Corporate Presentation September 2015 OTCQB: VYCO
Corporate Presentation
September 2015
OTCQB:VYCO
OTCQB:VYCO
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Safe Harbor Statement
Information in this document constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast", "anticipate", "estimate", "project", "intend", "expect", "should", "believe", and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve, and are subject to known and unknown risks, uncertainties and other factors which could cause VYCOR MEDICAL's actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. The risks, uncertainties and other factors are more fully discussed in VYCOR'S SEC filings. All forward-looking statements attributable to VYCOR herein are expressly qualified in their entirety by the abovementioned cautionary statement. VYCOR disclaims any obligation to update forward-looking statements contained in this estimate , except as may be required by law. The recipient acknowledges that Vycor Medical, Inc. is a publicly traded company. Recipient acknowledges that any confidential information constituting material nonpublic information that Vycor Medical, Inc. provides to the recipient is being provided to the recipient in reliance upon the agreement that the information will remain confidential. By accepting this material, the recipient acknowledges that it is aware of the applicable requirements of the federal securities laws relating to material non-public information and trading in securities of Vycor Medical, Inc.
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Key Stats (OTCQB: VYCO)
Stock Price (8/31/15) $1.60
52 Week Low-High $1.00-$2.65
Avg. Vol. (3 mo.) 14,862
Shares Outstanding 10.9M
Free Float (est.) 59%
Insider Holdings1 41%
Institutional Holdings <1%
Market Cap $17.4M
Enterprise Value $16.7M
Date Founded 2005
Employee Count 17Data sources: Yahoo! Finance, S&P Capital IQ, company estimates
(mrq) = most recent quarter as of June 30, 2015
(ttm) = trailing twelve months as of June 30, 2015
1) Insiders include directors and Fountainhead Capital Management
2) For the reconciliation of non-GAAP Information to GAAP, see related slides in Appendix
3) Based on three months ended June 30, 2015.
4) ViewSite Brain Access System (VBAS)
VBAS Hospital Approvals (U.S.)4Total Revenue (ttm) $1.2M
Non-GAAP Cash Op. Exp. (ttm)2 $2.5M
Non-GAAP Net Loss (ttm)2 $1.7M
Non-GAAP EPS (ttm)2 $(0.15)
EV/Revenue (ttm) 13.8X
EBITDA Loss (annualized)2,3 $1.3M
Cash (mrq) $1.0M
Total Assets (mrq) $2.8M
Total Debt (mrq) $0.3M
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186202
2013 2014 YTD
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Vycor Medical is focused on providing the medical community with innovative and superior surgical and therapeutic solutions
Through our two business units, Vycor Medical and NovaVision, we are pursuing minimal or non-invasive approaches to treating brain disorders or injury
Our portfolio of FDA-cleared medical solutions are changing and improving lives every day
Technology validated by numerous independent third party practitioners and by clinical studies
Robust patent portfolio: 43 patents and 14 pending
Who We Are
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Our Two Product Lines
Most comprehensive, commercially available and clinically-supported line of complementary therapies:
Visual Restoration Therapy® (VRT): the only FDA-cleared therapy for the restoration of vision loss as the result of stroke or brain damage
NeuroEyeCoach™: helps patient compensate for vision disorders as a result of stroke or brain damage
ViewSite™ Brain Access System (VBAS)• VBAS is a revolutionary neurosurgical device used
to retract and gain access to targets within the brain
• Allows access to tumors or other pathologies, or physical objects, like bullets or shrapnel fragments
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NovaVision’s suite of complementary therapies
helps patients with vision disorders resulting
from stroke or brain injury
Similar to recovery from motor deficits after
brain injury, where repetitive stimulation has
proven effective in recovery of patient functions
such as movements of lower limbs, systematic
repetitive visual training can lead to improved
visual sensitivity and function
By stimulating the adjacent neuronal pathways,
they assume some of the functionality that had
been lost, effectively creating a bypass
mechanism
NovaVision
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8 Million Stroke Survivors in the U.S. – 30% or 2.4 Million Suffer from Vision Disorders1 $13 Billion Global Market Opportunity1
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Multi-Billion Dollar Market Opportunity for NovaVision
US$2B
Europe$2BROW
$9B
Suffer from Vision Disorders
2.4M or30%
• Vision loss from stroke and traumatic brain injury (TBI) has been largely unaddressed
• Every 40 seconds someone has a stroke
• Every year 600,000 people suffer from vision disorders due to stroke or TBI
• NovaVision: ~$4bn in the US/Europe, ~$13bn globally
• Stroke associations & support groups total over 6,000 in the US, powerful disseminators
• Most patients touch a stroke rehab center/clinic
1) Company estimate
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Recently launched Internet-delivered VRT and NeuroEyeCoachtherapy suite
• VRT the only FDA cleared therapy for restoration of this type of vision loss
• NeuroEyeCoach also FDA registered
Validated by Healthcare Professionals
• HealthSouth has approved VRT diagnostic and NeuroEyeCoach to be offered in its 100+ rehab hospital network, the largest in the US
• 200+ prescribing physicians in the US, 38 partners clinics in Europe
No clinically supported alternative
• No other real competitors – Sight Science the largest, purchased in 2012
• Fully patent-protected: 34 granted and 4 pending patents
An Unrivaled Approach…
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Clinically Demonstrated to Restore and Make the Most of Remaining Vision
VRT: 15 years of research, 20 clinical studies including a 302 patient study in which notable improvements were seen in over 70% of the patients. Prescription-based, bespoke “at home” therapy — Not an App
NeuroEyeCoach: based on empirical evidence gained from several decades of research and 14 studies on a total of 591 patients
Patient Success Stories Substantial body of testimonials from enthusiastic patients
whose lives were changed
Carol Urban, a former patient, interviews aired on 200+ US radio stations
…And it Works
“VRT makes a world of difference. Every day I feel like l see a little better. This would not be possible without NovaVision.
This is second time NovaVisionsaved my eye sight when no-one else would help. Your program is a life saver I can smile again.”
- Annette, a VRT and NeuroEyeCoach patient, Aug. 2015
“We do not need a new brain, but innovative methods of treatment to overcome the functional consequences of brain injury”- Prof. Josef Zihl
NovaVision Scientific Advisor
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Impact on daily life can be dramatic, enabling a patient to live at home alone, cross the road unaided, shop, read and even drive
Pre-VRT Post-VRT
“My vision began coming back after the first month of therapy…I passed my driving test, can read normally, and enjoy driving my boat on the lake…my life is back to normal.”– Stroke survivor & VRT patient
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An Important Therapy for Daily Life
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Patients Professionals
NovaVision will Launch New Model in Europe Q4 & Roll Out Similar Strategies11
Multi-Faceted Growth Strategy
Stroke Associations & Support Groups• Over 6,000 in the US, powerful disseminators;
identified, mailing and marketing to them• Partnered with American Stroke Association
Stroke Rehabilitation Centers and ClinicsMost patients touch a rehab center/clinic• VRT Diagnostic model• NeuroEyeCoach Center model• Both approved by HealthSouth
NovaVision’s Multi-faceted Marketing Strategy to Drive Awareness & Adoption Into Key Interest Groups
Physicians and Other Healthcare ProfessionalsVRT is a prescription-only therapy• NovaVision referral program: >200 prescribers• Pro Physician Model• Website, in-bound and out-bound marketing
Direct to Patients47% of our enquires come through our website• New website to drive traffic, capture info• In-bound/out-bound marketing• Multi-channel digital/social media• Blogs, media placements, success stories
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ViewSite Brain Access System
“It is the ideal system for providing deep brain access through a smaller incision.”
-Leading Neurosurgeon
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VBAS is a Step Change Improvement. Incumbent Technology Hasn't Changed in Over 50 Years13
• Less brain tissue damage
• Less invasive: requires smaller opening
• Better access
• Better visibility
• Self-contained working channel
• Reduced operating and recovery time
The Future Standard of Care
Old Blade/Ribbon Retractor Technology
VBAS Next Generation Technology
Allows for use in procedures previously considered inoperable, saving lives
VS.
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VBAS Saves Lives
Previously Inoperable…Now Operable
“Her case would have been inoperable via a traditional surgery, because she was taking Avastin®, which delays surgical wound healing.
“The VBAS’ minimally invasive nature enabled the surgeon to gain access to the target through only a 3cm incision.
“The patient was discharged uneventfully and there were no issues regarding her wound.”
– Daniel Prevedello, MD, Director of the Minimally Invasive Cranial Surgery Program, Ohio State University
Bullet fragment removal“We would not have attempted this without this technology. It’s very exciting” – Narayan Sundaresan, MD, Chief Neurosurgeon at Lincoln Medical
Center, NY, and Professor at Mount Sinai Hospital, NYC
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Large body of clinical papers and studies evidence VBAS’ clinical superiority and improved patient outcomes; including VBAS appearing on the cover of the prestigious Journal of Neurosurgery in March 2015
International presence with regulatory approvals in key international markets including Australia, Brazil, China, Europe, Japan and Russia
Technology protected by 10 granted and 9 pending patents in the U.S. and abroad
Patented, Validated & Approved Technology
Approved for Use in 202 Hospitals, including the Nation’s Leading Medical Centers
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Virtual Business Model Enables Vycor to Leverage Both Internal and Outsourced Partner Resources to Maximize Efficiency & Reduce Cost 16
Vycor operates upon “virtual outsourced” business model to focus its resources on product development and direct targeted marketing to physicians and hospitals
Manufacturing: outsourced to qualified sub-contract manufacturer
US sales: outsourced to 20 distributors with av. 4-5 reps each who are experts in the neurosurgical device space, have local presence and are in the OR daily
International sales and marketing: outsourced to leading distributors in each country/region focused on neurosurgical devices
Virtual Company: Reduces Cost
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Four-Part Growth Strategy
US Market Penetration
• Well-defined market of 4,000 surgeons
• Strengthening the distributor network
• Broaden VBAS usage beyond “deep and difficult”
• Focus on key teaching hospitals
Clinical data
• Drives adoption and user acceptance, increases revenues
• 5 papers already in 2015
• Moves VBAS up the hospital cost/benefit curve
• Provides evidence of broader applicability
International
• Target markets with patent protection and/or clear regulatory path
• Use distributors with experience in neurosurgical devices
• Focus on Brazil, larger European markets, Asia
New Product Development
• VBAS provides platform for product extensions
• Objective to broaden adoption and increase applicability
• Set of 2 smaller VBAS devices
• Developing 4 new IGS-compatible devices
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Industry/Peer Comparables
($ in millions) (mrq)MRI
Interventions (MRIC)
ViewRay(VRAY)
Ekso Bionics Holdings(EKSO)
Avinger (AVGR)
CorindusVascular Robotics (CVRS)
Second Sight Medical Products
(EYES)
Revenue ($M) 0.8 0.2 2.1 3.0 0.9 2.7 0.3
Gross Profit to Sales Ratio 52% (248)% 24% 46% (4)% 41% 88%
Operating Expenses to SalesRatio
317% 3,938% 290% 344% 759% 227% 248%
Income (Loss) from Operations ($M)
(2.2) (9.7) (5.6) (9.1) (6.9) (4.9) (0.5)
Net Income (Loss) ($M) (3.1) (10.3) (5.6) (10.2) (7.3) (4.9) (0.4)
Market Cap (9/14/2015) ($M) 50.2 256.1 132.8 178.3 467.0 355.4 14.6
Price/Sales Ratio 14.6x 72.7x 19.3x 16.4x 165.2x 54.8x 12.1x
Net Cash Flow (2.9) 3.3 (4.9) (8.7) 36.9 (0.2) (0.3)
Data source: S&P Capital IQ(mrq) – most recent quarter as of June 30, 2015
Vycor Medical has a Relatively Low Stock Price to Sales Ratio
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Non-GAAP Net Loss & EPS Improving2
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Relatively low “cash burn” of $1.3M on an annualized basis 1,2
Both company businesses have high margins
Clear path to breakeven, with minimal incremental revenues required
New focus on marketing will increase cash burn, but within manageable levels and only if yielding results
Financial Discussion
$(506,944)$(473,388)
$(361,006)
$(0.05)$(0.04)
$(0.03)
-0.150
-0.130
-0.110
-0.090
-0.070
-0.050
-0.030
-0.010
0.010
-520000.000
-420000.000
-320000.000
-220000.000
-120000.000
-20000.000
Q4 2014 Q1 2015 Q2 2015
Bar
Net Income
Basic EPS
1) Based on three months ended June 30, 2015
2) For the reconciliation of non-GAAP Information to GAAP, see related slide in Appendix
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Two “game changing” product lines that are FDA-cleared (no development risk)
NovaVision VRT only FDA cleared therapy targeted at vision loss from neurological brain damage, like stroke
Extensive published clinical data highly supportive
Large addressable markets:
NovaVision: ~$4bn in the US/Europe, ~$13bn globally
Vycor: $700m globally
Limited competition that face major barriers to entry
Robust patent portfolio: 43 patents and 14 pending
Well-established international footprint
Strong new product pipeline
Management with significant “skin in the game”
Key Takeaways
VBAS Hospital Approvals (U.S.)
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186202
2013 2014 YTD
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Peter Zachariou, CEODavid Cantor, PresidentAdrian Liddell, Chairman & CFO
Company Contacts Corporate Headquarters6401 Congress Avenue Suite 140Boca Raton, FL 33487
www.vycormedical.com
www.vycorvbas.com
www.novavision.com
www.sightscience.com
German OfficeKlausenerstr. 12 39112 Magdeburg, Germany
UK Office214 Union Street, Aberdeen, AB10 1TLScotland, UK
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Contact Us
Websites
Investor Relations ContactRon Both, Senior Managing DirectorLiolios Group Tel [email protected]
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Appendix
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Peter Zachariou
CEO & Director
David Cantor
President & Director
Adrian Liddell
Chairman & CFO
Steven Girgenti
Director
Lowell Rush
Director
Dr. Oscar Bronsther
Director
Pascale Mangiardi
Director
Extensive operating experience over range of manufacturing businesses
Active investor in variety of companies and industries, both public and private, specializing in capital formation/raising and development companies
22 years experience of Investing in, raising money for and providing strategic advice to growth companies across a broad range of sectors
Investment Banking (Citigroup, Donaldson, Lufkin & Jenrette, Lehman Brothers)
Over 30 years of strategic, corporate and financial advisory and company investment
Private equity (Phoenix Equity Partners); Investment Banking (Citigroup, Donaldson, Lufkin & Jenrette, Lehman Brothers)
Chartered Accountant
Pharmaceutical and healthcare executive with 45 years experience
Managing partner of Medi-Pharm consulting, providing strategic advice to healthcare companies
Former President and CEO of DermWorx and former Chairman of Ogilvy Healthworld
CEO of Direct Incite
Former COO of Cosmetic Dermatology,CFOof Bijoux Ternerand Little Switzerland, and has held operational and financial roles at SunGlasses Hut, Burger King and Knight-Ridder. CPA and MBA
Clinical professor at George Washington Univ. and Director of Transplant Services at Kaiser Permanente Medical Group. Previously Associate Prof. at Univ of Rochester, Univ of Pittsburg and Univ. of California San Diego
President of RougemontManagement Services
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Executive Management & Board of Directors
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Scientific Advisory Boards
Dr. David Langer
Dr. Konstantin Slavin
Dr. EzrielKornel
Prof. ArashSahraie
Alvaro Pascale-Leone, MD/PhD
Jason S. Barton, MD
Joseph Zihl, MD
Jose Romano, MD
Vycor Vycor Vycor NovaVision NovaVision NovaVision NovaVision NovaVision
Director of Cerebrovascular Neurosurgery at St. Luke’s-Roosevelt, Beth-Israel and Long Island College Hospitals (New York, NY)
University of Illinois at Chicago (Chicago, IL); AlexianNeuroscience Center (Elk Grove Village, IL); Director of Illinois Gamma Knife Center
Director, Institute for Neurosciences at Northern Westchester Hospital Center (Mount Kisco, NY); President-elect New York State Neurosurgical Society; Board of Directors, Medical Liability Mutual Insurance; Director for Center NeurochiropracticEducation
Professor, Chair in Vision Sciences at Univ. of Aberdeen (UK); PhD in Optics and Visual Science, City Univ. (London, UK); Founder of Sight Science Ltd
Professor of Neurology at Harvard Medical School; Director of Research, Cognitive Neurology Unit, Beth Israel Deaconess Medical Center; MD/PhD Neurophysiology, Albert-Ludwigs Univ(Germany); Former Medical Fellow National Institute of Health; Author 450+ Scientific papers as well as several books
Professor of Neurology, Ophthalmology and Visual Sciences, University of British Columbia
Prof. Josef Zihl, Prof. emeritus in the Department of Psychology at University of Munich (Germany), and Head (retired) of the Neuropsychology Research Group at the Max Planck Institute of Psychiatry Munich
Chief of Stroke Division and Professor of Neurology at the University of Miami Miller School of Medicine
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Management uses certain non-GAAP financial measures (including non-GAAP operating expenses and non-GAAP net loss and loss per share), which exclude non-cash amortization of acquired intangible assets, non-cash stock-based compensation, one-time Offering costs and the change in value of derivative warrant liability. Management does not consider these costs in evaluating the continuing operations of the Company. Therefore, management calculates the non-GAAP financial measures provided in this presentation excluding these costs and uses these non-GAAP financial measures to enable it to analyze further, and more consistently, the period-to-period financial performance of its core business operations.
Management believes that providing investors with these non-GAAP measures gives them additional important information to enable them to assess, in the same way management assesses, the Company's current and future continuing operations. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. For reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures, see related slide in Appendix.
Reconciliation of Non-GAAP Information
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Non-GAAP Reconciliations & Trailing Twelve Month Calculations
Q3 2014 Q4 2014 YR 2014 Q1 2015 Q2 2015 TTM
Revenue $334,339 $259,291 $1,250,292 $328,552 $286,018 $1,208,200
Non-GAAP Cash Operating Expenses (Note)
Non-GAAP Operating Expenses ($606,847) ($711,124) ($2,633,309) ($738,410) ($601,202) ($2,657,583)
Add back: all D&A (Note) $35,243 $23,033 $134,138 $24,032 $28,091 $110,399
Non-GAAP Cash Operating Expenses ($571,604) ($688,091) ($2,499,171) ($714,378) ($573,111) ($2,547,184)
Non-GAAP Operating Loss ($319,848) ($482,070) ($1,539,317) ($461,550) ($349,165) ($1,612,633)
Non-GAAP EBITDA ("Cash Burn") (Note)
Non-G Operating Loss ($319,848) ($482,070) ($1,539,317) ($461,550) ($349,165) ($1,612,633)
Add back: all D&A (Note) $35,243 $23,033 $134,138 $24,032 $28,091 $110,399
Non-GAAP EBITDA ($284,605) ($459,037) ($1,405,179) ($437,518) ($321,074) ($1,502,234)
Non-GAAP Net Loss ($344,722) ($506,944) ($1,670,036) ($473,388) ($361,006) ($1,686,060)
Non-GAAP Net Loss Per Share ($0.03) ($0.05) ($0.22) ($0.04) ($0.03) ($0.15)
Note
Disclosed Non-GAAP Operating Expenses adds back only amortization on acquired intangible assets. Non-GAAP Cash Operating Expenses and Non-GAAP Operating Loss Before Depreciation And Amortization ("EBITDA") adds back all Depreciation and Amortization.