EX-99.4 5 d27822_ex99-4.htm EX-99.4 HTML



Exhibit    99.4

VYCOR MEDICAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On November 29, 2010, Vycor Medical, Inc."(Vycor" or "the Company") acquired substantially all of the assets of NovaVision, Inc. ("NovaVision") for $900,000. The acquisition was funded with $750,000 loans from Fountainhead Capital Partners Limited and related parties, and $150,000 of equity issuance. The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2010 and the unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2010 and the fiscal year ended December 31, 2009 give effect to the Company's purchase of NovaVision. The acquisition has been accounted for as a business combination under FASB ASC 805 and the initial purchase price was allocated to NovaVision's assets and liabilities based on their fair values at the date of the acquisition.

The unaudited pro forma condensed consolidated balance sheet presents the financial position of the Company as if the acquisition of NovaVision occurred on September 30, 2010. The unaudited pro forma condensed consolidated statement of operations for the nine months ended September 30, 2010 and year ended December 31, 2009 has been prepared as if the acquisition occurred on January 1, 2010 and January 1, 2009, respectively.

The unaudited pro forma adjustments are based on management's preliminary estimates of the value of the tangible and intangible assets and liabilities acquired. As a result, the actual adjustments may differ materially from those presented in these unaudited pro forma statements. A change in the unaudited pro forma adjustments of the purchase price for the acquisition would primarily result in a reallocation affecting the value assigned to tangible and intangible assets. The income statement effect of these changes will depend on the nature and amount of the assets or liabilities adjusted.

The unaudited pro forma condensed consolidated financial statements, which have been prepared in accordance with rules prescribed by Article 11 of Regulation S-X, are provided for informational purposes only and are not necessarily indicative of the past or future results of the operations or financial position of the Company.

This information should be read in conjunction with the previously filed Current Report on Form 8-K filed with the Securities and Exchange Commission on November 29, 2010, the previously filed historical financial statements and accompanying notes of the Company contained in its Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2010 and the historical financial statements and accompanying notes of NovaVision included in this report on Form 8-K/A.

VYCOR MEDICAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

SEPTEMBER 30, 2010

                                                           
  ASSETS     Vycor           NovaVision           Adjustments           Proforma Combined  
  Current assets:                                            
        Cash and cash equivalents   $ 44,142                     $ 900,000     A   $ 944,142  
                                            (900,000 )   A     (900,000 )
        Accounts receivable     75,616                                   75,616  
        Inventory     41,265                       9,200     B     50,465  
        Prepaid expenses and other current assets     76,922                                   76,922  
              Total current assets     237,945                       9,200           247,145  
                                                           
  Fixed assets, net     175,535                       621,000     B     796,535  
  Intangible assets, net     91,356                       269,800     C     361,156  
  Security deposits     3,633                                   3,633  
  Assets of Discontinued Operations     -           900,000           (900,000 )   B     -  
              Total assets   $ 508,469         $ 900,000         $ 0         $ 1,408,469  
                                                           
  LIABILITIES AND SHAREHOLDERS' EQUITY                          
                                                           
  Current liabilities:                                            
        Accounts payable   $ 77,191                                 $ 77,191  
        Accrued liabilities     161,785                       91,200     D     252,985  
        Other Current Liabilities     21,158                                   21,158  
        Notes payable     496,215                       750,000     A     1,246,215  
              Total current liabilities     756,349                       841,200           1,597,549  
                                                           
  Liabilities of Discontinued Operations               $ 900,000         $ (900,000 )            
                                                           
              Total liabilities     756,349           900,000           (58,800 )         1,597,549  
                                                           
  Shareholders' equity (deficit):                                            
        Preferred stock     -           4,968           (4,968 )   E     -  
        Common stock     69,655           1,028           (238 )   A, E     70,445  
        Additional paid-in capital     5,768,369           40,259,654           (40,110,444 )   A, E     5,917,579  
        Accumulated deficit     (6,085,904 )         (40,265,650 )         40,174,450     D,E     (6177,104 )
                                                           
              Total shareholders' equity (deficit)     (247,880 )         (0 )         58,800           (189,080 )
                                                           
              Total liabilities and shareholders' equity   $ 508,469         $ 900,000         $ 0         $ 1,408,469  

VYCOR MEDICAL, INC.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

                             
  A     Reflects acquisition by Vycor to acquire the assets of NovaVision. The transaction took place on November 29, 2010 and was funded by the issuance of $150,000 of common stock and the issuance of $750,000 of Notes Payable to Fountainhead Capital Partners and related parties.  
           
  B     Reflects the preliminary valuation of the assets acquired in the transaction:  
                       
        Inventory   $ 9,200        
        Purchased software           Estimated useful life 3 years  
        Devices           Estimated useful life 3 years  
        Internally Developed Software - Commercially launched           Estimated useful life 3 years  
        Internally Developed Software - Passed preliminary project stage, not yet launched              
                       
              Fixed Assets   $ 621,000        
           
  C     Reflects the preliminary valuation of the identified intangible assets:  
                       
        Trademarks   $ 36,000        
        Patents     233,800     Estimated useful life 9 years  
                       
                             
              Intangible Assets   $ 269,800        
           
  D     Reflects the transaction costs incurred by Vycor in connection with the acquisition. The adjustment was recorded to Accrued expenses and Accumulated deficit.  
           
  E     Reflects the elimination of NovaVision's shareholders' equity in consolidation.  

VYCOR MEDICAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010

                                                     
              Vycor           NovaVision           Adjustments           Pro forma Combined  
                                                     
  Revenue     210,308                                   210,308  
                                                     
  Cost of revenue     33,134                                   33,134  
                                                     
        Gross profit     177,174                                   177,174  
                                                     
  Operating expenses                                            
        Sales, General and administrative     1,159,532                       91,200     F     1,250,732  
        Research and development     9,657                                   9,657  
        Depreciation and amortization     30,577                       58,583     G     89,160  
                                                     
        Total operating expenses     1,199,766                       142,183           1,341,949  
                                                     
        Loss from operations     (1,022,592 )                     (142,183 )         (1,164,775 )
                                                     
  Net Interest and Other income (expense)     (186,624 )                     (33,750 )   H     (220,374 )
                                                     
        Loss before income taxes     (1,209,216 )                     (175,933 )         (1,385,149 )
                                                     
  Income tax expense     -                                   -  
                                                     
        Loss from Continuing Operations     (1,209,216 )                     (175,933 )         (1,385,149 )
                                                     
  Net Loss from Discontinued Operations (net of tax)                 (837,321 )         140,403     I     (696,918 )
  Net Profit from disposal of Discontinued Operations (net of tax)     -           18,001,095           (18,001,095 )   J        
                                                     
        Net loss   $ (1,209,216 )       $ 17,163,774         $ (18,036,625 )       $ (2,082,067 )
                                                     
  Loss per Share                                            
        Basic and diluted   $ (0.002 )                               $ (0.003 )
                                                     
  Weighted average number of common shares outstanding                                      
        Basic and diluted     650,384,814                                   658,279,551  
                                                     

VYCOR MEDICAL, INC.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

                             
  F     This adjustment reflects the transaction costs incurred by Vycor in connection with the acquisition.  
           
  G     This adjustment reflects the depreciation and amortization of the acquired fixed and intangible assets to the extent the preliminary valuation of the assets based on the preliminary purchase price allocation was greater, or lesser, than the prior carrying value of the NovaVision assets (see Note B above):  
                             
              Value     Depn/Amort        
        Fixed assets subject to depreciation/amortization     $126,000     $31,500     Estimated useful life 3 years  
        Patents     $233,800     $19,483     Estimated useful life 3 years  
                             
  H     This adjustment reflects the 6% accrued interest expense for the funds borrowed for the acquisition of NovaVision  
           
  I     This adjustment reflects the elimination of depreciation and amortization on the assets in discontinued operations as these reflected prior cost carrying values (see Note G above)  
           
  J     This adjustment reflects the elimination of the profit on disposal of the assets of NovaVision to Vycor, which arose out of the write off of debts and other liabilities, net of the write down of assets.  

VYCOR MEDICAL, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2009

                                                     
              Vycor           NovaVision           Adjustments           Pro forma Combined  
                                                     
  Revenue     199,046                                   199,046  
                                                     
  Cost of revenue     22,482                                   22,482  
                                                     
        Gross profit     176,564                                   176,564  
                                                     
  Operating expenses                                            
        Sales, General and administrative     1,077,411                                   1,077,411  
        Research and development     4,761                                   4,761  
        Depreciation and amortization     36,995                       78,111     K     115,106  
                                                     
        Total operating expenses     1,119,167                       78,111           1,197,278  
                                                     
        Loss from operations     (942,603 )                     (78,111 )         (1,020,714 )
                                                     
  Net Interest and Other income (expense)     (198,780 )                     (45,000 )   L     (243,780 )
                                                     
        Loss before income taxes     (1,141,383 )                     (123,111 )         (1,264,494 )
                                                     
  Income tax expense     -                       -           -  
                                                     
        Loss from Continuing Operations     (1,141,383 )                                 (1,264,494 )
                                                     
  Net Loss from Discontinued Operations (net of tax)                 (7,580,281 )         264,471     M     (7,315,810 )
                                                     
        Net loss   $ (1,141,383 )       $ (7,580,281 )       $ 141,360         $ (8,580,304 )
                                                     
                                                     
  Loss per Share                                            
        Basic and diluted   $ (0.039 )                               $ (0.231 )
                                                     
  Weighted average number of common shares outstanding                                            
        Basic and diluted     29,183,482                                   37,078,219  
                                                     

VYCOR MEDICAL, INC.

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

                             
  K     This adjustment reflects the depreciation and amortization of the acquired fixed and intangible assets to the extent the preliminary valuation of the assets based on the preliminary purchase price allocation was greater, or lesser, than the prior carrying value of the NovaVision assets (see Note B above):  
                             
              Value     Depn/Amort        
        Fixed assets subject to depreciation/amortization     $126,000     $42,000     Estimated useful life 3 years  
        Patents     $233,800     $36,111     Estimated useful life 3 years  
                             
  L     This adjustment reflects the 6% accrued interest expense for the funds borrowed for the acquisition of NovaVision  
           
  M     This adjustment reflects the elimination of depreciation and amortization on the assets in discontinued operations as these reflected prior cost carrying values (see Note G above)