     the device in humans, takes longer and is typically a significantly
                     more complex and expensive process than the 510(k) procedure.
                     Clinical studies of devices in humans is also subject to regulation
                     by the FDA. Testing must be conducted in compliance with the
                     investigational device exemption (IDE) regulations. According to the US FDA, our products have been classified as Class
                     II products and cleared for marketing through the 510(k) process.
 28


We can provide no assurance that we will be able to maintain and
                     obtain clearances or approvals needed to introduce new products and
                     technologies. After a device is placed on the market, numerous
                     regulatory requirements apply. These include: 
                           
                           
                           quality system regulation, which requires manufacturers to follow
                              design, testing, control, documentation and other quality assurance
                              procedures during the manufacturing process;
                           
                           
                           labeling regulations, which prohibit the promotion of products for
                              unapproved or "off-label" uses and impose other restrictions on
                              labeling; and
                           
                           
                           medical device reporting regulations, which require that
                              manufacturers report to the FDA if their device may have caused or
                              contributed to a death or serious injury or malfunctioned in a way
                              that would likely cause or contribute to a death or serious injury if
                              it were to recur.Failure to comply with applicable regulatory requirements can
                              result in enforcement action by the FDA, which may include any of the
                              following sanctions:
                           
                           
                           fines, injunctions, and civil penalties;
                           
                           
                           recall or seizure of our products;
                           
                           
                           operating restrictions, partial suspension or total shutdown of production;
                           
                           
                           Refusing a request for 510(k) clearance or premarket approval of new products;
                           
                           
                           withdrawing 510(k) clearance or premarket approvals that are already
                              granted; and criminal prosecution. Medical device laws are also in effect in many of the countries
                     outside of the United States in which we will do business. These laws
                     range from comprehensive device approval and quality system
                     requirements for some or all of our medical device products to simple
                     requests for product data or certifications. The number and scope of
                     these requirements are increasing. In June 1998, the European Union
                     Medical Device Directive became effective, and all medical devices
                     must meet the Medical Device Directive standards and receive CE mark
                     certification. CE mark certification involves a comprehensive Quality
                     System program, and submission of data on a product to the Notified
                     Body in Europe. We have obtained the CE marking approval to allow for distribution of
                     our VBAS products in Europe and have received our HPB licensing
                     approval for distribution in Canada. Health Care Regulatory Issues The health care industry is highly regulated and the regulatory
                     environment in which we operate may change significantly in the
                     future. In general, regulation of health care-related companies is
                     increasing. We anticipate that Congress and state legislatures will
                     continue to review and assess alternative health care delivery and
                     payment systems. We cannot predict what impact the adoption of any
                     federal or state health care reform measures may have on our business. We regularly monitor developments in statutes and regulations
                     relating to our business. We may be required to modify our
                     agreements, operations, marketing and expansion strategies from time
                     to time in response to changes in the statutory and regulatory
                     environment. We plan to structure all of our agreements, operations,
                     marketing and strategies in accordance with applicable law, although
                     we can provide no assurance that our arrangements will not be
                     challenged successfully or that required changes may not have a
                     material adverse effect on our business, financial condition, results
                     of operations and cash flows. We believe that the discussion above summarizes all of the material
                     health care regulatory requirements to which we currently are
                     subject. Complying with these regulatory requirements may involve
                     expense to us, delay in our operations and/or restructuring of our
                     business relationships. Violations could potentially result in the
                     imposition of civil and/or criminal penalties.
 29


Results of OperationsComparison of the Three Months Ended September 30, 2010 to the Three
                              Months September 30, 2009 The following table presents the dollar amount changes from period to
                     period of the line-items included in our Statements of Operations for
                     the three months ended September 30, 2010 and September 30, 2009 Three months ended September 30:
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           
                           
                           
                           Increase/(Decrease)Revenue:Sales
                           
                           $
                           71,205
                           
                           
                           
                           
                           $
                           44,198
                           
                           
                           
                           
                           $
                           27,007Cost of Goods Sold
                           
                           
                           11,859
                           
                           
                           
                           
                           
                           4,584
                           
                           
                           
                           
                           
                           7,275Gross Profit
                           
                           
                           59,346
                           
                           
                           
                           
                           
                           39,614
                           
                           
                           
                           
                           
                           19,732Operating expenses:Research and Development
                           
                           
                           4,009
                           
                           
                           
                           
                           
                           -
                           
                           
                           
                           
                           
                           4,009General and administrative
                           
                           
                           337,033
                           
                           
                           
                           
                           
                           159,158
                           
                           
                           
                           
                           
                           177,875Operating loss
                           
                           
                           (281,696
                           )
                           
                           
                           
                           
                           (119,544
                           )
                           
                           
                           
                           
                           162,152Interest Expense
                           
                           
                           90,440
                           
                           
                           
                           
                           
                           33,477
                           
                           
                           
                           
                           
                           56,963Net Loss
                           
                           $
                           (372,136
                           )
                           
                           
                           
                           $
                           (153,021
                           )
                           
                           
                           
                           $
                           219,115 Revenue: The company recorded revenue of $71,205 from the sale of our products
                     in the three months ended September 30, 2010, an increase of 61% for
                     the same period in 2009. The increase in sales was attributable to
                     greater penetration and usage of our product in hospitals in the
                     United States both direct and through distributors, and increased
                     sales internationally. Gross margin of 83% was achieved in the three
                     months ended September 30, 2010 compared to 90% for the same period
                     in 2009, however gross margin is mostly a product of sale mix between
                     US sales through distributors, US sales direct and international
                     sales which vary quarter by quarter. Research and Development Expense: Research and development expenses were $4,009 for the three months
                     ended September 30, 2010 compared $0 for the three months ended
                     September 30, 2009. General and Administrative Expenses: General and administrative expenses increased by $177,875 to $337,033
                     for the three months ended September 30, 2010 from $159,158 for the
                     three months ended September 2009. Following the recapitalization transaction that closed on December
                     29, 2009 the board and management of Vycor has embarked on a period
                     of heightened sales and marketing activity and engagement with
                     distributors and hospital customers following a prolonged period of
                     reduced activity in 2009 as a result of capital constraints. This has
                     lead to an increase in the marketing-related costs of the Company.
                     Vycor has also carried out a series of fundraisings since the closing
                     of the recapitalization, which has resulted in additional cash and
                     non-cash expenses. The increases for the three months ended September 30, 2010 over the
                     three months ended September 30, 2009 are attributable to an
                     increased level of: sales and marketing activity; personnel costs;
                     fundraising fees and related costs; and professional fees, as follows: Total G&A expenses for the three months ended September 30, 2009
                           
                           $
                           159,158Increase in marketing expenditure and travel costs
                           
                           
                           39,488Increase in personnel costs
                           
                           
                           46,091Increase in non-cash consulting fees
                           
                           
                           28,218Increase in professional fees
                           
                           
                           12,818Increase in other operating expenses
                           
                           
                           51,260Total G&A expenses f or the three months ended September 30, 2010
                           
                           $
                           337,033
 30


Interest Expense: Interest expense comprises: interest expense on the Company's debt;
                     and the amortization of the Beneficial Conversion Feature (BCF) in
                     the Company's convertible debt. Interest expense for the three months
                     ended September 30, 2010 was reduced by $24,128 to $9,359 from
                     $33,487 for the three months ended September 30, 2009, as a result of
                     debt reduction. The amortization of the BCF was $81,083 compared to
                     $0, as the BCF on the Company's debt for the same period in 2009 had
                     been fully amortized. Comparison of the Nine Months Ended September 30, 2010 to the Nine
                           Months Ended September 30, 2009 The following table presents the dollar amount changes from period to
                     period of the line-items included in our Statements of Operations for
                     the nine months ended September 30, 2010 and September 30, 2009 Nine months ended September 30:
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2009
                           
                           
                           Increase/(Decrease)Revenue:Sales
                           
                           $
                           210,308
                           
                           
                           
                           
                           $
                           156,587
                           
                           
                           
                           
                           $
                           53,721Cost of Goods Sold
                           
                           
                           33,134
                           
                           
                           
                           
                           
                           19,417
                           
                           
                           
                           
                           
                           13,717Gross Profit
                           
                           
                           177,174
                           
                           
                           
                           
                           
                           137,170
                           
                           
                           
                           
                           
                           40,004Operating expenses:Research and Development
                           
                           
                           9,657
                           
                           
                           
                           
                           
                           -
                           
                           
                           
                           
                           
                           9,657General and administrative
                           
                           
                           1,190,109
                           
                           
                           
                           
                           
                           735,171
                           
                           
                           
                           
                           
                           454,938Operating loss
                           
                           
                           (1,022,592
                           )
                           
                           
                           
                           
                           (598,001
                           )
                           
                           
                           
                           
                           424,591Interest Expense
                           
                           
                           186,624
                           
                           
                           
                           
                           
                           226,869
                           
                           
                           
                           
                           
                           (40,245
                           )Net Loss
                           
                           $
                           (1,209,216
                           )
                           
                           
                           
                           $
                           (824,870
                           )
                           
                           
                           
                           $
                           384,346 Revenue: The company recorded revenue of $210,308 from the sale of our
                     products in the nine months ended September 30, 2010, an increase of
                     34% for the same period in 2009. The increase in sales was
                     attributable to greater penetration and usage of our product in
                     hospitals in the United States both direct and through distributors,
                     and increased sales internationally. Gross margin of 84% was achieved
                     in the nine months ended September 30, 2010 compared to 88% for the
                     same period in 2009. Gross margin is mostly a product of sale mix
                     between US sales through distributors, US sales direct and
                     international sales which vary quarter by quarter. Research and Development Expense: Research and development expenses were $9,657 compared to $0 for the
                     nine months ended September 30, 2009. General and Administrative Expenses: General and administrative expenses increased by $454,938 to
                     $1,190,109 for the nine months ended September 30, 2010 from $735,171
                     for the nine months ended September 2009. Following the recapitalization transaction that closed on December
                     29, 2009 the board and management of Vycor has embarked on a period
                     of heightened sales and marketing activity and engagement with
                     distributors and hospital customers following a prolonged period of
                     reduced activity in 2009 as a result of capital constraints. This has
                     lead to an increase in the marketing-related costs of the Company.
                     Vycor has also carried out a series of fundraisings since the closing
                     of the recapitalization, which has resulted in additional cash and
                     non-cash expenses. The increases for the nine months ended September 30, 2010 over the
                     nine months ended September 30, 2009 are attributable to an increased
                     level of: sales and marketing activity; personnel costs; fundraising
                     fees and related costs; offset by a reduction in corporate activity,
                     as follows:
 31


Total G&A expenses for the nine months ended September 30, 2009
                           
                           
                           
                           
                           $
                           735,171Increase in marketing expenditure and travel costs
                           
                           
                           
                           
                           
                           194,224Increase in personnel costs
                           
                           
                           
                           
                           
                           16,525Fundraising costs
                           
                           
                           
                           
                           
                           72,500Increase in non-cash consulting fees
                           
                           
                           
                           
                           
                           78,767Increase non-cash warrant/option recognition expense
                           
                           
                           
                           
                           
                           44,800Reduction in professional fees from reduced corporate activity
                           
                           
                           
                           
                           
                           (18,423
                           )Increase in other operating expenses
                           
                           
                           
                           
                           
                           66,545Total G&A expenses for the nine months ended September 30, 2010
                           
                           
                           
                           
                           $
                           1,190,109 Warrant and Option Recognition Expense Included within General and Administrative expenses above is a
                     non-cash charge for share based compensation as the result of
                     amortizing warrants and options which have been issued by the Company
                     over various periods. The charge for the nine months ended September
                     30, 2010 was $109,324, an increase of $44,800 over the nine months
                     ended September 30, 2009. Interest Expense: Interest expense comprises: interest expense on the Company's debt;
                     and the amortization of the Beneficial Conversion Feature (BCF) in
                     the Company's convertible debt. Interest expense for the nine months
                     ended September 30, 2010 was reduced by $48,057 to $33,766 from
                     $81,823 for the nine months ended September 30, 2009, as a result of
                     debt reduction. The amortization of the BCF was $152,864 compared
                     to $145,303. Balance Sheet, Liquidity and Capital Resources As of September 30, 2010 we had $44,142 cash, a working capital
                     deficit of $518,404 and an accumulated deficit of $6,085,904 through
                     September 30, 2010. The Stockholders' deficit at September 30, 2010
                     was $247,880, an improvement from $1,111,941 at December 31, 2009.
                     Debt at September 30, 2010 was $496,215 a reduction from $1,111,053
                     in December 2009. Our operating activities used $1,102,415 in cash for the nine months
                     ended September 30, 2010. Aside from the increased operating expenses
                     discussed above, the Company has significantly reduced historic
                     payables, from $336,942 in December 2009 to $77,191 in September
                     2010, and increased operating assets. This is accounted for
                     as follows: Net cash loss adjusted for change in accrued interest
                           
                           
                           
                           
                           $
                           851,314Reduction in accounts payable
                           
                           
                           
                           
                           
                           245,725Increase in accounts receivable and inventory
                           
                           
                           
                           
                           
                           45,166Purchase of new molds not yet delivered
                           
                           
                           
                           
                           
                           18,380Net Change in other assets and liabilities
                           
                           
                           
                           
                           
                           (58,170
                           )$
                           1,102,415 Under a previously disclosed agreement entered into with Fountainhead
                     Capital Management Limited, Fountainhead agreed to fund or procure
                     funding for Vycor Medical's monthly operating expenses through
                     September 2010 subject to the Company meeting certain financial
                     benchmarks. The Company entered into a new agreement on September 29,
                     2010 under which Fountainhead agreed to extend this commitment for
                     Vycor Medical's operating expenses through August, 2011. Going Concern Our independent auditors have added an explanatory paragraph to their
                     audit issued in connection with the financial statements for the
                     period ended December 31, 2009, relative to our ability to continue
                     as a going concern. This means that there is substantial doubt that
                     the company can continue as an ongoing business for the next 12
                     months. The financial statements do not include any adjustments that
                     might result from the uncertainty about our ability to continue our
                     business. The company has incurred losses since inception, including
                     net losses of $1,141,383 for the year ended December 31, 2009 and
                     $1,209,216 for the nine months ended September 30, 2010, and expects
                     to incur substantial additional losses, including additional
                     development
 32


costs, costs related to clinical trials and manufacturing expenses.
                     The company has incurred negative cash flows from operations since
                     inception. As of September 30, 2010 and December 31, 2009, the
                     company had an accumulated deficit of $6,085,904 and $4,876,688,
                     respectively, and cash and cash equivalents balance of $44,142 and
                     $12,771 at September 30, 2010 and December 31, 2009, respectively.
                     Since there is no record of profitable operations, there is high a
                     possibility that you may suffer a complete loss of your investment.
                     Because our auditors have issued a going concern opinion, there is
                     substantial uncertainty we will continue operations in which case you
                     could lose your investment. In these circumstances the Company
                     believes it may not have enough cash to meet ongoing cash needs
                     unless the Company is able to obtain additional cash from the
                     issuance of debt or equity securities. There is no assurance that
                     additional funds from the issuance of equity will be available for
                     the Company to finance its operations on acceptable terms. If
                     adequate funds are not available, the Company may have to delay
                     development or commercialization of products or technologies that the
                     Company would otherwise seek to commercialize, or cease operations.
                     These conditions raise substantial doubt about the Company's ability
                     to continue as a going concern. The financial statements do not
                     include any adjustments to reflect the possible future effects on the
                     recoverability and classification of assets or the amounts and
                     classification of liabilities that may result from the outcome of
                     this uncertainty. Recently Issued Accounting Pronouncements The Company has adopted all recently issued accounting
                     pronouncements. The adoption of the accounting pronouncements,
                     including those not yet effective, is not anticipated to have a
                     material effect on the financial position or results of operations of
                     the Company. Critical Accounting Policies and Estimates Uses of estimates in the preparation of financial statements The preparation of financial statements in conformity with accounting
                     principles generally accepted in the United States ("GAAP") requires
                     management to make estimates and assumptions that affect the amounts
                     reported in the financial statements and accompanying notes.
                     Currently, the Company estimates depreciation, amortization of
                     intangible assets, and the fair values of options and warrants. The most critical estimates that impact the financial position and
                     results of operation of the company have to do with the methodologies
                     and assumptions used in determining the fair value of various debt
                     estimates. These include assumptions associated with warrants,
                     options and stock issued in conjunction with such debt. Additionally,
                     the Black-Scholes option pricing model and its related assumptions of
                     volatility, risk free interest, stock price also significantly
                     impacted share based compensation and the results of operations. Research and Development The Company expenses all research and development costs as incurred.
                     For the nine months ended September 30, 2010 and 2009, the amounts
                     charged to research and development expenses were $9,657 and $0,
                     respectively. Cash and cash equivalents The Company considers all highly liquid debt investments with
                     original maturities of nine months or less when purchased to be cash
                     equivalents. The carrying amounts approximate fair market value
                     because of the short maturity. The Company maintains cash balances at
                     various financial institutions. Accounts at each institution are
                     insured by the Federal Deposit Insurance Corporation up to $250,000.
                     The Company's accounts at these institutions may, at times, exceed
                     the federally insured limits. The Company has not experienced any
                     losses in such accounts. Fair Values of Financial Instruments At September 30, 2010 and 2009, fair values of cash and cash
                     equivalents, accounts payable, convertible promissory notes, and
                     options and warrants approximate their carrying amount due to the
                     short period of time to maturity and various fair value model
                     calculations. Property and equipment The Company records property and equipment at cost and calculates
                     depreciation using the straight-line method over the estimated useful
                     life of the assets, which is estimated to be between three and
                     ten years.
 33


Income taxes The Company accounts for income taxes in accordance with SFAS 109, Accounting for Income Taxes. This statement prescribes the use of the liability method whereby
                     deferred tax assets and liability account balances are determined
                     based on differences between financial reporting and tax bases of
                     assets and liabilities and are measured using the enacted tax rates
                     and laws that will be in effect when the differences are expected to
                     reverse. The Company provides a valuation allowance, if necessary, to
                     reduce deferred tax assets to their estimated realizable value. Patents The Company capitalizes legal and related costs associated with the
                     establishment of patents for its products. Costs associated with the
                     development of the patented item or process are charged to research
                     and development costs as incurred. The costs associated with the
                     establishment of the patents are amortized over the life of
                     the patent. The Company reviews existing patents as well as those in the approval
                     process for impairment on an annual basis using a present value, cash
                     flow method pursuant to Statement of Financial Accounting Standards
                     142, Goodwill and Other Intangible Assets. Since the Company's
                     patents are either very new or still in the process of approval, the
                     Company does not believe that any impairment of these amounts exists. Revenue Recognition The Company records revenue at the time, pursuant to Staff Accounting
                     Bulletin Topic 13(a), that a completed contract for the sale exists,
                     title transfers to the buyer and the product is invoiced and shipped
                     to the customer. The Company intends to sell a surgical access system
                     which has already cleared the U.S. FDA 510(k) review process. It has
                     been granted a 510(k) number to market to hospitals and other medical
                     professionals. The Company does not expect the need to provide for
                     product returns or warrantee costs but will review such potential
                     costs after the commencement of sales. Educational and marketing expenses The Company may incur costs for the education of customers on the
                     uses and benefits of its products. The Company will expense such
                     costs as a component of selling, general and administrative costs as
                     such costs are incurred. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable ITEM 4A(T). CONTROLS AND PROCEDURES (a)      Disclosure Controls and Procedures The Company's management, with the participation of its principal
                     executive officer and principal accounting officer, has evaluated the
                     effectiveness of the Company's disclosure controls and procedures (as
                     defined in Rules 13a-15(e) or 15d-15 (e) under the Securities
                     Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
                     of the period covered by this Quarterly Report on Form 10-Q. Based on
                     such evaluation, the Company's principal executive officer and
                     principal financial officer have concluded that, as of the end of
                     such period, the Company's disclosure controls and procedures were
                     adequate and effective. (b)      Changes in Internal Controls There have not been any changes in the Company's internal control
                     over financial reporting (as such term is defined in Rules 13a-15(f)
                     and 15d-15(f) under the Exchange Act) during the quarter ended
                     September 30, 2010 that have materially affected, or are reasonably
                     likely to materially affect, the Company's internal control over
                     financial reporting. PART II ITEM 1. LEGAL PROCEEDINGS We are subject from time to time to litigation, claims and suits
                     arising in the ordinary course of business. As of September 30, 2010,
                     we were not a party to any material litigation, claim or suit whose
                     outcome could have a material effect on our financial statements.
 34


ITEM 1A. RISK FACTORS. As a "smaller reporting company" as defined by Item 10 of Regulation
                     S-K, the Company is not required to provide information required by
                     this Item ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS On January 11, 2010, the Company issued 531,376,500 shares of common
                     stock to Fountainhead Capital Management Limited in accordance with
                     the terms of a Debenture Exchange Agreement dated as of December 29,
                     2009 (see Exhibit 4.1 to the Company's Form 8-K Current Report filed
                     with the SEC on January 6, 2010). On January 11, 2010, the Company issued 4,000,000 shares of common
                     stock to Jodi Yeager on the conversion of $50,000 face value of the
                     Company's convertible debenture. On January 11, 2010, the Company issued 8,787,600 shares of common
                     stock to Panamerica Capital Group, Inc. on the conversion of $109,845
                     face value of the Company's convertible debenture. On January 11, 2010, the Company issued 9,187,600 shares of common
                     stock to Hyperlink Media, LLC on the conversion of $114,845 face
                     value of the Company's convertible debenture. On January 11, 2010, the Company issued 10,320,000 shares of common
                     stock to Karen Ginder on the conversion of $129,000 face value of the
                     Company's convertible debenture. On January 11, 2010, the Company issued 4,000,000 shares of common
                     stock to Accessible Development Corp. on the conversion of $50,000
                     face value of the Company's convertible debenture. On January 11, 2010, the Company issued 16,000,000 shares of common
                     stock to Altitude Group, LLC on the conversion of $200,000 face value
                     of the Company's convertible debenture. On January 11, 2010, the Company issued 6,000,000 shares of common
                     stock to Mario Zachariou on the conversion of $75,000 face value of
                     the Company's convertible debenture. On January 11, 2010, the Company issued 6,000,000 shares of common
                     stock to Anthony Cantor on the conversion of $75,000 face value of
                     the Company's convertible debenture. On February 23, 2010, in consideration for services provided to the
                     Board of Directors (valued at $10,000), the Company issued 800,000
                     shares of its common stock to Steven Girgenti. In accordance with the previously filed Certificate of Designation,
                     during the period January 2010 through March 2010, the Company sold
                     140,000 shares of Series B Preferred Stock during the current fiscal
                     year for an aggregate amount of $140,000. These shares yield
                     dividends of 8% per annum, payable in cash or stock at the Company's
                     sole discretion. Series B Preferred Stock can be converted into the
                     Company's Common Stock at a multiple of 80 common shares per Series B
                     share at the holder's discretion, or can be redeemed by the Company
                     using the equivalent multiple after the issue's one year anniversary. In accordance with an agreement with Joe Simone for consulting
                     services relating to identifying sales and marketing opportunities,
                     increase investor awareness of the Company, identify potential new
                     investors who might have an interest in investing in the Company, and
                     other activities in the furtherance of the above, in April 2010, the
                     Company issued 750,000 shares of its Common Stock valued at $9,375. On April 14, 2010, by action by written consent of the Board of
                     Directors, the Company developed the 2010 Professional/Consultant
                     Stock Compensation Plan. Further, a Form S-8 Registration Statement
                     was filed with the Securities and Exchange Commission on April 16,
                     2010, registering 934,986 shares for the Plan's use. It was further
                     resolved that these shares be issued to Gregory Sichenzia for
                     services provided to the Company by Sichenzia Ross Friedman Ference
                     LLP, valued at $14,025. From April 13, 2010 through May 10, 2010, the Company accepted
                     Subscription Agreements from eleven subscribers for the purchase of
                     its Common Stock. In accordance with these Agreements, 49,966,665
                     shares were purchased at $0.015 per share, totaling $749,500.
                     Approximately $72,500 of reimbursable out-of-pocket costs were
                     incurred by consultants in furtherance of these transactions. On August 11, 2010, in consideration for services provided to the
                     Board of Directors (valued at $5,000), the Company issued 250,000
                     shares of its common stock to Steven Girgenti. On August 11, 2010, in consideration for services provided to the
                     Board of Directors (valued at $6,000), the Company issued 300,000
                     shares of its common stock to Ramin Rak, M.D., P.C.
 35


On August 11, 2010, in consideration for services provided to the
                     Board of Directors (valued at $5,250), the Company issued 262,500
                     shares of its common stock to Konstantin V. Slavin. From July to September 2010, the Company received subscription
                     agreements from six investors to purchase an aggregate of 9,428,571
                     shares of Company common stock at a price of $0.0175 per share for
                     aggregate gross proceeds of $165,000. The securities issued in the abovementioned transactions were issued
                     in connection with private placements exempt from the registration
                     requirements of Section 5 of the Securities Act of 1933, as amended,
                     pursuant to the terms of Section 4(2) of that Act and Rule 506 of
                     Regulation D. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. (REMOVED AND RESERVED) None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS Index to Exhibits 31.1
                           
                           
                           Certification of Chief Financial Officer under Rule 13(a) - 14(a) of
                              the Exchange Act.31.2
                           
                           
                           Certification of Chief Executive Officer under Rule 13(a) - 14(a) of
                              the Exchange Act.32.1
                           
                           
                           Certification of CEO under 18 U.S.C. Section 135032.2
                           
                           
                           Certification of CFO under 18 U.S.C. Section 1350 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the
                     registrant caused this report to be signed on its behalf by the
                     undersigned, thereunto duly authorized, on November 15, 2010. VYCOR MEDICAL, INC.By:
                           
                           
                           /s/ Kenneth T. CovielloKenneth T. CovielloChief Executive andDirector (Principal Executive Officer)By:
                           
                           
                           /s/ Adrian C. LiddellAdrian C. LiddellChairman of the Board andDirector (Principal Accounting and Financial Officer)
 36