- Current report filing (8-K)
October 05 2010 - 4:00PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 29, 2010
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Vycor Medical, Inc.
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(Exact Name of Registrant as Specified in its Charter)
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Delaware
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333-149782
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20-3369218
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(State or Other Jurisdiction of Incorporation)
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(Commission File No.)
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(I.R.S. Employer Identification No.)
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80 Orville Drive, Suite 100, Bohemia, NY
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11716
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant's telephone number, including area code: 631-244-1435
n/a
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
TABLE OF CONTENTS
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Item 1.01 Entry Into a Material Definitive Agreement
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Item 5.02 Departure of Directors or certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers
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Item 9.01 Financial Statements and Exhibits
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SIGNATURES
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EXHIBIT INDEX
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Item 1.01 Entry Into a Material Definitive Agreement
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(1) On September 29, 2010, Vycor Medical, Inc. (the "Company")
entered into an Amended and Restated Consulting Agreement
("Consulting Agreement") with Fountainhead Capital Management Limited
("FCM"), effective as of February 10, 2010, the date of the original
Consulting Agreement ("Original Consulting Agreement"). The
amendments have been made in conjunction with the entry into
employment agreements with David Cantor and Peter Zachariou as
officers of the Company (see below), in order to clarify the roles of
Mr Cantor and Mr Zachariou as officers of the company versus their
roles as principals of FCM. There is no financial impact to the
Company as a result of these amendments or the entering into the
employment agreements.
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Pursuant to the Consulting Agreement FCM will provide the following
services to the Company:
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(a) FCM will familiarize itself to the extent it deems appropriate
with the business, operations, financial
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condition and prospects of the Company and assist in developing an
overall strategic plan;
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(b) At the request of the Company's management, FCM will provide
strategic advisory services relative to
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the achievement of the Company's business plan;
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(c) FCM will assist the Company on the preparation of budgets and
strategic plans and assist in the analysis
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and negotiation of proposed contractual and other transactions;
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(d) FCM will assist in the identification and qualifying of potential
investors including institutional funds which
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might have an interest in evaluating participation in financing
transactions with the Company;
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(e) At the request of the Company's management, FCM will provide
advisory services related to corporate
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governance and matters related to the maintenance of the Company's
status as a publicly-reporting company, and will assist the Company
in satisfying various corporate compliance matters;
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(f) At the request of the Company's management, FCM will assist the
Company in negotiation strategies
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with Company creditors; and
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Under the terms of the Consulting Agreement, FCM will not have
the authority to bind the Company. The term of the Consulting
Agreement is two (2) years from February 10, 2010 and FCM will be
compensated as follows:
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(a) Signing Warrants. Upon the signing of the Original Consulting
Agreement, the Company issued to FCM
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warrants to purchase 39,063,670 shares of the Company's Common Stock,
at a price of $0.0125 per share.
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(b) Success Warrants. Should new funding totaling $3 million in
aggregate in Common Stock of Vycor or
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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 this agreement (the "Funding"), then the Company shall issue to
FCM additional warrants to purchase 39,063,670 shares of the
Company's Common Stock, at a price of $0.0125 per share.
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(c) Monthly Retainer. Commencing February 10, 2010 the Company agreed
to pay to FCM a retainer
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of $8,500. This monthly retainer shall be accrued and paid out to FCM
at the option of FCM as follows: (i) in Vycor stock at any time at
$0.0125 per share; or (ii) in cash following the closing of a
fundraising of $1.5 million or on the sale of the Company.
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(d) Out of Pocket Expenses. Commencing February 10, 2010 the Company
agreed to reimburse FCM for all
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reasonable out-of-pocket expenses directly incurred in the provision
of the services set forth in Section 1 above, to include expenses
incurred during FCM's visit to Vycor commencing January 24, 2010.
This reimbursement shall be accrued and paid out to FCM at the option
of FCM as follows: (i) in Vycor stock at any time at $0.0125 per
share; or (ii) in cash following the closing of a fundraising of $1.5
million or on the sale of the Company.
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This Agreement supersedes in all respects the Company's prior
Consulting Agreement with FCH. A copy of the Amended and Restated
Consulting Agreement is attached hereto as Exhibit 10.1.
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(2) Effective September 29, 2010, the Company agreed to an
extension of the prior funding commitment by FCM. By its terms, the
prior funding commitment expired on August 30, 2010 and the extended
commitment now runs through August 31, 2011.
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In the same manner as detailed in the original funding commitment,
advances under the Extended Funding Commitment will be subject to
FCM's confirmation that Vycor's operations for the period commencing
September 1, 2010 through the end of each month immediately preceding
any funding under the Extended Funding Commitment are within ten
percent (10%) of the budgeted gross margin and net expenses in
accordance with Vycor's then approved budget (as the same may be
revised from time to time based on the mutual agreement of Vycor and
FCM). Vycor and Fountainhead will agree to revise the existing budget
no later than October 31, 2010.
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As compensation for the extension of the Funding Commitment, Vycor
will immediately issue to FCM additional warrants to purchase shares
of Vycor Common Stock equivalent to six percent (6%) of the fully
diluted share capital of Vycor as of the date of this Agreement. The
warrants will be exercisable for a period of five (5) years from the
date of this Agreement at an exercise price of $0.175 per share and
will carry a cashless exercise feature.
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Any funds directly invested by FCM will be in the form of a
convertible debenture with a final maturity of August 31, 2011,
accruing interest at a rate of six percent (6%) per annum and
convertible in whole or in part at the option of the holder into
shares of Vycor
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Common Stock at $0.0175 per share. The other terms will be the same
as FCM's existing convertible debentures, which have a final maturity
date of March 31, 2011. Under these terms, FCM confirms that FCM has
the right to convert at any time, and Vycor has the right to repay at
any time, but FCM does not have the right to demand repayment prior
to maturity unless there is an event of default.
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A copy of the extended funding commitment is attached hereto as Exhibit 10.2.
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(3) Effective September 30, 2010, the Company entered into
Employment Agreements with David Cantor and Peter C. Zachariou. The
term of each agreement runs through August 30, 2011 and is subject to
automatic extensions thereafter unless terminated. No compensation is
payable under the terms of the agreements. (see also Item 5.02, below)
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Copies of the employment agreements with David Cantor and Peter C.
Zachariou are attached as Exhibits 10.3 and 10.4 respectively.
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Item 5.02 Departure of Directors or Certain Officers; Election of
Directors; Appointment of certain Officers; Compensatory Arrangement
of Certain Officers
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Effective as of September 30, 2010, Vycor appointed two additional
officers of the Company, David Cantor and Peter C. Zachariou, as
President and Executive Vice President, respectively. The following
new officers were appointed:
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David Marc Cantor
(44) He has been a director of the Company since February 2010 and
is a founding principal of Fountainhead Capital Partners Limited, an
investment company based in Jersey, Channel Islands, which invests
in, raises capital for and provides strategic advice to growth
companies across a broad range of sectors. Mr. Cantor has over 22
years experience in Investment Banking with a focus on Mergers and
Acquisitions and Equity Capital Raisings. Prior to Fountainhead from
2001 - 2005 he was at Citigroup Capital Markets where he was Co-head
of its European Business Development and subsequently European Head
of its Diversified Industrials and Aerospace activities. Prior to
Citigroup he was a Managing Director in M&A at Donaldson Lufkin &
Jenrette and worked at Lehman Brothers both in New York and London in
both the Equity capital and M&A groups. Mr. Cantor has a BSc with
Honours from City Business School, London.
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Peter C. Zachariou
(49) was appointed a Director of the Company in May 2010. He is an
investment manager for Fountainhead Capital Partners Limited, an
investment company based in Jersey, Channel Islands, which invests
in, raises capital for and provides strategic advice to growth
companies in healthcare and other sectors. For the past 20 years, Mr.
Zachariou has been an active investor in a variety of companies and
industries, both public and private, specializing in workouts and
capital formation. Mr. Zachariou's investments and activities have
predominantly been in U.S. emerging and growth companies across a
broad range of industry sectors. He has also been proprietor and
operator of several businesses in the U.K. and U.S. in the
manufacturing, retail and leisure industries.
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Both new officers entered into Employment Agreements with the Company
dated as of September 30, 2010 (see Item 1.01, above).
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Item 9.01 Financial Statements and Exhibits.
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(a) Financial Statements
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None
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(d) Exhibits
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10.1 Amended and Restated Consulting Agreement dated as of
September 29, 2010 by and between Vycor Medical, Inc. and
Fountainhead Capital Management Limited
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10.2 Extension of Funding Commitment letter dated as of September
29, 2010 from Fountainhead Capital Management Limited to Vycor
Medical, Inc.
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10.3 Employment Agreement dated as of September 30, 2010 between
Vycor Medical, Inc. and David Cantor
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10.4 Employment Agreement dated as of September 30, 2010 between
Vycor Medical, Inc. and Peter C. Zachariou
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SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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VYCOR MEDICAL, INC.
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By:
/s/ David Cantor
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Name: David Cantor
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Title: President
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Dated: October 4, 2010
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