Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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

The Company was 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"). The Company's listing went effective on February 2009 and on November 29, 2010 Vycor completed the acquisition of substantially all of the assets of NovaVision, Inc. ("NovaVision") and on January 4, 2012 Vycor, through its wholly-owned NovaVision subsidiary, completed the acquisition of all the shares of Sight Science Limited ("Sight Science"), a previous competitor to NovaVision.

2. Overview of Business

Vycor is dedicated to providing the medical community with innovative and superior surgical and therapeutic solutions and operates two distinct business units within the medical device industry. Vycor Medical designs, develops and markets medical devices for use in neurosurgery. NovaVision provides non-invasive rehabilitation therapies for those who have vision disorders resulting from neurological brain damage such as that caused by a stroke. Both businesses adopt a minimally or non-invasive approach. The Company leverages joint resources across the divisions to operate in a cost-efficient manner.

Vycor Medical

Vycor Medical designs, develops and markets medical devices for use in neurosurgery. Vycor Medical's ViewSite Brain Access System ("VBAS") is a next generation retraction and access system. Vycor Medical is ISO 13485:2016 and MDSAP (Medical Device Single Audit Program) certified, and VBAS has U.S. FDA 510(k) clearance and CE Marking for Europe (MDD Class III) for brain and spine surgeries, and regulatory approvals in other international markets.

NovaVision

NovaVision provides non-invasive, computer-based rehabilitation therapies targeted at people who have impaired vision as a result of stroke or other brain injury.

Strategy

The Company is continuing to execute on a plan to achieve revenue growth. The strategy for Vycor Medical includes: increasing market penetration in the US; increasing international growth in territories where we are not represented or under-represented; continued new product development in response to market demands and demonstrating applicability in a broader range of pathologies; and adding products complementary to VBAS where the Company is able to leverage its existing distribution network.

Given NovaVision's resources, and the large size and diversity of its end markets, we believe that the most efficient way to tackle the distribution of its patient and professional products is by partnering with entities that have either direct access to the end users or the technological capability to leverage the NovaVision therapy platform, particularly in digital health and into non-medical areas. Management is also open to a broad range of alternatives for NovaVision as a whole, which could comprise distribution and marketing partnerships, licensing, merger or sale.

Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025

Revenue and Gross Margin:

		Three months ended
		March 31,
		2026				2025				% Change
Revenue:
Vycor Medical		$	440,441			$	418,520				5	%
NovaVision			18,099				17,858				1	%
		$	458,540			$	436,378				5	%
Gross Profit
Vycor Medical		$	359,040			$	341,798				5	%
NovaVision			16,113				16,736				-4	%
		$	375,153			$	358,534				5	%

Vycor Medical recorded revenue of $440,441 from the sale of its products for the three months ended March 31, 2026, an increase of $21,921, or 5%, over the same period in 2025, most of the increase being from growth in international markets. Gross margin of 82% was recorded for the three months ended March 31, 2026 and 2025, respectively.

NovaVision recorded revenues of $18,099 for the three months ended March 31, 2026, an increase of $241, or 1%, over the same period in 2025. Gross margin was 89% for the three months ended March 31, 2026, compared to 94% for the same period in 2025 due to higher chinrest costs.

Research & Development:

Research & Development expenses were $0 for the three months ended March 31, 2026 compared to $5,762 for the same period in 2025.

Selling, General and Administrative Expenses:

Selling, general and administrative expenses decreased by $35,333 to $315,365 for the three months ended March 31, 2026 from $350,698 for the same period in 2025. Included within Selling, General and Administrative Expenses are non-cash charges for stock-based compensation as the result of amortizing non-employee shares which have been issued by the Company. The charge for the three months ended March 31, 2026 was $0, a $18,315 decrease from the charge in 2025 due to amortization of the Maxim financial advisory agreement in 2025. Also included within Selling, General and Administrative Expenses are Sales Commissions, which decreased by $44,593 from $85,527 in 2025 to $40,934 in 2026 reflecting higher international sales during the 2026 period.

The remaining Selling, General and Administrative expenses increased by $27,575 from $246,856 in 2025 to $274,431 in 2026, as set out in the table below. Investor relations expense relates to a investor and public awareness campaign run by the company.

Investor Relations		$	13,383
Software expense			9,204
Bad debt expense			8,340
Accounting, audit and tax			3,132
Patents			(6,395	)
Other			(89	)
Total change		$	27,575

Interest Expense:

Interest comprises expense on the Company's debt and insurance policy financing. Related Party Interest expense for the three months ended March 31, 2026 and 2025 was $12,570. Other Interest expense for the three months ended March 31, 2026 and 2025 was $13,139.

Income (loss) from Discontinued Operations:

Income (loss) from Discontinued Operations in the three months ended March 31, 2026 was $13 compared to $(49) in 2025; the Company has some minor ongoing costs related to the wind-down of the discontinued operations in Germany but no revenues.

Liquidity

The following table shows liquidity data as of March 31, 2026 and December 31, 2025:

		March 31, 2026				December 31, 2025				$ Change
Cash		$	173,634			$	86,982			$	86,652
Accounts receivable, inventory and other current assets		$	477,413			$	476,440			$	973
Total current liabilities		$	(4,948,048	)		$	(4,781,468	)		$	(166,580	)
Working capital (deficit)		$	(4,297,001	)		$	(4,218,046	)		$	(78,955	)

The following table shows cash flow for the periods ended March 31, 2026 and 2025:

		March 31, 2026				March 31, 2025				$ Change
Cash provided by (used in) operating activities		$	99,422			$	(26,909	)		$	126,331
Cash provided by investing activities		$	2,140			$	-			$	2,140
Cash used in financing activities		$	(14,910	)		$	(17,690	)		$	2,780
Net increase (decrease) in cash		$	86,652			$	(44,599	)		$	131,251

Operating Activities. Cash provided by (used in) operating activities comprises net loss adjusted for non-cash items and the effect of changes in working capital and other activities.

The following table shows the principal components of cash provided by (used in) operating activities during the three months ended March 31, 2026 and 2025, with a commentary of changes during the periods and known or anticipated future changes:

		March 31, 2026				March 31, 2025				$ Change
Net income (loss)		$	20,108			$	(38,563	)		$	58,671
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities:
Depreciation of fixed assets		$	15,668			$	16,110			$	(442	)
Allowance for doubtful accounts - accounts receivable		$	8,340			$	-			$	8,340
Stock based compensation		$	-			$	18,315			$	(18,315	)
		$	24,008			$	34,425			$	(10,417	)
Changes in operating assets and liabilities
Accounts receivable		$	16,510			$	15,846			$	664
Accounts payable and accrued liabilities		$	6,534			$	(13,556	)		$	20,090
Inventory		$	10,970			$	(19,913	)		$	30,883
Prepaid expenses		$	(4,232	)		$	(29,603	)		$	25,371
Accrued interest (not paid in cash)		$	24,407			$	24,406			$	1
Changes in discontinued operations, net		$	1,117			$	49			$	1,068
		$	55,306			$	(22,771	)		$	78,077
Cash provided by (used in) operating activities		$	99,422			$	(26,909	)		$	126,331

Investing Activities. There was $2,140 provided by investing activities during the three months ended March 31, 2026 due to sale of chin rests for $340 and a reduction of $1,800 due to an adjustment to molds. The Company anticipates limited investing activities during the next twelve months.

Financing Activities. During the three months ended March 31, 2026, the Company repaid loans primarily related to insurance of $14,910. During the three months ended March 31, 2025 the Company made repayments of $17,690.

Liquidity and Plan of Operations, Ability to Continue as a Going Concern

The accompanying unaudited consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred losses since its inception, although generated net income of $20,108 for the three months ended March 31, 2026 and has not generated sufficient positive cash flows from operations. As of March 31, 2026 the Company had a working capital deficiency of $4,297,001 which includes related party liabilities of $3,833,138. These conditions, among others, raise substantial doubt regarding our ability to continue as a going concern. The unaudited consolidated 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.

As described earlier in this ITEM 1 "Strategy", the Company is executing on a plan to achieve a growth in revenues. Included within the working capital deficiency above is a term note for $300,000 to EuroAmerican Investment Corp. ("EuroAmerican"), together with accrued interest of $580,866 which has a maturity date of June 30, 2026, having been extended on a number of occasions from its initial due date of June 11, 2011. At this time, it is not known whether any further extension of the note beyond June 30, 2026 will be available. However, the Company believes it may not have sufficient cash to meet its various cash needs through May 31, 2027 unless the Company is able to obtain additional cash from the issuance of debt or equity securities. Fountainhead, the Company's largest shareholder, has provided working capital funding to the Company on an as-needed basis, although there is no guarantee that this will continue to be the case. The Company may consider seeking additional equity or debt funding, although there is no assurance that this would be available on acceptable terms or at all. If adequate funds are not available, the Company may have to delay or curtail development or commercialization of products or cease some of its operations.

Critical Accounting Policies and Estimates

The Company's unaudited consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of its unaudited consolidated financial statements and related disclosures requires it to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in the Company's unaudited consolidated financial statements. The Company bases its estimates on historical experience, known trends and events and various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The Company evaluates its estimates and assumptions on an ongoing basis. Actual results may differ from these estimates under different assumptions or conditions.

Our senior management has reviewed the critical accounting policies and estimates with our Board of Directors. For a description of the Company's critical accounting policies and estimates, refer to "Part II-Item 7-Management's Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates" in our most recent Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 31, 2026. Critical accounting policies are those that are most important to the portrayal of our financial condition, results of operations and cash flows and require management's most difficult, subjective and complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. If actual results were to differ significantly from estimates made, the reported results could be materially affected. There were no significant changes to our critical accounting policies and estimates during the three months ended March 31, 2026.