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, 2011 o  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from                              to VYCOR MEDICAL, INC. (Exact name of small business issuer as specified in its charter)  Delaware
                           
                           
                           
                           
                           
                           333-149782
                           
                           
                           
                           
                           
                           20-3369218(State of Incorporation)
                           
                           
                           
                           
                           
                           (Commission File Number)
                           
                           
                           
                           
                           
                           (IRS Employer Identification No.) 3651 FAU Boulevard, Suite 300, Boca Raton, FL 33434 (Address of principal executive offices) (Zip code) Issuer's telephone number: (561) 558-2000Securities 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 806,157,246 shares outstanding of registrant's common
                  stock, par value $0.0001 per share, as of November 4, 2011. 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, 2011 (unaudited) and
                              December 31, 2010
                           
                           
                           3Unaudited Consolidated Statements of Operations for the three and
                              nine months ended September 30, 2011 and September 30, 2010
                           
                           
                           4Unaudited Consolidated Statements of Cash Flows for the nine months
                              ended September 30, 2011
                               and 2010
                           
                           
                           5Notes to Unaudited Consolidated Financial Statements
                           
                           
                           6Item 2.
                           
                           
                           Management's Discussion and Analysis of Financial Condition and
                              Results of Operation
                           
                           
                           20Item 3.
                           
                           
                           Quantitative and Qualitative Disclosures About Market Risk
                           
                           
                           29Item 4.
                           
                           
                           Controls and Procedures
                           
                           
                           
                           
                           
                           29PART IIItem 1.
                           
                           
                           Legal Proceedings
                           
                           
                           
                           
                           
                           30Item 1A.
                           
                           
                           Risk Factors
                           
                           
                           
                           
                           
                           30Item 2.
                           
                           
                           Unregistered Sales of Equity Securities and Use of Proceeds
                           
                           
                           30Item 3.
                           
                           
                           Defaults Upon Senior Securities
                           
                           
                           
                           
                           
                           32Item 4.
                           
                           
                           (Removed and Reserved)
                           
                           
                           
                           
                           
                           32Item 5.
                           
                           
                           Other Information
                           
                           
                           
                           
                           
                           32Item 6.
                           
                           
                           Exhibits
                           
                           
                           
                           
                           
                           32SIGNATURES
                           
                           
                           
                           
                           
                           32
 2


PART I ITEM 1. FINANCIAL STATEMENTS VYCOR MEDICAL, INC.Consolidated Balance Sheets  September 30,2011(unaudited)
                           
                           
                           December 31,2010(restated)ASSETSCurrent AssetsCash
                           
                           $
                           1,833,831
                           
                           $
                           127,081Accounts receivable, net
                           
                           
                           113,575
                           
                           
                           76,460Inventory
                           
                           
                           118,157
                           
                           
                           52,360Prepaid expenses and other current assets
                           
                           
                           1,176,941
                           
                           
                           645,302Total Current Assets
                           
                           
                           3,242,504
                           
                           
                           901,203Fixed assets, net
                           
                           
                           671,607
                           
                           
                           773,188Intangible and Other assets:Trademarks
                           
                           
                           130,000
                           
                           
                           130,000Patents, net of accumulated amortization
                           
                           
                           343,622
                           
                           
                           333,072Website, net of accumulated amortization
                           
                           
                           5,165
                           
                           
                           3,932Security deposits
                           
                           
                           8,988
                           
                           
                           12,299487,775
                           
                           
                           479,303TOTAL ASSETS
                           
                           $
                           4,401,886
                           
                           $
                           2,153,694LIABILITIES AND STOCKHOLDERS' EQUITYCurrent LiabilitiesAccounts payable
                           
                           $
                           241,889
                           
                           $
                           114,447Accrued interest
                           
                           
                           24,986
                           
                           
                           36,992Accrued liabilities
                           
                           
                           658,098
                           
                           
                           406,998Other current liabilities
                           
                           
                           101,179
                           
                           
                           90,881Notes payable - current
                           
                           
                           1,634,689
                           
                           
                           1,415,6622,660,841
                           
                           
                           2,064,980Notes payable - long-term
                           
                           
                           -
                           
                           
                           -TOTAL LIABILITIES
                           
                           
                           2,660,841
                           
                           
                           2,064,980STOCKHOLDERS' EQUITYPreferred stock, $0.0001 par value, 10,000,000 shares authorized,
                              63.8 and none issued and outstanding as at September 30, 2011 and
                              December 31, 2010 respectively
                           
                           $
                           1
                           
                           $
                           -Common Stock, $0.0001 par value, 1,500,000,000 shares authorized,
                              806,157,246 and 724,488,929 shares issued and outstanding at
                              September 30, 2011 and December 31, 2010 respectively
                           
                           
                           80,616
                           
                           
                           72,449Additional Paid-in Capital
                           
                           
                           12,461,726
                           
                           
                           6,902,427Accumulated Deficit
                           
                           
                           (10,803,211
                           )
                           
                           (6,883,163
                           )Accumulated Other Comprehensive Income
                           
                           
                           1,913
                           
                           
                           (2,999
                           )1,741,045
                           
                           
                           88,714TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
                           
                           $
                           4,401,886
                           
                           $
                           2,153,694 See accompanying notes to financial statements
 3


VYCOR MEDICAL, INC.Consolidated Statement of Operations(unaudited)  For the three months ended September 30,
                           
                           
                           
                           
                           
                           For the nine months ended September 30,2011
                           
                           
                           
                           
                           
                           2010
                           
                           
                           
                           
                           
                           2011
                           
                           
                           
                           
                           
                           2010(restated)
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           
                           (restated)Revenue
                           
                           $
                           231,278
                           
                           
                           
                           
                           $
                           71,205
                           
                           
                           
                           
                           $
                           518,731
                           
                           
                           
                           
                           $
                           210,308Cost of Goods Sold
                           
                           
                           36,298
                           
                           
                           
                           
                           
                           11,980
                           
                           
                           
                           
                           
                           93,863
                           
                           
                           
                           
                           
                           30,752Gross Profit
                           
                           
                           194,980
                           
                           
                           
                           
                           
                           59,225
                           
                           
                           
                           
                           
                           424,868
                           
                           
                           
                           
                           
                           179,556Operating expenses:Research and development
                           
                           
                           33,624
                           
                           
                           
                           
                           
                           4,009
                           
                           
                           
                           
                           
                           94,960
                           
                           
                           
                           
                           
                           9,657Depreciation and Amortization
                           
                           
                           53,628
                           
                           
                           
                           
                           
                           10,753
                           
                           
                           
                           
                           
                           155,381
                           
                           
                           
                           
                           
                           30,577General and administrative
                           
                           
                           1,218,140
                           
                           
                           
                           
                           
                           392,099
                           
                           
                           
                           
                           
                           4,002,430
                           
                           
                           
                           
                           
                           1,222,280Total Operating expenses
                           
                           
                           1,305,392
                           
                           
                           
                           
                           
                           406,861
                           
                           
                           
                           
                           
                           4,252,771
                           
                           
                           
                           
                           
                           1,262,514Operating loss
                           
                           
                           (1,110,412
                           )
                           
                           
                           
                           
                           (347,636
                           )
                           
                           
                           
                           
                           (3,827,903
                           )
                           
                           
                           
                           
                           (1,082,958
                           )Other income (expense)Other income (expense)
                           
                           
                           (6,406
                           )
                           
                           
                           
                           
                           -
                           
                           
                           
                           
                           
                           3,661
                           
                           
                           
                           
                           
                           -Interest expense
                           
                           
                           (32,276
                           )
                           
                           
                           
                           
                           (9,357
                           )
                           
                           
                           
                           
                           (95,810
                           )
                           
                           
                           
                           
                           (33,759
                           )Total Other expense
                           
                           
                           (38,682
                           )
                           
                           
                           
                           
                           (9,357
                           )
                           
                           
                           
                           
                           (92,149
                           )
                           
                           
                           
                           
                           (33,759
                           )Net Loss Before Taxes
                           
                           
                           (1,149,094
                           )
                           
                           
                           
                           
                           (356,993
                           )
                           
                           
                           
                           
                           (3,920,052
                           )
                           
                           
                           
                           
                           (1,116,717
                           )Taxes
                           
                           
                           -
                           
                           
                           
                           
                           
                           -
                           
                           
                           
                           
                           
                           -
                           
                           
                           
                           
                           
                           2,078Net Loss
                           
                           
                           (1,149,094
                           )
                           
                           
                           
                           $
                           (356,993
                           )
                           
                           
                           
                           
                           (3,920,052
                           )
                           
                           
                           
                           $
                           (1,118,795
                           )Loss Per ShareBasic and diluted
                           
                           $
                           (0.001
                           )
                           
                           
                           
                           $
                           (0.001
                           )
                           
                           
                           
                           $
                           (0.005
                           )
                           
                           
                           
                           $
                           (0.002
                           )Weighted Average Number of Shares Outstanding
                           
                           
                           802,577,945
                           
                           
                           
                           
                           
                           683,067,846
                           
                           
                           
                           
                           
                           770,330,972
                           
                           
                           
                           
                           
                           650,384,814 See accompanying notes to financial statements
 4


VYCOR MEDICAL, INC. Consolidated Statement of Cash Flows(unaudited)  For the nine months ended September 302011
                           
                           
                           
                           
                           
                           2010(restated)Cash flows from operating activities:Net loss
                           
                           $
                           (3,920,052
                           )
                           
                           
                           
                           $
                           (1,118,795
                           )Adjustments to reconcile net loss to cash used in operating activities:Amortization of intangible assets
                           
                           
                           127,052
                           
                           
                           
                           
                           
                           13,172Depreciation of fixed assets
                           
                           
                           38,812
                           
                           
                           
                           
                           
                           17,405Share based compensation
                           
                           
                           1,576,176
                           
                           
                           
                           
                           
                           203,278Shares based interest expense
                           
                           
                           4,884
                           
                           
                           
                           
                           
                           -Foreign currency gain (loss)
                           
                           
                           12,359
                           
                           
                           
                           
                           
                           -Net loss as adjusted for non-cash items
                           
                           
                           (2,160,769
                           )
                           
                           
                           
                           
                           (884,940
                           )Changes in assets and liabilities:Accounts receivable
                           
                           
                           (37,069
                           )
                           
                           
                           
                           
                           (45,868
                           )Inventory
                           
                           
                           (65,697
                           )
                           
                           
                           
                           
                           702Prepaid expenses
                           
                           
                           (542,855
                           )
                           
                           
                           
                           
                           (54,553
                           )Security deposit
                           
                           
                           3,311
                           
                           
                           
                           
                           
                           (1,283
                           )Accounts payable
                           
                           
                           126,932
                           
                           
                           
                           
                           
                           (245,726
                           )Accrued interest
                           
                           
                           (10,816
                           )
                           
                           
                           
                           
                           29,512Accrued liabilities
                           
                           
                           249,861
                           
                           
                           
                           
                           
                           21,158Other current liabilities
                           
                           
                           8,540
                           
                           
                           
                           
                           
                           78,583Cash used in operating activities
                           
                           
                           (2,428,562
                           )
                           
                           
                           
                           
                           (1,102,415
                           )Cash flows used in investing activities:Purchase of fixed assets
                           
                           
                           (22,872
                           )
                           
                           
                           
                           
                           (1,931
                           )Purchase of website
                           
                           
                           (3,360
                           )
                           
                           
                           
                           
                           -Acquisition of patents
                           
                           
                           (56,435
                           )
                           
                           
                           
                           
                           (3,783
                           )Cash used in investing activities
                           
                           
                           (82,667
                           )
                           
                           
                           
                           
                           (5,714
                           )Cash flows from financing activities:Net proceeds from issuance of Common stock
                           
                           
                           889,000
                           
                           
                           
                           
                           
                           914,500Net proceeds from issuance of Series B preferred stock
                           
                           
                           -
                           
                           
                           
                           
                           
                           140,000Net proceeds from issuance of Series C preferred stock
                           
                           
                           3,068,200
                           
                           
                           
                           
                           
                           -Net proceeds from issuance of Notes Payable
                           
                           
                           530,304
                           
                           
                           
                           
                           
                           376,500Repayment of Notes Payable
                           
                           
                           (272,400
                           )
                           
                           
                           
                           
                           (291,500
                           )Cash provided by financing activities
                           
                           
                           4,215,104
                           
                           
                           
                           
                           
                           1,139,500Effect of exchange rate changes on cash
                           
                           
                           2,875
                           
                           
                           
                           
                           
                           -Net increase in cash
                           
                           
                           1,706,750
                           
                           
                           
                           
                           
                           31,371Cash at beginning of period
                           
                           
                           127,081
                           
                           
                           
                           
                           
                           12,771Cash at end of period
                           
                           $
                           1,833,831
                           
                           
                           
                           
                           $
                           44,142Supplemental Disclosures of Cash Flow information:Interest paid:
                           
                           $
                           1,550
                           
                           
                           
                           
                           $
                           -Taxes paid
                           
                           $
                           -
                           
                           
                           
                           
                           $
                           2,078Non-Cash Transactions:Warrants, options and common stock issued for debt financing
                           
                           $
                           41,190
                           
                           
                           
                           
                           $
                           803,690See accompanying notes to financial statements
 5


VYCOR MEDICAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2011(unaudited) 1.  BASIS OF PRESENTATION The condensed consolidated balance sheet as of December 31, 2010,
                  which has been derived from restated audited financial statements,
                  and the accompanying unaudited condensed financial statements have
                  been prepared by Vycor Medical, Inc. (together with its consolidated
                  subsidiaries, the "Company" or "Vycor") in accordance with accounting
                  principles generally accepted in the United States of America
                  ("GAAP") for interim financial information and with the instructions
                  to the quarterly report on Form 10-Q and Rule 8-03 of Regulation S-X.
                  Accordingly, they do not include all of the information and footnotes
                  required by accounting principles generally accepted in the United
                  States of America for annual financial statements. In the opinion of
                  management, all adjustments, consisting of normal recurring accruals
                  considered necessary for a fair presentation, have been included.
                  Operating results for the three and nine months ended September 30,
                  2011 are not necessarily indicative of the results that may be
                  expected for the year ending December 31, 2011. These financial
                  statements should be read in conjunction with the financial
                  statements and footnotes thereto included in the Company's annual
                  report on Form 10-K/A for the year ended December 31, 2010, as
                  amended and restated. Certain prior period amounts have been
                  reclassified to conform to the current presentation. All financial
                  information included in these Notes relating to the Company's
                  financial position as of December 31, 2010 and results of operations
                  for the interim period ended September 30, 2010 have been restated to
                  give effect to the accounting corrections discussed in Note 5. 2.  FORMATION AND BUSINESS OF THE COMPANY Business Description Vycor Medical, LLC was formed on June 17, 2005 as a New York Limited
                  Liability Company. The Company changed its name to Vycor Medical,
                  Inc. and converted to a Delaware Corporation on August 14, 2007 and
                  issued 16,048 shares of common stock in exchange for each of the
                  1,122 partnership 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. Accordingly, all references to
                  number of shares prior to the date of conversion are based upon the
                  common stock equivalent of the partnership units outstanding on
                  such dates. The Company designs, develops and markets neurological medical
                  devices and therapies through two operating divisions: Vycor Medical
                  and NovaVision. Vycor Medical focuses on brain and cervical surgical
                  access systems for sale to hospitals and medical professionals;
                  NovaVision focuses on neuro-stimulation therapies and diagnostic
                  devices for the treatment and screening of vision field loss. 3.   GOING CONCERN The Company's financial statements have been presented on a basis
                  that contemplates the realization of assets and the satisfaction of
                  liabilities in the normal course of business and assumes the Company
                  will continue as a going concern. The Company has incurred losses
                  since its inception, including a net loss of $3,920,052 for the nine
                  months ended September 30, 2011, and the Company expects to continue
                  to incur substantial additional losses in the future, including
                  significant development, marketing, manufacturing and distribution
                  costs. The Company has generated negative cash flows from operations
                  since inception. As of September 30, 2011 the Company had a
                  stockholders' equity of $1,741,045 and cash and cash equivalents of
                  $1,833,831. The Company believes it will 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, or at all. 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.
 6


4.   ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Vycor
                  Medical, Inc., and its wholly-owned subsidiaries, NovaVision, Inc. (a
                  Delaware corporation) and NovaVision AG (a German corporation), a
                  wholly owned subsidiary of NovaVision, Inc. The Company is
                  headquartered in Boca Raton, FL. The operations of NovaVision, Inc.
                  have been consolidated from November 30, 2010, the date of the
                  acquisition of substantially all the assets of the former NovaVision,
                  Inc. All material inter-company accounts, transactions, and profits
                  have been eliminated in consolidation. Research and Development The Company expenses all research and development costs as incurred.
                  For the nine months ended September 30, 2011 and 2010 the amounts
                  charged to research and development expenses were $94,960 and $9,657,
                  respectively. Software Development Costs The authoritative accounting guidance requires software development
                  costs to be capitalized upon completion of the preliminary project
                  stage. Accordingly, direct internal and external costs associated
                  with the development of the features and functionality of the
                  Company's software, incurred during the application development
                  stage, are capitalized and amortized using the straight-line method
                  of the estimated life of three years. The Company acquired internally
                  developed software valued at $540,000 as part of the acquisition of
                  the assets of NovaVision, Inc. on November 30, 2010. For the nine
                  months ended September 30, 2011 and 2010 there was no capitalization
                  of software development costs. Uses of estimates in the preparation of financial statements The preparation of consolidated financial statements in conformity
                  with GAAP requires management to make estimates and assumptions that
                  affect the amounts reported in the consolidated financial statements
                  and accompanying notes. Actual results could differ from those
                  estimated. To the extent management's estimates prove to be
                  incorrect, financial results for future periods may be adversely
                  affected. Significant estimates and assumptions contained in the
                  accompanying consolidated financial statements include management's
                  estimate of the allowance for uncollectible accounts receivable,
                  amortization of intangible assets, and the fair values of options and
                  warrants included in the determination of debt discounts and share
                  based compensation. Fair Values of Assets and Liabilities We value financial instruments using a three-tier fair value
hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active
markets for identical assets or liabilities; Level 2, defined as inputs other than quoted prices for similar assets or liabilities in active markets that are
either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to
develop its own assumptions. 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 principally derived or corroborated from market data. Using
                  level 3 inputs uses management's assessment about the assumptions
                  market participants would utilize in pricing the asset or liability.
                  In the Company's case this entailed assumptions used in pricing
                  models for attached warrant calculations. Valuation techniques
                  utilized to determine fair value are consistently applied. The Company has no items that are subject to these standards as of
                  September 30, 2011.
 7


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 computed giving effect to all
                  dilutive potential common shares that were outstanding during the
                  period. Dilutive potential common shares consist of incremental
                  shares issuable upon exercise of stock options and warrants and
                  conversion of preferred stock and convertible debt.  Such potentially
                  dilutive shares are excluded when the effect would be to reduce a net
                  loss per share. No dilution adjustment has been made to the weighted
                  average outstanding common shares in the periods presented because
                  the assumed exercise of outstanding options and warrants and the
                  conversion of preferred stock and debt 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:  September 30,
                           
                           
                           
                           
                           
                           September 30,2011
                           
                           
                           
                           
                           
                           2010Stock options outstanding
                           
                           
                           833,333
                           
                           
                           
                           
                           
                           833,333Warrants to purchase common stock
                           
                           
                           264,564,530
                           
                           
                           
                           
                           
                           116,766,670Debentures convertible into common stock
                           
                           
                           55,308,960
                           
                           
                           
                           
                           
                           40,166,103Preferred shares convertible into common stock
                           
                           
                           141,777,768
                           
                           
                           
                           
                           
                           -Total
                           
                           
                           462,484,591
                           
                           
                           
                           
                           
                           102,281,557 Recent Accounting Pronouncements From time to time new accounting pronouncements are issued by the
                  Financial Accounting Standards Board or other standard setting bodies
                  that may have an impact on the Company's accounting and reporting.
                  The Company believes that such recently issued accounting
                  pronouncements and other authoritative guidance for which the
                  effective date is in the future will not have an impact on its
                  accounting or reporting or that such impact will not be material to
                  its financial position, results of operations and cash flows when
                  implemented. 5.   NOTES PAYABLE As of September 30, 2011 and December 31, 2010 Notes Payable consists of:   September 30, 2011
                           
                           
                           December 31, 2010On December 29, 2009 and February 3, 2010, the Company issued
                              convertible debentures in the amount of $371,362 and $70,000,
                              respectively, payable to Fountainhead Capital Management
                              ("Fountainhead"), the beneficial owner of more than 50% of the
                              Company's common stock. These debentures accrue interest at a rate of
                              6% per annum, are secured by a first priority security interest in
                              all of the assets of the Company, and are 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 debentures 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. These debentures were originally due August 31, 2010. On
                              May 14, 2010, the due date for satisfaction was extended to March 30,
                              2011, on March 28, 2011 the due date was further extended to August
                              31, 2011 and on June 6, 2011 the due date was further extended to
                              December 31, 2012.
                           
                           
                           
                           
                           
                           441,362
                           
                           
                           441,362On September 30, 2010 and October 14, 2010, the Company issued
                              convertible debentures payable to Fountainhead in the amount of
                              $85,000 and $90,000, respectively. These debentures accrue interest
                              at a rate of 6% per annum, are secured by a first priority security
                              interest in all of the assets of the Company, and are 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 debentures 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 debentures were originally due August 31, 2011,
                              however the due date for satisfaction was extended on June 6, 2011 to
                              December 31, 2012.
                           
                           
                           
                           
                           
                           175,000
                           
                           
                           175,000
 8


September 30, 2011
                        
                        
                        December 31, 2010On October 26, 2010 and November 15, 2010, the Company issued
                           debentures payable to Fountainhead in the amount of $77,500 and
                           $322,500, respectively. These debentures accrue interest at a rate of
                           6% per annum, are secured by a first priority security interest in
                           all of the assets of the Company, and are senior to or pari passu with, all other obligations of the Company, subject to certain
                           conditions. The debentures were originally due August 31, 2011,
                           however the due date for satisfaction was extended on June 6, 2011 to
                           December 31, 2012.
                        
                        
                        
                        
                        
                        400,000
                        
                        
                        400,000On November 15, 2010, the Company issued a convertible debenture in
                           the amount of $350,000 payable to Peter Zachariou, a Director of the
                           Company. This debenture accrues interest rate of 6% per annum, is due
                           on December 31, 2012, 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
                           $0.019 per share, subject to adjustment and does not require
                           bifurcation. On December 20, 2010, the Company repaid $50,000 of this
                           debenture and removed the convertible rights. On June 6, 2011 the due
                           date for satisfaction was extended to December 31, 2012.
                        
                        
                        
                        
                        
                        300,000
                        
                        
                        300,000On December 3, 2010, the Company issued a debenture in the amount of
                           $40,000 payable to Berardino Investment Group. This debenture accrued
                           interest at a rate of 6% per annum, was due June 30, 2011, was
                           secured by a first priority security interest in all of the assets of
                           the Company, and was senior to or pari passu with, all other obligations of the Company, subject to certain
                           conditions. The Holder was entitled to convert all or any amount of
                           the principal face amount of the debenture then outstanding into
                           shares of common stock of the Company at the conversion price of
                           $0.019 per share, subject to adjustment and did not require
                           bifurcation. On June 30, 2011, the entire principal and unpaid
                           interest on this debenture was converted into 2,167,902 shares of the
                           Company's Common Stock at the conversion price of $0.019 per share.
                        
                        
                        
                        
                        
                        -
                        
                        
                        40,000On March 25, 2011 the Company issued a term note for $300,000 to
                           EuroAmerican Investment Corp. ("EuroAmerican"). The term note bears
                           interest at 16% per annum and was due June 25, 2011. In connection
                           with the loan the Company also issued EuroAmerican warrants to
                           purchase 400,000 shares of the Company's common stock at an exercise
                           price of $0.03 per share for a period of three (3) years. On June 25,
                           2011 the due date for this note was extended to September 25, 2011
                           and the Holder was granted the right to convert all or any amount of
                           the principal face amount of the debenture then outstanding and
                           accrued interest into shares of common stock of the Company at the
                           conversion price of $0.03 per share, subject to adjustment and does
                           not require bifurcation. On October 25, 2011 the due date for this
                           note was further extended to December 10, 2011
                        
                        
                        
                        
                        
                        300,000
                        
                        
                        -Unsecured, non-interest bearing loan from the chief executive of
                           NovaVision AG, advanced a total of to NovaVision AG, which is being
                           repaid in monthly installments to December 31, 2011. As of September
                           30, and December 31, 2010 the remaining balance is €11,000 and
                           €33,000, respectively.
                        
                        
                        
                        
                        
                        14,957
                        
                        
                        44,019Insurance policy finance agreements
                        
                        
                        
                        
                        
                        3,370
                        
                        
                        15,281Total Notes Payable:
                        
                        
                        
                        
                        $
                        1,634,689
                        
                        $
                        1,415,662
 9


The following is a schedule of future minimum loan payments:  Twelve months ending December 30,
                           
                           
                           
                           
                           
                           Amount2011
                           
                           
                           
                           
                           $
                           318,3272012
                           
                           
                           
                           
                           
                           1,316,3622013
                           
                           
                           
                           
                           
                           -2014
                           
                           
                           
                           
                           
                           -2015
                           
                           
                           
                           
                           
                           -Thereafter
                           
                           
                           
                           
                           
                           -Total
                           
                           
                           
                           
                           $
                           1,634,689 As of September 30, 2011, $1,316,362 of Company's notes payable are
                  secured by a first security interest in all of the assets of the
                  Company. The company assesses the value of the beneficial conversion
                  feature of its convertible debt by determining the intrinsic value of
                  such conversion, under ASC 470, at the time of issuance. At the time
                  of issuance of each of the convertible debt instruments set out
                  above, the fair value of the stock was either the same or less than
                  the conversion price, and so there was no value attributable to any
                  beneficial conversion feature. 6.   SEGMENT REPORTING, GEOGRAPHICAL INFORMATION (a) Business segments The Company operates in two business segments: Vycor Medical, which
                  focuses on devices for neurosurgery; and NovaVision, which focuses on
                  neuro stimulation therapies and diagnostic devices for the treatment
                  and screening of vision field loss. Set out below are the revenues,
                  gross profits and total assets for each segment.  Three Months Ended September 30,
                           
                           
                           Nine Months Ended September 30,2011
                           
                           
                           2010
                           
                           
                           2011
                           
                           
                           2010Revenue:Vycor Medical
                           
                           $
                           66,510
                           
                           $
                           71,205
                           
                           $
                           248,591
                           
                           $
                           210,308NovaVision
                           
                           
                           164,768
                           
                           
                           -
                           
                           
                           270,140
                           
                           
                           -Total Revenue
                           
                           $
                           231,278
                           
                           $
                           71,205
                           
                           $
                           518,731
                           
                           $
                           210,308Gross Profit:Vycor Medical
                           
                           $
                           49,010
                           
                           $
                           59,225
                           
                           $
                           202,624
                           
                           $
                           179,556NovaVision
                           
                           
                           145,970
                           
                           
                           -
                           
                           
                           222,244
                           
                           
                           -Total Gross Profit
                           
                           $
                           194,980
                           
                           $
                           59,225
                           
                           $
                           424,868
                           
                           $
                           179,556  September 30,2011
                           
                           
                           December 31,2010 (restated)Total Assets:Vycor Medical
                           
                           $
                           2,846,528
                           
                           $
                           1,085,680NovaVision
                           
                           
                           1,555,358
                           
                           
                           1,068,014Total Assets
                           
                           $
                           4,401,886
                           
                           $
                           2,153,694 (b) Geographic information The Company operates in two geographic segments, the United States
                  and Germany. Set out below are the revenues, gross profits and total
                  assets for each segment.  Three Months Ended September 30,
                           
                           
                           Nine Months Ended September 30,2011
                           
                           
                           2010
                           
                           
                           2011
                           
                           
                           2010Revenue:United States
                           
                           $
                           181,137
                           
                           $
                           71,205
                           
                           $
                           390,339
                           
                           $
                           210,308Germany
                           
                           
                           50,141
                           
                           
                           -
                           
                           
                           128,392
                           
                           
                           -Total Revenue
                           
                           $
                           231,278
                           
                           $
                           71,205
                           
                           $
                           518,731
                           
                           $
                           210,308
 10


Three Months Ended September 30,
                           
                           
                           Nine Months Ended September 30,2011
                           
                           
                           2010
                           
                           
                           2011
                           
                           
                           2010Gross Profit:United States
                           
                           $
                           155,277
                           
                           $
                           59,225
                           
                           $
                           328,934
                           
                           $
                           179,556Germany
                           
                           
                           39,703
                           
                           
                           -
                           
                           
                           95,934
                           
                           
                           -Total Gross Profit
                           
                           $
                           194,980
                           
                           $
                           59,225
                           
                           $
                           424,868
                           
                           $
                           179,556  September 30,2011
                           
                           
                           December 31,2010 (restated)Total Assets:United States
                           
                           
                           
                           
                           
                           
                           
                           $
                           4,307,783
                           
                           $
                           2,084,029Germany
                           
                           
                           
                           
                           
                           
                           
                           
                           94,103
                           
                           
                           69,665Total Assets
                           
                           
                           
                           
                           
                           
                           
                           $
                           4,401,886
                           
                           $
                           2,153,694 7.  PROPERTY AND EQUIPMENT As of September 30, 2011 and December 31, 2010, Property and
                  Equipment and the estimated lives used in the computation of
                  depreciation is as follows:  June 30,
                           
                           
                           December 31,2011
                           
                           
                           2010Machinery and equipment
                           
                           $
                           99,076
                           
                           $
                           93,764Purchased Software
                           
                           
                           15,608
                           
                           
                           10,000Molds and Tooling
                           
                           
                           230,830
                           
                           
                           230,830Furniture and fixtures
                           
                           
                           18,642
                           
                           
                           18,288Therapy Devices
                           
                           
                           58,995
                           
                           
                           44,412Internally Developed Software
                           
                           
                           540,000
                           
                           
                           540,000963,151
                           
                           
                           937,294Less: Accumulated depreciation and amortization
                           
                           
                           (291,544
                           )
                           
                           (164,106
                           )Property and Equipment, net
                           
                           $
                           671,607
                           
                           $
                           773,188 Estimated useful lives of property and equipment are as follows:  Therapy devices
                           
                           
                           3 yearsComputer equipment and software
                           
                           
                           3 yearsFurniture and fixtures
                           
                           
                           7 yearsMachinery and office equipment
                           
                           
                           5 yearsInternally Developed Software
                           
                           
                           5 years 8.   INTANGIBLE ASSETS As of September 30, 2011 and December 31, 2010, Intangible Assets consists of:  September 30,
                           
                           
                           December 31,2011
                           
                           
                           2010Amortized intangible assets: Patent (8 years useful life)Gross carrying Amount
                           
                           $
                           438,175
                           
                           $
                           381,740Accumulated Amortization
                           
                           
                           (94,553
                           )
                           
                           (48,668
                           )$
                           343,622
                           
                           $
                           333,072Intangible assets not subject to amortizationTrademarks
                           
                           $
                           130,000
                           
                           $
                           130,000 Amortization expense for the nine-month periods ended September 30,
                  2011 and 2010 was $46,052 and $13,172, respectively.
 11


9.   EQUITY Certain Equity Transactions In January and February 2011, the Company issued an aggregate of
                  7,578,947 shares of common stock to three investors at a price of
                  $0.019 per share for aggregate gross proceeds of $144,000. In February 2011, the Company issued 250,000 shares of its common
                  stock (valued at $5,000) to Steven Girgenti in consideration for
                  services provided to the Board of Directors. In May 2011, the Company
                  issued an additional 222,222 shares of its common stock (valued at
                  $5,000) to Mr. Girgenti. On March 2, 2011, the Company issued warrants to seven parties to
                  purchase 14,710,530 shares of the Company's common stock at a price
                  of $0.03 per share. The warrants are exercisable over a period of
                  three years from the date of issuance. On March 25, 2011, in connection with the issuance by the Company of
                  a term note for $300,000 to EuroAmerican Investment Corp, the Company
                  issued warrants to purchase 400,000 shares of Company common stock at
                  an exercise price of $0.03 per share for a period of three years from
                  the date of issuance. The estimated fair value of this warrant was
                  recorded as a debt discount at issuance and was amortized over the
                  three-month term of the loan as interest expense. In April 2011, the Company issued 24,444,442 shares of common stock
                  together with Warrants to purchase 12,222,221 shares of common stock
                  at an exercise price of $0.03 per share for a period of three years
                  for aggregate gross proceeds of $550,000. In April 2011, in connection with a consultancy agreement, the
                  Company issued 18,000,000 shares of common stock (valued at $360,000)
                  to Jerrald Ginder. On June 25, 2011, pursuant to an amendment to this
                  consultancy agreement, the Company issued an additional 2,666,667
                  shares of common stock to Mr. Ginder in lieu of aggregate monthly
                  cash payments due under the agreement totaling $60,000. In May 2011, the Company issued 8,666,666 shares of common stock
                  together with Warrants to purchase 4,333,334 shares of Company common
                  stock at an exercise price of $0.03 per share for a period of three
                  years for aggregate gross proceeds of $195,000. On June 7, 2011, the Company completed the sale of 31.4 Units
                  comprising Series C Convertible Preferred Shares and Warrants (the
                  "Units") to accredited investors (the "Investors") (the "Preferred
                  Offering") for aggregate proceeds of $1,570,000. The Units were
                  issued pursuant to separate Series C Convertible Preferred Stock
                  Purchase Agreements (the "Agreements") between the Company and each
                  of the Investors.  This sale was an initial closing (the "Initial
                  Closing") under the Agreements which allows for maximum proceeds of
                  $3,000,000. Each Unit was priced at $50,000 and comprised one share
                  of Series C Preferred Convertible Stock convertible (at the Holder's
                  option or mandatorily upon the occurrence of certain events) into
                  2,222,222 shares of the Company's Common Stock ($0.0225 per share)
                  and a Warrant to purchase 1,111,111 shares of the Company's Common
                  Stock at $0.03 per share (subject to adjustments) for a period of
                  three years (the "Warrant" or "Warrants").  A total of 31.4 shares of
                  Series C Convertible Preferred Stock convertible into 69,777,773
                  shares of the Company's Common Stock and Warrants to purchase
                  34,888,890 shares of the Company's Common Stock were issued.  On June
                  28, 2011, the Company completed a second closing of the Preferred
                  Offering (the "Second Closing") with the sale of an additional 15.40
                  Units to Investors for aggregate proceeds of $770,000. An additional
                  15.40 shares of Series C Convertible Preferred Stock convertible into
                  34,222,220 shares of the common stock and Warrants to purchase
                  17,111,111 shares of the Company's common stock were issued in
                  connection with the Second Closing.  The Company entered into a
                  Registration Rights Agreement with the Investors with respect to the
                  Warrants. On June 3, 2011, in connection with a consultancy agreement, the
                  Company issued 15,500,000 shares of common stock (valued at $348,750)
                  to GreenBridge Capital Partners IV, LLC. On June 6, 2011, in connection with a consultancy agreement, the
                  Company issued 1,000,000 shares of common stock (valued at $22,500)
                  to Burnham Hill Advisors, LLC. Burnham Hill Partners LLC ("BHP") served as placement agent in
                  connection with the sale of 24.8 Units in the Preferred Offering.
                  Pursuant to a placement agent agreement with BHP, the Company paid
                  BHP a cash placement fee equal to seven percent (7%) of the gross
                  proceeds received by the Company from Units placed by BHP. Also
                  pursuant to the placement agent agreement, the Company issued BHP
                  Warrants (the "Placement Agent Warrants") to purchase a number of
                  shares equal to seven percent (7%) of the number of shares of common
                  stock issuable upon conversion of the 24.8 Units placed by BHP
                  (3,857,778 shares) in the Preferred Offering. The Placement Agent
                  Warrants are exercisable for three years from the date of issuance at
                  an exercise price of $0.0225 per share.
 12


On June 30, 2011, the entire principal and unpaid interest on a
                  Debenture dated December 3, 2010 payable to Berardino Investment
                  Group in the original principal amount of $40,000 was converted into
                  2,167,902 shares of common stock at a conversion price of $0.019
                  per share. Under the terms of a Consulting Agreement dated February 10, 2010
                  with Fountainhead, the Company was required to issue to Fountainhead
                  fully vested warrants to purchase 39,063,670 shares of the Company's
                  common stock should certain conditions be met during the term of the
                  Consulting Agreement. These warrants are exercisable at $0.0125 per
                  share for a period of five years from February 2010. These warrants
                  became issuable upon completion of the Preferred Offering and were
                  issued in June 2011. In July 2011 the Company issued Warrants to purchase 2,300,000 shares
                  of Company common stock at an exercise price of $0.03 per share for a
                  period of three years to Millenium Capital Corporation in respect of
                  consulting and advisory services. On August 4, 2011, the Company completed a final closing of the
                  Preferred Offering (the "Final Closing") with the sale of an
                  additional 13.2 Units to Investors for aggregate proceeds of
                  $660,000. An additional 13.2 shares of Series C Convertible Preferred
                  Stock convertible into 29,333,330 shares of the Company's Common
                  Stock and Warrants to purchase 14,666,665 shares of the Company's
                  Common Stock were issued in connection with the Final Closing. An
                  aggregate of 60 Units were sold to Investors in the First Closing,
                  Second Closing and Final Closing of the Preferred Offering for total
                  proceeds of $3,000,000. A total of 60 shares of Series C Convertible
                  Preferred Stock, convertible into an aggregate of 133,333,324 shares
                  of Common Stock, and Warrants to purchase 66,666,666 shares of the
                  Company's Common Stock. In August 2011 the Company issued 154,600 shares of Common Stock
                  (valued at $5,000) to Steven Girgenti, 78,300 shares of Common Stock
                  to Alvaro Pascale-Leone (valued at $3,125) and 428,571 shares of
                  Common Stock (valued at $10,000) to McCombie Group, LLC in respect of
                  consulting agreements. On August 26, 2011, the Company completed a new sale of 3.8 Units
                  comprising Series C Convertible Preferred Shares and Warrants (the
                  "Units") to an accredited investor (the "Investor") (the " New
                  Preferred Offering") for aggregate proceeds of $190,000. Each Unit
                  was priced at $50,000 and comprised one share of Series C Preferred
                  Convertible Stock convertible (at the Holder's option or mandatorily
                  upon the occurrence of certain events) into 2,222,222 shares of the
                  Company's Common Stock ($0.0225 per share) and a Warrant to purchase
                  1,111,111 shares of the Company's Common Stock at $0.03 per share
                  (subject to adjustments) for a period of three years (the "Warrant"
                  or "Warrants"). In September 2011 the Company entered into a Consulting Agreement
                  with Dr Oscar Bronsther with regard to certain potential clinical
                  studies utilizing Vycor's VBAS product. Under the terms of the
                  agreement, Dr Bronsther received warrants to purchase up to 400,000
                  of the Company's Common Stock for a period of three years from
                  September 30, 2011 at a price of $0.03 per share. On September 30, 2011 the Company issued 510,000 shares of Company
                  common stock to Joe Simone in respect of an amendment to a previously
                  disclosed consulting agreement. During the nine months ended September 30, 2011, the Company received
$889,000 in net cash proceeds from the sale of Common Shares and $3,068,200 in net proceeds from the sale of Preferred Stock, as detailed above. 10.   SHARE-BASED COMPENSATION The Company recognizes the cost of all share-based payments under the
                  relevant authoritative accounting guidance. Share-based payments
                  include any remuneration paid by the Company in shares of the
                  Company's common stock or financial instruments that grant the
                  recipient the right to acquire shares of the Company's common stock.
                  For share-based payments to employees, which consist only of awards
                  made under the stock option plan described below, the Company
                  accounts for the payments in accordance with the provisions of ASC
                  Topic 718, "Stock Compensation" (formerly referred to as SFAS No.
                  123(R)). Share-based payments to consultants, service providers and
                  other non-employees are accounted for under in accordance with ASC
                  Topic 718, ASC Topic 505, "Equity Payments to Non-Employees" or other
                  applicable authoritative guidance. Stock Option Plan The Company adopted the Vycor Medical, Inc Employee, Director, and
                  Consultant Stock Plan (the "Plan") as of February 13, 2008. The Plan
                  provides for both incentive stock options and nonqualified stock
                  options to be granted to employees, officers, consultants,
                  independent contractors, directors and affiliates of the
                  Company.   The board of directors establishes the terms and
                  conditions of all stock option 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 non-employees
 13


is determined based on the services being provided. The maximum
                  number of shares of stock which may be 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. Under ASC Topic 718, the Company estimates the fair value of option
                  awards on the date of grant using an option pricing model. The grant
                  date fair value is recognized over the option vesting period, the
                  period during which an employee is required to provide service in
                  exchange for the award. No compensation cost is recognized for equity
                  instruments for which employees do not render the requisite service.
                  Under these standards, compensation cost for employee cost for
                  employee stock-based awards is based on the estimated grant-date fair
                  value and recognized over the vesting period of the applicable award
                  on a straight-line basis.  No employee stock options were granted for
                  the six month periods ended June 30, 2011 and 2010. Initial grants of options to purchase 500,000 shares were issued
                  under the Plan on February 13, 2008 to each of Kenneth T. Coviello,
                  the Company's Chief Executive Officer and Heather N. Vinas, the
                  Company's President at an exercise price of $0.135 per share.  The
                  options vested 33-1/3% on each of the first, second, and third
                  anniversary of the grant and expire February 12, 2018. Following
                  Heather Vinas' resignation as President of the Company in May 2010,
                  166,667 unvested options were cancelled. Accordingly, for the nine
                  months ended September 30, 2011, the Company recognized share-based
                  compensation only for the grant to Mr. Coviello, totaling $29,796. 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, 2011 there were no
                  awards of any stock appreciation rights. The Company from time to time issues common stock, stock options or
                  common stock warrants to acquire services or goods from
                  non-employees. Common stock, stock options and common stock warrants
                  issued to other than employees or directors are recorded on the basis
                  of their fair value, which is measured as of the "measurement date"
                  using an option pricing model. The "measurement date" for options and
                  warrants related to contracts that have substantial disincentives to
                  non-performance is the date of the contract, and for all other
                  contracts is the vesting date. Expense related to the options and
                  warrants is recognized on a straight-line basis over the shorter of
                  the period over which services are to be received or the life of the
                  option or warrant. The details of the outstanding rights, options and warrants and value
                  of such rights, options and warrants are as follows:  STOCK WARRANTS:
                           
                           
                           Number of shares
                           
                           
                           
                           
                           
                           Weighted average exercise price per shareOutstanding at December 31, 2009
                           
                           
                           35,493,172
                           
                           
                           
                           
                           $
                           0.030Granted
                           
                           
                           90,191,077
                           
                           
                           
                           
                           
                           0.015ExercisedCancelled or expired
                           
                           
                           (9,079,473
                           )
                           
                           
                           
                           
                           0.015Outstanding at December 31, 2010
                           
                           
                           116,604,776
                           
                           
                           
                           
                           $
                           0.019Granted
                           
                           
                           148,176,421
                           
                           
                           
                           
                           
                           0.025Exercised
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Cancelled or expired
                           
                           
                           (50,000
                           )
                           
                           
                           
                           
                           0.500Outstanding at September 30, 2011
                           
                           
                           264,731,197
                           
                           
                           
                           
                           $
                           0.022STOCK OPTIONS:
                           
                           
                           Number of shares
                           
                           
                           
                           
                           
                           Weighted average exercise price per shareOutstanding at December 31, 2009
                           
                           
                           1,000,000
                           
                           
                           
                           
                           $
                           0.14GrantedExercisedCancelled or expired
                           
                           
                           (166,667
                           )
                           
                           
                           
                           
                           0.14Outstanding at December 31, 2010
                           
                           
                           833,333
                           
                           
                           
                           
                           $
                           0.14Granted
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Exercised
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Cancelled or expired
                           
                           
                           -
                           
                           
                           
                           
                           
                           -Outstanding at September 30, 2011
                           
                           
                           833,333
                           
                           
                           
                           
                           $
                           0.14 As of September 30, 2011, the weighted-average remaining contractual
                  life of outstanding warrants and options is 3.17 and 7.88 years,
                  respectively.
 14


Non-Employee Stock Compensation Under the terms of a consulting agreement dated February 2010, the
                  Company issued fully vested warrants to Fountainhead to purchase up
                  to 39,063,670 shares of the Company's common stock at $0.0125 per
                  share. The warrants are valid from February 10, 2010 for a period of
                  five years. The fair value of these warrants was estimated using the
                  Black-Scholes option pricing model and is being amortized over the
                  two-year life of the consultancy agreement. For the nine months ended
                  September 30, 2011, $134,322 was recognized as share-based
                  compensation in connection with this agreement. Under the same
                  agreement, the Company was also required to issue fully vested
                  warrants to purchase an additional 39,063,670 shares of the Company's
                  common stock, at a price of $0.0125 per share should new funding
                  totaling $3 million in aggregate in Common Stock of Vycor or in
                  securities convertible into Common Stock of Vycor at a price of no
                  less than $0.0125 per share of Common Stock be closed during the term
                  of the Consulting Agreement. These warrants became issuable upon
                  completion of the Preferred Offering and were issued in June 2011.
                  The fair value of these warrants was estimated at $658,651 using the
                  Black-Scholes model and, because the performance criteria of the
                  warrants had been satisfied on the date of issuance the full value
                  was expensed immediately. During the nine months ended September 30, 2011, the Company issued
                  an aggregate of 626,822 shares of common stock to Steven Girgenti for
                  services rendered to the board of directors. For the nine months
                  ended September 30, 2011, $15,000 was recognized as share-based
                  compensation for the issuance of these shares. Under the terms of a twelve-month sales and marketing consulting
                  agreement dated March 2010, the Company issued 750,000 shares of its
                  Common Stock to Joe Simone, valued at $9,375. As an amendment to this
                  agreement in September 2011, 510,000 shares of Common Stock were
                  issued, valued at $15,300. For the nine months ended September 30,
                  2011, $17,071 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 to
                  purchase up to 50,627,407 shares of the Company's common stock at
                  $0.0175 per share. The warrants are valid from September 29, 2010 for
                  a period of five years. The fair value of these warrants was
                  estimated using the Black-Scholes model and is being amortized over
                  the life of the agreement to August 30, 2011. For the nine months
                  ended September 30, 2011, $336,114 was recognized as share-based
                  compensation in connection with this agreement. Under the terms of a one-year consulting agreement dated December 6,
                  2010, the Company issued warrants to Market Media Connect, LLC to
                  purchase up to 500,000 shares of the Company's common stock at $0.07
                  per share. The warrants are valid from December 1, 2010 for a period
                  of three years. The fair value of these warrants was estimated using
                  the Black-Scholes model and is being amortized over the life of the
                  consulting agreement. For the nine months ended September 30, 2011,
                  $2,506 was recognized as share-based compensation in connection with
                  this agreement. In March 2011 the Company entered into a one-year consultancy
                  agreement with Mr Jerrald Ginder, effective April 1, 2011. Mr Ginder
                  has extensive experience in sales and marketing and the development
                  of medical device products, and has contacts which will be of use to
                  the Company. Under the terms of the agreement, which the Company has
                  the right to terminate with 30 days notice, Mr. Ginder was to receive
                  $60,000 cash, payable monthly, and 18,000,000 restricted shares of
                  common stock of the Company. The stock has been valued by the Company
                  at $360,000 and is being amortized over the life of the agreement as
                  share-based compensation expense. On June 22, 2011, the Company and
                  Mr. Ginder entered into an Amendment to the Consulting Agreement.
                  Pursuant to this amendment, the Company issued to Mr. Ginder an
                  additional 2,666,667 shares of the Company's common stock in lieu of
                  the $60,000 cash due under the Consulting Agreement. The $60,000
                  value of the additional shares is also being amortized as share-based
                  compensation over the life of the agreement. For the nine months
                  ended September 30, 2011, aggregate compensation recognized in
                  respect of the Consulting Agreement, as amended, was $201,075. In June 2011, the Company entered into a one-year Consulting
                  Agreement with GreenBridge Capital Partners, IV, LLC, to provide
                  consulting and advisory services to the Company. Under the terms of
                  this agreement, GreenBridge is to receive up to 15,500,000 shares of
                  the Company's common stock. The stock has been valued by the Company
                  at $348,750 and is being amortized over the life of the agreement as
                  share-based compensation expense. For the nine months ended September
                  30, 2011, $113,344 was recognized as share-based compensation in
                  connection with this agreement. In June 2011 the Company entered into a Consulting Agreement with
                  Burnham Hill Advisors LLC ("BHA") under which BHA shall provide, for
                  a period of six months, financial and strategic advice to the
                  Company. BHA received 1,000,000 restricted shares of the Company's
                  common stock. The stock has been valued by the Company at $22,500 and
                  is being amortized over the life of the agreement as share-based
                  compensation expense. For the nine months ended September 30, 2011,
                  $14,250 was recognized as share-based compensation in connection with
                  this agreement. In July 2011 the Company issued Warrants to purchase 2,300,000 shares
                  of Company common stock at an exercise price of $0.03 per share for a
                  period of three years to Millenium Capital Corporation in respect of
                  consulting and advisory services.
 15


The fair value of these warrants was estimated at $28,735 using the
                  Black-Scholes model and, because because the performance criteria of
                  the warrants had been satisfied on the date of issuance, the full
                  value was recognized immediately. In relation to his appointment as a member of the Strategic Advisory
                  Board of NovaVision, the Company issued 78,300 shares of the
                  Company's Common Stock to Alvaro Pascale-Leone, valued at $3,125,
                  which was recognized as share-based compensation in the nine months
                  ended September 30, 2011. In July 2011 the Company entered into a Consulting Agreement with
                  McCombie Group LLC with regard to certain business and strategic
                  planning services. Under the terms of the agreement McCombie Group
                  received 428,571 shares of Common Stock valued at $15,000, which was
                  recognized as share-based compensation in the nine months ended
                  September 30, 2011. In September 2011 the Company entered into a Consulting Agreement
                  with Dr Oscar Bronsther with regard to certain potential clinical
                  studies utilizing Vycor's VBAS product. Under the terms of the
                  agreement, Dr Bronsther received warrants to purchase up to 400,000
                  of the Company's Common Stock for a period of three years from
                  September 30, 2011 at a price of $0.03 per share. The fair value of
                  these warrants was estimated at $7,351 using the Black-Scholes model
                  and, because the time period for the agreement is indeterminable, the
                  full value was recognized immediately. Aggregate stock-based compensation expense charged to operations on
                  employee options and on stock and warrants granted to the above
                  non-employees for the nine months ended September 30, 2011 is
                  $1,576,325. As of September 30, 2011, there was approximately
                  $528,309 of total unrecognized compensation costs related to warrant
                  and stock awards and non-vested options, which are expected to be
                  recognized over a weighted average period of approximately 0.56 years. Stock-based compensation expenses related to employee options and
                  warrants granted to non-employees are recognized as the stock options
                  and warrants are earned. The fair value of the stock options or
                  warrants granted is estimated at the grant date, using the
                  Black-Scholes option pricing model, and the expense is recognized on
                  a straight-line basis over the shorter of the period over which
                  services are to be received or the life of the option or
                  warrant.  The grant date fair value of employee share options and
                  similar instruments is estimated using the Black-Scholes option
                  pricing model on the basis of the fair value of the underlying common
                  stock on the measurement date, adjusted for the unique
                  characteristics of those equity instruments, using the assumptions
                  noted in the table below. The fair value of the common stock is
                  determined by the then-prevailing private placement purchase price.
                  Expected volatility was based on the historical volatility of a peer
                  group of publicly traded companies. The expected term of options and
                  warrants was based upon the life of the option, and the risk-free
                  rate used was based on the U.S. Treasury Constant Maturity rate. The following assumptions were used in calculations of the
                  Black-Scholes option pricing model in the nine month periods ended
                  September 30, 2011 and 2010:  Nine months ended September 30,2011
                           
                           
                           2010Risk-free interest rates
                           
                           
                           0.42-1.60 %
                           
                           
                           1.91-2.39 %Expected life
                           
                           
                           3 years
                           
                           
                           3 yearsExpected dividends
                           
                           
                           0%
                           
                           
                           0%Expected volatility
                           
                           
                           96-99%
                           
                           
                           96%Vycor Common Stock fair value
                           
                           
                           $0.02-$0.03
                           
                           
                           $0.0125-$0.0175  11. INCOME TAXES The Company has incurred net operating losses since inception. The
                  Company has not reflected any tax benefit related to such net
                  operating losses in the financial statements.  Prior to August 15,
                  2007 the Company was a limited liability company and losses were
                  passed 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. The authoritative guidance requires a valuation allowance to reduce
                  the deferred tax assets reported if, based on the weight of the
                  evidence, it is more likely than not that some portion or all of the
                  deferred tax assets will not be realized. 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
 16


of these deductible differences. Accordingly, management has
                  determined that a 100% valuation allowance is appropriate at
                  September 30, 2011 and December 31, 2010. The Company's gross
                  deferred tax assets and valuation allowance at September 30, 2011 and
                  December 31, 2010 are as follows:  September 30, 2011
                           
                           
                           
                           
                           
                           December 31, 2010Gross deferred tax assets
                           
                           
                           1,925,000
                           
                           
                           
                           
                           
                           1,286,000Valuation allowance
                           
                           
                           (1,925,000
                           )
                           
                           
                           
                           
                           (1,286,000
                           )Net deferred tax asset
                           
                           
                           
                           
                           
                           
                           
                           
                            As of September 30, 2011 and December 31, 2010, the Company has U.S.
                  federal net operating loss carryforwards of approximately $5,500,000
                  and $3,675,000, respectively.  The federal net operating loss
                  carryforwards expire in the tax years 2027 through 2031. Federal tax laws impose significant restrictions on the utilization
                  of net operating loss carryforwards and research and development
                  credits in the event of a change in ownership of the Company, as
                  defined by the Internal Revenue Code Section 382. The Company's net
                  operating loss carryforwards and research and development credits may
                  be subject to the above limitations. At September 30, 2011 and December 31, 2010 the Company has available
                  for carryforward German net operating losses of approximately
                  $350,000 and $125,000 respectively, to be applied against future
                  German taxable income which may be subject to certain restrictions
                  and limitations. Such carryforwards are subject to certain
                  restrictions and limitations in the event of changes in the
                  NovaVision AG's ownership. 12.   COMMITMENTS AND CONTINGENCIES Lease The Company executed a lease agreement for administrative office
                  space at its current location of 3651 FAU Boulevard, Boca Raton,
                  Florida. The lease term is 12 months from December 1, 2010. The
                  Company vacated its premises at 80 Orville Drive, Bohemia, NY in
                  February, 2011. Rental expense for the Company for the nine months
                  ended September 30, 2011 and 2010 was $83,640 and $17,108,
                  respectively. The Company has entered into a lease for new premises in Boca Raton.
                  The lease term is 66 months and the rental cost for fiscal 2012,
                  taking into account certain rebates under the lease, is approximately
                  $142,000. Kenneth Coviello retention bonus Under the terms of the 2009 Recapitalization Agreement, certain
                  accrued salaries totaling $70,643 were converted into a contingent
                  retention bonus payable either on the closing of a Company
                  fundraising of more than $1.5 million or on the sale of the Company
                  (or substantially all of its assets) at a value above $3 million. The
                  Company and Mr. Coviello are in discussions with regard to this
                  agreement and potential eventual payment. 13. CONSULTING AND OTHER AGREEMENTS The Company has entered into the following consulting and other
                  agreements during the nine months ended September 30, 2011: Consulting Agreement with Jerrald Ginder In March 2011 the Company entered into a one-year consultancy
                  agreement with Mr. Jerrald Ginder, a sales executive of Stryker
                  Corporation, effective April 1, 2011. Mr. Ginder has extensive
                  experience in sales and marketing and the development of medical
                  device products, and has contacts which will be of use to the
                  Company. Under the terms of the agreement, which the Company has the
                  right to terminate with 30 days notice, Mr. Ginder was to receive
                  $60,000 cash, payable monthly, and 18,000,000 restricted shares of
                  common stock of the Company. The stock has been valued by the Company
                  at $360,000 and is being amortized over the life of the agreement as
                  share-based compensation expense. On June 22, 2011, the Company and
                  Mr. Ginder entered into an Amendment to the Consulting Agreement.
                  Pursuant to this amendment, the Company issued to Mr. Ginder an
                  additional 2,666,667 shares of the Company's common stock in lieu of
                  the $60,000 cash due under the Consulting Agreement. The $60,000
                  value of the additional shares is also being amortized as share-based
                  compensation over the life of the agreement. For the six months ended
                  June 30, 2011, aggregate compensation recognized in respect of the
                  Consulting Agreement, as amended, was $91,720.
 17


Supplement to Consulting Agreement with Fountainhead Capital Management Limited On May 12, 2011, the Company entered into a Supplement to a prior
                  Consulting Agreement with Fountainhead entered into on February 10,
                  2010 (amended September 29, 2010) to recognize Fountainhead's
                  expanded responsibilities as a result of the acquisition by the
                  Company of the assets of NovaVision, Inc. Under the terms of the
                  Supplement, commencing January 1, 2011 the Company will pay to
                  Fountainhead an additional monthly retainer of $29,000. This
                  additional monthly retainer shall be accrued and paid out to
                  Fountainhead at the option of Fountainhead as follows: (i) in Vycor
                  stock at any time at $0.0225 per share; or (ii) in cash following the
                  closing of a fundraising of no less than $2.5 million or on the sale
                  of the Company or a substantial part of the assets thereof at any
                  time after June 30, 2011. Notwithstanding, Fountainhead shall have
                  the option to receive up to $5,000 of the additional monthly retainer
                  in cash each month, commencing April 1, 2011. In addition, the term
                  of the Consulting Agreement was extended to May 5, 2013. Other than
                  as supplemented, the Consulting Agreement remains in full force and
                  effect according to its terms. Consulting Agreement with GreenBridge Capital Partners, IV, LLC On June 3, 2011,the Company entered into a Consulting Agreement
                  ("Consulting Agreement") with GreenBridge Capital Partners, IV, LLC,
                  a Delaware limited liability company ("GreenBridge"), to provide
                  consulting and advisory services to the Company. Under the terms of
                  this agreement GreenBridge is to receive up to 15,500,000 shares of
                  the Company's Common Stock.  Said shares are subject to a Company
                  repurchase option, which may be exercised within specified time
                  periods at the Company's sole discretion. On August 18, 2011, the Company agreed with GreenBridge to amend the
                  Consulting Agreement to modify the dates for exercise of the
                  Company's repurchase option related to the shares delivered to
                  Greenbridge pursuant to the terms of the Agreement.  Specifically,
                  the parties agreed that, of the 15,500,000 shares delivered to
                  GreenBridge, the Company would have the option to repurchase
                  5,166,666 of the shares prior to November 30, 2011 and an additional
                  5,166,667 shares prior to February 28, 2012.  The remaining 5,000,000
                  shares are not subject to a repurchase option. The shares which are
                  the subject of the repurchase option are to be held in escrow by a
                  third party.  In all other respects, the original Consulting
                  Agreement remains in full force and effect as written. Consulting Agreement with Burnham Hill Advisors LLC The Company entered into a Consulting Agreement dated June 6, 2011
                  with Burnham Hill Advisors LLC ("BHA") under which BHA shall provide,
                  for a period of six months, financial and strategic advice to the
                  Company. BHA shall receive fees of $10,000 per month and received
                  1,000,000 restricted shares of the Company's Common Stock. Agreement with Partizipant, LLC On July 31, 2011, the Company entered into an Agreement (the
                  "Agreement") with Partizipant, LLC, a Delaware limited liability
                  company ("Partizipant"), to provide a broad range of investor
                  relations and public relations services as more particularly
                  described in the Agreement, a copy of which is attached as Exhibit
                  10.1 to the Company's Current report on Form 8-K filed on August 4,
                  2011. Pursuant to the Agreement, the Company agreed to pay
                  Partizipant a one-time payment of $300,000. 14. RELATED PARTY TRANSACTIONS In January, February and March 2011 the Company issued unsecured,
                  subordinated loan notes to Fountainhead for a total of $99,000. The
                  loan notes are subordinated to the Company's secured debentures, bear
                  interest at a rate of 6% and are due May 30, 2011. In January and February 2011 the Company issued unsecured,
                  subordinated loan notes to Peter Zachariou, a director of the Company
                  for a total of $55,000. The loan notes are subordinated to the
                  Company's secured debentures, bear interest at a rate of 6% and are
                  due on demand. In February 2011 the Company issued an unsecured, subordinated loan
                  note to David Cantor, a director of the Company for $10,000. The loan
                  notes are subordinated to the Company's secured debentures, bear
                  interest at a rate of 6% and are due on demand. On May 6, 2011, the Company entered into a Supplement to a prior
                  Consulting Agreement with Fountainhead entered into on February 10,
                  2010 (amended September 29, 2010) to recognize Fountainhead's
                  expanded responsibilities as a result of the acquisition by the
                  Company of the assets of NovaVision, Inc. Under the terms of the
                  Supplement, commencing January 1, 2011 the Company will pay to FCM an
                  additional monthly retainer of $29,000. This additional monthly
                  retainer shall be accrued and paid out to Fountainhead at the option
                  of Fountainhead as follows: (i) in Vycor stock at any time at $0.0225
                  per share; or (ii) in cash following the closing of a fundraising of
                  no less than $2.5 million or on the sale of the Company or a
                  substantial
 18


part of the assets thereof at any time after June 30, 2011.
                  Notwithstanding, Fountainhead shall have the option to receive up to
                  $5,000 of the additional monthly retainer in cash each month,
                  commencing April 1, 2011. In addition, the term of the Consulting
                  Agreement was extended to May 5, 2013. Other than as supplemented,
                  the Consulting Agreement remains in full force and effect according
                  to its terms. Under the terms of a Consulting Agreement dated February 10, 2010
                  with Fountainhead, the Company was required to issue to Fountainhead
                  fully vested warrants to purchase an additional 39,063,670 shares of
                  the Company's Common Stock, at a price of $0.0125 per share should
                  new funding totaling $3 million in aggregate in Common Stock of Vycor
                  or in securities convertible into Common Stock of Vycor at a price of
                  no less than $0.0125 per share of Common Stock be closed during the
                  term of the Consulting Agreement. These warrants became issuable upon
                  completion of the Preferred Offering and were issued in June 2011. On June 6, 2011, in connection the Preferred Offering, Fountainhead
                  agreed to extend to maturity of debentures totaling $931,362 to
                  December 31, 2012. At the same time, Peter Zachariou, a director of
                  the Company, agreed to extend the maturity of debentures totaling
                  $300,000 to the same date. On September 30, 2011, short-term loans including accrued interest of
                  $102,450 and accrued interest on the loans extended on June 6, 2011
                  of $76,658, were repaid to Fountainhead. At the same time, short-term
                  loans including accrued interest of $57,004 and accrued interest on
                  the loans extended on June 6, 2011 of $14,992 were repaid to Peter
                  Zachariou, a director of the Company; and short-term loans including
                  accrued interest of $10,352 were repaid to David Cantor, a director
                  of the Company. 15. SUBSEQUENT EVENTS The Company evaluated subsequent events through the date the
financial statements were issued and filed with this Form 10Q. New Lease On November 8, 2011 the Company entered into a lease for new premises
                  in Boca Raton. The lease term is 66 months and the rental cost for
                  fiscal 2012, taking into account certain rebates under the lease, is
                  approximately $142,000. Share Issuance On November 6, 2011 the Company issued 166,667 shares of Common Stock
                  (valued at $5,000) to Steven Girgenti and 104,167 shares of Common
                  Stock to Alvaro Pascale-Leone (valued at $3,125) in respect of
                  consulting agreements.
 19


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                     AND RESULTS OF OPERATIONS. Forward Looking Statements This Interim Report on Form 10-Q contains, in addition to historical
                  information, certain forward-looking statements within the meaning of
                  the Private Securities Litigation Reform Act of 1995 ("PLSRA"),
                  Section 27A of the Securities Act of 1933, as amended (the
                  "Securities Act"), and section 21E of the Securities Exchange Act of
                  1934, as amended (the "Exchange Act") regarding Vycor Medical, Inc.
                  (the "Company" or "Vycor," also referred to as "us", "we" or "our").
                  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. We intend that all forward-looking
                  statements be subject to the safe harbor provisions of the PSLRA. 1. Organizational History We were formed as a limited liability company under the laws of the
                  State of New York on June 17, 2005 as "Vycor Medical LLC". On August
                  14, 2007, we converted into a Delaware corporation and changed our
                  name to "Vycor Medical, Inc." ("Vycor" or the "Company"). On November
                  29, 2010, Vycor, through its wholly-owned subsidiary NovaVision
                  Acquisition, Inc., completed the acquisition of substantially all of
                  the assets of the former 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. Subsequent to the purchase, NovaVision Acquisition, Inc.
                  changed its name to NovaVision, Inc. ("NovaVision"). 2. Overview of Business Vycor operates two distinct business units within the medical device
                  industry: Vycor Medical (which operates as a division of the Company)
                  and NovaVision. Vycor Medical is a medical device company that
                  designs, develops and markets medical devices for use in
                  neurosurgery. NovaVision develops non-invasive, computer-based visual
                  neuro-stimulation therapy for patients suffering from vision field
                  deficits resulting from neurological trauma such as stroke and
                  traumatic brain injuries, as well as screening and diagnostic
                  products. In addition to our existing products and products in
                  development, we actively seek acquisition, joint ventures and
                  in-licensing opportunities in the medical device and therapy fields
                  which we believe are complementary and will add shareholder value. Vycor Medical Introduction Vycor Medical is a medical device company that designs, develops and
                  markets medical devices for use in neurosurgery. Vycor Medical is ISO
                  13485:2003 compliant, has U.S. Food and Drug Administration ("FDA")
                  510(k) clearance for brain and spine self-retaining retractors used
                  during surgeries, CE Marking for Europe and Canadian HPB licensing
                  for sale in Canada of its brain access system.
 20


Vycor Medical's ViewSite Brain Access System ("VBAS"), is a
                  neurosurgical access system which was commercially launched in
                  November 2008. The VBAS addresses a market that has not changed
                  materially in over 50 years in contrast to the numerous developments
                  in most other neurosurgical technologies. VBAS has the potential to
                  reduce brain tissue trauma when accessing deep brain targets. In early stages of development is the Cervical Access System
                  ("VCAS"), which requires further prototyping and successful market
                  testing prior to commercialization. Like the VBAS, this product is
                  also designed to allow the surgeon easy access to a desired target;
                  in this case the VCAS allows the surgeon to gain access to the
                  anterior cervical surgery site. Vycor Medical has received FDA 510(k) clearance for its products,
                  with which we are authorized to market our products in the U.S.
                  without further approvals. Viewsite Brain Access System (VBAS) To access most surgical sites in the brain, surgeons usually need to
                  remove part of the skull (craniotomy) and then separate (retract) the
                  soft brain tissue to access the target site. The current standard of
                  care utilizes a metal blade retractor (also known as a ribbon or
                  blade retractor) to separate the tissue, and the retractor blades are
                  attached to a head frame in order to apply tension to the tissue and
                  maintain the opening. With the VBAS system, the surgeon makes an incision, inserts the
                  clear, elliptical-shaped VBAS introducer through the brain tissue,
                  and then removes the introducer and uses the clear hollow working
                  channel to provide access to the precise location desired for surgery. VBAS was designed to be used to access surgical sites in the brain in
                  a minimally-invasive manner. VBAS provides a minimally traumatic
                  surgical corridor to most areas of the brain for the surgeon. With
                  various sizes ranging from 12mm to 28mm, VBAS can be used for many
                  types of procedures from "key hole" endoscopic surgery to removal of
                  large tumors using standard instruments. VBAS is compatible with
                  Image Guidance Systems ("IGS") and can be used with these
                  neuro-navigation systems to accurately reach the target in the brain.
                  This allows the surgeon real-time visualization of retractor
                  positioning. The VBAS is a single-use product and is available in multiple sizes.
                  The series consists of twelve disposable products, offered in four
                  different port diameters of 12mm, 17mm, 21mm and 28 mm and a choice
                  of three lengths for each of 3, 5, and 7cm. We intend to add
                  additional models in the future. Product Advantages Management believes that VBAS has a number of advantages over
                  standard blade or ribbon retractors: Less Invasive Procedure: The VBAS' shape and minimal footprint enables the surgeon to access
                     a specific target with a smaller incision, resulting in a smaller
                     corticotomy and less disruption to surrounding tissues. Reduction of Venous Pressure:Normal surgical procedures utilizing standard retractors require the
                     pulling away of tissue to expose the target site. Current retractors
                     have low surface areas and edges that in turn may lead to focal
                     pressure on the delicate tissue of the brain. The lack of edges on
                     the VBAS device, and the way in which the elliptical introducer
                     retracts the tissue reduces pressure on the tissue. Superior Field of View: Made of polished transparent polycarbonate, the VBAS increases a
                     surgeon's field of vision through a clear, visible and stable
                     channel, allowing for continual monitoring of surrounding tissue and
                     structures during surgery. More Accurate Navigation: The VBAS device when inserted into the brain retracts tissue as the
                     surgeon navigates to the surgical site; standard retractors do not.
                     The VBAS product when used with a navigational pointer allows 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. This helps the surgeon to accurately reach
                     the target site with minimum healthy tissue trauma. Minimizes target shift: When standard retractors are utilized to access the target site,
                     they pull on the brain's soft tissue. This may cause the target area
                     to shift from the location shown on the navigational system. This
                     shifting of the target requires the surgeon to spend time
                     repositioning the retractors as they work towards re-locating the
                     target, exposing the delicate tissue to additional potential
                     pressure. As a result of the VBAS' elliptical shape there is even
                     distribution of pressure and therefore less pulling of the tissue in
                     one direction.
 21


Potential ability to address previously difficult or inoperable
                     procedures: Through its design, VBAS potentially allows the surgeon
                     to address previously difficult or inoperable conditions, such as
                     tumors seated too deeply or very close to critical structures
 Product shortcomings Our products have a few shortcomings: As compared to existing blade retractors diameter of our device 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. Our device uses an elliptical channel which potentially limits the
                     working area compared to a round channel. Certain procedures such as aneurysms require greater site access and
                     therefore are less appropriate for VBAS' minimal approach.
 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, and the extent to which we
                  are successful in achieving our objectives will be judged by the
                  acceptance of the devices in the market. Vycor Medical Product Pipeline Brain Access and Related Products We plan to develop additional Brain Access Systems shapes and sizes
                  and we are also identifying other products that may be used in
                  conjunction with our VBAS product. We are developing an extension arm as a re-usable accessory that
                  attaches to the VBAS device; this will enable easier connection to
                  halo systems and other retractor systems on the market. Cervical Access Products We will continue our preliminary development of 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
                  early stage. Market We believe that approximately 30% of the 4,500 US neurosurgeons focus
                  predominantly on craniotomies or cranial procedures that could
                  potentially benefit from the VBAS product. Management believes that
                  there are approximately 1,500 hospitals that represent the majority
                  of its US target market. Competition Competing manufacturers of brain retractors include, among others,
                  Cardinal Health, Aesculap, Integra Life Sciences, Codman (Division of
                  Johnson & Johnson), Medtronic, Stryker and others. Sales, Marketing and Customers Vycor Medical is currently focusing its marketing efforts for VBAS on
                  the US and Canada, China and Europe. Vycor Medical markets VBAS
                  products to leading neurosurgeons and neurosurgery hospitals. Our
                  domestic distribution partners are independent distributors that have
                  existing relationships with neurosurgeons and target hospitals
                  serving approximately 75% of the U.S. population. Our European distribution partners focus on the neurosurgery markets
                  in Spain, Italy, Belgium, Scandinavia, Switzerland and the U.K. We
                  have also entered into a distribution agreement for VBAS with a
                  Chinese distributor, however we must receive
 22


SFDA clearance before commencing sales in China. Vycor Medical has
                  filed for, but not yet received such SFDA approval. We are also
                  undertaking the regulatory approval process in Australia and Japan. In the US Vycor Medical sells to stocking regional distributors and
                  direct to hospitals through independent representatives. Management
                  believes that its products currently are being utilized in
                  approximately 80 hospitals in the United States and currently being
                  evaluated in a further 40 hospitals. Manufacturing Vycor Medical has executed agreements with Lacey Manufacturing
                  Company of Bridgeport, CT ("Lacey") and C&J Industries of Meadville,
                  PA ("C&J") to provide a full range of vertically integrated services
                  for our products, including engineering, contract manufacturing and
                  logistical support. Lacey and C&J are U.S. FDA-registered and meet
                  ISO standards and certifications. Intellectual Property Patent Applications Vycor Medical has an issued patent in China and a patent approved for
                  grant in Russia, as well as 13 patent applications pending in the
                  U.S. and internationally with respect to its technology. Trademarks VYCOR MEDICAL is a registered trademark and VIEWSITE is pending
                  registration as a trademark with the United States Patent and
                  Trademark Office. NovaVision, Inc. Introduction NovaVision provides a non-invasive, computer-based visual
                  neuro-stimulation rehabilitation therapy called Vision Restoration
                  Therapy ("VRT") for those patients suffering from visual field
                  deficits as a result of neurological trauma. The Company also has
                  some screening and diagnostic products. VRT is a patient-specific
                  diagnostic and therapeutic platform that can potentially increase a
                  patient's visual field and enable them to experience significant
                  functional improvements. VRT is currently focused on visual deficits
                  resulting from stroke and traumatic brain injuries. It is estimated
                  that 15 to 20% of these patients experience a visual field deficit
                  (VFD), reducing mobility and other activities of daily living (ADL).
                  Patients with VFD often experience difficulties walking, are prone to
                  bumping into foreign objects and may be unable to read or even see
                  different foods on their plates. The result is a loss of
                  self-confidence, decreased mobility, ADL difficulties and a lower
                  quality of life. It is this sub-set of patients that is NovaVision's
                  target market. In the US alone this target audience is estimated to
                  be in excess of 800,000 treatable patient population. Management
                  believes that VRT could ultimately be applied to other neurological
                  causes of VFD. Management believes that NovaVision is a leader in the field of
                  neurologically-caused VFD rehabilitation in the U.S. and Europe with
                  over 2,000 patients having been treated with VRT. The Company's
                  therapy can be delivered to market through a variety of different
                  channels - physicians, rehabilitation centers, therapy centers and
                  direct-to-patient. NovaVision has a strong IP portfolio with 19
                  allowed, issued or granted patents and 17 pending patents. NovaVision operates in the US and in Germany through NovaVision AG,
                  its wholly-owned subsidiary and has received 510(k) clearance and CE
                  Marking for VRT. VRT Platform Technology The platform technology is comprised of proprietary algorithms that
                  generate patient-specific therapies enabling NovaVision's products to
                  be used as both diagnostic and therapeutic tools. The platform
                  technology generates light-based stimulus programs, beginning with a
                  fixation point on a display screen. As the patient focuses on this
                  fixation point, a series of light stimuli are delivered on the screen
                  that are specific to the patient's visual field loss. Most stimuli
                  are presented along the border of the patient's visual field loss and
                  relayed directly to the brain using the optic nerve as a conduit. For ophthalmic indications, the platform technology is incorporated
                  into NovaVision's VRT product and the programmed light sequences
                  stimulate the border zone between the "seeing" and "blind" visual
                  fields. The diagnostic algorithm in the VRT product first maps the
                  visual field and defines the areas of defect in patients suffering
                  vision loss. The therapeutic algorithm
 23


in the VRT product is then specifically designed for each patient
                  based upon the results of the diagnostic program and it repetitively
                  challenges the visual cortex with multiple stimuli over the course
                  of time. VRT is performed over a six-month period twice a day for an hour
                  total, six days a week. Most patients do not necessarily experience
                  material benefits until the third month of treatment, although there
                  have been a number of cases of faster improvement. During the initial
                  months, patients may need ongoing encouragement so that they remain
                  motivated to continue with the treatment regimen. NovaVision currently delivers its program in the US through an
                  integrated hardware/software package. The VRT device has a monitor
                  and chinrest, along with a computer preloaded with the VRT software
                  application, to ensure that the patient is optimally positioned to
                  ensure maximum consistency and effectiveness of treatment. The therapy requires a prescription by a licensed physician in the
                  US. NovaVision markets VRT technology to active physicians; to date,
                  approximately 500 prescribing physicians in the U.S. have registered
                  with NovaVision. Product shortcomings VRT has a few shortcomings:  
                           
                           
                           There are certain conditions for which VRT may not be suitable,
                              including: those with a light sensitive seizure disorder such as
                              epilepsy; those with acute central nervous system or eye disease;
                              those with significant cognitive difficulties that would preclude
                              understanding the instructions or maintaining attention for the daily
                              therapy sessions; and those with best corrected visual acuity worse
                              than 20/200, and therefore with an inability to detect the stimuli
                              reliably.
                           
                           
                           Results can vary significantly, and some patients who have been
                              treated have had little to no improvement in their vision field.
                           
                           
                           There may be side effects. The majority of patients who undergo VRT
                              do not experience any noticeable side effects, though a small number
                              of patients have reported infrequent headaches. Marketing NovaVision markets its therapy through physicians and directly to
                  patients, whom it refers to physicians for consultation, prescription
                  and diagnosis prior to undergoing therapy. Its screening and
                  diagnostic products are marketed to physicians, medical and
                  rehabilitation centers as well as academic institutions. NovaVision
                  is in the process of finalizing a significantly enhanced marketing
                  strategy which will entail increased sales and marketing expenditure. Market NovaVision's core VRT product addresses a currently largely unmet and
                  substantial market. In the US alone management believes there are
                  over 7 million stroke sufferers and 2.8 million TBI patients. It is
                  estimated that this equates to a treatable patient population of
                  approximately 800,000, increasing each year. NovaVision Product Pipeline Utilizing VRT's underlying technology, NovaVision has developed and
                  commercialized related visual products for physicians. Management is
                  in the advanced stages of development of a Class 1 screening device
                  with an integrated head-mounted perimetry "HMP". Management believes
                  its greatest advantage is its portability which enables it to be
                  utilized in a number of situations where patients with a VFD may
                  otherwise not be able to take a table mounted test. Regulatory Matters NovaVision's products are regulated in the U.S. by the FDA as Class U
                  medical devices subject to 510(k) clearances, and in Europe
                  NovaVision has CE Marking for VRT as a Class I device. NovaVision
                  received its FDA 510(k) clearance for VRT specific to Stroke and TBI
                  indications in 2003. Intellectual Property Patents NovaVision maintains a portfolio of patent protection on its methods
                  and apparatus in the form of issued patents and applications, both
                  domestically and internationally. NovaVision has 19 allowed, issued
                  or granted patents and 17 pending applications.
 24


Trademarks NovaVision maintains a portfolio of registered trademarks for
                  NovaVision, NovaVision VRT and Vision Restoration Therapy amongst
                  others, both in the US and internationally. Manufacturing and Operations NovaVision assembles and tests all of its medical devices within the
                  Company's headquarters facility. NovaVision has an FDA Establishment
                  Registration and the Company does not have any long-term contractual
                  obligations with its vendors to purchase products from them, nor are
                  suppliers contractually obligated to sell products to NovaVision. 3. Other Matters Product Liability Insurance We presently have Product Liability insurance for both Vycor Medical
                  and NovaVision. Government Regulations We are committed to an integrated total quality management system. We
                  believe that we have completed the necessary procedures and are
                  certified to the ISO standards expected of medical device
                  manufacturers as follows: ISO 13485:2003 Medical Devices  Quality Management Systems The certification of a quality management system to ISO 13485,
                  specifically for medical devices, is advantageous and often essential
                  for medical companies to export their products to the global market,
                  as well as maintain and enter into certain agreements and business
                  growth opportunities within the U.S. For example, Canada requires
                  that medical device manufacturers marketing their products in Canada
                  must have a quality system certified to ISO 13485:2003. The
                  certification is also required for placement of branded devices into
                  the European Union. Vycor Medical has the following certification/licensing: Fully Quality Assurance System Directive 93/42/EEC for Medical
                     Devices, Annex II (3) EC Design-Examination Certificate Directive 93/42/EEC for Medical
                     Devices, Annex II (4) ISO 13485.2003 HPB Licensing for Canada
 Employees We currently have 14 full-time employees. Comparison of the Three Months Ended September 30, 2011 to the Three
                        Months Ended September 30, 2010 Results for the three months ended September 30, 2010 include
                  adjustments to reflect of the effects of the restated financial
                  statements included in the Company's Quarterly Report on Form 10-Q/A
                  for the quarterly period ending September 30, 2010. Revenue and Gross Margin:  2011
                           
                           
                           2010
                           
                           
                           % ChangeRevenue:Vycor Medical
                           
                           $
                           66,510
                           
                           $
                           71,205
                           
                           
                           (7
                           )%NovaVision
                           
                           
                           164,768
                           
                           
                           -
                           
                           
                           NMTotal Revenue
                           
                           $
                           231,278
                           
                           $
                           71,205
                           
                           
                           225
                           %Cost of Revenue:Vycor Medical
                           
                           $
                           (17,500
                           )
                           $
                           (11,980
                           )
                           
                           46
                           %NovaVision
                           
                           
                           (18,798
                           )
                           
                           -
                           
                           
                           NMTotal Cost of Revenue
                           
                           $
                           (36,298
                           )
                           $
                           (11,980
                           )
                           
                           203
                           %
 25


2011
                        
                        
                        2010
                        
                        
                        % ChangeGross ProfitVycor Medical
                        
                        $
                        49,010
                        
                        $
                        59,225
                        
                        
                        (17
                        )%NovaVision
                        
                        
                        145,970
                        
                        
                        -
                        
                        
                        NMTotal Gross Profit
                        
                        $
                        194,980
                        
                        $
                        59,225
                        
                        
                        229
                        % Vycor Medical recorded revenue of $66,510 from the sale of its
                  products for the three months ended September 30, 2011, a decrease of
                  7% over the same period in 2010. Gross margin of 74% was achieved
                  compared to 82% for the same period in 2010. Gross margin is mostly a
                  product of sales mix between US and International sales through
                  different sales channels. Gross margin also reflects non-recurring
                  inventory regulatory costs in the three months ended September 30,
                  2011. NovaVision recorded revenues of $164,768 for the three months ended
                  September 30, 2011 and gross margin of 89%. Research and Development Expense: Research and development ("R&D") expenses were $33,624 for the three
                  months ended September 30, 2011, as compared to $4,009 for the same
                  period in 2010. The increase in R&D expense relates primarily to the
                  inclusion of NovaVision in the 2011 period. General and Administrative Expenses: General and Administrative expenses increased by $826,041 to
                  $1,218,140 for the three months ended September 30, 2011 from
                  $392,099 for the same period in 2010. Of this increase, $367,001 was
                  from non-cash charges representing the value of existing and
                  newly-issued share based payments to non-employee consultants
                  attributable to the period. The increase was primarily related to the
                  recognition of common stock issued to Jerrald Ginder and GreenBridge
                  Capital Partners. The remaining General and Administrative increase
                  of $459,040 reflects approximately $275,000 of additional expenses
                  related to the inclusion of NovaVision as well as increased
                  professional and consulting fees, including increased consulting fees
                  with Fountainhead following the NovaVision acquisition. Interest Expense: Interest expense includes interest expense on the Company's debt and
                  insurance policy financing. Interest expense in the three months
                  ended September 30, 2011 increased by $22,919 to $32,276 from $9,357
                  for the same period in 2010, reflecting increased debt levels. Comparison of the Nine Months Ended September 30, 2011 to the Nine
                        Months Ended September 30, 2010 Results for the nine months ended September 30, 2010 include
                  adjustments to reflect of the effects of the restated financial
                  statements included in the Company's Quarterly Report on Form 10-Q/A
                  for the quarterly period ending September 30, 2010. Revenue and Gross Margin:  2011
                           
                           
                           2010
                           
                           
                           % ChangeRevenue:Vycor Medical
                           
                           $
                           248,591
                           
                           $
                           210,308
                           
                           
                           18
                           %NovaVision
                           
                           
                           270,140
                           
                           
                           -
                           
                           
                           NM$
                           518,731
                           
                           $
                           210,308
                           
                           
                           147
                           %Cost of Revenue:Vycor Medical
                           
                           $
                           (45,967
                           )
                           $
                           (30,752
                           )
                           
                           (49
                           )%NovaVision
                           
                           
                           47,896
                           
                           
                           -
                           
                           
                           NM$
                           (93,863
                           )
                           $
                           (73,138
                           )
                           
                           %Gross ProfitVycor Medical
                           
                           $
                           202,624
                           
                           $
                           179,556
                           
                           
                           %NovaVision
                           
                           
                           222,244
                           
                           
                           -
                           
                           
                           NM$
                           428,868
                           
                           $
                           179,556
                           
                           
                           %
 26


Vycor Medical recorded revenue of $248,591 from the sale of its
                  products for the nine months ended September 30, 2011, an increase of
                  18% over the same period in 2010. The increase in sales was
                  attributable to greater penetration and usage of our product in
                  hospitals in the in our US and European markets. Gross margin of 82%
                  was achieved compared to 85% for the same period in 2010. Gross
                  margin is mostly a product of sales mix between US and International
                  sales through different sales channels. Gross margin also reflects
                  inventory credits in the nine months ended September 30, 2010 and
                  non-recurring product life extension and validation costs in the nine
                  months ended September 30, 2011. NovaVision recorded revenues of $222,244 for the nine months ended
                  September, 2011 and gross margin of 82%. Research and Development Expense: Research and development expenses were $94,960 for the nine months
                  ended September 30, 2011 compared to $9,657 for the same period in
                  2010. The increase in R&D expense relates primarily to the inclusion
                  of NovaVision in the 2011 period. General and Administrative Expenses: General and administrative expenses increased by $2,780,150 to
                  $4,002,430 for the nine months ended September 30, 2011 from
                  $1,222,280 for the same period in 2010. Of this increase, $1,404,410
                  was from non-cash charges representing the value of existing and
                  newly-issued share based payments to employee and non-employee
                  consultants attributable to the period. The increase was primarily
                  related to the recognition of $658,651 for fully vested warrants
                  issued to Fountainhead during the 2011 period, as well as the
                  recognition of common stock issued to Jerrald Ginder and GreenBridge
                  Capital Partners IV, LLC. The remaining General and Administrative
                  increase of $1,375,740 reflects approximately $725,000 of additional
                  expenses related to the inclusion of NovaVision in 2011, increased
                  professional and consulting fees, including increased consulting fees
                  with Fountainhead following the NovaVision acquisition, and higher
                  levels of marketing activities in Vycor Medical. Interest Expense: Interest expense for the nine months ended September 30, 2011
                  increased by $62,051 to $95,810 from $33,759 for the same period in
                  2010, reflecting increased debt levels. Liquidity and Capital Resources Liquidity The following table shows cash flow and liquidity data for the
                  periods ended September 30, 2011 and December 31, 2010:  September 30, 2011
                           
                           
                           December 31, 2010
                           
                           
                           $ ChangeCash
                           
                           $
                           1,833,831
                           
                           $
                           127,081Accounts receivable, inventory and other current assets
                           
                           
                           1,408,673
                           
                           
                           774,122Total current liabilities and long term debt
                           
                           
                           (2,660,841
                           )
                           
                           (2,064,980
                           )Working capital surplus (deficit)
                           
                           
                           581,663
                           
                           $
                           (1,163,777
                           )Cash provided by financing activities
                           
                           $
                           4,215,104
                           
                           $
                           889,500 As of September 30, 2011 we had $1,833,831 cash, a working capital
                  surplus of $1,898,025 and an accumulated deficit of $10,803,211.
                  Total Stockholders' equity at September 30, 2011 was $1,741,045.
                  Total debt at September 30, 2011, included in the working capital
                  deficit above, was $1,634,689, a change of $234,308 from $1,400,381
                  at December 31, 2010. Our operating activities used $2,428,562 in
                  cash for the nine months ended September 30, 2011. Uses of estimates in the preparation of financial statements The preparation of consolidated financial statements in conformity
                  with generally accepted accounting principles requires management to
                  make estimates and assumptions that affect the amounts reported in
                  the consolidated financial statements and accompanying notes. Actual
                  results could differ from those estimated. To the extent management's
                  estimates prove to be incorrect, financial results for future periods
                  may be adversely affected. Significant estimates and assumptions
                  contained in the accompanying consolidated financial statements
                  include management's estimate of the allowance for uncollectible
                  accounts receivable, amortization of intangible assets, and the fair
                  values of options and warrant included in the determination of debt
                  discounts and share based compensation.
 27


Going Concern Our 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 we will
                  continue as a going concern. We have incurred losses since our
                  inception, including a net loss of $3.9 million for the nine months
                  ended September 30, 2011, and we expect to continue to incur
                  substantial additional losses in the future, including additional
                  product development, marketing, manufacturing and distribution
                  expenses. We have generated negative cash flows from operations since
                  inception. As of September 30, 2011 the Company had stockholders'
                  equity of $1.7 million and cash and cash equivalents of $1.8 million.
                  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. Research and Development The Company expenses all research and development costs as incurred. Cash and cash equivalents The Company maintains cash balances at various financial
                  institutions. Accounts at each institution are insured by the Federal
                  Deposit Insurance Corporation up to $250,000. Cash balances may at
                  times exceed the FDIC insured limits. Cash also includes a US
                  investment account in a money market backed by government securities
                  up to 105% of the account balance. The Company considers all highly
                  liquid investments with a maturity of three months or less when
                  purchased to be cash equivalents. Property and equipment The Company records property and equipment at cost and calculates
                  depreciation using the straight-line method over the estimated useful
                  life of the assets, which is estimated to be between three and seven
                  years. Maintenance, repairs and minor renewals are charged to expense
                  when incurred. Replacements and major renewals are capitalized. Income taxes The Company accounts for income taxes in accordance with the current
                  authoritative guidance. Deferred income tax assets and liabilities
                  are determined based upon differences between financial reporting and
                  tax basis of assets and liabilities and are measured using the
                  enacted tax rates and laws that will be in effect when the
                  differences are expected to reverse. Valuation allowances are
                  established, when it is more likely than not that such benefit will
                  not be realized. Patents and Other Intangible Assets The Company capitalizes legal and related costs associated with the
                  establishment and enhancement of patents for its products once
                  patents have been applied for. Costs associated with the development
                  of the patented item or processes are charged to research and
                  development costs and expensed as incurred. The capitalized costs are
                  amortized over the life of the patent. The Company reviews intangible
                  assets for impairment on an annual basis. Trademarks have an
                  indefinite life and are also reviewed annually by management for
                  impairment in accordance with the authoritative guidance. Revenue Recognition Vycor Medical generates revenue from the sale of its surgical access
                  system to hospitals and other medical professionals. Vycor Medical
                  records revenue when a completed contract for the sale exists, the
                  product is invoiced and shipped to the customer. Vycor Medical does
                  provide for product returns or warranty costs. NovaVision generates revenues from various programs, therapy services
                  and other sources such as government grants. Therapy services
                  revenues represent fees from NovaVision's vision restoration therapy
                  software, diagnostic software, medical devices, clinic set up and
                  training fees, and the professional and support services associated
                  with the therapy. NovaVision recognizes revenue for providing the
                  vision restoration therapy as the Company's work effort is expended.
                  NovaVision provides vision restoration therapy directly to patients.
                  The typical vision restoration therapy consists of six modules,
                  performed on average over 6 months in the U.S. and 10 months in
                  Germany. A patient contract comprise set-up fees and monthly therapy
                  fees. Set-up
 28


fees are recognized at the outset of the contract and therapy revenue
                  is recognized ratably over the therapy period. Patient therapy is
                  restricted to being completed by a patient within a specified
                  time frame. Research grants and other subsidies represent revenue from certain
                  German government agencies to cover certain patients within an
                  insurance group and also to reimburse NovaVision AG for certain
                  payroll and other costs. The Company recognizes grant revenue when
                  services or costs have been incurred which would entitle the Company
                  to use the German government funds, and the grant requirements have
                  been satisfied. Deferred revenue results from patients paying for the therapy in
                  advance of receiving the therapy. Accounts Receivable The Company's accounts receivable are due from the hospitals and
                  distributors in the case of Vycor Medical, and from patients directly
                  therapy or physicians for diagnostic products in the case of
                  NovaVision. Accounts receivable are due once products have been
                  delivered or at the time the therapy is initiated; however, for
                  NovaVision therapy patients sometimes credit is extended through
                  various payment plans based on individual financial conditions,
                  generally not to exceed the 9 or 10 month therapy period. The
                  outstanding balances are stated net of an allowance for doubtful
                  accounts. The Company determines its allowance by considering a
                  number of factors, including the length of time accounts receivable
                  are past due, and the customer's ability to pay its obligations. The
                  Company writes off accounts receivable when they become uncollectible. Inventory Inventories are comprised of Vycor Medical VBAS devices, components
                  ancillary to NovaVision's medical device provided to patients and
                  centers and diagnostic products, and are stated at the lower of cost
                  or market, determined under the first-in, first-out method. The
                  inventory is charged to cost of revenue at the time that a device is
                  shipped to a customer or patient. Foreign Currency The Euro is the local currency of the country in which NovaVision AG
                  conducts its operations and is considered the functional currency of
                  this entity. All balance sheet amounts are translated to U.S. dollars
                  using the U.S. exchange rate at the balance sheet date except for the
                  equity section which is translated at historical rates. Operating
                  statement amounts are translated using an average exchange rate for
                  the period of operations. Foreign currency translation effects are
                  accumulated as part of the accumulated other comprehensive income
                  (loss) and included in shareholders' (deficit) in the accompanying
                  Consolidated Balance Sheet. Educational marketing and advertising expenses The Company may incur costs for the education of customers on the
                  uses and benefits of its products. The Company will include
                  education, marketing and advertising expense as a component of
                  selling, general and administrative costs as such costs are incurred. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not applicable ITEM 4. CONTROLS AND PROCEDURES (a)      Disclosure Controls and Procedures We are required to maintain disclosure controls and procedures that
                  are designed to ensure that information required to be disclosed in
                  our reports filed under the Securities Exchange Act of 1934, as
                  amended, is recorded, processed, summarized and reported within the
                  time periods specified in the Securities and Exchange Commission's
                  rules and forms, and that such information is accumulated and
                  communicated to our management, including our chief executive officer
                  (also our principal executive officer) and our chief financial
                  officer (also our principal financial and accounting officer) to
                  allow for timely decisions regarding required disclosure. On August 12, 2011, the Board of Directors concluded that the Company
                  had not properly accounted for warrants issued in connection with
                  consulting or other service agreements and for the beneficial
                  conversion feature of certain convertible debentures. The Company had
                  previously not recognized the fair value of warrants issued in
                  connection with consulting or other service agreements at the
                  measurement date, and has previously recognized the expense ratably
                  over the life of the warrant. The Company's management has determined
                  that the proper accounting, following the guidance in ASC Topic 505,
                  is to record
 29


the fair value of these warrants as a prepaid expense on the date of
                  issuance, and recognize the expense ratably over the life of the
                  underlying service agreement. The Company has, since December 2009,
                  been determining the existence of a beneficial conversion feature of
                  convertible debt based on the fair value of the conversion feature on
                  the date of issuance, rather than using the intrinsic value of the
                  conversion feature on the date of issuance, as required under ASC
                  Topic 470. These items had a material effect on our previously issued
                  consolidated financial statements for the years ended December 31,
                  2009 and 2010 and for each of the quarters for the year ended
                  December 31, 2010 and the quarter ended March 31, 2011, requiring us
                  to restate the financial statements for such periods. The Company has
                  now filed restatements of the affected financial statements and the
                  financial statements included in this report incorporate such
                  restated financial statements. Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934
                  ("Exchange Act"), the Company carried out an evaluation, with the
                  participation of the Company's management, including the Company's
                  Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO")
                  (the Company's principal financial and accounting officer), of the
                  effectiveness of the Company's disclosure controls and procedures (as
                  defined under Rule 13a-15(e) under the Exchange Act) as of the end of
                  the period covered by this report.  Based upon that evaluation, and
                  taking the matters described above into account (including certain
                  remedial action described in prior reports), the Company's CEO and
                  CFO concluded that the Company's disclosure controls and procedures
                  were effective as of September 30, 2011 to ensure that information
                  required to be disclosed by the Company in the reports that the
                  Company files or submits under the Exchange Act, is recorded,
                  processed, summarized and reported, within the time periods specified
                  in the SEC's rules and forms, and that such information is
                  accumulated and communicated to the Company's management, including
                  the Company's CEO and CFO, as appropriate, to allow timely decisions
                  regarding required disclosure. (b)      Changes in Internal Controls There have not been any changes in the Company's internal control
                  over financial reporting (as such term is defined in Rules 13a-15(f)
                  under the Exchange Act) during the fiscal period to which this report
                  relates that have materially affected, or are reasonably likely to
                  materially affect, the Company's internal control over financial
                  reporting.  In light of the matters described above with respect to
                  accounting for warrants issued under consulting or other service
                  agreements and the beneficial conversion feature of certain
                  convertible debt, the Company intends to re-evaluate its internal
                  control over financial reporting and to implement such changes as it
                  may deem appropriate in light of such re-evaluation. The Company's management, including the Company's CEO and CFO, does
                  not expect that the Company's internal control over financial
                  reporting will prevent all errors and all fraud.  Because of its
                  inherent limitations, internal control over financial reporting may
                  not prevent or detect misstatements.  Also, projections of any
                  evaluation of effectiveness to future periods are subject to the risk
                  that controls may become inadequate because of changes in conditions,
                  or that the degree or compliance with the policies or procedures may
                  deteriorate. 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, 2011,
                  we were not a party to any material litigation, claim or suit whose
                  outcome could have a material effect on our financial statements. ITEM 1A. RISK FACTORS. As a "smaller reporting company" as defined by Item 10 of Regulation
                  S-K, the Company is not required to provide information required by
                  this Item. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Common Stock In April 2011, the Company issued 24,444,442 shares of Company Common
                  Stock together with Warrants to purchase 12,222,221 shares of Company
                  common stock at an exercise price of $0.03 per share for a period of
                  three years for aggregate gross proceeds of $550,000. In April 2011, in connection with a consultancy agreement (valued at
                  $360,000), the Company issued 18,000,000 shares of Company Common
                  Stock to Jerrald Ginder.
 30


In May 2011, the Company issued 8,666,666 shares of Company Common
                  Stock together with Warrants to purchase 4,333,334 shares of Company
                  common stock at an exercise price of $0.03 per share for a period of
                  three years for aggregate gross proceeds of $195,000. In May, 2011, in consideration for services provided to the Board of
                  Directors (valued at $5,000), the Company issued 222,222 shares of
                  its common stock to Steven Girgenti. On June 3, 2011, in connection with a consultancy agreement (valued
                  at $348,750), the Company issued 15,500,000 shares of Company Common
                  Stock to GreenBridge Capital Partners IV, LLC. On June 6, 2011, in connection with a consultancy agreement (valued
                  at $22,500), the Company issued 1,000,000 shares of Company Common
                  Stock to Burnham Hill Advisors, LLC. On June 25, 2011, as an amendment to an consultancy agreement, the
                  Company issued 2,666,667 shares of Company Common Stock to Jerrald
                  Ginder in lieu of monthly cash payments due under the agreement
                  of $60,000. On June 30, 2011, the entire principal and unpaid interest on a
                  Debenture dated December 3, 2010 payable to Berardino Investment
                  Group in the original principal amount of $40,000 was converted into
                  2,167,902 shares of Company Common Stock ($0.019 per share). In August 2011 the Company issued 154,600 shares of Common Stock
                  (valued at $5,000) to Steven Girgenti, 78,300 shares of Common Stock
                  to Alvaro Pascale-Leone (valued at $3,125) and 428,571 shares of
                  Common Stock (valued at $10,000) to McCombie Group, LLC in respect of
                  consulting agreements. On September 30, 2011 the Company issued 510,000 shares of Company
                  common stock to Joe Simone in respect of an amendment to a previously
                  disclosed consulting agreement. Preferred Stock On June 7, 2011, the Company completed the sale of $1,570,000 in
                  Units comprising Series C Convertible Preferred Shares and Warrants
                  (the "Units") to accredited investors (the "Investors") (the
                  "Preferred Offering"). The Units were issued pursuant to separate
                  Series C Convertible Preferred Stock Purchase Agreements (the
                  "Agreements") between the Company and each of the Investors.  This
                  sale was an initial closing (the "Initial Closing") under the
                  Agreements which allows for maximum proceeds of $3,000,000. Each Unit
                  was priced at $50,000 and comprised one share of Series C Preferred
                  Convertible Stock convertible (at the Holder's option or mandatorily
                  upon the occurrence of certain events) into 2,222,222 shares of the
                  Company's Common Stock ($0.0225 per share) and a Warrant to purchase
                  1,111,111 shares of the Company's Common Stock at $0.03 per share
                  (subject to adjustments) for a period of three years (the "Warrant"
                  or "Warrants").  A total of 31.4 shares of Series C Convertible
                  Preferred Stock convertible into 69,777,773 shares of the Company's
                  Common Stock and Warrants to purchase 34,888,890 shares of the
                  Company's Common Stock were issued.  The proceeds of the sale of the
                  Units will be used for working capital and general corporate
                  purposes.  A portion of the proceeds is earmarked for the cost of
                  investor relations. On June 28, 2011, the Company completed a second closing of the
                  offering with the sale of an additional $770,000 in Units comprising
                  Series C Convertible Preferred Shares and Warrants (the "Units") to
                  Investors. An additional 15.40 shares of Series C Convertible
                  Preferred Stock convertible into 34,222,220 shares of the Company's
                  Common Stock and Warrants to purchase 17,111,111 shares of the
                  Company's Common Stock were issued in connection with the second
                  closing. 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. On August 4, 2011, the Company completed a final closing of the
                  Preferred Offering (the "Final Closing") with the sale of an
                  additional 13.2 Units to Investors for aggregate proceeds of
                  $660,000. An additional 13.2 shares of Series C Convertible Preferred
                  Stock convertible into 29,333,330 shares of the Company's Common
                  Stock and Warrants to purchase 14,666,665 shares of the Company's
                  Common Stock were issued in connection with the Final Closing. An
                  aggregate of 60 Units were sold to Investors in the First Closing,
                  Second Closing and Final Closing of the Preferred Offering for total
                  proceeds of $3,000,000. A total of 60 shares of Series C Convertible
                  Preferred Stock, convertible into an aggregate of 133,333,324 shares
                  of Common Stock, and Warrants to purchase 66,666,666 shares of the
                  Company's Common Stock. On August 26, 2011, the Company completed a new sale of 3.8 Units
                  comprising Series C Convertible Preferred Shares and Warrants (the
                  "Units") to an accredited investor (the "Investor") (the " New
                  Preferred Offering") for aggregate proceeds of $190,000. Each Unit
                  was priced at $50,000 and comprised one share of Series C Preferred
                  Convertible Stock convertible (at the Holder's option or mandatorily
                  upon the occurrence of certain events) into 2,222,222 shares of the
                  Company's Common
 31


Stock ($0.0225 per share) and a Warrant to purchase 1,111,111 shares
                  of the Company's Common Stock at $0.03 per share (subject to
                  adjustments) for a period of three years (the "Warrant" or
                  "Warrants"). ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. (REMOVED AND RESERVED) None. ITEM 5. OTHER INFORMATION Subsequent events The Company evaluated subsequent events through the date the
financial statements were issued and filed with this Form 10Q. New Lease On November 8, 2011 the Company entered into a lease for new premises
                  in Boca Raton. The lease term is 66 months and the rental cost for
                  fiscal 2012, taking into account certain rebates under the lease, is
                  approximately $142,000. Share Issuance On November 6, 2011 the Company issued 166,667 shares of Common Stock
                  (valued at $5,000) to Steven Girgenti and 104,167 shares of Common
                  Stock to Alvaro Pascale-Leone (valued at $3,125) in respect of
                  consulting agreements. 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 11, 2011.  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 Financial Officer)
 32