Notwithstanding, for the period commencing March 1, 2013 and
continuing through June 30, 2013, Vycor Medical's sales have returned
to pre-February 2013 levels and Vycor is not able at this time to
determine whether there will be any additional financial impact on
the Company as a result of this recall. Vycor's customers have
appreciated that Vycor took swift voluntary action to remove this
product from the marketplace, even though the incidence of this fiber
and therefore the risk was low, before any units could be used, and
to maintain Vycor's high safety and quality standards.
10. CONSULTING AND OTHER AGREEMENTS
The Company has entered into no new consulting or other agreements
during the six months ended June 30, 2013. The following agreements
remained in force during the period:
Consulting Agreement with Fountainhead Capital Management Limited
("Fountainhead")
In February 2010 the Company entered into a Consulting Agreement with
Fountainhead, which was the subject of a Supplement Agreement in May,
2011 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 Agreement and Supplement, the Company
pays to Fountainhead a monthly retainer of $37,500 ($8,500 under the
Original Agreement and $29,000 under the Supplement). This monthly
retainer is accrued and paid out to Fountainhead at the option of
Fountainhead as follows: (i) in Vycor stock 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 has the
option to receive up to $5,000 of monthly retainer in cash each month.
Consulting Agreement with Del Mar Consulting Group, Inc and Alex Partners, LLC.
On November 30, 2012 the Company entered into 12 month consulting
agreements with Del Mar Consulting, Inc and Alex Partners, LLC to
provide investor relations and investor awareness consultancy
services. Under these agreements, Del Mar and Alex Partners received
Common Shares valued at $157,500 and $105,000 respectively and cash
of $7,200 and $4,800 respectively. Del Mar and Alex Partners have
agreed to take Vycor Common Stock in lieu of cash payments for July
and August, 2013.
11. RELATED PARTY TRANSACTIONS
During January to June 2013, the Company issued unsecured,
subordinated loan notes to: Fountainhead for a total of $234,225; and
to Peter Zachariou, a director of the Company, for a total of
$190,000. During July and August 2013, the Company issued unsecured,
subordinated loan notes to Fountainhead for a total of $90,000. The
loan notes are subordinated to the Company's secured debentures and
Preferred C Stock of the Company, bear interest at a rate of 6% are
due on demand or by their one-year anniversary.
In March 2013, Fountainhead and Peter Zachariou, a director of the
Company, extended the maturity of secured loans totaling $1,016,362
and $300,000 respectively from March 31, 2013 to December 31, 2013.
In April 2013, in connection with her departure from the Board of
Directors, the Company and Heather Vinas entered into a Warrant
Exercise and Share Sales Agreement (the "Agreement"). Under the terms
of the Agreement Mrs. Vinas agreed to exercise her warrants to
purchase 54,834 shares of Common Stock, which are exercisable on a
cashless basis, at a price of $2.60 per share and receive 32,152
shares of Common Stock. Following this exercise, Mrs. Vinas holds an
aggregate of 66,272 shares of Common Stock. The Agreement also
requires Mrs. Vinas not to sell more than 16,000 shares in any 30-day
period.
During April and May 2013, Fountainhead Capital Management sold
warrants to purchase 162,250 shares of Vycor Common Stock at an
exercise price of $1.88 per share. These warrants were granted to
Fountainhead by the Company in February 2010 and were sold by
Fountainhead to investors at a price of $0.10 per warrant share. The
warrants were immediately exercised by the investors.
There were no other related party transactions during the six months
ended June 30, 2013 other than the payment or accrual of fees under
the Fountainhead Consulting agreement described in 10 above.
12. SUBSEQUENT EVENTS
The Company evaluated subsequent events through the date the
financial statements were issued and filed with this Form 10Q.