VYCOR MEDICAL, INC. RESULTS OF OPERATIONS
Comparison of the Year Ended
Revenue and Gross Margin:
6 Research & Development:
Research & Development expenses were
Selling, General and Administrative Expenses:
Selling, General and Administrative expenses decreased by
The remaining Selling, General and Administrative expenses decreased by
An analysis of the change in cash and non-cash G&A is shown in the table below:
2022 G&A Change Cash G&A Non-Cash G&A Board and financial - (155,488 ) Scientific, clinical and software development (57,218 ) - Legal, patent, audit/accounting and regulatory (48,195 ) - Commissions (47,599 ) - Premises, insurances, other (24,552 ) - Sales and marketing 19,558 - Payroll 31,137 - Total change (126,869 ) (155,488 ) 7 Interest Expense:
Interest comprises expense on the Company's debt and insurance policy financing.
Related Party Interest expense for 2022 increased
Other Income:
Other Income of
Operating loss from Discontinued Operations:
Operating loss from Discontinued Operations decreased by
Liquidity and Capital Resources
Liquidity
The following table shows cash flow and liquidity data for the years ended
December 31, 2022 December 31, 2021 $ Change
Cash $ 37,035 $ 90,941 $ (53,906 )
Accounts receivable, inventory
and other current assets $ 480,728 $ 396,470 $ 84,258
Total current liabilities $ (3,654,796 ) $ (3,149,997 ) $ (504,799 )
Working capital $ (3,137,033 ) $ (2,662,586 ) $ (474,447 )
Cash provided by financing
activities $ 165,889 $ 61,945 $ 103,944 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 net repayment of normal insurance financing should also be taken into account when considering cash provided by (used in) operating activities.
The following table shows the principal components of cash provided by (used in)
operating activities during the years ended
December 31, 2022 December 31, 2021 $ Change
Net loss $ (404,917 ) $ (435,662 ) $ 30,745
Adjustments to reconcile net
loss to cash provided by (used
in) operating activities:
Amortization and depreciation of
assets $ 61,403 $ 68,418 $ (7,015 )
Stock based compensation $ 185,610 $ 341,098 $ (155,488 )
Forgiveness of PPP loan $ - $ (117,200 ) $ 117,200
Other $ 15,515 $ 12,360 $ 3,155
$ 262,528 $ 304,676 $ (42,148 )
Net loss adjusted for non-cash
items $ (142,389 ) $ (130,986 ) $ (11,403 )
Changes in working capital
Accounts receivable $ (30,108 ) $ 33,142 $ (63,250 )
Accounts payable and accrued
liabilities $ (63,283 ) $ 58,521 $ (121,804 )
Inventory $ (56,868 ) $ (38,785 ) $ (18,083 )
Prepaid expenses and net
insurance financing repayments $ (21,547 ) $ 13,379 $ (34,926 )
Accrued interest (not paid in
cash) $ 92,227 $ 83,423 $ 8,804
Changes in discontinued
operations, net $ (1,659 ) $ (3,980 ) $ 2,321
$ (81,238 ) $ 145,700 $ (226,938 )
Cash provided by (used in)
operating activities, adjusted
for net insurance repayments $ (223,627 ) $ 14,714 $ (238,341 )
8
The adjustments to reconcile net loss to cash of
Additional inventory of
Investing Activities. Cash used in investing activities of continuing operations
for the year ended
Financing Activities. During the year ended
Liquidity and Plan of Operations, Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. The Company has incurred
losses since its inception, including a net loss of
As described earlier in this ITEM 1 "Strategy", the Company is executing on a
plan to achieve a reduction in cash operating losses2. Included within the
working capital deficiency above is a term note for
2 Operating Income or Loss before Depreciation, Amortization and non-cash Stock Compensation
Off-Balance Sheet Arrangements
As of
9 Seasonality
Our operating results are not affected by seasonality.
Inflation
Our business and operating results are not affected in any material way by inflation, although rising raw material and labor costs will result in an increase in the cost of sales.
Critical Accounting Policies and Estimates
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, provision for inventory obsolescence, useful life of intangible assets, and the fair values of options and warrant included in the determination of debt discounts and stock based compensation.
Revenue Recognition
On
Vycor determines revenue recognition through the following steps:
? Identification of the contract, or contracts, with a customer
? Identification of the performance obligations in the contract
? Determination of the transaction price
? Allocation of the transaction price to the performance obligations in the
contract
? Recognition of revenue when Vycor satisfy a performance obligation
Deferred revenue results from patients paying for the therapy in advance of receiving the therapy.
10 Inventory
Inventories are stated at the weighted average cost method. Net realizable value
is the estimated selling price, in the ordinary course of business, less
estimated costs to complete and dispose of the product. If the Company
identifies excess, obsolete or unsalable items, its inventories are written down
to their realizable value in the period in which the impairment is first
identified. The provision charge for inventory for the years ended
Discontinued Operations
In accordance with ASU No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results when the components of an entity meets the criteria in paragraph 205-20-45-1E to be classified as held for sale. When all of the criteria to be classified as held for sale are met, including management, having the authority to approve the action, commits to a plan to sell the entity, the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations (which we presented as operations to be disposed and operations disposed), less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations in accordance with ASC 205-20-45.
Contractual Obligations
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.
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