Rafina Innovations Inc. - FORM 10-K

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EX-31.1 - CERTIFICATION - Rafina Innovations Inc.	ex311.htm
EX-32.1 - CERTIFICATION - Rafina Innovations Inc.	ex321.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.20549

Form 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from __________ to __________

000-53089
Commission File Number

HCi Viocare
(Exact name of registrant as specified in its charter)

Nevada	30-0428006
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

Kintyre House, 209 Govan Road, Glasgow Scotland	G51 1HJ
(Address of principal executive offices)	(Zip Code)

+44 141 370 0321
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each class	Name of each exchange on which registered
n/a	n/a

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock

Title of class

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

[ ]

[X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes

[X]

[ ]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

[X]

[ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes

[X]

[ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

Yes

[ ]

[X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]

Non-accelerated filer	[ ]	Smaller reporting company	[X]
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

[ ]

[X]

The aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant as at June 30, 2015 (the last business day of the registrant’s most recently completed second quarter), was approximately $21,631,432 based on the $0.70 per share (post 7 for 1 forward split retroactively impacted) which was the last selling price of the Company’s common stock, assuming solely for the purpose of this calculation that all directors, officers and greater than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.

APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

191,912,461 shares of common stock issued and outstanding as of March 23, 2016

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g. Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933. The listed documents should be clearly described for identification purposes.

None

Table Of Contents

TABLE OF CONTENTS

		Page
	PART I

Item 1	Business	5
Item 1A	Risk Factors	28
Item 1B	Unresolve Unresolved Staff Comments	38
Item 2	Properties	38
Item 3	Legal Proceedings	39
Item 4	Mine Safety Disclosure’s	39

	PART II

Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	40
Item 6	Selected Financial Data	42
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	47
Item 8	Financial Statements and Supplementary Data	F-1 TO F-30

Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48
Item 9A	Controls and Procedures	49
Item 9B	Other Information	49

	PART III

Item 10	Directors, Executive Officers and Corporate Governance	50
Item 11	Executive Compensation	54
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	57
Item 13	Certain Relationships and Related Transactions, and Director Independence	58
Item 14	Principal Accounting Fees and Services	61

	PART IV

Item 15	Exhibits, Financial Statement Schedules	63

	SIGNATURES	66

Forward Looking Statements

This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements. These statements relate to future events or our future financial performance. A number of important factors could cause our actual results to differ materially from those expressed in any forward-looking statements made by us in this Form 10-K. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" and the risks set out below, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Our business is subject to a number of risks of which you should be aware before making an investment decision. These risks are discussed more fully in the "Risk Factors" section of this annual report. These risks include, by way of example and not in limitation:

we have a limited operating history, have only recently commenced generating revenues in our first Prosthetics and Orthotics clinic, and we currently have no commercial products in the market;

we currently have several technologies and product prototypes which require further development to commercialize its applications. Our ability to generate product revenues, which may not occur for several years, if ever, will depend on the successful development and commercialization of these technologies including the “Sensor” technology, the “Socketfit” technology and product applications derived from our “Smart Insole” product prototypes as well as our recently developed portable motion capture and gait analysis technology.

·	our current and any future collaborations with third parties for the development and commercialization of our current product or any newly acquired products or businesses may not be successful;
·	we intend to acquire and operate additional clinics related to our business, however, there can be no assurance that we will successful in doing so or if that if we do acquire such clinics that they will be profitable;

·	risks related to the failure to successfully manage or achieve growth of our business if we are successful in the development of our technology or the acquisition of clinics; and
·	other risks and uncertainties related to our business strategy.

This list is not an exhaustive list of the factors that may affect any of our forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on our forward-looking statements.

Forward looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and we undertake no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Private Securities Litigation Reform Act of 1995 are unavailable to us.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common shares in our capital stock.

As used in this Annual Report, the terms "we," "us," "company," "our" and "Viocare" mean HCi Viocare, and our wholly-owned Scottish subsidiaries: HCi Viocare Technologies Limited and HCi Viocare Clinics UK Limited, unless otherwise indicated.

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PART I

ITEM 1. BUSINESS

1.1 BACKGROUND

The address of our principal executive office is Kintyre House, 209 Govan Road, Glasgow G511HJ, Scotland, United Kingdom. Our telephone number is +44 141 370 0321. The Company’s web-site is http://www.hciviocare.com.

Our common stock is quoted on the OTC Markets Inc. owned and operated Inter-dealer Quotation System (“OTCQB”) under the symbol "VICA".

We were incorporated in the State of Nevada on March 26, 2007 as a company intending to sell medical devices in the northern regions of China. Our intent was to seek strategic relationships with medical device manufacturers both in China and North America with the aim to be their sales and distribution agent in northern China. We also intended to assist Chinese medical device manufacturers on the development of the North American market. The Company did not find suitable relationships with which to progress its business until it undertook a change in management in September 2013. With the change in management, the Company determined that it would initially concentrate on the development and marketing of medical devices in Europe, more particularly initially in Scotland, where management had identified several opportunities for entry into the markets for prosthetics and orthotics. We are currently engaged in healthcare innovation in the fields of prosthetics and orthotics (P&O), and we intend to be engaged in the operation of P&O total rehabilitation clinics. We have two wholly-owned Scottish subsidiaries: HCi Viocare Technologies Limited and HCi Viocare Clinics UK Limited.

On December 27, 2013, pursuant to approval of the Board of Directors and the majority stock holder on November 28, 2013 and November 29, 2013 respectively, the Company filed a Certificate of Amendment to the Articles of Incorporation of the Company for the purpose of clearly providing the directors of the Company with the authority to issue both common and preferred stock without approval by the stockholders and to grant the authority of the directors of the Company to issue such shares of common and/or preferred stock in one or more series, with such voting power, designation, preferences and rights or qualifications, limitations or restrictions as they may determine by resolution of the Board of Directors.

On January 13, 2014, the Company filed a Certificate of Designation with the Secretary of State of the State of Nevada. The Certificate of Designation sets forth the rights, preferences and privileges of a class of the Company’s preferred stock. Such class shall be designated as the “Series A Preferred Stock” and the number of shares constituting such series shall be 5,000,000 shares. The holders of Series A Preferred Stock will be entitled to a preference over all of the shares of the Company’s common stock. The holders of common stock and the holders of Series A preferred stock vote together as a single class with the holders of the Series A preferred stock having 50 votes per share of Series A preferred stock and the holders of common stock having 1 vote per share of common stock. Holders of Series A Preferred Stock are entitled to notice of any stockholders’ meeting. No shares of Series A preferred stock have been issued as of the filing date of this report.

On the 15th of January, 2014, we formed our wholly-owned subsidiary, HCi Viocare Technologies Limited (“Viocare Technologies”), a corporation incorporated pursuant to the laws of Scotland, under registration number SC467480. Viocare Technologies undertakes research, development and commercialization of state of the art, new, innovative medical devices, methods and products in the fields of prosthetics, orthotics, rehabilitation, bioengineering, mobility, diabetes, diabetic foot, tissue mechanics, ultrasonics, medical signal processing and analysis, medical technology, orthopedics and robotic surgery. Viocare Technologies also plans to expand its research and development reach, to create a stable pipeline of new products and upgrades in the fields of prosthetics, orthotics, and diabetes.

On the 12th of February, 2014 we acquired intellectual property rights ("IPR”) over an innovative medical technology entitled ‘SocketFit’ from our Board Member Dr. Christos Kapatos, as well as over any additional technologies under development or that may be developed in the future. Consideration for the acquisition of the exclusive, perpetual, revocable, transferable, royalty free worldwide ownership of the IPR, and know how to develop and exploit the IPR was the issuance of 3,500,000 shares of the common stock of the Company to Kapatos. SocketFit is a system that will help overcome technical and resource hurdles endemic to the prosthetic sector. The system has been designed with the aim of offering optimally fitted prosthetic sockets that will reduce the number of prostheses made for, resulting in a reduced number of visits by the patient to the prosthetic, and also assisting in the rehabilitation of amputees.

On March 21, 2014, the Company’s name changed from China Northern Medical Device, Inc. to HCi Viocare in regard to actions taken on November 28, 2013, when the Board of Directors of the Company approved, and recommended to the majority stockholder that they approve the name change. On November 29, 2013, the majority stockholder approved the name change by written consent in lieu of a meeting, in accordance with Nevada State Law. FINRA approved the name change with an effective date of March 21, 2014. Our trading symbol is “VICA”. We filed an amendment to our Articles of Incorporation with the Secretary of State of Nevada changing our name to HCi Viocare to be effective on March 21, 2014.

On April 17, 2014, the Company, through our Scottish subsidiary, HCi Viocare Technologies Limited, entered into an acquisition agreement with Dr. Christos Kapatos, a director of both the Company and HCi Viocare Technologies (“Kapatos”), to acquire all rights and interest in and to the background IPR for a developing technology known as “Smart Insole”. Kapatos has conceived and been working on a Smart Insole System which is believed to be a state-of-the-art, pressure and shear force sensing insole with an incorporated real-time global display application and a fully featured support web-space that suggests to the user and his podiatrist/physiotherapist when inappropriate or dangerous conditions are developing on the feet. The product is being designed to help mitigate diabetic foot complications, such as ulceration, infection and amputation

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The competing insoles that were commercially available at this time can only monitor vertical pressure on the foot and not shear and have a significantly higher cost, and are intended for use in clinical or research environments.

As consideration for the acquisition:

HCi Viocare Technologies shall cause the parent Company to issue to Kapatos a total of 3,500,000 shares of the common stock of the Company on execution of the agreement and 3,500,000 shares of the common stock of the Company for each and every new version of the technology (new version to mean any update or improvement to the initial commercial product to be developed from the technology, after the commercial development of the first Market Ready Insole from the technology acquired, should the new version be developed to commercial market ready stage);

·	a cash bonus in the amount of $10,000,000USD should the technology be sold at any stage of development for an amount equal or greater than five hundred million ($500,000,000) cash or the equivalent thereof by way of any other consideration.

On May 8, 2015, the Company through its wholly owned subsidiary company HCi Viocare Technologies Limited entered into an agreement with Dr. Christos Kapatos, to amend the acquisition agreement (“Amendment of Acquisition Agreement”) dated April 17, 2014. Under the Amendment of Acquisition Agreement, the parties agreed, among certain other terms and conditions, to the issuance of 7,000,000 restricted shares of the common stock of the Company as additional consideration for all other applications of the Smart Insole technology. Furthermore, under the terms of the Amendment of Acquisition Agreement no cash bonus shall be provided to Kapatos.

On April 16, 2014, the Company entered into a Consulting Agreement with Kapatos whereby he will provide his services as Chief Technical Officer for the Company and the Company’s wholly-owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be forty thousand Euros (€40,000) (USD$43,625) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Kapatos shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million US dollars ($20,000,000 USD).

Mr. Kapatos abstained from voting on the acquisition of the IPR and the Consulting Agreement. Kapatos is an officer of the Company and is also an officer and director of HCi Viocare Technologies.

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Dr. Christos Kapatos.

Concurrently, the Company appointed Professor Martha Lucia Zequera, Professor William Sandham, Professor Stephan Solomonidis and Doctor Christos Kapatos to the Advisory Board of the Company and entered into advisory board agreements with each member. Compensation for the members of the Advisory Board shall be the grant of a total of 5,000 stock options entitling the advisory board member the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five years from the date of vesting. The advisory board appointments are for a term of one year and the options granted under the agreements will vest on completion of the term of the appointment. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

On May 1, 2015, the Company approved a one-year extension of the advisory agreements entered into with Professor William Sandham, Professor Stephan Solomonidis and Doctor Christos Kapatos which thereafter shall expire on April 15, 2016.

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Further, on April 16, 2014, the Company entered into Consulting Agreements with the members of its Scientific Advisory Board as follows:

	-	Professor Stephan Solomonidis (“Solomonidis”) will provide services as Head of Research for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand pounds (£20,000 GBP) (USD$29,650) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Solomonidis’ fee will be readjusted to the amount of forty thousand pounds (£40,000 GBP) (USD$59,300) per annum, and he shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD). On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Professor Stephan Solomonidis.
	-	Professor Martha Lucia Zequera (“Zequera”) will provide services as Director of Diabetic Foot Related Products and Services for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand dollars ($20,000 USD) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Zequera’s fee will be readjusted to the amount of forty thousand dollars ($40,000 USD) per annum, and she shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD). The consulting agreement entered into with Professor Martha Lucia Zequera was not renewed upon its expiration.

Professor William Sandham (“Sandham”) will provide services as Director of Diabetes Technology Research for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be Twenty Thousand pounds (£20,000 GBP) (USD$29,650) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Sandham’s fee will be readjusted to the amount of forty thousand pounds (£40,000 GBP) (USD$59,300) per annum, and he shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD).

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Professor William Sandham.

On June 9, 2014, the Company appointed Mr. William Spence to the Advisory Board of the Company and entered into an advisory board agreement. Compensation shall be the grant of a total of 5,000 stock options entitling Mr. William Spence the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share. The advisory board appointment is for a term of one year and the options granted under the agreement will vest on completion of the term of the appointment. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

The consulting agreement entered into with Mr. William Spence was not renewed upon its expiration.

On June 9, 2014, the Company, through our Scottish subsidiary, HCi Viocare Clinics, entered into a Share Purchase Agreement with Mr. William Donald Spence, Miss Catriona Ann Spence, and Mrs. Eilidh Isabel Malcolm (together the “vendors”), to acquire 100% of the issued capital of W D Spence Prosthetics Limited (the “Clinic”). The Clinic is incorporated in Scotland under company number SC307652, having its registered office at 8 Tomcroy Terrace, Pitlochry, Perthshire, PH16 5JA, UK. The Clinic is a private company limited by shares, with no registered charges, and the total issued share capital amounts to 1,000 ordinary shares par value of £1 each. The vendors to the Share Purchase Agreement are the beneficial owners and registered holders of all (100%) the shares of the Clinic, with Mr. William Donald Spence holding 520 ordinary shares, and Miss Catriona Ann Spence and Mrs. Eilidh Isabel Malcolm each holding 240 ordinary shares. Mr. Spence is also the director of the Clinic, and Miss Malcolm is the secretary. The Clinic has no employees or subsidiaries, and is not a subsidiary of another company.

The Clinic is located in Glasgow, Scotland, and is a fully operational prosthetics clinic. The acquisition of the Clinic is the first step to the Company’s and HCi Viocare Clinics’ intention to develop the first chain of prosthetics and orthotics (P&O) and diabetes clinics in the European market, covering Southern Europe, the Middle East and North Africa.

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As consideration for the acquisition, HCi Viocare Clinics shall pay to the vendors in cash the amount of one hundred thousand GBP (£100,000) (USD$168,121) on execution of the agreement.

Further, on June 10, 2014, HCi Viocare Clinics entered into a Taxation Undertaking with the vendors pursuant to the Share Purchase Agreement. Concurrently, on June 10, 2014, the Company made the required payment under the agreement to the vendors, thus completing the acquisition of the Clinic.

Also on June 9, 2014, HCi Viocare Clinics entered into an agreement with Mr. William Donald Spence (the “Employment Agreement”) whereby he will provide his services as Director of Clinical Operations of HCi Viocare Clinics and its wholly-owned subsidiary clinics. The contract has a term of one year, starting on June 10, 2014, and ending on June 9, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation shall be sixty thousand GBP (£60,000) (USD$88,950) per year payable monthly in arrears on the last Friday of every month by credit transfer. HCi Viocare Clinics shall also pay any fees in connection with the membership of Mr. Spence to any professional, regulatory or other such body of which Mr. Spence’s membership is required to carry out his role with HCi Viocare Clinics, as well as all insurance payments. During the period ended June 30, 2015 Mr. Spence resigned as the Director of Clinical Operations and his annual contract was not renewed.

Further, on June 9, 2014, the Company appointed Mr. William Spence to the Advisory Board of the Company and entered into an advisory board agreement. Compensation shall be the grant of a total of 5,000 stock options entitling Mr. William Spence the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from the date of vesting. The advisory board appointment is for a term of one year and the options granted under the agreement will vest on completion of the term of the appointment. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

The advisory board agreement entered into with William Spence was not renewed upon its expiration date.

On November 7, 2014, the Company’s subsidiary, HCi Viocare Clinics entered into a service agreement with Mrs. Heleen Francoise Kist whereby she will provide her services as Chief Operating Officer (“COO”) of the Company. The contract has a term of one year, being effective as of October 1, 2014, and ending on September 30, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation was thirty thousand GBP (£30,000) (USD$44,475) per year payable monthly in arrears on the last Friday of every month by credit transfer. On October 15, 2015, the Company’s COO, Heleen Kist and wholly owned subsidiary, HCI Viocare Clinics UK, signed an Addendum to an employment contract to extend the term to September 30, 2016, with a remuneration increase to forty five thousand GBP (£45,000) (USD$ 66,712) per year.

On January 1, 2015 the Company entered into a consulting agreement with an individual residing in the Czech Republic, for the provision of Investor Relations Services for the Company. Under the terms of the agreement, Mikulas Dylowicz shall be an independent contractor and shall provide services including responding to shareholder and investor email and telephone inquiries, dissemination of the Company’s public press releases and working with the Company to continue to raise operating capital. Mikulas Dylowicz shall receive monthly consideration of Euros €2,000 per month and shall be reimbursed for all approved out-of-pocket expenses including travel and office expense.

On March 2, 2015 the Company announced the conclusion of a lease agreement for a modern, stand-alone 5,300 square foot facility in Glasgow, Scotland with an entry date of 1 March, 2015.

The building hosts the Company’s first Viocare centre, a full service Prosthetic and Orthotic (“P&O”) practice with a superior standard of personalised care. This new facility serves as the centre of reference and training for the intended chain of Viocare P&O and diabetic foot centres across Europe, ensuring their adherence to British and International standards. The Company’s Technologies subsidiary occupies the first floor of the building to continue to develop its portfolio of bioengineering innovations.

On March 18, 2015 the Company entered into a Trademark Assignment and Conveyance Agreement (“Trademark Assignment”) with its CEO, President and Director, Mr. Sotirios Leontaritis in respect of the national trademark “viocare” No. 223133 registered for protection in classes 10, 12 and 44 in Greece.

The aforementioned trademark was granted to Mr. Leontaritis on October 11, 2013 and is valid for a period of 10 years from the date of grant. On June 5, 2015 the Trademark Assignment was filed with the Greek Trademarks office for processing. The assignment of the trademark became effective on August 4, 2015. Mr. Leontaritis received no compensation for the Trademark Assignment.

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On March 31, 2015 the Company’s wholly owned subsidiary HCi Viocare Clinics and its subsidiary W D Spence Prosthetics Limited completed a merger with the resulting combined entity having the name HCi Viocare Clinics UK Limited.

On May 7, 2015, the Company entered into an agreement with HELLENIC AMERICAN SECURITIES S.A. (“HAS S.A.”) for a term of one year. According to the respective agreement HAS S.A. shall provide its services and advice to the Company regarding the capital structure, industry strategy and similar matters, as well mergers and acquisitions under the Greek Law, an introduction of the Company’s securities to Greek and Foreign Investors, both Private and Institutional ones, as well as preparation of analyses for the Company which will be circulated to various websites and media groups.

HAS S.A. is a Public Limited Stock Brokerage Company, member of the Athens Stock Exchange and Athens Derivative Exchange, incorporated in Greece, with registered office in Athens.

HAS S.A. is entitled to the following consideration under the Agreement:

1. $3,000 per month or its current equivalent in Euro, plus applicable VAT, payable monthly on the first day of the month, for each quarter;

2. Issuance of 168,000 restricted shares of the Company’s common stock quarterly (the “Shares”), payable in monthly installments as to 56,000 shares per month, to be issued and delivered within 10 days after the 1st day of each month.

On June 11, 2015, the Company entered into a Loan Agreement with the Company’s CEO, President and Director, Sotirios Leontaritis, (the “Lender”), whereby the Lender, in order to provide general working capital and to allow the Company to effectuate its business plan, agreed to provide the Company a loan facility of EUR150,000 with an annual interest of 5%, payable on maturity, and the Company agreed to repay the loan within 5 years from the date of the loan agreement.

On July 8, 2015 the Company incorporated HCi Viocare Clinics (Hellas) S.A. in order to carry out operations for the P&O clinic under development in Athens, Greece.

On August 8, 2015 FINRA approved a seven (7) new for one (1) old forward split of our authorized and issued and outstanding shares of common. A Certificate of Change for the stock split was filed and became effective with the Nevada Secretary of State on August 7, 2015. Consequently, our authorized share capital increased from 100,000,000 to 700,000,000 shares of common stock and our issued and outstanding common stock increased accordingly, all with a par value of $0.0001. Our preferred stock remained unchanged. All share and per share figures contained herein reflect the impact of the forward split.

On July 18, 2015 the Company appointed Mr. Yiannis Levantis as a member of the Board of Directors.

On September 1, 2015, the Board of Directors approved a consulting agreement with Sergios Katsaros and appointed Mr. Katsaros Vice President of HCi Viocare.

Under the terms of the consulting agreement, Mr. Katsaros will work directly with the Company’s President and CEO in order to create and implement the Company’s strategic plan and assist in securing additional financing to meet the needs of the Company’s business plan and corporate objectives. The initial term of the contract is six months and Mr. Katsaros will receive compensation of EUR2,000 per month.

Mr. Katsaros is a valuable addition to the rapidly developing Company having worked in key positions for various large international conglomerates including Deutsche Börse AG, Mercedes – Benz Hellas, Alpha Private Bank and ASC Energy.

On March 1, 2016 the Company approved a one-year extension to the consulting agreement (the “Agreement”) between the Company and its Vice - President, Sergios Katsaros, originally entered into on September 1, 2015.

On September 1, 2015 the Company appointed Ms. Evaggelia Moschidou as Marketing Director of the Company.

Ms. Moschidou is responsible for the coordination of Marketing Communication and Strategy Planning sectors of the Company as well as its affiliates. Ms. Moschidou is a valuable addition to the Company having worked for over a decade in telecommunications sector –most recently for Sony Ericsson holding various business and marketing management positions.

On September 17, 2015, the Company notified its independent registered public accounting firm, Anderson Bradshaw PLLC (“Anderson Bradshaw”), that the Company had decided to change auditors and was therefore dismissing Anderson Bradshaw, effective immediately and appointed Heaton & Company, PLLC as the Company’s new independent registered public accounting firm.

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On September 25, 2015 the official opening of the Company’s new Research and Development (R&D) center together with its first Prosthetics and Orthotics (P&O) clinic in the UK took place in Glasgow, Scotland with an official ribbon cutting by Scotland’s First Minister, Nicola Sturgeon MSP. Additional information and updates on the Company’s Clinic and R&D center can be found at the new Glasgow clinic website: www.hci-viocare.co.uk and on Twitter: @HCiVioClinic.

On February 1, 2016, the Company entered into a consulting agreement with Sitimo Ltd. for the development and expansion of its business and establishment of Prosthetics and Orthotics clinics in the region of South Eastern Europe as well as the Middle East. The Consultant undertakes to introduce the Company to the healthcare market of South Eastern Europe and Middle East.

The Agreement has a term of twelve (12) months and the Consultant is entitled to remuneration for the provision of services in the form of 100,000 shares of the common stock to be issued within thirty days from the enforcement of the Agreement.

On February 2, 2016, the Company entered into an Agreement with LXM Finance LLP (“LXM”), a company with a registered office in London, UK in order to be assisted with fund raising. LXM is member of LXM Group is a joint venture between the company’s management and the owners of the Libra Group, an international business group with operations spanning five continents and 30 locations worldwide. The group has a multi-billion dollar diversified investment portfolio with interests principally in shipping, aviation, hospitality, real estate and renewable energy.

On February 10, 2016, the Company entered into a consulting agreement with an individual for the introduction of the Company to the healthcare market of Spain in view of the Company's plans to expand its clinics business and establish a Prosthetic and Orthotic Clinic in Spain. The Agreement has a six-month term ending on August 2, 2016, and the Consultant shall be remunerated with 50,000 shares of the Company's common stock.

On February 18, 2016, the Company entered into a consulting agreement with an individual for the introduction of the Company to the healthcare market of Middle East and specifically of Saudi Arabia in view of the Company project to expand its business and establish a Prosthetic and Orthotic Clinic in the Middle East. The Agreement has a six-month term ending on 18.8.2016 and the Consultant shall be remunerated with 200,000 shares of the common stock.

On February 19, 2016, the Company entered into a consulting agreement with an individual for the introduction of the Company to the healthcare market of Turkey in view of the Company project to expand its business and establish a Prosthetic and Orthotic Clinic in Turkey. The Agreement has a six-month term ending on 19.8.2016 and the Consultant shall be remunerated with 200,000 shares of the common stock.

Additional information on the Company’s activities, technologies and management team can be found at the Company’s website: http://www.hciviocare.com

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

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Our Current Business – Research & Development and commercialization of technology for healthcare innovation including various athletic applications, and the operation of Prosthetics and Orthotics clinics.

The Company intends to exploit the growing need for high quality care and prevention in the growing population of the obese, diabetic, amputated and/or movement impaired through development of:

-	Chain of Clinics: Prosthetic, Orthotic and (diabetic foot) rehabilitation centres in poorly served markets, such as Mediterranean Europe & the Middle East. Differentiation through British standards in clinical practice, qualifications and training.

-	Technologies: Suite of patented solutions to help prevent, monitor & alleviate complications across different patient and athletic populations. Collaboration with and licensing to established industry participants globally to facilitate rapid development, distribution and scale.

We commenced modest revenue generating operations in fiscal 2014 and are primarily engaged in the research and development and marketing of innovative medical technologies, and the operation of prosthetics and orthotics (“P&O”) and diabetic foot total rehabilitation clinics. Presently our revenue stream is solely derived from the Company’s flagship P&O clinic located in Glasgow, Scotland, and some initial commercial income from prospective licensing partners for the Technologies business.

The Company’s technologies and R&D portfolio presently consists of:

•

Filing of 3 patents in the UK: pressure sensor system; pressure & shear; pressure & positioning (Dec 2014) (all of which patents were abandoned upon the filing of a new International (PCT) patent application in December 2015 which covers over 140 countries around the world, and includes further advances made to the sensor systems, and a wider range of applications in products that touch people’s everyday lives;

•	2 further patents being drafted for first half of fiscal 2016

•	4 prototypes: pressure & shear insole; smart cushion, smart mattress

•	1 proof of concept device: robotic surgical assistive device

•	High level diagrams or complex documentation and software for other innovations in the portfolio.

1.2	OUR TECHNOLOGIES

Research and Development

As at December 31, 2015 and 2014, the date of this Annual Report, we had expended a total of $5,317,942 and $2,652,465 respectively on research and development, including costs related to shares issued for acquisition of our Insole and SocketFit technologies and their derivative applications.

A.	The Sensor Technology

As part of our ongoing development efforts stemming from R&D related to our base technologies acquired in fiscal 2014 from Dr. Christos Kapatos, notably the Smart Insole technology, HCi Viocare has developed a sensor system that can be incorporated into any thin, flexible, bendable material and is capable of measuring direct force applied vertically and shear forces applied horizontally. Each sensor can connect with other sensors, creating a network, in order to monitor an entire area.

Due to the nature of the technology used, which is currently being kept confidential, the sensor is unaffected by bending, temperature, humidity and excess pressure, load, making it suable for medical applications, wearable devices and on-body applications. The sensor system has been designed to be used in insoles, in shoes, in cushions, seats, mattresses, saddles and any other wearable devices such as smart apparel and sports equipment. A key feature of the sensor system is its low cost, with the components for each one sensing point measuring pressure and shear forces at a cost of US$1.10, which is an order of magnitude lower than conventional pressure-only sensing solutions such as capacitance, resistance or strain gauges.

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The sensor system has been integrated into a prototype of an insole which is an autonomous, non-invasive, stand-alone unit, with its own rechargeable power supply, microcontroller and wireless communication unit. The insole can connect with smartphones, tablet pcs and pcs, through a mobile application, in order to transmit the data collected to the end user. End users could be a diabetic patient, to monitor pressure and shear forces for the prevention of diabetic foot ulcers, athletes interested in the impact on their knees of their running style or wanting to monitor the totality of their golf swing, or clinicians such as physiotherapists, orthotists and prosthetists needing to evaluate a person’s gait.

The Company believes that there are applications for its force sensing technology in many fields within healthcare and sports, as well as more industrial fields due to its relative low cost vs conventional pressure sensing, its ability to measure shear forces in addition to pressure, its bendability and its reliability in a wide range of environments.

The Company concentrated its R&D efforts during fiscal 2014 and 2015 on the development of the sensor technology and the second half of 2015 on seeking licensing partners for the insole and mattress technologies, with conversations taking place with various industry partners.

Diabetic Insole

The Company has developed a prototype for a smart insole measuring pressure and shear forces that can communicate wirelessly to smartphones and could be worn by diabetic patients to alert them to risky behavior and provide them and their clinicians with information to help prevent the diabetic foot ulcers that can ultimately result in amputation.

Many complications can be associated with diabetes. Diabetes disrupts the vascular system, affecting many areas of the body such as the eyes, kidneys, legs, and feet. People with diabetes are more prone to infection. They can also develop neuropathy (damaged nerves) or peripheral vascular disease (blocked arteries) of the legs. This can cause diminished feeling in the feet leading to unnoticed cuts, scratches, and tissue breakdown. This may result in ulceration and infection. Infection and foot ulceration, alone or in combination, often lead to amputation.

In terms of market size of the opportunity: foot complaints are the leading cause of hospitalisation of people with diabetes and is estimated that 30% of all diabetics will develop a serious foot complaint at some time (http://www.who.int/topics/diabetes_mellitus/en/). In the USA alone the value of the diabetic foot ulcers therapeutics market in 2011 was $1.53 billion, showing continuous growth.

(http://www.companiesandmarkets.com/News/Healthcare-and-Medical/Diabetic-foot-ulcers-therapeutics-market-expected-to-maintain-a-moderate-growth/NI3941

It is widely understood that pressure and shear forces on the feet cause ulcerations and due to diabetic patients having neuropathy (resulting in loss of sensation in the feet), feet are not offloaded or taken care of appropriately.

It is very important for diabetics to take the necessary precautions to prevent all foot related injuries. Due to the consequences of neuropathy, daily observation of the feet is critical. Theoretically, if diabetes is well controlled and monitored it should be possible to avoid these foot problems. However, whilst clinical advice to diabetics is to ‘mind their feet’ and monitor them daily, they are not provided with a usable tool to measure the stresses and strains on their feet where there is some loss of sensation. This is what the insole intends to address.

The resulting product(s) will be a Class 1 medical device, depending on claims and disclaimers. While default alerts settings would be provided, based on existing academic and clinical research, users would be encouraged to get their physician to set parameters.

The Company is not alone in recognizing the importance of measuring pressure on the feet of diabetics. Orpyx in Canada has launched a consumer product priced at $2,400, which requires an additional on-shoe component and a dedicated watch vs. HCi Viocare’s fully integrated insole which could be marketed at <$500. A few other start-up companies (FeetMe, Sensoria) and research groups are working on diabetic foot monitoring insoles, but all only measure pressure, ignoring shear forces which can greatly impact ulceration, and use conversional pressure sensing (capacitive or resistive technology) which the Company feels may not be as reliable in the hot and humid environment of a shoe. Because HCi Viocare’s technology measures all three forces (pressure and 2 horizontal shear forces) we are able to model with reasonable accuracy the calorific expenditure of the wearer, thereby potentially contributing to the diabetic patient’s glucose management.

The Company is presently seeking licensing partners in respect of the diabetic insole application. The license partner could be any company marketing products to diabetics (e.g. blood glucose monitors and lancets) or wearable technologies company wanting to extend its healthcare reach (iHealth, Samsung) or foot specialist already catering to diabetic foot market (eg Dr Scholl).

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Figure : Smart insole

Medical gait analysis insoles

Orthotists, podiatrists, physiotherapists and prosthetists all require a good understanding of a patient’s gait in order to diagnose biomechanical issues, provide appropriate rehabilitation and ensure appropriate alignment of the body when using orthoses (such as braces) or prosthetic limbs. Equally, researchers in these fields and biomedical engineering more generally are interested in the forces involved in gait and their impact on the body.

Academic and commercial researchers may have force plates at their disposal: metal plates built into the floor, which can capture the forces of a person walking or running over them. However, there are prohibitively priced (>$40,000) for most clinicians. There are therefore different systems on the market addressing clinicians and researchers:

·	optical gait analysis: whilst these can show movement very well, they do not yield any information on forces

·	pressure mats: these measure pressure but have a small surface meaning that one can only capture a snapshot of the gait

·	pressure sensing insoles: which can measure pressure more realistically over a larger distance

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Presently we are aware of 3 devices that compete directly with the insole intended for clinical use only, each priced at in excess of $4,000: from Algeos (www.algeos.co.uk) which attaches sensors directly to the foot; and insoles from Tekscan (www.tekscan.com) , from Novel, (www.novel.de) and Moticon (www.moticon.de).

Management believes its medical insole would be unique in its ability to measure shear forces, and to operate for longer periods of time reliability and accurately due to limitations of the competing technologies (eg in humidity, when bent). Moreover, unlike the HCi Viocare prototype, existing insoles are not stand-alone, requiring ancillary componentry to communicate with the data capture unit and therefore making their use restricted to in-clinic. A cheaper, stand-alone insole could be given to patients to take away and record gait over time and over different surfaces.

The medical insole can also be expanded to become a combined 3D motion capture and gait analysis system for use by physiotherapists, orthotists, athletes and possibly in film and gaming.

Athletic insoles

Sports and fitness wearable devices have been in the market for more than 30 years. However, in the last 3 years the application of micro-electronics, wireless technology and the explosion of smartphones and mobile applications has revolutionised the market, with many established, as well as new, companies offering products applications for a wide range of sports.

Wearable wireless devices in the Sports, Fitness and Wellness market measure sports performance, daily activity, sleep patterns, and other related physical parameters. Another key factor that distinguishes this market is its consumer focus and that, unlike devices in the other healthcare markets, these devices usually do not require regulatory approval as a medical device.

The consumer market for wearable devices is exploding, and people appear to have an insatiable appetite for data to analyse their fitness and athletic performance. Nearly 50 million sports performance monitors were sold in 2014 and Worldwide revenue is forecast to reach $2.3 billion in 2017. http://cdn2.hubspot.net/hub/396065/file-2568104498-pdf/Blog_Resources/IHS-Wearable-Technology.pdf?t=1427903372862

Companies like Adidas-Salomon Ag, Nike Inc., Garmin, New Balance and Suunto invest millions of dollars every year for the development of wearable devices and material, and the market is booming as demand is ever increasing. The focus for most of these companies seems to be in the running shoes, apparel and equipment sector, as this sector is the fastest growing sports and fitness sector wold-wide with billions of revenue every year. Under Armour has just launched its first smart shoe, monitoring only cadence.

The Company’s sensor technology can be used in an insole or built into shoes to provide information to the wearer. It is the only pressure sensing technology that can work accurately in a warm and moist environment and with significant bending, like that experienced during running.

In keeping with the attractiveness of the market, there are a number of relatively new companies intending to launch insoles to give information to runners, together with coaching ‘Apps’. Some of these measure only contact or movement (e.g., www.ambiorun.com) and others do measure pressure, usually not fully wireless/stand-alone (Medhab www.medhab.com; Arion www.ato-gear.com). Another competitor is Sensoria which markets a smart textile sock that measures pressure and pace. It also has a ‘running coach’ App. It requires an anklet to be worn, to house the battery and communication modules, and the socks require washing, potentially reducing their life span.

Note that the resistive or capacitive technologies used by competition struggle with bending and hot/humid environments and are therefore considered to be less reliable. Also, due to the cost associated with pressure sensing, competitors usually only have a small number of sensing points, limiting the value of the information. The Company’s more cost effective sensing technology would permit a much greater number of points.

A further important differentiator from the competition is that the Company’s sensor technology measures forces in three directions, giving not just plantar pressure information but also making the system capable of using industry accepted biomechanical modelling capabilities to project the impact on the knee f the wearer’s running style. And the knee is an area of great focus for runners, who frequently experience injuries.

The athletic insoles could be coupled with other devices to give wearable performance information across a number of sports, including the high value tennis and golf markets. Golfers, for example would be able to link their swing (from an on-club sensor) to their weight displacement to optimise their performance. Currently on-racket or on-club sensors exist but fail to address this critical weight placement / foot force element for the athletes.

The Company is presently seeking licensing partners in respect of the athletic insole applications, with a number of discussions with market leaders in their fields ongoing.

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Smart Mattress

Ulceration and skin (soft tissue) breakage is very common to people with tetraplegia or paraplegia and to most patients with limited movability that spend time in a bed, or in a wheelchair. It is caused by low continues pressure over time and/or high (peak) pressure points. The most commonly used method in a clinical environment, to avoid ulceration in such patients, is for a nurse to “turn” them, in better words; to change the position in which they lay in bed, frequently. This practice is supported by specialist therapeutic support surfaces (mattresses and overlays) to attempt to reduce pressure points. The more modern surfaces are powered air mattress. There are different types of powered air mattresses, which can alternating pressure in their air cells on a pre-defined timetable.

In terms of market opportunity, hospitals are under tremendous pressure to address decubitus, particularly in the US where payers are moving away from covering “never events”. Pressure ulcers affect a million patients in the USA alone each year and it costs the US healthcare system alone an est. $12 billion in direct treatment costs, not counting associated costs such as medical malpractice lawsuits;

Existing market solutions:

•

Adoption of pressure relieving overlays is increasing; these are generally not ‘active’ and merely made of a suitable material to reduce pressure, resulting in a lower cost; Whilst there is no direct clinical evidence for their effectiveness, there is a widespread belief and acceptance that they can reduce pressure ulcers;

•

Winncare's Axensor system is an example of an inflatable mattress with sections which goes through a standard cycle of in-/deflation to relieve pressure; these are increasingly common for high risk patients and are supplied by all leading therapeutic support surface manufacturers.

•

Israeli start-up Wellsense has the first pressure sensing mattress cover and their clinical evidence shows that the monitoring of pressure alone is already effective; however, it has low adoption because it is not breathable (which could aggravate ulcer formation) and it is costs >$3000.

With the Company’s sensor technology incorporated into mattresses and overlays, for which a prototype exists, technology licensees could develop a range of products with the following: lower production costs, sensors not affecting the properties of the mattresses, ability to measure shear in addition to pressure (shear forces being a recognized key contributor to ulceration).

Furthermore, with the sensor integrated into an inflatable mattress itself, we have developed a smart mattress that can respond intelligently to the pressure and shear data and inflate and deflate the mattress compartments automatically to reduce the risk of ulceration for patients, in between nursing interventions. This dynamic smart mattress adapts to the specific need of every patient and provides relief and adjustment only where and when is needed, maximising the effectiveness of the treatment. This would be classed as a Class 1 medical device, and the license partner would need to pursue such registration prior to launch.

The Company is in discussions with a number of leading therapeutic support surface providers who have expressed interest in licensing the technology.

Wheelchairs and medical chairs

The same technology as the Mattress can be used to provide pressure and shear monitoring integrated into wheelchair cushions and medical day-chairs to help prevent ulceration. This may be licensed to the same license partner as the mattress solutions.

Automotive

By incorporating the HCi Viocare sensor technology into automotive seating, professional drivers could be monitored automatically for posture, projected blood circulation, pressure and shear. Posture is important as back pain is a leading cause of absenteeism in the workplace, but in a driving environment, positioning can be an indicator of fatigue, a leading cause of accidents. Adoption of such technology could be driven by health and safety considerations and/or the insurance industry.

The Company is seeking partners in the automotive industry to discuss the potential of incorporating the technology into their vehicles.

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SocketFit

The Company will build on the work done by Dr Kapatos in developing a scanning device to determine the optimal shape of an amputee’s socket, capturing the internal geometry and the biomechanical properties of the tissues in the residual limb. This SocketFit technology was acquired in 2014. The intention is to partner with a leading scanning provider or manufacturer in the P&O market, through a development and license agreement, to produce a socket system for use by prosthetists worldwide.

Market opportunity

The number of amputees world-wide is estimated to be 20 million, and for most amputees finding a well-fitted prosthesis is far from easy. Traditional methods of design, manufacture and fitting of a prosthetic socket are typically carried out by “artisan” techniques but unfortunately often result in ill-fitting devices that make wearing a prosthesis almost intolerable for a large number of amputees.

A prosthetic socket is a custom-made “cone” that connects the rest of the prosthesis (foot, shank and knee) to an amputee’s residual limb. Sockets generally need to be replaced every other year, though more frequently in the initial stages after amputation when the residual limb can still change shape significantly. While many significant technological advances have been made with the design and manufacture of prosthetic components, such as electronic knee assemblies and feet, socket design has not kept up. Over the past 20 years a great deal of research has been undertaken to automate the process of socket design and manufacturing, but it has met with limited success. Most sockets continue to be created with hand-sculpted plaster moulds made by the Prosthetist or a technician hours or days after examining the amputee. The result is that, typically, one in four sockets are discarded because of their poor fit.

Many prosthetists, (if not all), are frustrated by the lack of an objective method that would ensure an optimum fit of the socket. This ‘need’ for assistance instigated the advent of industrial sector technologies to be taken up in the field, even though these systems, in reality, lack the necessary ‘ingredient’ to allow the optimum socket to be produced. They merely attempt to replicate current practices in a digital manner (CAD-CAM systems), without taking into account the biomechanical or anatomical characteristics of the residual limb.

The key element of the project is work done by Dr. Christos Kapatos to improve the nature of the data used in socket modeling software. Finite element analysis (FEA) has been used widely in a variety of applications, including prosthetics. But its prosthetics applications have suffered from the fact that only external boundary data and limited information on the nature of the internal tissue was provided. The results were not promising. By including far more data on the nature of the internal anatomy as well as, for the first time ever (to our knowledge) data on the bio-mechanical properties of the tissue to the FEA, a system can be created that enables Prosthetists to build a socket that evenly distributes weight, provides enhanced comfort, and raises the bar across the industry on socket creation.

SocketFit is a digital system for assessing an amputee’s residual limb and for the production of truly functional and comfortable prosthetic sockets. It takes account of the external and internal geometry of the amputee’s stump, the biomechanical properties of each individual soft tissue layer i.e. skin, fat, muscle and bone, and the boundary and loading conditions of a complete prosthesis to generate a virtual 3D model of the residual limb. It is then possible to produce an accurate, functional and comfortable prosthetic socket.

By minimising the time and cost of socket production and by reducing the number of faulty sockets (it has been reported that a quarter of all prostheses are currently rejected due to poor fit), there will be a reduction in costs incurred by health services and insurance companies worldwide as well as great benefits to the amputee.

The technology

The intended Socket-Fit device consists of three modules:

The Ring - a device to scan the residual limb and export data, which uses ultrasound technology.

The external geometry of the medium under examination, is acquired by the position data from the stepper instruments and the use of the rotary position sensors; as the ring moves vertically, spinning at the same time, the spring-supported arms comes in contact with the entire residual limb, mapping every detail and transmitting it to a PC.

The internal geometry is acquired with the use of the on-board ultrasound transducers. Information on the mechanical properties of the tissues has also been captured.

Data Tools – software to analyse and collate the data into intelligible information.

All the data are sent to the control box for onward transmission to the PC. Software generates a 3D image of the stump’s external and internal geometry.

3.	Socket Modelling – FEA simulation FEA and optimisation software generate the optimum design for the socket in order to obtain the best pressure distribution, and therefore the most comfortable prosthesis for the amputee.

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The process to getting to an optimized socket shape is shown in figure 2 and a schematic of the system in figure 3.

Figure 2: Process map of system

Figure 3: Schematic of the system

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The greatest value provided by the acquired SocketFit technology rests in the algorithms that transform the data captured by the ultrasound transducers on the Ring to sanitized, usable data about the biomechanical properties of the tissues scanned. Specifically, the algorithms use data derived from the scans to generate stress-strain curves for the tissue layers within the limb.

This data is then used by the FEA software to simulate pressures onto the residual limb, similar to those experienced when walking, for different shapes of sockets, until the ultimate shape is found – meaning, the shape that provides uniform pressure where needed and avoids known pain areas (eg bone) to create a socket designed to have superior comfort in use.

Current Status of SocketFit

We plan to first find a commercialization partner, to help fund and/or conduct the required research and development and to launch the product within two years of commencement of the proposed research and development. This is to minimise risk but also because the technology could be designed to (retro-)fit into the partners’ existing product suite, minimizing effort. While the Company focuses attention on its immediately marketable Sensor Technology and its varying applications, any additional development work for SocketFit is currently on hold.

C.	Other technology opportunities

Blood flow visualization:

The Company has developed a proof of concept device that permits the visualization of peripheral blood flow. This could be incorporated into a smart ‘mat’ for the diagnosis and progression monitoring of diabetic foot conditions. Diabetic patients can suffer from reduced peripheral blood flow in their feet. This contributes to neuropathy but also prevents the healing of diabetic foot ulcers, which can lead to amputation. Such a mat could shift the monitoring of diabetic foot care to primary care, away from podiatry specialists, but also provide essential health information to podiatrists which they would otherwise not have. With a relatively low manufacturing cost, patients could even monitor their own condition at home. It is hoped the product would be prescribed/reimbursed.

Sleep apnea device (BiPAP)

•

The company has developed an early prototype of a small, silent, portable bidirectional airway device to assist sufferers of sleep apnea

Robotic surgical assist

•

Working (miniature) prototype of robotic device to assist in orthopaedic surgery, reducing number of staff in OR; uses proprietary sensor technology also used in Digital Health products

Adaptive socket

•

The ‘Holy Grail’ of prosthetic sockets, this technology would utilise our proprietary pressure and shear sensors to signal a smart material inside the socket to adapt its shape to the wearer’s gait and daily fluctuations in the size and shape of the stump.

Photo acoustic imaging

•

The team is exploring a theory that would remove the barriers currently preventing the human adoption of photo acoustic imaging, producing a relatively low-cost non-contact, non-invasive methodology. This would be a substantial project but with the potential to transform medical imaging.

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D.	Intellectual property

We have acquired exclusive ownership of the innovative medical device ‘SocketFit’. Dr. Kapatos in conjunction with another development company had prior filed a patent application which has been abandoned. Significant development of the technology has been undertaken since the filing of the abandoned patent and, after corresponding with our patent agents, it was deemed in the best interests of the Company not to revive the old patent, but to apply for new – multiple patents on the technology, and use the old patent as background technology, as new innovations have sprang out of the initial patent and additional fields of application have been identified.

We have acquired all rights and interest in and to the background IPR for a developing technology known as “Smart Insole”. Dr. Kapatos has conceived and been working on a Smart Insole System which is believed to be a state-of-the-art, pressure and shear pressure sensing insole with an incorporated real-time global display application and a fully featured support web-space that tells the user and his podiatrist/physiotherapist when inappropriate or dangerous conditions are developing on the feet. The product is being designed to mitigate diabetic foot complications, such as ulceration, infection and amputation, as well as improve the total health of a person with diabetes, by incorporating the readings from the insole system to a specialized web-space that will help the user monitor not just the health of his feet but also his diabetes by looking after his diet and exercise. The Company has also identified various other applications. Presently we have filed three patents in the UK in respect of this IPR:

British Patent Application No. 1421952.1, HCI VIOCARE TECHNOLOGIES LTD. (abandoned December 2015)

- The first patent based on development of the “Insole” IP relates to the Company’s pressure sensing system technology, which supports the development of very low cost, flexible and scalable pressure sensing devices in a range of sectors including wearable devices, Prosthetics & Orthotics, medical devices (e.g. for the diabetic foot), and automotive health and safety.

British Patent Application No. 1421950.5, HCI VIOCARE TECHNOLOGIES LTD. (abandoned December 2015)

- The second patent, also based on additional development of the “Insole” IP relates to the Company’s ground-breaking shear sensing system technology, which is supports the development of low cost, flexible and scalable sensor systems in a range of sectors including wearable devices, medical devices (e.g. diabetic foot), Prosthetics & Orthotics and automotive health and safety

British Patent Application No. 1421953.9, HCI VIOCARE TECHNOLOGIES LTD. (abandoned December 2015)

- The third patent application also follows additional in-house development of the “Insole” intellectual property (IP) and relates to pioneering low-cost, portable motion capture and gait analysis technology, which has applications in a range of sectors, including athletic wearable devices, physiotherapy, orthotics and potentially also gaming and film.

International Patent Application No. PCT/GB2015/053785, HCI VIOCARE TECHNOLOGIES LTD.

On December 10, 2015 the Company through its subsidiary HCi Viocare Technologies Ltd. filed an international application according to the Patent Cooperation Treaty (PCT) which received a PCT application number PCT/GB2015/053785. The filed international patent covers over 140 countries around the world. The new patent builds on the company’s three UK patent applications filed in December 2014 (as set out above), with further advances made to the sensor systems, and a wider range of applications in products that touch people’s everyday lives

The Company plans to file additional patent applications in fiscal 2016.

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E.	Regulatory Requirements

The Company’s business model of licensing technology to commercialization partners means that it is the partner, who will be the manufacturer of the eventual products and therefore subjected to the regulations of manufacturing and marketing devices. However, as the Company will support its licensing partner in the development of the final products it has ensured that in understands the eventual requirements, and has identified suitable consultants to provide support, where required.

The products are expected to be marketed worldwide, with an initial commercialization in Europe of the USA, depending on the partner. Their regulatory systems are highlighted below, together with the anticipated implications for the products that may result from our technologies.

Europe

Products that will be marketed in Europe will be required to comply with the EU Directives regarding medical devices, which apply to all EU member states. The basic relevant EU Directive which applies to our case is Directive 93/42/EEC (as amended by 2007/47/EC) regulating medical devices, as well as Directive 98/68/EEC that requires the manufacturers to place CE marking on their products to demonstrate compliance with the above regulations.

The Directive on medical devices also lays down rules in Annex IX for the classification of devices based essentially on the potential risks involved, with class III devices having the highest potential risk and class I device the lowest.

With reference to the stated Rules to determine a product’s classification, the anticipated classification of the products that could arise from the Company’s technology are listed below. It is important to note that classification is determined only at the stage of a final product and with reference to its features and the claims made by the manufacturer. Hence, there classifications are dependent on the decisions of the license partner and may be subject to change:

·	Diabetic and Medical Insoles: Class I

·	SocketFit: Class IIa – because of the use of ultrasound, which applies energy to the body. This is the usual classification for imaging devices.

·	Photoacoustic imaging: Class IIa – because energy is applied to the body

·	Blood Flow visualization: Class IIs – because energy is applied to the body

·	BiPAP: Class IIb – as it is relied upon for breathing

The Notified Body of the country in which the products are marketed will need to notified by the manufacturer, and their specific processes for registration and audit will need to be adhered to.

USA Regulations

Medical devices are subject to the general controls of the Federal Food Drug & Cosmetic (FD&C) Act which are contained in the final procedural regulations in Title 21 Code of Federal Regulations Part 800-1200 (21 CFR Parts 800 - 1299). These controls are the baseline requirements that apply to all medical devices necessary for marketing, proper labeling and monitoring its performance once the device is on the market.

Much like in Europe, the license partner will be required to determine how FDA may classify our devices - which one of the three classes the device may fall into. Unless exempt, FDA will classify our devices. Classification identifies the level of regulatory control that is necessary to assure the safety and effectiveness of a medical device. Most importantly, the classification of the device will identify, unless exempt, the marketing process (either premarket notification [510(k)] or premarket approval (PMA)) the manufacturer must complete in order to obtain FDA clearance/approval for marketing.

The Company will need to review the development of data and/or information necessary to submit a marketing application, and to obtain FDA clearance to market. For some [510(k)] submissions and most PMA applications, clinical performance data is required to obtain clearance to market. In these cases, conduct of the trial must be done in accord with FDA's Investigational Device Exemption (IDE) regulation, in addition to marketing clearance.

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1.3	OUR CLINICS

A.	Market and Industry

It is estimated that the global health market is growing by 6-8% per annum, which suggests it will double in the next 10 years. The global Orthopedic Prosthetics market seems to be following the same pattern, as it is growing rapidly, and is projected to exceed US$ 4.5 billion by 2017, according to the 2011 Global Data’s report “Orthotics and Prosthetics - Global Pipeline Analysis, Competitive Landscape and Market Forecasts to 2017”.

Demand for orthopedic prosthetics products is driven by a multitude of factors, including:

growing elderly population: The percentage of people aged 65 and older will increase at a rate three times that of younger generations. Subsequently, the frequency of vascular diseases and diabetes – diseases that often lead to amputation – will increase considerably;

causes of amputation: the most common causes of amputation are prosperity diseases related to diseases, such as diabetes and vascular diseases. Accidents account for only 26% of all amputations in developed countries. Indicatively, it is estimated that the number of people with diabetes worldwide (382 million as of November 2013) is expected to reach 592 million by 2035. As a result of the general increase in diabetes and vascular diseases, the number of amputations in the western world is also likely to continue to increase;

·	rising incidence of degenerative joint diseases, such as osteoporosis and arthritis, and increasing numbers of sports injuries;
·	social demands: the growing desire of more and more disabled individuals – especially young people – to become independent, lead active lifestyles, and go about their daily routines without outside help;

·	renewal: the lifetime of traditional prosthetic devices used by previous generations is three to five years. Also prosthetic sockets require replacement after three to six months;
·	market niche: reorganization of healthcare services has led to increased pressure to lower costs within the health sector, which in turn increases the demand for the efficiency of the solutions chosen; and

the growing demand for orthopedic prosthetics products is also driving the development of innovative medical devices forward. Advancements in biological science and stem cells technology, as well as rapid technological advances in medical science and development of durable and improved materials and implants have led to large number of people requiring physical rehabilitation, thus contributing to the market’s growth.

Overall, the market is set to grow significantly as the incidence of amputation increases. The number of amputees living on developing countries is estimated by the World Health Organization to have reached 300 million with up to 95% lacking access to prosthetic devices, thereby creating an increasing consumer base in need for affordable and reliable orthopedic prosthetics products and services that will improve the amputees’ long-term health and well-being.

Current solutions are inadequate, however, as state-of-the-art solutions from the US and Europe are cost-prohibitive, while low-cost devices run the risk of poor quality and/or unreliable performance. Especially in low-income areas and in developing countries, where the P&O industry is highly fragmented and poorly organized, with significant disparities in terms of clinical infrastructure, provision of medical rehabilitation and assistive devices, demographics (such as gender and/or socioeconomic inequalities), and funding.

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Clinics:

On January 15, 2014, we formed our other wholly-owned Scottish subsidiary, HCi Viocare Clinics UK Limited with registration number SC467486 (“Viocare Clinics”), with the intent to create the first state-of-the-art chain of Prosthetic and Orthotic (P&O) and diabetic foot clinics with global reach, while capitalizing on the aforementioned internally developed technologies. Viocare Clinics will establish and/or acquire movement rehabilitation clinics, limb fitting centers and diabetic foot centers, in the UK, Europe and the Middle East, initially. These centers will offer standardized and specialized rehabilitation and consultation services for the physically impaired, as well as for their families, friends, their workplaces and companies that employ or work with them. Some of the sections that will be covered by the centers are:

·	Prosthetic rehabilitation;
·	Orthotic rehabilitation;

·	Diabetic foot;
·	Foot congenital disorder and musculoskeletal defects;

·	Movement assisting devices;
·	Gait analysis;

·	Pediatric movement analysis and consultation;
·	Living and working spaces design and consultation for people with disabilities;

·	Walking training and body strengthening following amputation, stroke or accident;
·	Phantomlimb syndrome consultation;

·	Workshops and educational and training programs; and
·	Expert opinion mediation with insurance companies and organizations.

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The primary customers will be the physically impaired:

·	Amputees;
·	People with spasticity;

·	People with walking difficulties;
·	People with genetic abnormalities;

·	People with deformities;
·	People with musculoskeletal pain;

·	People with diabetes;
·	People with flat foot problems or just pain caused by long working hours or hard labor; and

·	Companies or organizations that employ or work with people with disabilities.

However, the market is not limited to these people; our customers will be families with children with disabilities and businesses that employ disabled persons.

Viocare Clinics operates in accordance with the standard mandated by the British Association of Prosthetist Orthotists and the International Society of Prosthetics and Orthotics.

In the next 3-4 years we target to establish a chain of 5 prosthetic, orthotic and diabetic foot rehabilitation centres in Europe and 2 centres in the Middle East through JVs, under the Viocare brand.

	•	Glasgow: Existing Prosthetic practice acquired and being expanded to include Orthotics; serves as the centre of reference and training ground for our other clinics.
	•	Mediterranean: The Mediterranean is prime location for medical and wellbeing tourism. It has also been used in governmental aid, e.g. Libya’s amputees, which we would seek to re-start. Targeted locations: Athens (planned to commence in Q4 2015), Spain, Portugal.

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Glasgow Clinic

·	The private practice of William Spence, WD Spence Prosthetics Ltd was acquired in June 2014, a profitable venture that was established in 2006, operating part-time with borrowed premises;

·	New premises of 5300 ft2 were secured in Spring 2015, to increase the capacity of the clinic, provide an on-site workshop to improve turnaround times and also to house our R&D staff, thereby facilitating the exchange of ideas;

·	The clinic was refurbished and reopened in September 2015 and is currently being actively marketed, with patient lead coming via:

-	Personal injury solicitors (road traffic and workplace accidents)

-	Word of mouth or internet searches

-	Social media marketing

-	Print advertisement

·	Due to the high quality care of the National Health Service, the market for private P&O provision is small, however, the clinic is the only private P&O clinic in the whole of Scotland;

·	It attracts patients from England also, where the market leader is Dorset Orthopedics (owned by Otto Bock) with a number of full-service and satellite clinics. However, provision in the North continues to be very limited.

Athens Clinic

	•	Athens is intended to be a major holistic P&O and rehabilitation centre, offering limb and orthotic fitting, physical and mental rehabilitation, and a diabetic foot clinic;
	•	The Company has secured a suitable ground floor location of 1200 m2, within 15 minutes of both the airport and the city centre and plan to open in the 4th quarter of 2016, following fit-out, recruitment and training;

	•	The Greek market is very concentrated, with only a handful of companies providing P&O services. Rehabline has an estimated 60% market share, but provides services that are sub-standard
	•	Key business development staff already identified, to liaise with physicians for referrals;
	•	In addition to serving the local population, the clinics will seek to attract medical tourism both from Scandinavia and from nearby regions.

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Competition

Hanger (www.hanger.com) dominates the prosthetic and orthotic clinic market in the USA, with over 1300 clinicians across over 740 clinics. However, in the rest of the world, provision of P&O services is extremely fragmented. Otto Bock, the market leading manufacturer of prosthetic components and vertically integrated to also provide clinical services at their headquarters and through clinics that have been acquired over time, focusing on Northern, Western Europe. Ossur, the Icelandic company which has roughly 20% of the P&O componentry market, has also expanded into clinic in Northern Europe.

The Company’s focus is on areas that are under-served both in terms of capacity and in the quality of service. Competition varies location by location ranging from the very fragmented to the very concentrated.

The Viocare clinics will seek to differentiate through high quality care, staff trained to British and International standards, modern systems and processes and a wide range of products from low- to high end. They will also provide a more holistic suite of services, to include physiotherapy, mental health and lifestyle rehabilitation. Also, our scientific team will lead the technological diversification of the clinics, thereby setting them apart from the competition. We will capitalize on our Scientific Board’s vast network of connections to attract customers from neighboring nations and will seek cooperation with global Medical Tourism operators.

C.	Trademarks

National Trademark

The aforementioned trademark was granted to Mr. Leontaritis on October 11, 2013 and is valid for a period of 10 years from the date of grant. On June 5, 2015 the Trademark Assignment was filed with the Greek Trademarks office for processing. The assignment of the trademark became effective August 4, 2015. t. Mr. Leontaritis received no compensation for the Trademark Assignment.

CTM

On May 13, 2014 the Company filed an application with the Office for Harmonization in the Internal Market (OHIM) which received the filing no. 012870754 for the registration of the individual figurative trademark “viocare” for protection in classes 10,12 and 44 within the European Union. The CTM is valid until its expiration/renewal on 13.05.2024.

D.	Regulations for P&O Clinics

The operation of our clinics will be subject to, and must comply with, the respective country’s government regulations. Given our planned acquisition or establishment of clinics in Scotland, UK and Athens, Greece, we are currently most interested in the respective applicable regulations. As we determine to establish clinics in other jurisdictions we will be required to understand and be compliant with the laws in those respective jurisdictions in which we intend to operate.

Scotland

1.	The Health and Social Work Professions Order 2001, made under section 60 of the Health Act 1999, established the UK Health & Care Professions Council (HCPC) that regulates, among others, prosthetists/orthotists in the UK:
·		according to the interpretation set out in Schedule 3, “relevant professions means arts therapists; chiropodists; clinical scientists; dietitians; medical laboratory technicians; occupational therapists; orthoptists; paramedics; physiotherapists; prosthetists and orthotists; radiographers; and speech and language therapists”;

·	according to article 3, par. 1, the Council is responsible for setting out “the standards of education, training, conduct and performance for members of the relevant professions and to ensure the maintenance of those standards”;
·	according to article 5, “the Council shall establish and maintain a register of members of the relevant professions”;

·	the HCPC sets out for all registrants standards of conduct, performance and ethics, and standards for CPD, as well as standards of proficiency for prosthetists/orthotists specifically

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The Health and Care Professions Council (Constitution) Order 2009 which sets out the composition of the Council (as amended by the Health and Care Professions Council (Constitution) Order 2014);

The Regulation of Care (Scotland) Act of 2001 established the Scottish Commission for the Regulation of Care (‘the Care Commission’), and set out the care services that it will regulate, i.e. all adult, child and independent healthcare services in Scotland, one of which independent healthcare services is ‘independent clinics’. As of April 1st 2011, the work of the Care Commission passed to a new body, the Care Inspectorate. Regulation of independent healthcare, including regulation of independent clinics, has passed to Healthcare Improvement Scotland. Healthcare Improvement Scotland is currently responsible for regulating independent hospitals, voluntary hospices, and private psychiatric hospitals. Regulation of independent clinics, independent medical agencies and independent ambulance services has not yet commenced. The Scottish Government consulted on the future arrangements for regulation of independent healthcare services, including the definition and scope of the services that should be regulated last year and are currently considering the way forward.

Greece:

We will be governed in Greece by Law 2072/1992 on Regulations for the profession of the technical specialist of prosthetic and orthotic products and other rehabilitation products, and other provisions. More specifically the law states that companies that operate laboratories of prosthetic, orthotic and other rehabilitation products can be formed by any person or legal entity, provided that they have as their chief technical officer an individual licensed as a technical specialist of prosthetic and orthotic products and other rehabilitation products. There is also a clause in the laws of Greece that refer to the necessary mechanical equipment, the specifications of the laboratory space, the required technical staff, and the committee in charge for granting the relevant permit, all of which are determined by a decision of the Minister of Health. In a review of the laws and conversations with the Ministry of Health directly this clause has not yet been enacted and there is no supporting documentation in regard to the requirements. We will be required to monitor the laws closely to ensure that if and when further regulations are enacted we are compliant.

We will be required to obtain those licenses, permits or other authorizations currently required to launch our products and operate our P&O clinics conduct exploration and other programs. It is possible that the costs and delays associated with such compliance could become so prohibitive that we may decide to not proceed with our business plans.

1.4

EMPLOYEES

The Company presently has a total of 9 employees and 9 consultants working in its administrative offices in Greece and its UK Clinic. We also retain financial, legal and management consultants as required to meet our financial reporting and SEC reporting compliance requirements on an annual basis. Details of certain of these consulting agreements with respect to our officers, directors and key advisors are provided below.

We have a consulting agreement with our Chief Executive Officer, Sotirios Leontaritis which was entered into on January 15, 2014, whereby Mr. Leontaritis shall provide services to the Company as the Company’s President and Chief Executive Officer in regards to the Company’s management and operations for the period from January 1, 2014 to December 31, 2017. Under the terms of the agreement, the Company agreed to pay to Mr. Leontaritis US$60,000 per annum payable in monthly payments of US$5,000 a month for the term of the contract. Further, under the terms of the contract, Mr. Leontaritis will receive cash compensation of US$5,000 and a stock award of 7,000,000 shares of common stock of the Company in consideration of his services as an officer and director for the period from September 10, 2013 to December 31, 2013. On January 22, 2014, the Company issued the 7,000,000 shares to Mr. Leontaritis pursuant to the agreement.

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Dr. Christos Kapatos.

Further, on April 16, 2014 the Company entered into Consulting Agreements with the members of its Scientific Advisory Board as follows:

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	-	Professor Stephan Solomonidis (“Solomonidis”) will provide services as Head of Research for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand pounds (£20,000 GBP) (USD$29,650) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Solomonidis’ fee will be readjusted to the amount of forty thousand pounds (£40,000 GBP) (USD$59,300) per annum, and he shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD). On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Professor Stephan Solomonidis.
	-	Professor Martha Lucia Zequera (“Zequera”) will provide services as Director of Diabetic Foot Related Products and Services for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand dollars ($20,000 USD) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Zequera’s fee will be readjusted to the amount of forty thousand dollars ($40,000 USD) per annum, and she shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD). The consulting agreement entered into with Professor Martha Lucia Zequera was not renewed upon its expiration.

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Professor William Sandham.

The consulting agreement entered into with Mr. William Spence was not renewed upon its expiration.

On January 1, 2015 the Company entered into a consulting agreement with Mikulas Dylowicz, an individual residing in the Czech Republic, for the provision of Investor Relations Services for the Company. Under the terms of the Agreement, the Consultant shall be an independent contractor and shall provide services including responding to shareholder and investor email and telephone inquiries, dissemination of the Company’s public press releases and working with the Company to continue to raise operating capital. The Consultant shall receive monthly consideration of EUR€2,000 (USD$2,430) per month and shall be reimbursed for all approved out-of-pocket expenses including travel and office expense.

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On September 1, 2015, the Board of Directors of the Company approved a consulting agreement with Sergios Katsaros and appointed Mr. Katsaros Vice President of HCi Viocare. Under the terms of the consulting agreement, Mr. Katsaros will work directly with the Company’s President and CEO in order to create and implement the Company’s strategic plan and assist in securing additional financing to meet the needs of the Company’s business plan and corporate objectives. The initial term of the contract is six months and Mr. Katsaros will receive compensation of EUR$2,000 per month. Οn March 1, 2016 the Company approved a one-year extension to the consulting agreement between the Company and its Vice - President, Sergios Katsaros, originally entered into on September 1, 2015.

On September 1, 2015 the Company appointed Ms. Evaggelia Moschidou as Marketing Director of the Company.

We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future.

1.5 AVAILABLE INFORMATION

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports that we file with the Securities and Exchange Commission, or SEC, are available at the SEC's public reference room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements and other information regarding reporting companies.

ITEM 1A. RISK FACTORS

An investment in our securities should be considered highly speculative due to various factors, including the nature of our business and the present stage of our development. An investment in our securities should only be undertaken by persons who have sufficient financial resources to afford the total loss of their investment. In addition to the usual risks associated with investment in a business, the following is a general description of significant risk factors which should be considered. You should carefully consider the following material risk factors and all other information contained in this Annual Report before deciding to invest in our common stock. If any of the following risks occur, our business, financial condition and results of operations could be materially and adversely affected. Additional risks and uncertainties we do not presently know or that we currently deem immaterial may also impair our business, financial condition or operating results.

Risks Associated with our Business

Implications of being an emerging growth company

As a company with less than $1 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may remain an emerging growth company until December 31, 2018, subject to satisfaction of certain conditions. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure and other requirements that are applicable to other public companies that are not emerging growth companies. In particular, in this annual report, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.

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We have a limited business history and have losses that we expect to continue into the future. If the losses continue we will have to suspend operations or cease functioning.

We were incorporated on March 26, 2007, and have only started our proposed business but have not realized any revenues. Our net loss since inception is $30,153,048. While we have existing operations we have not yet commenced significant revenue generating operations and have no significant assets other than fixed assets and cash on hand. While we have commenced revenue generating operations, we have yet to generate positive earnings and there can be no assurance that we will ever operate profitably. We have a limited operating history, upon which an evaluation of our future success or failure can be made. Prior to completion of the development stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. If our business plan is not successful and we are not able to operate profitably, then our stock may become worthless and investors may lose all of their investment in our company.

Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

•	our ability to find profitable markets in which to operate our P&O total rehabilitation clinics and launch our products;
•	our ability to generate revenues; and
•	our ability to manage research, development and costs of operations.

While we believe that our business plan has merit, there can be no assurance that we will be able to achieve any of the above and be successful in our future planned operations, and if our losses continue we will have to suspend operations or cease functioning.

Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

Our operations to date have been limited to organizing and staffing our company, developing and securing our technology, and raising capital. We have not yet demonstrated our ability to successfully complete development of any product candidates, obtain marketing approvals, manufacture a commercial scale product, or arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.

In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We will need to transition from a company with a research and development focus to a company capable of supporting commercial activities. We may not be successful in such a transition.

We have not yet found commercial partners for our saleable products and may never have saleable products.

We have only recently acquired technologies and developed products ready for commercialization. We have not yet found any commercial partners for our products and many of our products require additional research and development. We will also need to develop a market for our products if our commercial partners do not have an established marketing channel. There can be no assurance that we will successfully find commercial partners, market our products or complete our research and development of new products.

If healthcare professionals do not adopt our products in sufficient numbers or as rapidly as we anticipate, our operating results will be harmed.

The success of any of our products which we may develop will depend heavily on acceptance by healthcare professionals who will prescribe and recommend our products, and our failure to maintain a high level of confidence by key healthcare professionals in our products could adversely affect our business.

Consumers may not use our services, and thus we may never become profitable.

Our products represent a significant change from traditional diabetes treatment, and patients may be reluctant to accept them, or may not find them preferable to conventional treatment. In addition, patients may not comply with recommended treatment guidelines which could compromise the effectiveness of their treatment. Our success will depend upon the rapid acceptance of our products by a large number of potential patients to whom we intend to actively market. Market acceptance will depend in part upon the recommendations of prosthetists and orthotists, as well as other factors including effectiveness, safety, reliability, improved treatment aesthetics and greater comfort and hygiene compared to conventional prosthetic-orthotic products. Furthermore, consumers may not respond to our direct marketing campaigns or we may be unsuccessful in reaching our target audience. If consumers prove unwilling to adopt our products as rapidly or in the numbers that we anticipate, our operating results will be harmed.

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If the manufacturers of our products encounter problems or delays in the manufacturing process, our ability to generate revenue will be limited.

We intend to rely on third parties for our manufacturing process if we determine to manufacture and market our products directly. Our rapid growth may exceed the capacity of these manufacturers to produce our products in sufficient quantities to support our growth. In the event of delivery delays or shortages of our products, our business and growth prospects may be harmed.

The manufacturers of our products may encounter difficulties in scaling up production to meet demand, including:

·	problems involving production yields;
·	shortages of key manufacturing equipment;

·	shortages of qualified personnel; and
·	failure to develop new software processes.

If demand for our products exceeds manufacturing capacity, we could develop a substantial backlog of customer orders. If our manufacturers are unable to establish and maintain larger-scale manufacturing capabilities, our ability to generate revenue will be limited and our reputation in the marketplace would be damaged.

If we do not enhance our product offerings, either through the acquisition of or investment in new and complementary technologies, products or businesses, or our research and development efforts, we may be unable to compete effectively.

Our success depends in part on our ability to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures and technologies, and our ability to increase our market share. Accordingly, we expect to consider opportunities to acquire or make investments in other technologies, products and businesses that could enhance our capabilities, complement our current technology, or expand the breadth of our markets or customer base. Acquisitions and strategic investments involve numerous risks, including:

·	problems assimilating the purchased technologies, products or business operations;
·	issues maintaining uniform standards, procedures, controls and policies;

·	unanticipated costs associated with the acquisition or strategic investment;
·	diversion of management's attention from our core business;

·	adverse effects on existing business relationships with third-party distributers, suppliers and customers;
·	risks associated with entering new markets in which we have limited experience;

·	our ability to obtain regulatory approvals to market new products; and
·	potential loss of key employees of acquired businesses.

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While we are in negotiations for further acquisitions, currently our sole commitment is for the development of our recently acquired SocketFit and Smart Insole technologies. We do not know if we will be able to successfully complete any further acquisitions, or whether we will be able to successfully integrate any acquired business, product or technology into our business or retain any key personnel, suppliers or distributors. Our ability to successfully grow through acquisitions depends upon our ability to identify, negotiate, complete and integrate suitable acquisitions and to obtain any necessary financing. If we are unable to integrate any acquired technology, products or business effectively, our business, financial condition and results of operations could be materially adversely affected.

Furthermore, research and development efforts may require a substantial investment of time and resources before we are adequately able to determine the commercial viability of a new product, technology, material or other innovation. In addition, even if we are able to successfully develop enhancements or new generations of our products, these enhancements or new generations of products may not produce net sales in excess of the costs of development and they may be quickly rendered obsolete by changing customer preferences or the introduction by our competitors of products embodying newer technologies or features.

Issues related to the quality and safety of our products, packaging or sterilization could cause a product recall resulting in harm to our reputation and negatively impact our operating results.

Issues related to quality and safety of products, packaging or sterilization could jeopardize our image and reputation. Negative publicity related to these types of concerns, whether valid or not, might negatively impact demand for our products, or cause production and delivery disruptions. We may need to recall products if they become unfit for use.

Our business exposes us to risks of product liability claims, and we may incur substantial expenses if we are sued for product liability.

Medical devices involve an inherent risk of product liability claims. We may be held liable if any product we develop or any product that uses or incorporates any of our technologies causes injury or is otherwise found unsuitable. Although we intend to continue to maintain product liability insurance, adequate insurance may not be available on acceptable terms and may not provide adequate coverage against potential liabilities. A product liability claim, regardless of its merit or eventual outcome, could result in significant legal defense costs. Costs associated with these potential claims would increase our expenses, and could have a material adverse effect on our business, financial condition and results of operations.

Software defects may be discovered in our products which would damage our ability to sell our products, our results of operations, financial condition and cash flows.

Our systems will incorporate sophisticated computer software. Complex software frequently contains errors, especially when first introduced. Because our products are designed to be used to perform complex interventional procedures, we expect that physicians and hospitals will have an increased sensitivity to the potential for software and other defects. We cannot assure you that our software will not experience errors or performance problems in the future. If we experience software errors or performance problems, we would likely also experience:

	•	loss of revenue;
	•	increase in reportable adverse events to applicable authorities;
	•	delay in market acceptance of our products;
	•	damage to our reputation;
	•	additional regulatory filings;
	•	product recalls;
	•	increased service or warranty costs; and/or
	•	product liability claims relating to the software defects.

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We may fail to receive positive clinical results for our products in development that require clinical trials, and even if we receive positive clinical results, we may still fail to receive the necessary clearance or approvals to market our products.

In the development of new products or new indications for, or modifications to, existing products, we may conduct or sponsor clinical trials. Clinical trials are expensive and require significant investment of time and resources. Clinical trials are subject to regulations for clinical studies in each respective country and, failure to comply with such regulations, including, but not limited to, failure to obtain adequate consent of subjects, failure to adequately disclose financial conflicts, or failure to report data or adverse events accurately, could result in fines, penalties, and/or suspension of trials.

Our business may be harmed by technological and therapeutic changes, or the demand for our services could be diminished by the development of alternative treatments. Future innovations could make our inventions obsolete.

Our success will depend, in part, on continued demand for products that will incorporate our inventions. Changes in technology or customer requirements could render these inventions obsolete or unmarketable.

We will rely on information technology systems for accounting and finance, inventory management, engineering, distribution and other functions, and to maintain our research and development data. If such adopted information technology systems fail to adequately perform these functions, or if we experience an interruption in their operation, our business, financial condition and results of operations could be adversely affected.

The efficient operation of our business will be dependent on our information technology systems which we intend to develop. We will rely on our information technology systems to effectively manage:

·	sales and marketing, accounting and financial functions;
·	order entry, order fulfillment and inventory replenishment processes;

·	engineering tasks; and
·	our research and development data.

The failure of our intended information technology systems to perform as we anticipate, or our failure to effectively implement new systems, could disrupt our business and product development and could result in decreased sales, increased overhead costs, excess inventory and product shortages, all of which could have a material adverse effect on our business, financial condition and results of operations. In addition, our information technology systems are vulnerable to damage or interruption from:

·	tornado, earthquake, fire, flood and other natural disasters;
·	terrorist attacks and attacks by computer viruses or hackers;

·	power loss; and
·	network failure of computer systems, Internet, telecommunications or data.

Any such interruption could have material adverse effect on our business, financial condition and results of operations.

Our success depends in part on our proprietary technology and if we are unable to successfully enforce our intellectual property rights, our competitive position may be harmed.

Our success will depend in part on our ability to maintain existing intellectual property and to obtain and maintain further intellectual property protection for our products, in the U.K., Europe, the U.S.A., and in other countries. Our inability to do so could harm our competitive position. We do not currently have any granted patents related to our technology and our current technology could be at risk if we successfully obtain patent protection. While we have applied for patents for various products based on our IPR, there is no assurance we will be successful in obtaining these patents. We will rely on our IP portfolio of future patent applications to protect a large part of our intellectual property and our competitive position. However, our future patent filings may not issue as patents. Additionally, any patents issued to us may be challenged, invalidated, held unenforceable, circumvented, or may not be sufficiently broad to prevent third parties from producing competing products similar in design to our products. In addition, protection afforded by foreign patents may be more limited than that provided under U.S. patents and intellectual property laws.

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We rely on confidentiality agreements that could be breached and may be difficult to enforce which could have a material adverse effect on our business and competitive position.

Our policy is to enter into agreements relating to the non-disclosure of confidential information with third parties, including our contractors, consultants, advisors and research collaborators, as well as into agreements that purport to require the disclosure and assignment to us of the rights to the ideas, developments, discoveries and inventions of our employees and consultants while we employ them. However, these agreements can be difficult and costly to enforce. Moreover, to the extent that our contractors, consultants, advisors and research collaborators apply or independently develop intellectual property in connection with any of our projects, disputes may arise as to the proprietary rights to this type of information. If a dispute arises, a court may determine that the right belongs to a third party, and enforcement of our rights can be costly and unpredictable. In addition, we rely on trade secrets and proprietary know-how that we will seek to protect in part by confidentiality agreements with our employees, contractors, consultants, advisors or others. Despite the protective measures we employ, we still face the risk that:

	•	these agreements may be breached;
	•	these agreements may not provide adequate remedies for the applicable type of breach; or
	•	our trade secrets or proprietary know-how will otherwise become known.

Any breach of our confidentiality agreements or our failure to effectively enforce such agreements would have a material adverse effect on our business and competitive position.

The medical device industry is characterized by extensive litigation over patents and other intellectual property rights and we could become subject to litigation that could be costly, result in the diversion of management's time and efforts, require us to pay damages, and/or prevent us from marketing our existing or future products.

We may be the subject of patent or other litigation in the future. An adverse determination in a patent suit in any litigation or interference proceeding to which we may become a party could subject us to significant liabilities. An adverse determination of this nature could also put our patents, when granted, at risk of being invalidated or interpreted narrowly or require us to seek licenses from third parties. Licenses may not be available on commercially reasonable terms or at all, in which event our business would be materially adversely affected. We may also receive letters from third parties drawing our attention to their patent rights. While we do not believe that we infringe any valid and enforceable rights which have been brought to our attention, there may be other more pertinent rights of which we are presently unaware. If we infringe the patents or proprietary rights of other parties, our ability to grow our business will be severely limited. The defense and prosecution of intellectual property suits, interference proceedings and related legal and administrative proceedings could result in substantial expense to us and significant diversion of effort by our technical and management personnel.

Extensive and changing government regulation of the healthcare industry may be expensive to comply with and exposes us to the risk of substantial government penalties.

We face risks related to our international operations, including the need to obtain necessary foreign regulatory clearance or approvals. If we fail to obtain regulatory clearances in countries in which we intend to operate for products under development, we will not be able to commercialize these products in those countries. Sales of our products will be subject to regulatory requirements that vary widely from country to country. We may be unable to obtain regulatory approvals in the countries in which we intend to operate or to market our products. We may also incur significant costs in attempting to obtain and in maintaining regulatory approvals. If we experience delays in receipt of approvals to market our products or if we fail to receive these approvals, we may be unable to market our products or enhancements in our intended markets in a timely manner, if at all.

·	Noncompliance with applicable regulatory requirements can result in enforcement action which may include recalling products, ceasing product marketing, and paying significant fines and penalties, which could limit product sales, delay product shipment and adversely affect our profitability.

Our results of operations will suffer if we are unable to manage our operations effectively.

The sale and shipment of our products across international borders will subject us to extensive foreign governmental trade, import and export, and custom regulations and laws. Compliance with these regulations is costly and exposes us to penalties for non-compliance. Other laws and regulations that can significantly impact us include various anti-bribery laws and anti-boycott laws. Any failure to comply with applicable legal and regulatory obligations could impact us in a variety of ways that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals, fines and penalties, denial of export privileges, seizure of shipments, restrictions on certain business activities and exclusion or debarment from government contracting. Also, the failure to comply with applicable legal and regulatory obligations could result in the disruption of our distribution and sales activities. In addition, some of the countries in which we may sell our products may be subject to political, economic or social instability. Our intended international operations expose us and our distributors to risks inherent in operating in foreign jurisdictions. These risks include:

·	adverse changes in tariffs and trade restrictions;
·	political, social and economic instability and increased security concerns;

·	longer collection periods and difficulties in collecting receivables from foreign entities;
·	exposure to different legal standards;

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·	transportation delays and difficulties of managing international distribution channels;
·	lack of stringent protection of intellectual property;

·	potentially adverse tax consequences and the complexities of foreign value-added tax systems;
·	difficulties in staffing and managing foreign operations;

·	obstacles to obtaining domestic and foreign export, import and other governmental approvals, permits and licenses and compliance with foreign laws;
·	limitations on the repatriation of earnings; and

·	increased financing costs.

These risks may limit or disrupt our operations, restrict the movement of funds or result in the deprivation of contractual rights or the taking of property by nationalization or expropriation without fair compensation. Our continued success as a global company depends, in part, on our ability to develop and implement policies and strategies that are effective in anticipating and managing these and other risks in the countries in which we do business. Failure to manage these and other risks may have a material adverse effect on our operations in any particular country and on our business as a whole.

If we cannot successfully implement our business strategy, our business, results of operations and potential for growth will be adversely affected.

Our business strategy includes the development and marketing of our products and the obtaining of regulatory approval to sell our products in certain key markets and the acquisition or direct development of P&O clinics in various jurisdictions. Our ability to achieve our business strategy is subject to a variety of factors, many of which are beyond our control. In addition, the implementation of our business strategy may not improve our operating results. We may decide to alter or discontinue aspects of our business strategy and may adopt alternative or additional strategies due to business or competitive factors not currently foreseen, such as the introduction of new products or technologies by our competitors or the lack of clients for our clinics. Any failure to successfully implement our business strategy would have a material adverse effect on our business, financial condition and results of operations.

If we lose our key personnel or are unable to attract and retain key personnel, we may be unable to pursue business opportunities or develop our products.

We are highly dependent upon the experience and ability of certain key employees in our management and clinical bioengineering teams, including Sotirios Leontaritis, Director, President, Treasurer, Chief Financial Officer and Chief Executive Officer, Nikolaos Kardaras, Director and Secretary, Heleen Kist, our Chief Operating Officer, Dr. William Spence our clinical director and Christos Kapatos, Director, who heads the development of our technology. The loss of the services of any one of those individuals could have an adverse effect on our business, and may significantly delay or prevent the achievement of our product development and other business objectives. Our future success will also depend on our ability to identify, recruit, train and retain additional qualified personnel. There is currently a shortage of skilled clinical, bioengineering and management personnel and intense competition for these personnel. Thus, we may not be successful in retaining our key personnel or their services.

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Risks Associated with our Common Stock

We are an "emerging growth company," and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and may remain an emerging growth company until December 31, 2018, provided that, if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time or if we have annual gross revenues of $1 billion or more in any fiscal year, we would cease to be an emerging growth company as of December 31 of the applicable year. We also would cease to be an emerging growth company if we issue more than $1 billion of non-convertible debt over a three-year period. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include:

·	providing only three years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced "Management's discussion and analysis of financial condition and results of operations" disclosure;
·	not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting;
·	not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;
·	reduced disclosure obligations regarding executive compensation; and

·	exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We may choose to take advantage of some, but not all, of the available exemptions. We have taken advantage of reduced reporting burdens in this filing. In particular, in this filing, we have provided only two years of audited financial statements and have not included all of the executive compensation related information that would be required if we were not an emerging growth company. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

In addition, the JOBS Act also provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This allows an emerging growth company to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to delay such adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates, on which adoption of such standards is required for public companies that are not emerging growth companies. As a result of such election, our financial statements may not be comparable to the financial statements of other public companies.

We do not intend to pay dividends on any investment in the shares of our stock.

We have never paid any cash dividends and currently do not intend to pay any dividends for the foreseeable future. To the extent that we require additional funding currently not provided for in our financing plan, our funding sources may prohibit the payment of a dividend. Because we do not intend to declare dividends, any gain on an investment in our company will need to come through an increase in the stock’s price. This may never happen and investors may lose all of their investment in us.

Because we can issue additional shares of common stock, purchasers of our common stock may incur immediate dilution and may experience further dilution.

We are authorized to issue up to 700,000,000 shares of common stock, of which 191,912,461shares are issued and outstanding. Our board of directors has the authority to cause us to issue additional shares of common stock, and to determine the rights, preferences and privileges of such shares, without consent of any of our stockholders. Consequently, the stockholders may experience more dilution in their ownership of our stock in the future.

Because we can issue shares of preferred stock which will have certain voting rights, which, if voted collectively, could result in a control of any matters put before the Company’s stockholders, the shareholders of our common stock will suffer substantial dilution if issued or converted.

We have the right to issue a total of 5,000,000 shares of Series A Preferred Stock. Except with respect to matters which adversely affect the holders of Series A Preferred Stock, as required by law, or as required by the Articles of Incorporation, the holders of Series A Preferred and the holders of Common Stock shall be entitled to notice of any stockholders' meeting and to vote as a single class upon any matter submitted to the stockholders for a vote, on the following basis:

(a)	holders of Common Stock shall have one vote per share of Common Stock held by them; and
(b)	holders of Series A Preferred Stock shall have 50 votes per share of Series A Preferred Stock held by them.

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Holders of the Series A Preferred Stock have voting rights with respect to matters that generally require the approval of voting stockholders, in addition to voting rights as specifically required by Nevada law. In the event the holders of Series A Preferred Stock vote collectively as to any matter put before a vote, such holders of Series A Preferred Stock could control the vote. While the holders of Series A Preferred Stock have not advised that they intend to vote collectively on any matter, nor are we aware of any voting agreements currently in place, we cannot know with certainty that such holders of Series A Preferred Stock will not vote collectively in the future or enter into any voting agreements.

Further, the holders of any Series A Preferred Stock will have the right to convert to common stock at their election on the basis of 20 shares of common stock for each one share of Series A Preferred Stock issued, thus the holders of our common stock would suffer substantial dilution upon conversion.

A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations, and we may go out of business.

A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and a reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We also might not be able to meet our financial obligations if we cannot raise enough funds through the sale of our common stock and we may be forced to go out of business.

Our stock is a penny stock. Trading of our stock may be restricted by the Securities and Exchange Commission’s penny stock regulations which may limit a stockholder’s ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines “penny stock” to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and “accredited investors”. The term “accredited investor” refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our common stock.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the “penny stock” rules promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (FINRA) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, the FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.

Technology company stock prices are especially volatile, and this volatility may depress the price of our common stock.

The stock market has experienced significant price and volume fluctuations, and the market prices of technology companies have been highly volatile. We believe that various factors may cause the market price of our common stock to fluctuate, perhaps substantially, including, among others, the following:


•	announcements of developments in our patent enforcement actions, should patents be granted to us;
•	developments or disputes concerning our inventions or patents, if granted;
•	our competitors' technological innovations;

•	developments in relationships with licensees;

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•	variations in our quarterly operating results;

•	our failure to meet or exceed securities analysts' expectations of our financial results;
•	a change in financial estimates or securities analysts' recommendations;
•	changes in management's or securities analysts' estimates of our financial performance;

•	changes in market valuations of similar companies;

•	the current sovereign debt crises affecting several countries in the European Union and concerns about sovereign debt of the United States;

•	announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or patents, if granted; and
•	failure to complete significant transactions.

The financial crisis affecting the banking system and financial markets and the uncertainty in global economic conditions, which began in late 2007 and has continued up until today, have resulted in a tightening in the credit markets, a low level of liquidity in many financial markets, and extreme volatility in the credit, equity and fixed income markets. If investors have concerns that our business, operating results and financial condition will be negatively impacted by global economic conditions, our stock price could fluctuate significantly in future periods.

In addition, we believe that fluctuations in our stock price during applicable periods can also be impacted by court rulings and/or other developments in our patent licensing and enforcement actions. Court rulings in patent enforcement actions are often difficult to understand, even when favorable or neutral to the value of the patents we intend to apply for and our overall business, and we believe that investors in the market may overreact, causing fluctuations in our stock prices that may not accurately reflect the impact of court rulings on our business operations and assets.

In the past, companies that have experienced volatility in the market price of their stock have been the objects of securities class action litigation. If our common stock was the object of securities class action litigation, it could result in substantial costs and a diversion of management's attention and resources, which could materially harm our business and financial results.

Risks Related to our Financial Results and Need for Additional Financing

We may be unable to raise additional capital if it should be necessary, which could harm our ability to compete.

We expect to incur significant expenditures in order to establish an international brand, to develop both product and process technology, and to operate P&O clinics around the world. We do not currently have the funds available to effectuate our business plan. We have to date relied on loans from our chief executive officer and certain private placements, however, we cannot be assured that these opportunities will provide funding for our ongoing operations and we may require substantial funding that may not be available when required. We will be required to seek substantial funding in the equity markets or by loans for operations. We may not be able to raise funds when needed, or on acceptable terms.

We may not generate sufficient cash flow to service our debt, pay our contractual obligations and operate our business.

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Our ability to make payments on our indebtedness and contractual obligations, and to fund our operations depends on our future performance and financial results, which, to a certain extent, are subject to general economic, financial, competitive, regulatory and other factors, including the interest rate environment, that are beyond our control. Until such time as we can establish operations to generate sufficient liquidity to meet our obligations as they come due you are at risk of our business failing and the loss of your investment. There can be no assurance that our business will generate sufficient cash flow, if any, from operations in the future to service our debt, pay our contractual obligations and operate our business as currently planned.

Our financial results may vary significantly from quarter-to-quarter due to a number of factors, which may lead to volatility in our stock price.

Our quarterly revenue and results of operations may vary significantly from quarter-to-quarter if, and when, we commence revenues from operations. This variability may lead to volatility in our stock price as research analysts and investors respond to these quarterly fluctuations. These fluctuations are due to numerous factors, including: fluctuations in consumer demand for our products; our ability to design and deliver products to our consumers in a timely and cost-effective manner; quality control problems in the manufacturing operations; our ability to timely obtain adequate quantities of the components used in our products; new product introductions and enhancements by us and our competitors; unanticipated increases in costs or expenses; and fluctuations in foreign currency exchange rates. The foregoing factors are difficult to forecast, and these, as well as other factors, could materially and adversely affect our quarterly and annual results of operations.

Prolonged negative economic conditions in domestic and global markets may adversely affect our suppliers and consumers, which could harm our financial position.

Global credit and financial markets have experienced extreme disruptions over the past few years, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates, and uncertainty about economic stability. Although these markets have recently shown signs of rebounding, there can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by the recent economic downturn, volatile business environments and continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate further, or do not improve, it may make debt or equity financings, if needed, more difficult, more costly and more dilutive. Failure to secure financing, if needed, in a timely manner, on favorable terms or at all could have a material adverse effect on our growth strategy, financial performance and stock price, and could require us to delay or abandon certain aspects of our business strategy. These negative changes in domestic and global economic conditions or additional disruptions of either or both of the financial and credit markets may have a material adverse effect on our business, financial condition and results of operations.

ITEM 1B. UNRESOLVED STAFF COMMENTS

As a “smaller reporting company”, we are not required to provide the information required by this Item.

ITEM 2. PROPERTIES

The Company operates from a branch office at 2A Kolokotroni Street, 17563 Paleo Faliro, Greece. The address of our current corporate office in Glasgow is Kintyre House, 209 Govan Road, Glasgow Scotland G51 1HJ United Kingdom. Our telephone number is +44 141 370 0321.

Executive Office in Greece

On February 3, 2014 the Company leased office space in Paleo Faliro, Greece on a three-year lease, commencing on March 1, 2014 and ending on February 28, 2017. The monthly rental fee is $1,700 (EUR € 1,554) including applicable taxes in the first year. Thereafter, for every further lease year and for the whole duration of the lease agreement, as well as in case of compulsory statutory extension or extension by tacit agreement, the monthly rent shall be annually adjusted by a percentage equal to the Consumer Price Index of the adjustment month with respect to the respective month of the year before (simple annual rate of change), as this is calculated by the Hellenic Statistical Authority (ELSTAT), plus two (2) percentage points (+2%).

Under the term of the lease agreement, the Company paid a total of $25,010 (EUR €18, 540) including $4,047 (EUR €3,000) for deposit and $20,963 (EUR €15,540) for ten months’ rental fee upon executing the agreement. As of December 31, 2015, $3,272 (EUR €3,000) is reflected as a deposit in the prepaid accounts.

Clinic in Greece

On December 29, 2014 the Company leased office space at Peania Region of Attica in Greece on a ten-year lease, commencing on January 2, 2015 and ending on October 5, 2024. The monthly rental fee is $6,810 (EUR €6,233) plus applicable taxes and the monthly operating cost estimate is $1,089 (EUR €997).

Under the term of the lease agreement, the Company paid a total of $13,595 (EUR €12,465) as deposit in the prepaid account.

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On September 10, 2015 the terms of the lease were amended to include the following provisions:

-	Effective September 1, 2015, the monthly rental fee shall be reduced to $3,400 (EUR €3,116) for a period of 12 months ending August 31, 2016.

-	In the event that the Lessee commences leasehold improvements prior to August 31, 2016, it shall inform the Lessor respectively and pay retroactively the remaining balance of the total amount of monthly rental in full from the period commencing September 1, 2015, as if they have not been reduced;

-	In the event that the Company does not proceed with leasehold improvements in the 12-month period, the lease agreement will terminate and the Lessor with retain the deposit.

-	The Lessor until such time as the leasehold improvements commence, may at any time and without indemnity terminate the lease agreement with a 30-day prior written notice to the Lessee.

Lease in UK, Clinic location and technology development center

On March 2, 2015 the Company entered into a lease agreement for a modern, stand-alone 5,300 square foot facility in Glasgow, Scotland with an entry date of 1 March, 2015. The building will host the Company’s first Viocare centre, a full service Prosthetic and Orthotic (“P&O”) practice with a superior standard of personalized care. The renovations to the clinic were completed in June, and the facility was opened on August 1, 2015 with an official ribbon cutting on 25 September 2015. During the first year from the date of entry, the lease fees are USD$29,603 (GBP £20,000) per annum (exclusive of VAT). On the second anniversary of the date of entry, the lease will increase to USD$59,206 (GBP £40,000) per annum (exclusive of VAT). In the third anniversary of the date of entry, the lease will be USD$59,206 (GBP £40,000) per annum (exclusive of VAT). In the fourth anniversary of the date of entry, the lease will decrease to USD44,404 (GBP £30,000) per annum (exclusive of VAT). In the fifth anniversary of the date of entry, the lease will be USD$59,206 (GBP £40,000) per annum (exclusive of VAT).

Under the term of the lease agreement, the Company paid a total of $29,603 (GBP £20,000) as a deposit which is reflected in the prepaid accounts.

ITEM 3. LEGAL PROCEEDINGS

We know of no material, active or pending legal proceedings against our Company, nor of any proceedings that a governmental authority is contemplating against us.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information

Our common stock is quoted on the OTC Markets Inc. owned and operated Inter-dealer Quotation System (“OTCQB”) under the symbol "VICA". Information provided below represents the two years ended December 31, 2015, and the impact of a 7 for 1 forward split effective August 7, 2015:

Quarter	High ($)		Low ($)
4th Quarter ended 12/31/2015		0.7751		0.56
8/7/2015 through 9/30/2015		0.67		0.055
Forward Split 8/7/2015 on basis of 7 for 1
7/1/2015 through 8/6/2015 (presplit)		4.80		3.50
2nd Quarter ended 6/30/2015 (presplit)		4.85		3.51
1st Quarter ended 3/31/2015 (presplit)		4.00		1.90

4th Quarter ended 12/31/2014 (presplit)		3.10		2.00
3rd Quarter ended 9/30/2014 (presplit)		2.85		1.20
2nd Quarter ended 6/30/2014 (presplit)		2.25		1.16
1st Quarter ended 3/31/2014 (presplit)		1.60		1.10

The above information was taken from information on the OTC Markets website at www.otcmarkets.com. The quotations provided may reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions. The pre-split pricing is not adjusted for the split which occurred on August 7, 2015.

Our common shares are issued in registered form. Our registrar and transfer agent is Action Stock Transfer Corporation, 2469 E. Fort Union Blvd, Suite 214, Salt Lake City, UT 84121. Telephone: 801-274-1088

Holders

As of March 23, 2016, we had outstanding 191,912,461 shares of common stock, which were held by 42 record holders of the Company’s common stock (which number does not include the number of stockholders whose shares are held by a brokerage house or clearing agency, but does include such brokerage houses or clearing agencies as one record holder.

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Dividends

We have never declared or paid dividends on our common stock. We intend to retain earnings, if any, to support the development of our business and therefore do not anticipate paying cash dividends for the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

Recent Sales of Unregistered Securities

During the three months ended December 31, 2015 and the subsequent period to the date of the filing of this annual report, the Company issued the following shares:

On October 2, 2015, the Company entered into a Private Placement Subscription Agreement with a private investor for a total of 267,241 shares of the Company’s common stock at a purchase price of $0.58 per share for total cash proceeds of $155,000. The shares are subject to applicable resale restrictions.

On October 14, 2015, the Company entered into a Private Placement Subscription Agreement with a private investor for a total of 200,000 shares of the Company’s common stock at a purchase price of $0.50 per share for total cash proceeds of $100,000. The shares are subject to applicable resale restrictions.

On November 4, 2015, the Company entered into a Private Placement Subscription Agreement with a private investor for a total of 56,658 shares of the Company’s common stock at a purchase price of $0.50 per share for total cash proceeds of $28,329. The shares are subject to applicable resale restrictions.

On November 5, 2015, the Company entered into a Private Placement Subscription Agreement with a private investor for a total of 130,435 shares of the Company’s common stock at a purchase price of $0.50 per share for total cash proceeds of $65,524. The shares are subject to applicable resale restrictions.

On January 7, 2016, the Company entered into two Private Placement Subscription Agreements with two natural persons. Under the terms of the Agreements the Individuals subscribed for a cumulative total of 70,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$35,000. The shares are subject to applicable resale restrictions.

On February 1, 2016, the Company entered into a consulting agreement with Sitimo Ltd. Under the terms of the Agreement, Consultant shall provide consulting services to the Company for the development and expansion of its business and establishment of Prosthetics and Orthotics clinics in the region of South Eastern Europe as well as the Middle East. The Consultant undertakes to introduce the Company to the healthcare market of South Eastern Europe and Middle East. The Agreement has a term of twelve (12) months and the Consultant is entitled to remuneration for the provision of services in the form of 100,000 shares of the common stock to be issued within thirty days from the enforcement of the Agreement. The shares are subject to applicable resale restrictions.

On February 10, 2016, the Company entered into a consulting agreement with an individual. Under the terms and conditions of the Agreement the Consultant shall provide consulting services and introduce the Company to the healthcare market of Spain in view of the Company's plans to expand its clinics business and establish a Prosthetic and Orthotic Clinic in Spain. The Agreement has a six-month term ending on August 2, 2016, and the Consultant shall be remunerated with 50,000 shares of the Company's common stock. The shares are subject to applicable resale restrictions.

On February 17, 2016, the Company entered into a Private Placement Subscription Agreement with an individual. Under the terms of the Agreement the Individual subscribed for a total of 3,625 shares of the Company’s common stock at a purchase price of US$0.40 per share for total cash proceeds of US$1,450. The shares are subject to applicable resale restrictions.

On February 18, 2016, the Company entered into a consulting agreement with an individual. Under the terms and conditions of the Agreement the Consultant shall provide consulting services and introduce the Company to the healthcare market of Middle East and specifically of Saudi Arabia in view of the Company project to expand its business and establish a Prosthetic and Orthotic Clinic in the Middle East. The Agreement has a six-month term ending on 18.8.2016 and the Consultant shall be remunerated with 200,000 shares of the common stock. The shares are subject to applicable resale restrictions.

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On February 19, 2016, the Company entered into a consulting agreement with an individual. Under the terms and conditions of the Agreement the Consultant shall provide consulting services and introduce the Company to the healthcare market of Turkey in view of the Company project to expand its business and establish a Prosthetic and Orthotic Clinic in Turkey. The Agreement has a six-month term ending on 19.8.2016 and the Consultant shall be remunerated with 200,000 shares of the common stock. The shares are subject to applicable resale restrictions.

On March 1, 2016, the Company approved the grant of a stock award of 300,000 common shares as compensation for the services provided by Vice President, Sergios Katsaros. The award vests in three equal instalments of 100,000 shares as of the date of grant, the six month anniversary of the date of grant and the 12 month anniversary of date of grant.

On March 2, 2016, the Company entered into a Private Placement Subscription Agreement with an individual. Under the terms of the Agreement the Individual subscribed for a total of 50,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for cash proceeds of US$25,000. The shares are subject to applicable resale restrictions.

On March 8, 2016, the Company entered into a Private Placement Subscription Agreement with an individual. Under the terms of the Agreement the Individual subscribed for a total of 240,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$120,000.00. The shares are subject to applicable resale restrictions.

On March 9, 2016, the Company entered into a Private Placement Subscription Agreement with an individual. Under the terms of the Agreement the Individual subscribed each for a total of 54,875 shares of the Company’s common stock at a purchase price of US$0.40 per share for cash proceeds of US$21,950.00. The shares are subject to applicable resale restrictions. On March 22, 2016, the Company approved the issuance of 50,000 common shares for services provided by Mr. Mikulas Dylowicz, consultant, in the form of stock awards which shall vest as of the date of grant.

The shares of Common Stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Regulation S of the Securities Act of 1933, as amended, (“Securities Act”), as promulgated by the U.S. Securities and Exchange Commission under the Securities Act. Our reliance upon the exemption under Rule 903 of Regulation S of the Securities Act was based on the fact that the sales of the securities were completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. We did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities. The investor was not a US person, as defined in Regulation S, and was not acquiring the securities for the account or benefit of a US person.

Securities Authorized for Issuance Under Equity Compensation Plans

The Company does not currently have any equity compensation plans and thus no securities have been issued.

ITEM 6. SELECTED FINANCIAL DATA.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this Annual Report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in such forward looking statements. Factors that could cause or contribute to such differences include those discussed below and elsewhere in this Annual Report.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

The Company has only recently commenced generated revenues from planned principal operations and continues to develop its intellectual property to expand its revenue base through joint ventures and commercialization arrangements with third parties.

Results of Operations for the Year ended December 31, 2015 Compared to the Year ended December 31, 2014

Revenue, Cost of Revenue, and Gross Profit - We generated $60,121 in revenues from operations and $31,787 in cost of goods sold for the year ended December 31, 2015, compared to $27,068 in revenue and $17,125 costs of goods sold for the year ended December 31, 2014.

Operating Expenses – Operating expenses increased by $4,011,172 to $7,285,723 in 2015 compared to $3,274,551 in operating expenses in 2014, an increase of approximately 122%. The Company increased its research and development (R&D) expenses by $2,665,477, to $5,317,942 (of which a total of $4,550,000 relates to the market value of the issuance of 7,000,000 shares with respect to the acquisition of certain intellectual property from an officer of the Company) for 2015 compared to $2,652,465 (of which a total of $1,750,000 relates to the market value of the issuance of 7,000,000 shares to acquire certain intellectual property from an officer of the Company) for 2014. The substantial increase in professional fees by $899,377 from $112,291 (2014) to $1,011,668 (2015) is predominantly related to the issuance of a stock award of 700,000 shares to an officer of the Company valued at $450,000, as well as an expense of $324,640 related to the obligation of issuance of 448,000 shares in respect of a consulting agreement between the Company and Hellenic American Securities, with no comparative expenses in the prior year ended December 31, 2014. The increase to office expenses over the comparative periods from $92,697 (2014) to $373,149 (2015) is directly related to an increase in staff and overhead as the Company continued to execute its business plan, and an expense of $83,335 with respect to a stock award issued to administrative support staff, with no similar expense in the prior year ended December 31, 2014. Travel and entertainment and consultancy fees also increased period over period as the Company commenced discussions with commercial partners for its various applications of the insole technology.

Loss from Operations - Due to the increase in operating expenses, our loss from operations increased during 2015 by $3,992,781, to $7,257,389 compared to $3,264,608 during 2014, an increase of approximately 122%.

Other expenses - during the year ended December 31, 2015 the Company recorded a loss on settlement of certain loans and advances by way of the issuance of shares of common stock totaling $1,804,704, with $15,582,387 in a loss on settlement of certain loans and advances by way of the issuance of shares of common stock during the prior year ended December 31, 2014, and a substantive increase to interest expenses during the current period from $179,130 (2014) to $379,743 (2015).

Net Loss - As a result of the increase in operating expenses, with decrease in other expenses, our net loss for 2015 was $9,436,259 as compared to a net loss of $19,022,177 for 2014, resulting in a $9,585,918 decrease in the net loss or approximately 50%.

CAPITAL RESOURCES AND LIQUIDITY

At December 31, 2015, we had $9,579 cash on hand and liabilities of $650,389 in accounts payable and accrued expenses (including amounts due to related parties) and $649,420 in advances from related parties. Presently we rely on our President and director, as well as private placements from qualified investors to fund our general operating expenses. The Company has secured operating loans and advances from the Company’s Executive Officers of $455,364 in 2015 and $908,506 in 2014, and has closed private placements in the amount of $550,447 during the year ended December 31, 2015. These amounts contribute to our ongoing operating expenses and obligations until such time as the Company can conclude a larger equity based financing, anticipated during the first quarter of fiscal 2016.

The Company expects it will need to raise a total of $5,000,000 to fund its proposed operations for the next twelve months. It intends to fund operations by a combination of related party loans and equity placements. The Company intends to undertake a registration statement or bond offering to raise a total of up to $30,000,000 which it hopes to file prior to the end of the second quarter. In the interim, the Company is seeking equity private placements with which to fund operations until such time as it can file and clear the registration statements. Our President and CEO, Mr. Sotirios Leontaritis continues to personally fund any short fall in our ongoing operations by way of loans and advances.

There can be no assurance that continued funding will be available on satisfactory terms.

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GOING CONCERN

The Company incurred net losses of $9,436,259 for the year ended December 31, 2015. In addition, the Company had a working capital deficiency $1,412,052 and stockholders’ deficiency of $1,227,301 at December 31, 2015, with $30,153,048 in accumulated losses since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern.

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.

The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.

Need for Additional Financing

Costs associated with being a public company are much higher than those of a private company. There are present legal and accounting expenses, reporting requirements to the SEC, and investor relation costs that must be borne by a public company but not by a private company. These costs can be a burdensome expense which could adversely affect our financial survival. The ongoing regulatory costs, reporting requirements, and management details, which must be met when maintaining a public company, may make the economic viability of our Company very doubtful. In addition, the Company has projected it will need to raise $5,000,000 to meet its planned business objectives for 2016 and there can be no assurance those funds will be available if and when needed.

In the past we have relied on advances from our president to cover our operating costs, as well as equity private placements from qualified investors. There can be no assurance that the Company will be successful in finding joint venture partners or commercial partners to market and develop its technologies, or that funds for the development of the Company’s additional in-house technology development will be available if and when needed, or that funding will be available for marketing our products, if and when required. We will also require funding for leasehold improvements for our Athens based clinic which we hope to open by the close of fiscal 2016. There can be no assurance that the Company will be able to obtain funding as needed in order to meet our objectives on our proposed timeline, or at all.

Off- Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders.

Contractual Obligations

The following table outlines payments due under our significant contractual obligations over the periods shown, exclusive of interest:

	Payments due by Period

	Less than		One to		Three to		More Than
Contractual Obligations At December 31, 2015	One Year		Three Years		Five Years		Five Years		Total
Related Parties Debt	$	649,420	$	-	$	-	$	-	$	649,420
Convertible Debt	$		$	163,595	$	-	$	-	$	163,595

The above table outlines our obligations as of December 31, 2015 and does not reflect any changes in our obligations that have occurred after that date.

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Critical Accounting Policies

Principals of Consolidation

The consolidated financial statements include the accounts of HCi Viocare and its wholly-owned subsidiaries, HCi Viocare Technologies Limited, HCi Viocare Clinics UK Limited and HCi Viocare Clinics (Hellas) S.A. All significant intercompany balances and transactions have been eliminated.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("US GAAP") and are presented in U.S. dollars.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results when ultimately realized could differ from these estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits in banks with maturities of three months or less, and all highly liquid investments which are unrestricted as to withdrawal or use, and which have original maturities of three months or less.

Fair Value of Financial Instruments

The carrying value of financial instruments including cash and cash equivalents, receivables, prepaid expenses, accounts payable and accrued expenses, approximates their fair value due to the relatively short-term nature of these instruments.

Foreign Currencies

Functional and presentation currency - Items included in the consolidated financial statements of each of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the ‘functional currency’). The consolidated financial statements are presented in US Dollars, which is the Company’s functional and presentation currency.

Transactions and balances - Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at quarter end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of operations.

Subsidiaries The results and financial position of all subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

i) assets and liabilities are translated at the closing rate at the date of the balance sheet;

ii) income and expenses are translated at average exchange rates;

iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity.

Revenue Recognition

The Company recognizes revenue when the earnings process is complete and persuasive evidence of an arrangement exists. This generally occurs when products are shipped to unaffiliated customers, both title and the risks and rewards of ownership are transferred or services have been rendered and accepted, the selling price is fixed or determinable, and collectability is reasonably assured.

Inventory

Inventories, which consist principally of raw materials and work-in-process, are stated at the lower of cost or market. Cost is determined using the first-in, first-out method and are adjusted to actual cost quarterly based on a physical count. Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Work-in-process inventory consists of materials, labor and a predetermined fixed rate of overhead which is valued based on established standards for the stage of completion of each custom order. We do not carry finished goods on hand. Material, labor and overhead costs are determined at the individual clinic level. Presently we only maintain very limited parts and raw materials inventory.

Warranty

We do not record warranty liabilities at the time of sale for the estimated costs that may be incurred under the terms of the applicable limited warranty as all component parts are covered by our respective industry suppliers.

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Advertising Costs

The Company expenses advertising costs as incurred or the first time the advertising takes place, whichever is earlier, in accordance with ASC 720-35. Advertising costs were immaterial for the year ended December 31, 2015 and 2014, respectively.

Research and Development Costs

The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, “Research and Development”. Research and development costs were $5,317,942 and $2,652,465 for the year ended December 31, 2015 and 2014, respectively.

Related parties

For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Stock-based compensation

For stock-based compensation the Company follows the guidance codified in the Compensation – Stock Compensation Topic of FASB ASC (“ASC 718”). The Company determines the value of stock issued at the date of grant. It also determines at the date of grant, the value of stock at fair market value or the value of services rendered (based on contract or otherwise) whichever is more readily determinable.

Income Taxes

The Company accounts for income taxes in accordance with FASB ASC 740, "Income Taxes", which requires the asset and liability approach for financial accounting and reporting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Company has retained deficit from operations. Because there is no certainty that we will realize taxable income in the future, the Company did not record any deferred tax benefit as a result of these losses.

All income tax years from inception are open to examination by the taxing authorities.

Earnings (Loss) Per Share

The Company reports earnings per share in accordance with FASB ASC 260, “Earnings Per Share.” FASB ASC 260 requires presentation of basic and diluted earnings per share in conjunction with the disclosure of the methodology used in computing such earnings per share. Basic earnings (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company had potentially dilutive securities outstanding (convertible debt and liabilities) for the year ended December 31, 2015 and December 31, 2014, respectively, however, since the Company reflected a net loss in the year ended December 31, 2015 and in the fiscal year ended December 31, 2014, respectively, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive. A separate computation of diluted earnings (loss) per share is not presented.

Comprehensive Income

FASB ASC 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income, as defined, includes all changes in equity during a period from non-owner sources.

Segment Reporting

FASB ASC 820 “Segments Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. Our proposed business segments are expected to span more than one geographical area. Specifically, the Company intends to operate prosthetic and orthotic rehabilitation clinics with various European based locations, as well as a corporate development and technology center which will undertake ongoing research and marketing activities.

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Fair Value of Measurements

Accounting principles generally accepted in the United States define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Input other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company.

Level 3: Unobservable inputs. Unobservable inputs reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability.

An asset or liability’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Availability of observable inputs can vary and is affected by a variety of factors. The Company uses judgment in determining fair value of assets and liabilities and Level 3 assets and liabilities involve greater judgment than Level 1 and Level 2 assets or liabilities.

Recent Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes." Under this guidance, deferred tax liabilities and assets are required to be classified as noncurrent in a classified statement of financial position. Prior to this guidance, the deferred taxes for each jurisdiction (or tax-paying component of a jurisdiction) would be presented as a net current asset or liability and net non-current asset or liability. This guidance is effective for interim and annual reporting periods beginning after December 15, 2016 with earlier application permitted. This amendment will not have a material impact on our financial statements.

On September 25, 2015, the FASB issued Accounting Standards Update, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this Update with earlier application permitted for financial statements that have not been issued. This amendment will not have a material impact on our financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs. The new standard will require debt issuance costs to be presented on the balance sheet as a direct reduction of the carrying value of the associated debt liability, consistent with the presentation of debt discounts. Currently, debt issuance costs are presented as a deferred asset. The recognition and measurement requirements will not change as a result of this guidance. The standard is effective for the annual reporting periods beginning after December 15, 2015 and will be applied on a retrospective basis. This amendment will not have a material impact on our financial statements.

There are several new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) which are not yet effective. Each of these pronouncements, as applicable, has been or will be adopted by the Company. As of December 31, 2015, none of these pronouncements is expected to have a material effect on the financial position, results of operations or cash flows of the Company.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a “smaller reporting company”, we are not required to provide the information required by this Item.

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ITEM 8. FINANCIAL STATEMENTSAND SUPPLEMENTARY DATA

HCi Viocare

FINANCIAL STATEMENTS

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			PAGE
Reports of Independent Registered Public Accounting Firms			F-2, F-3

Consolidated Balance Sheets			F-4

Consolidated Statements of Operations and Comprehensive Loss			F-5

Consolidated Statement of Changes in Shareholders’ Equity (Deficit)			F-6

Consolidated Statements of Cash Flows			F-7

Notes to the Audited Consolidated Financial Statements			F-8 to F-30

F-1

Heaton & Company, PLLC

240 N. East Promontory

Suite 200

Farmington, Utah 84025

(T) 801.218.3523

heatoncpas.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders of

HCi Viocare

We have audited the accompanying balance sheet of HCi Viocare (the Company) as of December 31, 2015, and the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of HCi Viocare as of December 31, 2015, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 5 to the financial statements, the Company has negative working capital and has not generated revenues to cover operating expenses. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Heaton & Company, PLLC

Farmington, Utah

March 30, 2016

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

HCi Viocare

We have audited the accompanying consolidated balance sheet of HCi Viocare (the “Company”) as of December 31, 2014, and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity (deficit), and cash flows for the year ended December 31, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of HCi Viocare as of December 31, 2014, and the results of its operations and its cash flows for the year ended December 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses and has not generated revenues from its planned principal operations. These factors raise substantial doubt that the Company will be able to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Anderson Bradshaw PLLC

Anderson Bradshaw PLLC

Salt Lake City, Utah

April 15, 2015

F-3

HCi Viocare

CONSOLIDATED BALANCE SHEETS

	December 31, 2015			December 31, 2014


ASSETS
Current Assets:
Cash and cash equivalents	$	9,579		$	408,252
Accounts receivable		3,075			918
Other receivable		39,590			-
Inventory		6,346			6,750
Prepaid expenses (Note 5)		78,207			47,369
Total Current Assets		136,797			463,289

Long-term Assets
Property, plant and equipment, net (Note 6)		310,612			103,377

Total Assets	$	447,409		$	566,666

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	355,417		$	115,527
Accounts payable and accrued expenses-related party (Note 11)		294,972			81,818
Loan from a related party (Note 12)		649,420			393,044
Convertible notes from a related party (Note 9 and Note 10)		-			(3,620	)
Liability for unissued shares		249,040			-
Total Current Liabilities		1,548,849			586,769

Loan from a related party (Note 10)		163,595			-
Corporate taxes		12,074			-
Deferred taxes		192			202

Total Liabilities		1,724,710			586,971

Commitments and Contingencies

Stockholders' Equity (Deficit):
Preferred stock, par value $0.0001, 5,000,000 shares authorized;
none issued and outstanding as of December 31, 2015 and December 31, 2014		-			-
Common stock, par value $0.0001, 700,000,000 shares authorized;
190,743,961 shares issued and outstanding as of December 31, 2015
102,458,881 shares issued and outstanding as of December 31, 2014		19,074			10,246
Additional paid-in capital		28,767,850			20,632,647
Retained Deficit		(30,153,048	)		(20,716,789	)
Accumulated other comprehensive income		88,823			53,591
Stockholders' equity (deficiency)		(1,227,301	)		(20,305	)
Total Liabilities and Stockholders' Equity (Deficiency)	$	447,409		$	566,666

See Notes to Consolidated Financial Statements

F-4

HCi Viocare

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

		For the Year Ended
		December 31,
		2015		2014
Revenues
Sales	$	60,121		$	27,068
Cost of goods sold		31,787			17,125
Gross Profit		28,334			9,943

Operating Expenses
Depreciation		47,564			6,502
Office rent		122,169			49,220
Office expenses		373,149			92,697
Consultancy Fees		246,178			139,696
Professional fees		1,011,668			112,291
Research and development		5,317,942			2,652,465
Impairment of goodwill		-			149,988
Travel and entertainment		167,053			71,692
Total Operating Expenses		7,285,723			3,274,551

Loss from Operations		(7,257,389	)		(3,264,608	)

Other Income (Expenses)
(Loss) on debt settlement		(1,804,704	)		(15,582,387	)
Gain (Loss) on foreign currency transaction		6,483			3,948
Interest Expenses due to related party		(379,743	)		(179,130	)
Total Other Income (Expenses)		(2,177,964	)		(15,757,569	)

Loss before Provision for Income Tax		(9,435,353	)		(19,022,177	)

Provision for Income Tax		(906	)		-

Net Loss	$	(9,436,259	)	$	(19,022,177	)

Basic and fully diluted loss per share	$	(0.06	)	$	(0.44	)

Weighted average shares outstanding		155,174,460			42,781,809

Comprehensive Income (Loss):
Net loss	$	(9,436,259	)	$	(19,022,177	)
Effect of foreign currency translation		35,232			53,591
Comprehensive Loss	$	(9,401,027	)	$	(18,968,586	)

See Notes to Consolidated Financial Statements

F-5

HCi Viocare

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT)

					Additional paid-in capital		Accumulated other comprehensive income (loss)
	Common stock								Retained deficit			Total equity
	Shares		Amount						Retained deficit			Total equity
Balances, December 31, 2013		24,525,550		2,453		370,007		-		(1,694,612	)		(1,322,152	)
Issuance of common stock in connection with the acquisition of patented technologies		7,000,000		700		1,749,300		-		-			1,750,000
Common stock issued for settlement of liabilities		7,000,000		700		1,249,300		-		-			1,250,000
Conversion of convertible note and debt settlement		63,000,000		6,300		15,876,087		-		-			15,882,387
Proceeds received from issuance of common stock in private placement		933,331		93		199,907		-		-			200,000
Vesting of stock options		-		-		647,853		-		-			647,853
Beneficial conversion features		-		-		540,193		-		-			540,193
Foreign currency translation adjustments		-		-		-		53,591		-			53,591
Net income (loss)		-		-		-		-		(19,022,177	)		(19,022,177	)
Balances, December 31, 2014		102,458,881		10,246		20,632,647		53,591		(20,716,789	)		(20,305	)
Proceeds received from issuance of common stock in private placement		1,319,180		132		550,315		-		-			550,447
Shares issuance for stock award		816,669		81		533,254		-		-			533,335
Issuance of common stock in connection with the acquisition of patented technologies		7,000,000		700		4,549,300		-		-			4,550,000
Conversion of convertible note and debt settlement		79,037,231		7,904		2,135,535		-		-			2,143,439
Shares issuance for services provided		112,000		11		75,589		-		-			75,600
Vesting of stock options		-		-		-291,210		-		-			291,210
Net income (loss)		-		-		-		-		(9,436,259	)		(9,436,259	)
Foreign currency translation adjustments		-		-		-		35,232		-			35,232
Balances, December 31, 2015		190,743,961	$	19,074	$	28,767,850	$	88,823	$	(30,153,048	)	$	(1,277,301	)

See Notes to Financial Statements

Table Of Contents

F-6

HCi Viocare

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the Year Ended
	December 31,
	2015			2014

Operating Activities
Net loss	$	(9,436,259	)	$	(19,022,177	)
Adjustments to reconcile net loss to net cash used by operating activities:
Shares issued for acquisition of patented technologies		4,550,000			1,750,000
Stock option vested gradually		291,210			647,853
Shares issued for stock award		533,335			-
Shares issued for services provided		75,600			-
Amortization of beneficial conversion feature		368,273			171,920
Loss on debt settlement		1,804,704			15,582,387
Gain on foreign currency transactions		(27,411	)		(43,584	)
Impairment of goodwill		-			149,988
Depreciation		47,564			6,502
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable		(2,201	)		15,346
Decrease (Increase) in prepaid expense		(39,646	)		(46,839	)
Decrease (Increase) in other receivable		(41,289	)		-
Decrease (Increase) in inventory		85			(468	)
Increase (Decrease) in corporate taxes		12,074			(4,660	)
Increase (Decrease) in accounts payable and accrued expenses		291,186			105,450
Increase (Decrease) in accounts payable and accrued expenses, related party		218,830			212,468
Increase (Decrease) in liability of unissued shares		249,040			-
Net cash used by operating activities		(1,104,905	)		(475,814	)

Investing Activities
Additions to Property, plant and equipment		(274,470	)		(116,124	)
Investment in WD Spence Ltd.		-			(168,121	)
Cash acquired from business combination		-			2,929
Net cash (used) by investing activities		(274,470	)		(281,316	)

Financing Activities
Loans from related parties		455,364			908,506
Proceeds from private placement		550,447			200,000
Net cash provided by financing activities		1,005,811			1,108,506

Increase (decrease) in cash		(373,564	)		351,376

Cash at beginning of period		408,252			-
Effects of exchange rates on cash		(25,109	)		56,876
Cash at end of period	$	9,579		$	408,252

Supplemental Disclosures of Cash Flow Information:
Cash paid (received) during year for:
Interest	$	-		$	-
Income taxes	$	-		$	-

Non-Cash Investing and Financing Activities:
Convertible notes converted to shares	$	326,619		$	-
Interest payable converted to shares		12,116			-
Accounts receivable acquired from business combination		-			(17,603	)
Inventory acquired from business combination		-			(6,799	)
Prepaid expenses acquired from business combination		-			(574	)
Computer & Equipment acquired from business combination		-			(731	)
Accounts payable acquired from business combination		-			5,240
Corporate tax from related parties acquired from business combination		-			5,044
Deferred tax from related parties acquired from business combination		-			219
Advances from related party, converted to loan		-			540,193
Notes payable settled by the issuance of common stock					300,000

See Notes to Consolidated Financial Statements

F-7

HCi Viocare

Notes to Financial Statements

Note 1 - ORGANIZATION AND BUSINESS BACKGROUND

HCi Viocare ("VICA" or the "Company") was incorporated on March 26, 2007 under the laws of the State of Nevada. The Company has selected December 31 as its fiscal year end.

The Company has not yet generated significant revenues from planned principal operations and is considered a start-up enterprise. The Company was formed to sell medical devices with an emphasis on portable medical devices designed for home treatments with the initial focus in the northern regions of China. The Company’s intent was to seek strategic relationships with medical device manufacturers both in China and North America with the aim to be their sales and distribution agent in Northern China and to assist Chinese medical device manufacturers on the development of the North American market.

On September 10, 2013, the controlling shareholder of the Company sold his controlling interest in the shares of the Company and there was a change in the Board of Directors of the Company, effecting a change in control of the Company. The business of the Company remains in the field of medical devices and other opportunities related to their uses. We are currently engaged in the technology development and licensing of bioengineering innovations for the health, sports and wellness sectors, and we intend to be engaged in the operation of prosthetic and orthotic (P&O) total rehabilitation clinics.

On January 15, 2014, the Company incorporated two wholly-owned subsidiaries in Scotland, U.K., HCi Viocare Technologies Limited and HCi Viocare Clinics UK Limited. The Company intends to operate in Scotland under these two subsidiaries, one of which will undertake the development and marketing of technologies and the other which is a P&O clinic, which will serve as the centre of reference and training for the company’s further clinics.

On February 12, 2014, through our wholly owned subsidiary, HCi Viocare Technologies Limited, the Company acquired an interest in a patented technology known as “Socket-Fit”. SocketFit is a system that will help overcome technical and resource hurdles endemic to the prosthetic sector. The system has been designed with the aim of offering optimally fitted prosthetic sockets that will reduce the number of prostheses made for patients, resulting in a reduced number of visits by the patient to the prosthetic, and also assisting in the rehabilitation of amputees. Socket-Fit is a digital system for assessing an amputee’s residual limb and for the production of truly functional and comfortable prosthetic sockets. The technology takes account of the external and internal geometry of the amputee’s stump, the biomechanical properties of each individual soft tissue layer and the boundary and loading conditions of a complete prosthesis to generate a virtual 3D model of the residual limb making it possible to produce an accurate, functional and comfortable prosthetic socket. By minimizing the time and cost of socket production and reducing the number of faulty sockets there will be a reduction in costs incurred by health services and insurance companies worldwide as well as benefits to the amputee. The Company intends to undertake and fund, through its U.K. subsidiary, a project to improve the nature of the data used in socket modeling software with a view to creating a system that will enable prosthetists to build a socket that evenly distributes weight, provides enhanced comfort, and can be marketed and used across the industry for improved socket creation.

On February 19, 2014, the Company filed a Certificate of Amendment with the Secretary of State of Nevada to change the name of the Company to HCi Viocare effective March 21, 2014. Effective March 21, 2014, in accordance with approval from FINRA, we changed our name from China Northern Medical Device, Inc. to HCi Viocare. Concurrently we commenced trading on the Over-the-Counter Bulletin Board under the symbol “VICA”.

On April 16, 2014, through our wholly owned subsidiary HCi Viocare Technologies Limited, we acquired all rights and interest in and to the background Intellectual Property Rights (“IPR”) for a developing technology known as “Smart Insole”. The Smart Insole system is believed to be a state-of-the-art, pressure and shear (friction)-sensing insole that can wirelessly communicate with connected devices. The insole has a number of applications, including the mitigation of diabetic foot complications, such as ulceration, infection and amputation, in clinical gait analysis and in sports, as a wearable device to help athletes optimize their performance and prevent injury. The sensing system is very low cost, compared to traditional pressure sensing technologies, in our opinion making such applications affordable to the consumer for the first time.

F-8

HCi Viocare

Notes to Financial Statements

Note 1 - ORGANIZATION AND BUSINESS BACKGROUND (continued)

On June 9, 2014, the Company, through our wholly owned subsidiary, HCi Viocare Clinics, acquired W D Spence Prosthetics Limited (the “Clinic”). The Clinic is located in Glasgow, Scotland, and is a fully operational prosthetics and orthotics clinic. The acquisition of the Clinic is the first step to the Company’s and HCi Viocare Clinics’ intention to develop the first chain of prosthetics and orthotics (P&O) and diabetic foot rehabilitation clinics in the European market, covering Southern Europe, the Middle East and North Africa.

On July 8, 2015 the Company incorporated HCi Viocare Clinics (Hellas) S A in order to carry out operations for the P&O clinic under development in Athens, Greece.

Note 2 - GOING CONCERN

The Company incurred net losses of $9,436,259 and $19,022,177 for the year ended December 31, 2015 and 2014, respectively and has a retained deficit of $30,153,048. In addition, the Company had a working capital deficiency of $1,412,052 and a stockholders' deficit of $1,227,301 at December 31, 2015. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company has relied heavily for its financing needs on its Chief Executive Officer and President as more fully disclosed in Note 9.

Note 3 - CONTROL BY PRINCIPAL STOCKHOLDER/OFFICER

Our Chief Executive Officer owns beneficially and in the aggregate, the majority of the voting power of the Company. Accordingly, the Chief Executive Officer has the ability to control the approval of most corporate actions, including approving significant expenses, increasing the authorized capital stock and the dissolution, merger or sale of the Company's assets.

F-9

HCi Viocare

Notes to Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principals of Consolidation

Basis of Presentation

Use of Estimates

Cash and Cash Equivalents

Fair Value of Financial Instruments

Foreign Currencies

Subsidiaries The results and financial position of all subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

F-10

HCi Viocare

Notes to Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currencies (cont’d)

i) assets and liabilities are translated at the closing rate at the date of the balance sheet;

ii) income and expenses are translated at average exchange rates;

iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity.

Revenue Recognition

Inventory

Warranty

Advertising Costs

Research and Development Costs

Related parties

Stock-based compensation

Income Taxes

F-11

HCi Viocare

Notes to Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Income Taxes

All income tax years from inception are open to examination by the taxing authorities.

Earnings (Loss) Per Share

Comprehensive Income

Segment Reporting

FASB ASC 820 “Segments Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. Our proposed business segments are expected to span more than one geographical area. Specifically the Company intends to operate prosthetic and orthotic rehabilitation clinics with various European based locations, as well as a corporate development and technology center which will undertake ongoing research and marketing activities.

Fair Value of Measurements

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

F-12

HCi Viocare

Notes to Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements

Note 5 - PREPAID EXPENSES

Prepaid expenses consist of the following:

	December 31, 2015		December 31, 2014
Office lease	$	51,429	$	21,687
Professional fees		13,779		17,000
Travel advances and other expenses		12,999		8,682
Total prepaid expense	$	78,207	$	47,369

F-13

HCi Viocare

Notes to Financial Statements

Note 6 - PROPERTY AND EQUIPMENT

	Leasehold Improvement			Office Furniture			Computer & Equipment			Vehicles			Plant & Machine			Lab Equipment			Total
Cost
At 1 January, 2014	$	-		$	-		$	-		$	-		$	-		$	-		$	-
Additions - purchase		34,148			7,151			12,702			62,123			-			-			116,124
Additions - business combination		-			-			731			-			-			-			731
Foreign exchange		(3,927	)		(798	)		(910	)		(1,341	)		-			-			(6,976	)
At December 31, 2014		30,221			6,353			12,523			60,782			-			-			109,879

Additions - purchase		188,559			25,841			16,860			-			1,343			41,867			274,470
Foreign exchange		(8,117	)		1,144			(1,954	)		(6,250	)		(57	)		(4,437	)		(19,671	)
At December 31, 2015		210,663			33,338			27,429			54,532			1,286			37,430			364,678

	Leasehold Improvement		Office Furniture		Computer & Equipment		Vehicles		Plant & Machine		Lab Equipment		Total
Amortization
At 1 January, 2014	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Charge for the period		3,299		1,332		1,340		531		-		-		6,502
At December 31, 2014		3,299		1,332		1,340		531		-		-		6,502

Charge for the period		21,317		5,557		5,363		11,248		134		3,945		47,564
At December 31, 2015	$	24,616	$	6,889	$	6,703	$	11,779	$	134	$	3,945	$	54,066

Carrying Amounts
At December 31, 2014	$	26,922	$	5,021	$	11,183	$	60,251	$	-	$	-		103,377
At December 31, 2015	$	186,047	$	26,449	$	20,726	$	42,753	$	1,152	$	33,485		310,612

Leasehold improvements are amortized over the term of the lease: three to ten years.

Furniture is amortized over three to five years and computer and equipment is amortized over three years.

Vehicles are amortized over five years.

Plant and machine equipment and lab equipment is amortized over 4 years.

F-14

HCi Viocare

Notes to Financial Statements

Note 7 - PATENTED TECHNOLOGY

(1)	Socket-Fit

On February 12, 2014, the Company, through our wholly owned Scottish subsidiary, HCi Viocare Technologies Limited (“Viocare”), entered into an acquisition agreement with Dr. Christos Kapatos, a director of both the Company and Viocare (“Kapatos”), to acquire all rights and interest in and to patent pending technology known as “Socket-Fit”.

Consideration for the acquisition by Viocare of the exclusive, perpetual, revocable, transferable, royalty free worldwide ownership of the Intellectual Property Rights (“IPR”) and know how to develop and exploit the IPR was the issuance of 3,500,000 shares of the common stock of the Company to Kapatos valued at fair market value at issuance of $625,000 or $0.1786 per share. The Company recorded the $625,000 as research and development expenses during the three-month period ended March 31, 2014 due to the fact that Mr. Kapatos is a related party to the Company.

(2)	Smart Insole

On April 16, 2014, through our wholly owned Scottish subsidiary, HCi Viocare Technologies Limited, the Company entered into a second acquisition agreement with Dr. Christos Kapatos to acquire all rights and interest in and to the background IPR for a developing technology known as “Smart Insole”.

As consideration for the acquisition:

·HCi Viocare Technologies shall cause the parent Company to issue to Kapatos a total of 3,500,000 shares of the common stock of the Company on execution of the agreement;

·a cash bonus in the amount of $10,000,000USD should the technology be sold at any stage of development for an amount equal or greater than five hundred million ($500,000,000) cash or the equivalent thereof by way of any other consideration.

The issuance of 3,500,000 shares of the common stock of the Company to Kapatos was valued at fair market value on issuance totaling $1,125,000 or $0.32 per share. The Company recorded the $1,125,000 as research and development expenses during the three months ended June 30, 2014 due to the fact that Mr. Kapatos is a related party to the Company.

On May 8, 2015, the Company through its wholly owned subsidiary company HCi Viocare Technologies Limited entered into an agreement with Dr. Christos Kapatos, to amend the acquisition agreement (“Amendment of Acquisition Agreement”) dated April 16, 2014. Under the Amendment of Acquisition Agreement, the parties agreed, among certain other terms and conditions, to the issuance of 7,000,000 restricted shares of the common stock of the Company as additional consideration for all other applications of the Smart Insole technology.

The issuance of 7,000,000 shares of the common stock of the Company to Kapatos was valued at fair market value on issuance totaling $4,550,000 or $0.65 per share. The Company recorded the $4,550,000 as research and development expenses during the year ended December 31, 2015 due to the fact that Mr. Kapatos is a related party to the Company.

F-15

HCi Viocare

Notes to Financial Statements

Note 8 - OFFICE LEASE

Office in UK

On February 19, 2014 the Company leased office space in Glasgow, United Kingdom on a three-month renewable term, commencing on February 20, 2014 and initially ending on May 31, 2014. The per month rental fee is $914 (GBP 549) plus applicable taxes and can be renewed at any time prior to each three-month lease term ending date. During the period ended December 31, 2014, the monthly rental fee increased to $1,462 (GBP 930) plus applicable taxes when the Company elected to lease a larger office space within the same facility.

This lease was terminated during April 2015 and the deposit was returned in May, 2015.

Office in Greece

Clinic in Greece

Under the term of the lease agreement, the Company paid a total of $13,595 (EUR €12,465) as deposit in the prepaid account.

On September 10, 2015 the terms of the lease were amended to include the following provisions:

-	Effective September 1, 2015, the monthly rental fee shall be reduced to $3,400 (EUR €3,116) for a period of 12 months ending August 31, 2016.

-	In the event that the Lessee commences leasehold improvements prior to August 31, 2016, it shall inform the Lessor respectively and pay retroactively the remaining balance of the total amount of monthly rental in full from the period commencing September 1, 2015, as if they have not been reduced;

-	In the event that the Company does not proceed with leasehold improvements in the 12-month period, the lease agreement will terminate and the Lessor with retain the deposit.

-	The Lessor until such time as the leasehold improvements commence, may at any time and without indemnity terminate the lease agreement with a 30-day prior written notice to the Lessee.

F-16

HCi Viocare

Notes to Financial Statements

Note 8 - OFFICE LEASE (continued)

Lease in UK

Under the term of the lease agreement, the Company paid a total of $29,603 (GBP £20,000) as deposit in the prepaid account.

Prepaid expense relating to the aforementioned office leases consists of the following:

Location	Greece			United Kingdom
As of January 1, 2014	$	-		$	-
Addition – deposit		16,738			3,107
Addition – 10-month rental		20,963			-
Expensed rental fee during the fiscal year ended December 31, 2014		(20,620	)		-
Foreign exchange		1,717			(218	)
As of December 31, 2014		18,798			2,889
Addition – deposit		-			29,603
Addition – next month rent fee		-			5,140
Refund on deposits		-			(1,314	)
Expensed rental fee during the fiscal year ended December 31, 2015		-			(1,575	)
Foreign exchange		(1,931	)		(181	)
As of December 31, 2015	$	16,867		$	34,562

Note 9 - CONVERTIBLE NOTES

(1)	Convertible notes due on June 10, 2016:

On June 10, 2014, the Company entered into a loan agreement with Mr. Leontaritis, the President of the Company, pursuant to which the Company received $136,237 (EUR €100,000) as advances from a related party (the “Note”). The Note earns simple interest accruing at one percent (1%) per annum and is due and payable within two years from the date of the agreement (“Maturity Date”). At any such date as Mr. Leontaritis may desire on or before the Maturity Date of the Note, any unpaid indebtedness shall be convertible into common shares of the Company at a price of $0.00429 per share.

The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $136,237 on the Note. This value was recorded as a discount on debt and offset to additional paid in capital.

On November 28, 2014 the convertible note $124,971 (EUR € 100,000) was fully converted to 26,232,570 shares of common stock at $0.00476 per share.

Amortization of the discount for the period ended November 28, 2014 was $32,356, which amount has been recorded as interest expense. Unamortized discount as of November 28, 2014 was $103,881 and has been recorded as interest expenses.

F-17

HCi Viocare

Notes to Financial Statements

Note 9 - CONVERTIBLE NOTES (continued)

(2)	Convertible notes due on July 25, 2019:

The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of grant to be $403,956 on the Note. This value was recorded as a discount on debt and offset to additional paid in capital. Amortization of the discount for the three months ended March 31, 2015 was $20,198, which amount has been recorded as interest expense.

On May 28, 2015 the convertible note $326,619 (EUR € 300,000) plus accrued interest of $12,112 (EUR €11,125) was fully converted to 79,037,231 shares of common stock at $0.00429 per share. This transaction resulted in a loss on debt settlement of $1,804,704.

Amortization of the discount for the period from January 1, 2015 to May 28, 2015 was $33,214, which amount has been recorded as interest expense. Unamortized discount as of May 28, 2015 was $335,059 and has been recorded as interest expenses.

Interest expenses:

	For the year ended December 31,
	2015		2014
Amortization of debt discount	$	368,273	$	35,683
Interest at contractual rate		6,883		6,580
Totals	$	375,156	$	42,263

The following table summarizes the balance of the convertible notes on the balance sheets as of December 31, 2015 and December 31, 2014:

Balance, December 31, 2013	$	-
Gross principal amount		540,193
Converted to shares		(124,971	)
Foreign exchange		(50,569	)
Balance, December 31, 2014	$	364,653
Converted to shares		(326,619	)
Foreign exchange		(38,034	)
Balance, December 31, 2015	$	-
Unamortized discount	$	-

F-18

HCi Viocare

Notes to Financial Statements

Note 10 - LOAN

On June 11, 2015, the Company entered into a loan agreement with Mr. Leontaritis, the President of the Company, pursuant to which the Company received $163,595 (EUR €150,000) as advances (the “Note”). The Note earns simple interest accruing at five percent (5%) per annum and is due and payable within five years from the date of the agreement (“Maturity Date”). During the year ended December 31, 2015 we accrued interst totaling $4,628 (EUR €4,171).

Note 11 - COMMITMENTS

(1)	Consulting Agreement with Kapatos

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Dr. Christos Kapatos.

(2)

Advisors

On April 15, 2014, the Company established a scientific advisory board whereby the Company intends to appoint certain advisors that can contribute to the Company’s overall business strategy and future direction. On April 16, 2014 the Company entered into Consulting Agreements with the members of its Scientific Advisory Board as follows:

Professor Stephan Solomonidis (“Solomonidis”) will provide services as Head of Research for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand pounds (£20,000 GBP) (USD$29,650) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Solomonidis’ fee will be readjusted to the amount of forty thousand pounds (£40,000 GBP) (USD$59,300) per annum, and he shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD).

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Professor Stephan Solomonidis.

F-19

HCi Viocare

Notes to Financial Statements

Note 11 - COMMITMENTS (continued)

(2)	Advisors (continued)
		-	Professor Martha Lucia Zequera (“Zequera”) will provide services as Director of Diabetic Foot Related Products and Services for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand dollars ($20,000 USD) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Zequera’s fee will be readjusted to the amount of forty thousand dollars ($40,000 USD) per annum, and she shall receive one million four hundred thousand (1,400,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), three million five hundred thousand (3,500,000) shares of the Company’s common stock for each research project completed with a valuation equal or greater than twenty million dollars ($20,000,000 USD). The consulting agreement entered into with Professor Martha Lucia Zequera was not renewed upon its expiration.

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Professor William Sandham.

The consulting agreement entered into with Mr. William Spence was not renewed upon its expiration..

F-20

HCi Viocare

Notes to Financial Statements

Note 11 - COMMITMENTS (continued)

(3)	Employment Agreement with William Donald Spence

On June 9, 2014, HCi Viocare Clinics entered into an agreement with Mr. William Donald Spence (the “Employment Agreement”) whereby he will provide his services as Director of Clinical Operations of HCi Viocare Clinics and its wholly-owned subsidiary clinics. The contract has a term of one year, starting on June 10, 2014, and ending on June 9, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation shall be sixty thousand GBP (£60,000) (USD$88,950) per year payable monthly in arrears on the last Friday of every month by credit transfer. HCi Viocare Clinics shall also pay any fees in connection with the membership of Mr. Spence to any professional, regulatory or other such body of which Mr. Spence’s membership is required to carry out his role with HCi Viocare Clinics, as well as all insurance payments. During the period ended June 30, 2015 Mr. Spence resigned as the Director of Clinical Operations and his annual contract was not renewed.

(4)	Employment Agreement with Heleen Kist

On November 7, 2014, the Company’s subsidiary, HCi Viocare Clinics entered into a service agreement with Mrs. Heleen Francoise Kist (the “Agreement”) whereby she will provide her services as Chief Operating Officer (“COO”) of the Company. The contract has a term of one year, being effective as of October 1, 2014, and ending on September 30, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation was thirty thousand GBP (£30,000) (USD$44,475) per year payable monthly in arrears on the last Friday of every month by credit transfer. On October 15, 2015, the Company’s COO, Heleen Kist and wholly owned subsidiary, HCI Viocare Clinics UK, signed an Addendum to an employment contract to extend the term to September 30, 2016, with a remuneration increase to forty five thousand GBP (£45,000) (USD$ 66,712) per year.

(5)	Consulting Agreement with Hellenic American Securities S.A.

On May 7, 2015, the Company entered into an Agreement with HELLENIC AMERICAN SECURITIES S.A. (“HAS S.A.”) for the provision of services to firms regarding their capital structure, industry strategy and similar matters (the “Agreement”) HAS S.A. is a Public Limited Stock Brokerage Company, member of the Athens Stock Exchange and Athens Derivative Exchange incorporated in Greece with registered office in Athens.

According to the Agreement which carries a term of one year, HAS S.A. shall provide advice to the Company regarding its capital structure, industry strategy and similar matters, as well as advice and services regarding mergers and acquisitions under the Greek Law, an introduction of the Company’s securities to Greek and Foreign Investors, both Private and Institutional ones as well as preparation of analyses for the Company which will be circulated to various websites and media groups.

HAS S.A. is entitled to the following consideration under the Agreement:

1.	$3,000 per month or its current equivalent in Euro, plus applicable VAT, payable monthly on the first day of the month, for each quarter;
2.	Issuance of 168,000 restricted shares of the Company’s common stock quarterly (the “Shares”), payable in monthly installments as to 56,000 shares per month, to be issued and delivered within 10 days after the 1st of each month.

As at December 31, 2015 a total of 336,000 shares had not yet been issued and are reflected on the Company’s balance sheet in current liabilities as Liability for Unissued Shares, in the total amount of $249,040. In addition a total of $24,000 for monthly service fees are included in accounts payable.

(6)	Consulting Agreement with Sergios Katsaros

F-21

HCi Viocare

Notes to Financial Statements

Note 12 - RELATED PARTY TRANSACTIONS

The following table provides details of the Company’s related party transactions during the year ended December 31, 2015 and 2014:

Services provided from related parties:

	Year Ended December 31,
	2015		2014
Consulting fees from CEO and President (i)	$	60,000	$	60,000
Consulting fees from a Director (ii)		44,380		48,655
Professional fees from CFO (iii)		-		5,484
Professional fees from Director (iv)		13,314		15,924
Research and development from Director (v)		57,130		57,162
Stock award granted to Director (iv)		450,000		-
Consulting fees for VP (vii)		8,876		-
Consulting fees for COO (viii)		51,582		-
	$	685,282	$	187,225

(i)		On September 10, 2013 Mr. Leontaritis was appointed President. On January 15, 2014, the Board of Directors of the Company approved the execution of a consulting agreement between the Company and Sotirios Leontaritis (“Leontaritis”), whereby Leontaritis shall provide services to the Company as the Company’s President and Chief Executive Officer in regards to the Company’s management and operations for the period from January 1, 2014 to December 31, 2017. Under the terms of the agreement, the Company agreed to pay to Leontaritis US$60,000 per annum payable in monthly payments of US$5,000 a month for the term of the contract.
(ii)		On September 30, 2013, the Board of Directors of the Company appointed Dr. Christos Kapatos as a director of the Company.
(iii)		On November 27, 2013, the Board of Directors of the Company appointed Mr. Grigorios Tsourtos as Chief Financial Officer of the Company. On June 9, 2014, Mr. Grigorios Tsourtos resigned as Chief Financial Officer of the Company.
(iv)		On September 10, 2013, the Board of Directors of the Company elected Nikolaos Kardaras as Secretary and a director of the Company. On May 28, 2015, the Company approved the issuance of 700,000 common shares as compensation for prior services provided by director Nikolaos Kardaras in the form of fully vested stock awards.
(v)		On June 9, 2014, HCi Viocare Clinics entered into an employment agreement with Mr. William Donald Spence whereby he will provide his services as Director of Clinical Operations of HCi Viocare Clinics and any subsidiary clinics. During the period ended June 30, 2015 Mr. Spence resigned as the Director of Clinical Operations and his annual contract was not renewed. Mr. Spence continues to provide services to the Company as a consultant at a fixed hourly rate.
(vi)		On June 16, 2015, the Board of Directors of the Company appointed Yiannis Levantis as a member of the Board of Directors of the Company.

F-22

HCi Viocare

Notes to Financial Statements

Note 12 - RELATED PARTY TRANSACTIONS (continued)

(vii)		On September 1, 2015, the Board of Directors of the Company approved a consulting agreement with Sergios Katsaros and appointed Mr. Katsaros Vice President of HCi Viocare. Under the terms of the consulting agreement, the initial term of the contract is six months and Mr. Katsaros will receive compensation of EUR$2,000 (USD$2,180) per month.
(viii)		On November 7, 2014, the Company’s subsidiary, HCi Viocare Clinics (formerly W.D. Spence Prosthetics Limited) entered into a service agreement with Mrs. Heleen Francoise Kist (the “Agreement”) whereby she will provide her services as Chief Operating Officer (“COO”) of the Company. The contract has a term of one year, being effective as of October 1, 2014, and ending on September 30, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation shall be thirty thousand GBP (£30,000) (USD$44,475) per year payable monthly in arrears on the last Friday of every month by credit transfer. On October 15, 2015, the Company’s COO, Heleen Kist and wholly owned subsidiary, HCI Viocare Clinics UK, signed an Addendum to an employment contract to extend the term to September 30, 2016, with a remuneration increase to forty-five thousand GBP (£45,000) (USD$ 66,712) per year.

Accounts payable and accrued liabilities from related parties:

	Balance, December 31, 2014 ($)		Services provided during the period ($)	Reimbursement on Company’s expenses And interest on loan ($)		Payments ($)			Foreign exchange ($)			Balance, December 31, 2015 ($)
Consulting fees from CEO and President (i)		80,602	60,000		175,548		(12,116	)	(10,153		)		293,881
Consulting fees from a Director (ii)		-	44,380		-		(44,380	)	-				-
Professional fees from Director (iv)		1,216	13,314		-		(13,439	)		-			1,091
Research and development from Director (v)		-	57,130		-		(57,130	)		-			-
Consulting fees for VP (vii)		-	8,876		-		(8,876	)		-			-
Consulting fees for COO (viii)		-	51,582				(51,582	)		-			-
		81,818	235,282		175,548		(187,523	)		(10,153	)		294,972

Advances from related parties:

	Balance, December 31, 2014 ($)		Addition ($)	Payment ($)			Foreign exchange ($)			Balance, December 31, 2015 ($)
CEO and President (i)		393,044	262,535		-			(39,681	)		615,898
COO (viii)		-	82,050		(46,570	)		(1,958	)		33,522
		393,044	344,585		(46,570	)		(41,639	)		649,420

F-23

HCi Viocare

Notes to Financial Statements

Note 12 - RELATED PARTY TRANSACTIONS (continued)

Loan Agreement from related parties (ref Note 9 – Convertible Notes)

		Balance, December 31, 2014 ($)				Addition ($)				Converted to Shares ($)				Foreign Exchange on the Note ($)				Balance, December 31, 2015 ($)
CEO and President (i)			364,653				166,426				(326,619	)			(40,865	)			163,595

Note 13 - CAPITAL STOCK

The Articles of Incorporation authorize the Company to issue 5,000,000 shares of preferred stock with a par value of $0.0001, and 700,000,000 shares of common stock with a par value of $0.0001. No shares of preferred stock have been issued, however, the Company has granted 25,000 fully vested stock options for the purchase of 25,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from the date of vesting. (ref: Note 14 below).

On August 8, 2015 FINRA approved a seven (7) new for one (1) old forward split of our authorized and issued and outstanding shares of common. A Certificate of Change for the stock split was filed and became effective with the Nevada Secretary of State on August 7, 2015. Consequently, our authorized share capital increases from 100,000,000 to 700,000,000 shares of common stock and our issued and outstanding common stock increases accordingly, all with a par value of $0.0001. Our preferred stock remains unchanged.

Share issuances in 2015:

On February 2, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 473,942 shares of the Company’s common stock at a purchase price of $0.30 per share for total cash proceeds of $142,183. The shares are subject to applicable resale restrictions.

On February 17, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 57,575 shares of the Company’s common stock at a purchase price of $0.337 per share for total cash proceeds of $19,411. The shares are subject to applicable resale restrictions.

On March 23, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 133,329 shares of the Company’s common stock at a purchase price of $0.337 per share for total cash proceeds of $40,000. The shares are subject to applicable resale restrictions.

On May 8, 2015, the Company through its wholly owned subsidiary company HCi Viocare Technologies Limited entered into an agreement with Dr. Christos Kapatos, to amend the acquisition agreement (“Amendment of Acquisition Agreement”) dated April 17, 2014, originally filed with the Securities and Exchange Commission on Form 8-K as of May 6, 2014. Under the Amendment of Acquisition Agreement, the parties agreed, among certain other terms and conditions, to the issuance of one million restricted shares of the common stock of the Company as additional consideration. The issuance of 7,000,000 shares of the common stock of the Company to Kapatos was valued at fair market value on issuance totaling $4,550,000 or $0.65 per share.

On May 28, 2015, the Company granted a stock award of 700,000 shares to Mr. Nikolaos Kardaras, a director and Secretary of the Company. The issuance of 700,000 shares of the common stock of the Company to Kardaras was valued at fair market value on issuance totaling $450,000 or $0.64 per share.

On May 28, 2015 the convertible note $326,619 (EUR € 300,000) plus accrued interest of $12,112 (EUR €11,125) was fully converted to 79,037,231 shares of common stock at $0.00429 per share.

F-24

HCi Viocare

Notes to Financial Statements

Note 13 - CAPITAL STOCK (continued)

Share issuances in 2015: (continued)

On May 7, 2015 and June 1, 2015 respectively, the Company issued 56,000 shares of the common stock of the Company to Hellenic American Securities S.A under the consulting agreement. (ref Note 11(5)). Each issuance of 56,000 shares of common stock was valued at fair maket value on issuance date, totaling $36,400 and $39,200, respectively.

On July 24, 2015, the Company approved the issuance of 116,667 common shares for the services provided by Ms. Vasiliki Bountri, employee, in the form of stock awards. The issuance of 116,667 shares of the common stock was valued at fair market value on issuance totaling $83,335.

On October 2, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 267,241 shares of the Company’s common stock at a purchase price of $0.58 per share for total cash proceeds of $155,000. The shares are subject to applicable resale restrictions.

On October 14, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 200,000 shares of the Company’s common stock at a purchase price of $0.50 per share for total cash proceeds of $100,000. The shares are subject to applicable resale restrictions.

On November 4, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 56,658 shares of the Company’s common stock at a purchase price of $0.50 per share for total cash proceeds of $28,329. The shares are subject to applicable resale restrictions.

On November 5, 2015, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with a private investor for a total of 130,435 shares of the Company’s common stock at a purchase price of $0.50 per share for total cash proceeds of $65,524. The shares are subject to applicable resale restrictions.

Share issuances in 2014:

On January 22, 2014, the Company issued 7,000,000 shares, valued at $1,250,000, to the Company’s President, Mr. Leontaritis as compensation for consultancy services provided in 2013. The $1,250,000 was accrued as of December 31, 2013.

On February 13, 2014, the Company issued 3,500,000 shares of common stock, valued at $625,000, the required share consideration under an acquisition agreement with Kapatos, completing the acquisition of the IPR - Socket-Fit.

On April 17, 2014, the Company issued 3,500,000 shares of common stock, valued at $1,125,000, the required share consideration under an acquisition agreement with Kapatos, completing the acquisition of the IPR – Smart Insole.

On November 28, 2014, the Company entered into a Debt Settlement and Subscription Agreement (the “Agreement”) with the President of the Company, Mr. Sotirios Leontaritis (“Leontaritis”). Under the Agreement Leontaritis agreed to accept 63,000,000 shares of the Company’s common stock at a price of US$0.00476 per share to settle a total of $300,000 of the debt including convertible note $124,971 (EUR€100,000). We recorded $15,582,387 loss on the debt settlement.

On December 24, 2014, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with the President and controlling shareholder of the Company, Mr. Sotirios Leontaritis (“Leontaritis”). Under the terms of the Agreement Leontaritis subscribed for a total of 933,331 shares of the Company’s common stock at a purchase price of $0.214 per share for total cash proceeds of $200,000. The shares are subject to applicable resale restrictions.

F-25

HCi Viocare

Notes to Financial Statements

Note 13 - CAPITAL STOCK (continued)

As at December 31, 2015 and December 31, 2014 the Company has a total of 190,743,961 and 102,458,881 shares issued and outstanding, respectively.

Liability for Unissued Shares

Under the terms of the contract with the Company, Hellenic American Securities S.A shall receive payments of 56,000 shares of Company’s common stock on each month from July to December respectively (ref Note 11(5)). As at December 31, 2015 a total of 336,000 shares had not yet been issued and are reflected on the Company’s balance sheet in current liabilities as Liability for Unissued Shares, in the total amount of $249,040.

Designation of Series A Preferred Stock

On January 13, 2014, the Company filed a Certificate of Designation with the Secretary of State of the State of Nevada. The Certificate of Designation sets forth the rights, preferences and privileges of a class of the Company’s preferred stock. Such class shall be designated as the “Series A Preferred Stock” and the number of shares constituting such series shall be 5,000,000 shares. The holders of Series A Preferred Stock will be entitled to a preference over all of the shares of the Company’s common stock. Holders of Series A Preferred Stock shall have 50 votes per share of Series A Preferred Stock held by them and shall be entitled to notice of any stockholders’ meeting and to vote as a single class upon any matter submitted to the stockholders for a vote. Each share of Series A Preferred Stock is convertible into 20 shares of our common stock at any time at the holder’s option. Shares of Series A Preferred Stock shall not be entitled to any dividends. The preferred stock shall be entitled to a preference over all of the shares of common stock of the Company with respect to the distribution of assets in the event of the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs.

Note 14 - STOCK OPTIONS

On April 15, 2014, the Company appointed Professor Martha Lucia Zequera, Professor William Sandham, Professor Stephan Solomonidis and Doctor Christos Kapatos to the Advisory Board of the Company and entered into advisory board agreements with respect to services to be provided. Compensation for the members of the Advisory Board shall be the grant of a total of 5,000 stock options entitling the advisory board member the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from the date of vesting. The advisory board appointments are for a term of one year and the options granted under the agreements will vest on completion of the term of the appointment. All of the aforementioned stock options vested in April 2015. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

On June 9, 2014, the Company appointed Mr. William Spence to the Advisory Board of the Company and entered into an advisory board agreement with Mr. Spence. Compensation shall be the grant of a total of 5,000 stock options entitling Mr. Spence the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from the date of vesting. The advisory board appointment is for a term of one year and the options granted under the agreement will vest on completion of the term of the appointment. The aforementioned options vested upon the one year anniversary of the date of appointment. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

The following table summarizes information concerning stock options outstanding as of December 31, 2015 and December 31, 2014:

F-26

HCi Viocare

Notes to Financial Statements

Note 14 - STOCK OPTIONS (continued)

	December 31, 2015				December 31, 2014
	Series A Preferred stock		Weighted Average Exercise Price $		Series A Preferred stock		Weighted Average Exercise Price $
Outstanding at beginning of the year		25,000		0.04		-		-
Granted		-		-		25,000		0.04
Exercised		-		-		-		-
Expired or cancelled		-		-		-		-
Outstanding at the period		25,000		0.04		25,000		0.04

	Stock Options			Weighted Average Grant Date Fair Value

Unvested, at December 31, 2013		-			-
Granted		25,000		$	0.04
Vested		-			-
Forfeited		-			-
Unvested, end of December 31, 2014		25,000		$	0.04
Granted		-
Vested		(25,000	)		-
Forfeited		-			-
Unvested, end of December 31, 2015		-		$	-

The Company recognized stock-based compensation expense allocated to research and development of $291,210 during the year ended December 31, 2015 ($647,853 – December 31, 2014).

The Company accounts for share-based payments pursuant to ASC 718, “Stock Compensation” and, accordingly, the Company records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options using the Black-Scholes option pricing model. The fair value of stock options under the Black-Scholes model requires management to make assumptions regarding projected employee stock option exercise behaviors, risk-free interest rates, volatility of the Company’s stock price and expected dividends.

Stock compensation expense for stock options is recognized over the vesting period of the award.

The following table presents the range of the weighted average fair value of options granted and the related assumptions used in the Black-Scholes model for stock option grants:

	Options Granted during quarter ended June 30, 2014
Fair value of options granted	1.40 ~ 2.00
Assumptions used:
Expected life (years) (a)		1.00
Risk free interest rate (b)		0.11	%
Volatility (c)	117.09 ~ 119.83 %
Dividend yield (d)		0.00	%

F-27

HCi Viocare

Notes to Financial Statements

Note 14 - STOCK OPTIONS (continued)

	a)	Expected life: The expected term of options granted is determined using the “shortcut” method allowed by SAB No.107. Under this approach, the expected term is presumed to be immediately after the vesting date at the end of the contractual term of one (1) year.

	b)	Risk-free interest rate: The rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected life of the options.

	c)	Volatility: The expected volatility of the Company’s common stock is calculated by using the historical daily volatility of the Company’s stock price calculated over a period of time representative of the expected life of the options.

	d)	Dividend yield: The dividend yield rate is not considered in the model, as the Company has not established a dividend policy for the stock.

Note 15 – PROVISION FOR INCOME TAXES:

The Company has experienced losses since inception. As a result, it has incurred no Federal income tax. The Internal Revenue Code allows net operating losses (NOL's) to be carried forward and applied against future profits for a period of twenty years. The Greece Tax Code permits such carryforwards for a period of five years. The United Kingdom Tax Code permits such carryforwards indefinitely. The total of these NOL's at December 31, 2015 was $3,843,000 in the U.S., $800,840 in Greece and $453,700 in the U.K. and at December 31, 2014 was $2,403,548 in the U.S., $231,800 in Greece and $226,000 in the U.K.

The provision for income taxes in US consists of the following:

	Year ended December 31,
	2015			2014
Current operations	$	1,228,000		$	5,649,500
Timing differences, Stock based compensation		-			425,000
Loss on debt settlement and stock options		(738,800	)		-
Less, Change in valuation allowance		(489,200	)		(6,074,500	)
Net refundable amount	$	-		$	-

The provision for income taxes in Greece consists of the following:

	Year ended December 31,
	2015			2014
Current operations	$	147,900		$	60,000
Less, Change in valuation allowance		(147,900	)		(60,000	)
Net refundable amount	$	-		$	-

The provision for income taxes in UK consists of the following:

	Year ended December 31,
		2015			2014
Current operations	$	1,050,000		$	434,800
Research and development		(1,005,00	)		(389,000	)
Less, Change in valuation allowance		(45,000	)		(45,800	)
Net refundable amount	$	-		$	-

F-28

HCi Viocare

Notes to Financial Statements

Note 15 – PROVISION FOR INCOME TAXES: (continued)

The cumulative tax effect at the expected rates in U.S., in Greece and in U.K. for significant items comprising our net deferred tax amounts as of December 31, 2015 and December 31, 2014 are as follows:

	December 31, 2015									December 31, 2014
	US Expected rate 34%			Greece Expected rate 26%			UK Expected rate 20%			US Expected rate 34%			Greece Expected rate 26%			UK Expected rate 20%
Deferred tax asset attributable to:
Net operating loss carryover	$	3,843,000		$	800,840		$	453,700		$	2,403,548		$	231,800		$	226,800
Less, Valuation allowance		(3,843,000	)		(800,840	)		(453,700	)		(2,403,548	)		(231,800	)		(226,800	)
Net deferred tax asset	$	-		$	-		$	-		$	-		$	-		$	-

The Company has no tax position at December 31, 2015 and December 31, 2014 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the period presented. The Company had no accruals for interest and penalties at December 31, 2015 or at December 31, 2014. The Company’s utilization of any net operating loss carry forward may be unlikely as a result of its intended activities.

The Company recognized deferred tax assets and liabilities for both the expected impact of differences between the financial statements and the tax basis of assets and liabilities, and for the expected future tax benefit to be derived from tax losses and tax credit carryforwards. The Company will establish a valuation allowance to reflect the likelihood of realization of deferred tax assets. Tax years since inception to fiscal year ended December 31, 2014 have been filed and are still open for examination by the taxing authorities.

Note 16 - SUBSEQUENT EVENTS

On February 2, 2016, the Company entered into an Agreement with LXM Finance LLP (“LXM”), a company having a registered office in London, UK. Under the terms of the Agreement, LXM shall assist the Company with its proposed raising of funds (in the amount of up to fifty million (50,000,000 €) Euros), through introducing potential investors to the Company in order for an increase in the Company’s share capital, debt financing or by a combination thereof to be effected.

F-29

HCi Viocare

Notes to Financial Statements

Note 16 - SUBSEQUENT EVENTS (continued)

On February 18, 2016, the Company entered into a consulting agreement with an individual. Under the terms and conditions of the Agreement the Consultant shall provide consulting services and introduce the Company to the healthcare market of Middle East and specifically of Saudi Arabia in view of the Company project to expand its business and establish a Prosthetic and Orthotic Clinic in the Middle East. The Agreement has a six-month term ending on August 18, 2016 and the Consultant shall be remunerated with 200,000 shares of the common stock.

On February 19, 2016, the Company entered into a consulting agreement with an individual. Under the terms and conditions of the Agreement the Consultant shall provide consulting services and introduce the Company to the healthcare market of Turkey in view of the Company project to expand its business and establish a Prosthetic and Orthotic Clinic in Turkey. The Agreement has a six-month term ending on August 19, 2016 and the Consultant shall be remunerated with 200,000 shares of the common stock.

On March 22, 2016, the Company approved the issuance of 50,000 common shares for services provided by Mr. Mikulas Dylowicz, consultant, in the form of stock awards which shall vest as of the date of grant

F-30

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On, or about September 17, 2015, the Company notified its independent registered public accounting firm, Anderson Bradshaw PLLC ("AB"), that the Company had decided to change auditors and was therefore dismissing AB, effective immediately. The Company’s decision was approved by the Company’s board of directors, acting as the audit committee, on that same day, and concurrent with AB’s dismissal, the board of directors appointed Heaton & Company, PLLC (“Heaton”) as the Company’s new independent registered public accounting firm.

During the fiscal year ended December 31, 2014, and through September 17, 2015, neither the Company nor anyone acting on its behalf consulted Heaton regarding (i) either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided to the Company that Heaton concluded was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as defined in Item 304(a)(1)(v) of Regulation S-K).

The reports of AB regarding the Company’s financial statements for the fiscal year ended December 31, 2014 did not contain any adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope, or accounting principles, except to indicate that there was substantial doubt about the Company’s ability to continue as a going concern.

During the fiscal year ended December 31, 2014, and through September 17, 2015, the Company did not (i) have any disagreements (as defined in Item 304(a)(1(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) with AB on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of AB, would have caused it to make reference thereto in connection with its reports; or (ii) experience any reportable events (as defined in Item 304(a)(1)(v) of Regulation S-K).

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under supervision and with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based upon this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of December 31, 2015, because of the material weakness in our internal control over financial reporting (“ICFR”) described below, our disclosure controls and procedures were not effective.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that required information to be disclosed in our reports filed or submitted under the Securities Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that required information to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 14d-14(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2015. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework 2013. Based on its assessment, management concluded that, as of December 31, 2015, our internal control over financial reporting was not effective and that material weaknesses in ICFR existed as more fully described below.

As defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements” established by the Public Company Accounting Oversight Board (“PCAOB”), a material weakness is a deficiency or combination of deficiencies that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected. In connection with the assessment described above, management identified the following control deficiencies that represent material weaknesses as of December 31, 2015:

1)	Lack of an independent audit committee or audit committee financial expert, and no independent directors. We do not have any members of the Board who are independent directors and we do not have an audit committee. These factors may be counter to corporate governance practices as defined by the various stock exchanges and may lead to less supervision over management;
2)	Insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements;

Management's Remediation Initiatives

As of December 31, 2015, management assessed the effectiveness of our internal control over financial reporting. Based on that evaluation, it was concluded that during the period covered by this report, the internal controls and procedures were not effective due to deficiencies that existed in the design or operation of our internal controls over financial reporting. However, management believes these weaknesses did not have an effect on our financial results. During the course of our evaluation, we did not discover any fraud involving management or any other personnel who play a significant role in our disclosure controls and procedures or internal controls over financial reporting.

Due to a lack of financial and personnel resources, we are not able to, and do not intend to, immediately take any action to remediate these material weaknesses. We will not be able to do so until, if ever, we acquire sufficient financing and staff to do so. We will implement further controls as circumstances, cash flow, and working capital permits. Notwithstanding the assessment that our ICFR was not effective and that there were material weaknesses as identified in this report, we believe that our financial statements contained in our Annual Report on Form 10-K for the period ended December 31, 2015, fairly presents our financial position, results of operations, and cash flows for the periods covered, as identified, in all material respects.

Management believes that the material weaknesses set forth above were the result of the scale of our operations and intrinsic to our small size. Management also believes that these weaknesses did not have an effect on our financial results.

This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

During the period covered by this report, there were no changes (including corrective actions with regard to significant deficiencies or material weaknesses) in our internal controls over financial reporting that occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Executive Officer and Directors

The following individuals serve as the directors and executive officers of our Company as of the date of this annual report.

Name	Position Held with Our Company	Age	Date First Elected or Appointed
Sotirios Leontaritis	Chief Executive Officer, Chief Financial Officer, President, Treasurer, and Director	55	September 10, 2013
Nikolaos Kardaras	Secretary and Director	65	September 10, 2013
Christos Kapatos	Director, Chief Technical Officer	38	September 30, 2013
Heleen Kist	Chief Operating Officer	45	November 7, 2014
Yiannis Levantis	Director	40	July 18, 2015
Sergios Katsaros	Vice President	40	September 1, 2015

Our Board of Directors consists of only one class. All of the directors will serve until the next annual meeting of stockholders; until their successors are elected and qualified; or until their earlier death, retirement, resignation or removal. There are no family relationships among directors and executive officers. There are no arrangements or understandings between any director or executive officer and any other person(s) pursuant to which a director or executive officer was selected. Our executive officers are elected by our Board of Directors and hold office until their death, resignation or removal from office.

Our Board of Directors believes that the Board and our executive officer possesses a range of talent, skill, and experience sufficient to provide sound and prudent guidance with respect to our operations and interests. The information below with respect to our sole director and officer includes the individual’s experience, qualifications, attributes, and skills that led our Board of Directors to the conclusion that he or she should serve as a director and/or executive officer.

We know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us, or our subsidiaries, or has a material interest adverse to us or our subsidiaries.

None of our executive officers or directors have been involved in any bankruptcy proceedings within the last five years, been convicted in or has pending any criminal proceedings, been subject to any order, judgment or decree enjoining, barring, suspending or otherwise limiting involvement in any type of business, securities or banking activity or been found to have violated any federal or state securities or commodities law.

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Business Experience

The following is a brief account of the education and business experience during at least the past five years of each director, executive officer and key employee of our company, indicating the person’s principal occupation during that period, and the name and principal business of the organization in which such occupation and employment were carried out.

Sotirios Leontaritis, Chief Executive Officer, President, Treasurer and Director

Mr. Leontaritis has been a self-employed private businessman residing in Athens, Greece and has been for the past five years. He has been involved in the public markets for over 25 years in numerous capacities. In 2004, he was the co-founder of a public bio-tech startup company in Athens, Greece. In 2007 he co-founded a solar energy company also in Greece. For the past two years, Mr. Leontaritis has been working on a project for rehabilitation centers, diabetic foot care and research and development of health care technologies with a Cyprus corporation, H.C.I. Viocare Ltd., of which he is currently the sole shareholder.

He is not an officer and director of any other reporting issuers.

Nikolaos Kardaras – Secretary and Director

Mr. Nikolaos Kardaras is member of the Piraeus Bar, having practiced law since 1976. He graduated from the Law School of Athens, Greece in 1974. His current practice encompasses the disciplines of maritime, commercial, civil, initiatives and investments law, acquisition and mergers, and international shipping and commercial transactions.

Mr. Kardaras is not an officer or director of any other reporting issuers.

Dr. Christos Kapatos – Director, Chief Technical Officer

Dr. Kapatos operates a bioengineering technology consulting business, HCinnovations, Glasgow, where he has been the consultant and the managing director since 2009. He specializes in the fields of bioengineering, education, medical devices, healthcare automation, advanced prosthetics, orthotics and diabetic technologies, and medical technology startups. He has published a number of papers and has filed patents for prosthetic technologies. From 2008 to 2011 he was the innovation and commercialization director for Diolab Ltd, an international medical equipment company. From 2008 to present, he has worked with Scotsig, a company with small to medium equipment technology in the field of medical signal processing, as a medical devices, innovation and commercialization consultant. Dr. Kapatos received a BEng degree from Northumbria University in 1998, an Msc degree in bioengineering from the University of Strathclyde in 1999, a Msc degree related to new venture creation from Caledonian University Business School in 2007, and a Phd in Bioengineering from the University of Strathclyde in 2006. He has worked with Mr. Leontaritis on projects for H.C.I. Viocare Ltd.

Dr. Kapatos is not an officer and director of any other reporting issuers.

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Heleen Kist – Chief Operating Officer

Heleen Kist, is a former McKinsey consultant in the Healthcare practice and has worked in the technology/market interface for over 20 years, as a scientist, investor, entrepreneur and strategy consultant. She has a MS in Engineering-Economic Systems and Operations from Stanford University and a MS in Chemistry from Leiden, the Netherlands. She is the Chair of Scottish Health Innovations Ltd, an organization set up by the government to commercialize the IP from within the Scottish National Health Service.

The Company believes that Heleen Kist will be a valuable asset in developing a business strategy for the Company and engaging in commercial negotiations with potential partners.

Ms. Kist is not an officer or director of any other reporting issuers.

Sergios Katsaros, Vice President

Mr. Katsaros received a MEng Honours in Electrical and Electronic Engineering from the University of Bristol in 1998 and a MBA in International Business from the University of Bristol in association with École nationale des ponts et chausses (ENPC), France, in 2000. Mr. Katsaros has worked for various large international conglomerates including Deutsche Börse AG, Mercedes – Benz Hellas, Alpha Private Bank and ASC Energy. Mr. Katsaros has held various key positions in these business entities including the position of Key Account Manager. Over the recent years Mr. Katsaros has worked in the financial sector as a private banker handling relationship management and sales and also as an asset manager in cooperation with various Swiss entities. Mr. Katsaros also has significant experience having served as a team leader in the energy sector in the areas of business development and oil arbitrage.

Mr. Katsaros is not an officer or director of any other reporting issuers.

Yiannis Levantis, Director

Mr. Levantis received a BEng, Honors in Mechanical Engineering from the University of Manchester Institute of Science and Technology (UMIST) in 1997, an MSc in Computational and Experimental Stress Analysis from UMIST in 1998 and an MSc in Financial Management and Control from Aston Business School in 1999. Mr. Levantis has worked for various large international conglomerates including Unilever, Johnson & Johnson, GlaxoSmithKline and Rolls Royce Plc. and has extensive experience in definition and execution of strategy and roadmaps to support business strategy and drive operational efficiencies. Over the most recent years Mr. Levantis has been employed as the Global IT director (Rolls Royce PLC – Aerospace, Defence & Power Systems July 2011 to present and GlaxoSmithKline, Pharmaceutical January 2008 to June 2011) undertaking such rolls as global SAP-ERP design and delivery, delivering IT strategy and IT enabled business transformation programs supporting various business functions including supply chain purchasing, finance, quality and HR and operating with annual budgets in excess of £20 million as well as other key management and financial planning solutions.

Mr. Levantis is not an officer or director of any other reporting issuers.

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Code of Ethics

The Company has adopted a Code of Ethics applicable to its Chief Executive Officer and Chief Financial Officer. This Code of Ethics was filed as an exhibit to the Form 10-K for the year ending December 31, 2008 filed on April 6, 2009.

We will provide a copy of the Code of Ethics to any person without charge, upon request. Requests can be sent to our company at the address on the cover of this annual report.

Nominating Committee

There have been no material changes to the procedures by which security holders may recommend nominees to the Company's board of directors.

Audit Committee

At this time, the Company is not required to have an audit committee. Further, since there no independent members of the Board it is not feasible at this time to have an audit committee. The Board of Directors performs the same functions as an audit committee. The Board of Directors in performing its functions as an audit committee has determined that it does not have an audit committee financial expert.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of forms 3, 4 and 5 and amendments thereto furnished to the Company during its most recent fiscal year, the following directors, officers and/or person beneficially owning greater than 10% of the Company’s equity securities failed to timely file reports required by Section 16(a) of the Exchange Act during the most recent fiscal year or prior fiscal years:

Sergios Katsaros failed to timely file his Form 3 in connection with his appointment as Vice President. Sotirios Leontaritis failed to timely file his Form 4 in connection with the issuance of shares of common stock to him on two occasions. Nikolaos Kardaras failed to timely file his Form 4 in connection with the grant of stock awards. Christos Kapatos failed to timely file his Form 4s in connection with the issuance of shares of common stock to him.

The number of Forms 3, 4 and 5 and the number of transactions that were not filed timely are as follows: Sergios Katsaros (1 form, 0 transactions); Sotirios Leontaritis (2 forms, 2 transactions); Nikolaos Kardaras (1 form, 1 transaction); and Christos Kapatos (1 form, 2 transactions). We note in a review of the filings with the Securities and Exchange Commission that Mr. Jinzhao Wu has not filed a Form 4 or Form 5 reporting the disposition of his shares of the Company during fiscal 2013.

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ITEM 11. EXECUTIVE COMPENSATION.

The particulars of the compensation paid to the following persons:

·	Our principal executive officers for the fiscal years ended December 31, 2015 and 2014

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Sotirios Leontaritis(1) Chief Executive Officer, Chief Financial Officer, President, Treasurer, and Director	2015	60,000	Nil	Nil	Nil	Nil	Nil	Nil	60,000
	2014	60,000	Nil	Nil	Nil	Nil	Nil	Nil	60,000
Heleen Kist(3) Chief Operating Officer	2015	51,582	Nil	Nil		Nil	Nil	Nil	51,582
Heleen Kist(3) Chief Operating Officer	2014	13,670	Nil	Nil	Nil	Nil	Nil	Nil	13,670
Christos Kapatos (4) Chief Technical Officer	2015	44,380	Nil	Nil		Nil	Nil	Nil	44,380
Christos Kapatos (4) Chief Technical Officer	2014	48,655	Nil	Nil	Nil	Nil	Nil	Nil	48,655
Sergios Katsaros(2) Vice President	2015	8,876	Nil	Nil	Nil	Nil	Nil	Nil	8,876
Sergios Katsaros(2) Vice President	2014	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Grigorios Tsourtos(5) Former Chief Financial Officer	2015	Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
Grigorios Tsourtos(5) Former Chief Financial Officer	2014	5,484	Nil	Nil	Nil	Nil	Nil	Nil	5,484

(1) Mr. Sotirios Leontaritis was appointed as Chief Executive Officer, President, Treasurer, and Director on September 9, 2013 and Chief Financial Officer on June 9, 2014. During fiscal 2015 Mr. Leontaritis accrued total compensation of $60,000. During fiscal 2014 Mr. Leontaritis accrued total compensation of $60,000 under his contract, of which a total of $45,000 was converted to shares at $0.03333 per share.

(2)Sergios Katsaros was appointed Vice President on September 1, 2015.

(3) Ms. Kist was appointed Chief Operating Officer on November 7, 2014.

(4) Dr. Christos Kapatos was appointed to the Company’s Board of Directors on September 30, 2013 and agreed to act as the Company’s Chief Technical Officer on April 16, 2014.

(5) Mr. Tsourtos was appointed Chief Financial Officer on November 27, 2013. On June 9, 2014, Mr. Grigorios Tsourtos resigned as Chief Financial Officer.

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Outstanding Equity Awards at Fiscal Year-End

None.

Option Grants and Exercises

On April 15, 2014, the Company appointed Professor Martha Lucia Zequera, Professor William Sandham, Professor Stephan Solomonidis and Doctor Christos Kapatos to the Advisory Board of the Company and entered into advisory board agreements with respect to services to be provided. Compensation for the members of the Advisory Board shall be the grant of a total of 5,000 stock options entitling the advisory board member the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from the date of vesting. The advisory board appointments are for a term of one year and the options granted under the agreements will vest on completion of the term of the appointment. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

On June 9, 2014, the Company appointed Mr. William Spence to the Advisory Board of the Company and entered into an advisory board agreement with Mr. Spence. Compensation shall be the grant of a total of 5,000 stock options entitling Mr. Spence the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from the date of vesting. The advisory board appointment is for a term of one year and the options granted under the agreement will vest on completion of the term of the appointment. The Series A Preferred shares when vested will be convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

The following table summarizes information concerning stock options outstanding as of December 31, 2015:

	December 31, 2015			December 31, 2014
	Series A Preferred stock		Weighted Average Exercise Price $	Series A Preferred stock		Weighted Average Exercise Price $
Outstanding at beginning of the year		-	-		-	-
Granted		25,000	0.04		25,000	0.04
Exercised		-	-		-	-
Expired or cancelled		-	-		-	-
Outstanding at the period		25,000	0.04		25,000	0.04

Employment Agreements

On January 15, 2014, the Board of Directors of the Company approved the execution of a consulting agreement between the Company and its President and Chief Executive Officer, Sotirios Leontaritis (“Leontaritis”), whereby Leontaritis will provide services to the Company as the Company’s President and Chief Executive Officer in regards to the Company’s management and operations for the period from January 1, 2014 to December 31, 2017. Under the terms of the agreement, the Company will pay to Leontaritis US$60,000 per annum payable in monthly payments of US$5,000 a month for the term of the contract. Further, under the terms of the contract, Leontaritis received cash compensation of US$5,000 and a stock award of 7,000,000 shares of common stock of the Company in consideration of his services for the period from September 10, 2013 to December 31, 2013. During fiscal 2015 Mr. Leontaritis accrued total compensation of $60,000. During fiscal 2014 Mr. Leontaritis accrued total compensation of $60,000 under his contract, of which a total of $45,000 was converted to shares at $0.03333 per share.

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On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Dr. Christos Kapatos.

On November 7, 2014, the Company’s subsidiary, HCi Clinics W.D. Spence Prosthetics Limited entered into a service agreement with Mrs. Heleen Francoise Kist (the “Agreement”) whereby she will provide her services as Chief Operating Officer (“COO”) of the Company. The contract has a term of one year, being effective as of October 1, 2014, and ending on September 30, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation shall be thirty thousand GBP (£30,000) (USD$44,475) per year payable monthly in arrears on the last Friday of every month by credit transfer.

On October 15, 2015, the Company’s COO, Heleen Kist and wholly owned subsidiary, HCI Viocare Clinics UK, signed an Addendum to an employment contract to extend the term to September 30, 2016, with a remuneration increase to forty five thousand GBP (£45,000) (USD$ 66,712) per year.

On September 1, 2015, the Board of Directors approved a consulting agreement with Sergios Katsaros and appointed Mr. Katsaros Vice President of HCi Viocare.

On March 1, 2016, the Company approved a one-year extension of the consulting agreement entered into with Mr. Katsaros.

Compensation of Directors

During the most recent fiscal year, only Mr. Nikolaos Kardaras has received compensation for his services as a director of the Company. Mr. Kardaras received $13,314 in the fiscal year ended December 31, 2015 and $15,924 in the fiscal year ended December 2014. In addition, during fiscal 2015 Mr. Kardaras was issued a fully vested stock award of 700,000 shares of the Company’s common stock for prior services provided, valued at $450,000, which was the market price on the date of issue.

The Company has made no arrangements for the cash remuneration of its directors, except that they will be entitled to receive reimbursement for actual, demonstrable out-of-pocket expenses, including travel expenses, if any, made on the Company’s behalf.

Compensation Committee

We do not currently have a compensation committee. The Chief Executive Officer’s executive compensation has been approved by our Board of Directors. All of our other compensation contracts have been negotiated by our Chief Executive Officer and approved by our Board of Directors.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Security Ownership of Certain Beneficial Owners

Based on 191,912,461 shares of common stock issued and outstanding as of March 23, 2016, the beneficial owners holding more than 5% of the outstanding common stock, taking into account beneficial ownership of common stock if all outstanding options, warrants, rights and conversion privileges (to which the applicable 5% stockholders have the right to exercise in the next 60 days) are exercised and additional shares of common stock are issued, are disclosed below:

Title of Class	Name and address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Class (1)
Common Stock	Sotirios Leontaritis	142,710,562 shares held directly	74.4%
Common Stock	Christos Kapatos	14,100,000 shares held directly(2)	7.3%

(1)Beneficial ownership is determined in accordance with SEC rules and includes voting or investment power with respect to securities. All shares of common stock subject to options or warrants exercisable within 60 days of March 23, 2016 are deemed to be outstanding and beneficially owned by the persons holding those options or warrants for the purpose of computing the number of shares beneficially owned and the percentage ownership of that person. They are not, however, deemed to be outstanding beneficially owned for the purpose of computing the percentage ownership of any other person. Subject to the paragraph above, the percentage ownership of outstanding shares is based on 191,912,461 shares of common stock issued and outstanding as of March 23, 2016.

(2)This includes a total of 5,000 stock options entitling Mr. Kapatos the right to purchase a total of 5,000 shares of Series A Preferred Stock of the Company at a price of $0.04 per share for a period of five (5) years from April 16, 2014. The Series A Preferred shares are convertible on the basis of 20 shares of common stock for each one share held and have voting rights of 50 votes per share of Series A Preferred stock held at any meetings of the stockholders.

Security Ownership of Management

The following table shows, as of March 23, 2016, the shares of the Company’s common stock beneficially owned by each director (including each nominee), by each of the executive officers and by all directors and executive officers as a group. Information is also provided regarding beneficial ownership of common stock if all outstanding options, warrants, rights and conversion privileges (to which the applicable officers and directors have the right to exercise in the next 60 days) are exercised and additional shares of common stock are issued.

Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Class(1)
Common Stock	Sotirios Leontaritis, CEO and President	142,710,562 shares held directly	74.4%
Common Stock	Christos Kapatos, Director and CTO	14,100,000 shares held directly(2)	7.3%
Common Stock	Nikolaos Kardaras, Director and Secretary	700,000	0.4%
Common Stock	Yiannis Levantis, Director	-	-
Common Stock	Heleen Kist, COO	1,420,000 shares held directly	0.7%
Common Stock	Sergios Katsaros, Vice President	100,000 shares held directly	0.1%
	All Officers and Directors as a Group	159,030,562	82.9%

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Changes in Control

None

Securities authorized for issuance under equity compensation plans.

None.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The following table provides details of the Company’s related party transactions during the year ended December 31, 2015 and 2014:

Services provided from related parties:

	Year Ended December 31,
	2015		2014
Consulting fees from CEO and President (i)	$	60,000	$	60,000
Consulting fees from a Director (ii)		44,380		48,655
Professional fees from CFO (iii)		-		5,484
Professional fees from Director (iv)		13,314		15,924
Research and development from Director (v)		57,130		57,162
Stock award granted to Director (iv)		450,000		-
Consulting fees for VP (vii)		8,876		-
Consulting fees for COO (viii)		51,582		-
	$	685,282	$	187,225

(i)	On September 10, 2013 Mr. Leontaritis was appointed President. On January 15, 2014, the Board of Directors of the Company approved the execution of a consulting agreement between the Company and Sotirios Leontaritis (“Leontaritis”), whereby Leontaritis shall provide services to the Company as the Company’s President and Chief Executive Officer in regards to the Company’s management and operations for the period from January 1, 2014 to December 31, 2017. Under the terms of the agreement, the Company agreed to pay to Leontaritis US$60,000 per annum payable in monthly payments of US$5,000 a month for the term of the contract.
(ii)	On September 30, 2013, the Board of Directors of the Company appointed Dr. Christos Kapatos as a director of the Company.
(iii)	On November 27, 2013, the Board of Directors of the Company appointed Mr. Grigorios Tsourtos as Chief Financial Officer of the Company. On June 9, 2014, Mr. Grigorios Tsourtos resigned as Chief Financial Officer of the Company.
(iv)	On September 10, 2013, the Board of Directors of the Company elected Nikolaos Kardaras as Secretary and a director of the Company. On May 28, 2015, the Company approved the issuance of 700,000 common shares as compensation for prior services provided by director Nikolaos Kardaras in the form of fully vested stock awards.
(v)	On June 9, 2014, HCi Viocare Clinics entered into an employment agreement with Mr. William Donald Spence whereby he will provide his services as Director of Clinical Operations of HCi Viocare Clinics and any subsidiary clinics. During the period ended June 30, 2015 Mr. Spence resigned as the Director of Clinical Operations and his annual contract was not renewed.
(vi)	On July 18, 2015, the Board of Directors of the Company appointed Yiannis Levantis as a member of the Board of Directors of the Company.

(vii)

On September 1, 2015, the Board of Directors of the Company approved a consulting agreement with Sergios Katsaros and appointed Mr. Katsaros Vice President of HCi Viocare.

Under the terms of the consulting agreement, the initial term of the contract is six months and Mr. Katsaros will receive compensation of EUR2,000 (USD$2,180) per month.

(viii)

On November 7, 2014, the Company’s subsidiary, HCi Viocare Clinics (formerly W.D. Spence Prosthetics Limited) entered into a service agreement with Mrs. Heleen Francoise Kist (the “Agreement”) whereby she will provide her services as Chief Operating Officer (“COO”) of the Company. The contract has a term of one year, being effective as of October 1, 2014, and ending on September 30, 2015, renewable for such further term as may be mutually agreed between the parties. Compensation shall be thirty thousand GBP (£30,000) (USD$44,475) per year payable monthly in arrears on the last Friday of every month by credit transfer.

On October 15, 2015, the Company’s COO, Heleen Kist and wholly owned subsidiary, HCI Viocare Clinics UK, signed an Addendum to an employment contract to extend the term to September 30, 2016, with a remuneration increase to forty-five thousand GBP (£45,000) (USD$ 66,712) per year.

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Accounts payable and accrued liabilities from related parties:

	Balance, December 31, 2014 ($)		Services provided during the period ($)	Reimbursement on Company’s expenses And interest on loan ($)		Payments ($)			Foreign exchange ($)			Balance, December 31, 2015 ($)
Consulting fees from CEO and President (i)		80,602	60,000		175,548		(12,112	)	(10,157		)		293,881
Consulting fees from a Director (ii)		-	44,380		-		(44,380	)	-				-
Professional fees from Director (iv)		1,216	13,314		-		(13,439	)		-			1,091
Research and development from Director (v)		-	57,130		-		(57,130	)					-
Consulting fees for VP (vii)		-	8,876		-		(8,876	)		-			-
Consulting fees for COO (viii)		-	51,582				(51,582	)					-
		81,818	235,282		175,548		(187,519	)		(10,157	)		294,972

Advances from related parties:

	Balance, December 31, 2014 ($)		Addition ($)		Payment ($)			Foreign exchange ($)			Balance, December 31, 2015 ($)
CEO and President (i)		393,044		262,535		-			(39,681	)		615,898
COO (viii)		-		82,050		(46,570	)		(1,958	)		33,522

Loan Agreement(s) with related parties

		Balance, December 31, 2014 ($)				Addition ($)				Converted to Shares ($)				Foreign Exchange on the Note ($)				Balance, December 31, 2015 ($)
CEO and President (i)			364,653				166,426				(326,619	)			(40,865	)			163,595

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On July 25, 2014, the Company entered into a loan agreement with Mr. Leontaritis, the President of the Company, pursuant to which the Company received $403,956 (EUR €300,000) as advances from a related party (the “Note”). The Note earns simple interest accruing at five percent (5%) per annum and is due and payable within five years from the date of the agreement (“Maturity Date”). At any such date as Mr. Leontaritis may desire on or before the Maturity Date of the Note, any unpaid indebtedness shall be convertible into common shares of the Company at a price of $0.00429 per share. On May 28, 2015 the convertible note $326,619 (EUR € 300,000) plus accrued interest of $12,112 (EUR €11,125) was fully converted to 79,037,231 shares of common stock at $0.00429 per share. This transaction resulted in a loss on debt settlement of $1,804,704.

Review, Approval or Ratification of Transactions with Related Persons

We do not currently have any written policies and procedures for the review, approval or ratification of any transactions with related persons.

Promoters and Certain Control Persons

Parents

None.

Director Independence

As of the date of this Annual Report, we have one independent director. Mr. Yiannis Levantis.

We have developed the following categorical standards for determining the materiality of relationships that the directors may have with the Company. This information is not available on our Web site because such site is currently under development.

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A director shall not be deemed to have a material relationship with the Company that impairs the director's independence as a result of any of the following relationships:

	1.	the director is an officer or other person holding a salaried position of an entity (other than a principal, equity partner or member of such entity) that provides professional services to the Company and the amount of all payments from the Company to such entity during the most recently completed fiscal year was less than two percent of such entity’s consolidated gross revenues;
	2.	the director is the beneficial owner of less than five (5%) per cent of the outstanding equity interests of an entity that does business with the Company;
	3.	the director is an executive officer of a civic, charitable or cultural institution that received less than the greater of one million ($1,000,000) dollars or two (2%) per cent of its consolidated gross revenues, as such term is construed by the New York Stock Exchange for purposes of Section 303A.02(b)(v) of the Corporate Governance Standards, from the Company or any of its subsidiaries for each of the last three (3) fiscal years;
	4.	the director is an officer of an entity that is indebted to the Company, or to which the Company is indebted, and the total amount of either the Company's or the business entity's indebtedness is less than three (3%) per cent of the total consolidated assets of such entity as of the end of the previous fiscal year; and
	5.	the director obtained products or services from the Company on terms generally available to customers of the Company for such products or services. The Board retains the sole right to interpret and apply the foregoing standards in determining the materiality of any relationship.

The Board shall undertake an annual review of the independence of all non-management directors. To enable the Board to evaluate each non-management director, in advance of the meeting at which the review occurs, each non-management director shall provide the Board with full information regarding the director’s business and other relationships with the Company, its affiliates and senior management.

Directors must inform the Board whenever there are any material changes in their circumstances or relationships that could affect their independence, including all business relationships between a director and the Company, its affiliates, or members of senior management, whether or not such business relationships would be deemed not to be material under any of the categorical standards set forth above. Following the receipt of such information, the Board shall re-evaluate the director's independence.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees billed for the most recently completed fiscal year ended December 31, 2015 and for the fiscal year ended December 31, 2014 for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows:

	Year Ended
	December 31, 2015 $		December 31, 2014 $
Audit Fees		21,000		13,300
Audit Related Fees		-0-		-0-
Tax Fees		7,050		2,500
All Other Fees		-0-		-0-
Total		28,050		15,800

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Audit Fees

During the fiscal year ended December 31, 2015, we incurred approximately $21,000 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2015.

During the fiscal year ended December 31, 2014, we incurred approximately $13,300 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended December 31, 2014.

Audit-Related Fees

The aggregate fees billed during the fiscal years ended December 31, 2015 and 2014 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $0 and $0, respectively.

Tax Fees

The aggregate fees billed during the fiscal years ended December 31, 2015 and 2014 for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning were $7,050 and $2,500, respectively.

All Other Fees

The aggregate fees billed during the fiscal year ended December 31, 2015 and 2014 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0.

Our board of directors pre-approves all services provided by our independent auditors. All of the above services and fees were reviewed and approved by the board of directors either before or after the respective services were rendered.

Our board of directors has considered the nature and amount of fees billed by our independent auditors and believes that the provision of services for activities unrelated to the audit is compatible with maintaining our independent auditors’ independence.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibits:
3.1.1	Articles of Incorporation	Incorporated by reference to our Registration Statement filed with the SEC on Form SB-2 dated June 29, 2007.
3.1.2	Certificate of Amendment to the Articles of Incorporation	Incorporated by reference to our Definitive 14C filed with the SEC on December 27, 2013
3.1.3	Certificate of Amendment to the Articles of Incorporation	Incorporated by reference to our Definitive 14C filed with the SEC on March 3, 2014
3.1.4	Certificate of Change to the Articles of Incorporation	Incorporated by reference to our Form 8-K filed with the SEC on August 7, 2015
3.2	Bylaws	Incorporated by reference to our Registration Statement filed with the SEC on Form SB-2/A dated October 11, 2007.
4.1	Certificate of Designation	Incorporated by reference to our Definitive 14C filed with the SEC on December 27, 2013
10.1	Contract between the Company and Sotirios Leontaritis dated effective January 1, 2014	Incorporated by reference to our Form 8-K filed with the SEC on January 21, 2014
10.2	Acquisition Agreement between HCi VioCare Technologies Limited and Christos Kapatos dated February 2, 2014	Incorporated by reference to our Form 8-K filed with the SEC on February 14, 2014.
10.3	Acquisition Agreement between HCi VioCare Technologies Limited and Dr. Christos Kapatos dated April 16, 2014	Incorporated by reference to our Form 8-K filed with the SEC on May 6, 2014
10.4	Consulting Agreement between the Company and Dr. Christos Kapatos dated April 16, 2014	Incorporated by reference to our Form 8-K filed with the SEC on May 6, 2014
10.5	Consulting Agreement between the Company and Professor Stephan Solomonidis dated April 16, 2014	Incorporated by reference to our Form 8-K filed with the SEC on May 6, 2014
10.6	Consulting Agreement between the Company and Professor William Sandham dated April 16, 2014	Incorporated by reference to our Form 8-K filed with the SEC on May 6, 2014
10.7	Form of Advisory Board Agreement	Incorporated by reference to our Form 8-K filed with the SEC on May 6, 2014
10.8	Letter from Zhen dated June 19, 2014 regarding change in certified accountant.	Incorporated by reference to our Form 8-K filed with the SEC on June 25, 2014
10.9	Agreement between HCi Viocare Clinics UK Limited (Formerly W.D. Spence Prosthetics Limited) and Heleen Francoise Kist, dated November 7, 2014	Incorporated by reference to our Form 8-K filed with the SEC on November 12, 2014
10.10	Share purchase agreement between Sotirios Leontaritis and HCi Viocare Dated November 28, 2014	Incorporated by reference to our Form 8-K filed with the SEC on December 2, 2014
10.11	Private placement subscription agreement dated December 24, 2014	Incorporated by reference to our Form 8-K filed with the SEC on January 2, 2015
10.12	Consulting Agreement between the Company and Mikulas Dylowicz dated January 1, 2015	Incorporated by reference to our Form 8-K filed with the SEC on January 2, 2015
10.13	Form of Private Placement Subscription Agreement between the Company and a private investor dated February 2, 2015	Incorporated by reference to our Form 8-K filed with the SEC on February 9, 2015
10.14	Form of Private Placement Subscription Agreement between the Company and a private investor dated March 23, 2015	Incorporated by reference to our Form 10-K filed with the SEC on April 16, 2015
10.15	The Agreement with HELLENIC AMERICAN SECURITIES S.A. dated May 7, 2015	Incorporated by reference to our Form 8-K filed with the SEC on May 13, 2015
10.16	The Amendment of Acquisition Agreement between HCi VioCare Technologies Limited and Dr. Christos Kapatos dated May 8, 2015	Incorporated by reference to our Form 8-K filed with the SEC on May 13, 2015
10.17	The Addendums to the Consulting Agreements of April 16, 2014 with Dr. Christos Kapatos, Professor William Sandham and Professor Stephan Solomonidis dated May 1, 2015	Incorporated by reference to our Form 8-K filed with the SEC on May 13, 2015
10.18	The amendments to the scientific advisory agreements, dated May 8, 2015	Incorporated by reference to our Form 8-K filed with the SEC on May 13, 2015
10.19	The debt settlement agreement with Leontaritis dated May 28, 2015	Incorporated by reference to our Form 8-K filed with the SEC on June 3, 2015

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10.20	The grant notice for stock awards issued May 28, 2015	Incorporated by reference to our Form 8-K filed with the SEC on June 3, 2015
10.21	Loan agreement dated June 11, 2015 between the Company and its President, Sotirios Leontaritis	Incorporated by reference to our Form 8-K filed with the SEC on June 18, 2015
10.22	Trademark assignment dated March 18, 2015	Incorporated by reference to our Form 8-K filed with the SEC on June 18, 2015
10.23	The grant notice for stock award dated July 24, 2015	Incorporated by reference to our Form 8-K filed with the SEC on July 29, 2015
10.24	Consulting agreement between HCi Viocare and Sergios Katsaros, dated September 1, 2015	Incorporated by reference to our Form 8-K filed with the SEC on September 10, 2015
10.25	Form of Private Placement Subscription Agreement between the Company and a private investor	Incorporated by reference to our Form 8-K filed with the SEC on October 8, 2015
10.26	Form of Private Placement Subscription Agreement between the Company and the Individual	Incorporated by reference to our Form 8-K filed with the SEC on October 14, 2015
10.27	Addendum No. 1 to the services agreement between HCi Viocare Clinics UK Limited and Heleen Francoise Kist, dated October 15, 2015	Incorporated by reference to our Form 8-K filed with the SEC on October 16, 2015
10.28	Form of Private Placement Subscription Agreement between the Company and the Individuals	Incorporated by reference to our Form 10-Q filed with the SEC on November 16, 2015
10.29	Form of Private Placement Subscription Agreement between the Company and the Individual	Incorporated by reference to our Form 10-Q filed with the SEC on November 16, 2015
10.30	Form of Private Placement Subscription Agreement between the Company and the Individuals	Incorporated by reference to our Form 8-K filed with the SEC on January 8, 2016
10.31	The Agreement with LXM Finance LLP	Incorporated by reference to our Form 8-K filed with the SEC on February 11, 2016
10.32	The Agreement with Consultant dated February 1, 2016	Incorporated by reference to our Form 8-K filed with the SEC on February 11, 2016
10.33	The Agreement with Consultant dated February 18, 2016	Incorporated by reference to our Form 8-K filed with the SEC on February 11, 2016
10.34	The Agreement with Consultant dated February 19, 2016.	Incorporated by reference to our Form 8-K filed with the SEC on February 11, 2016
10.35	Form of Private Placement Subscription Agreement between the Company and the Individual	Incorporated by reference to our Form 8-K filed with the SEC on March 3, 2016
10.36	Form of Private Placement Subscription Agreement between the Company and the Individual	Incorporated by reference to our Form 8-K filed with the SEC on March 11, 2016
10.37	Addendum No. 1 to the consulting agreement between HCi Viocare and Sergios Katsaros, dated September 1, 2016	Incorporated by reference to our Form 8-K filed with the SEC on March 11, 2016
10.38	The grant notice for stock awards issued March 1, 2016	Incorporated by reference to our Form 8-K filed with the SEC on March 11, 2016
10.3	The grant notice for stock awards issued March 22, 2016	Incorporated by reference to our Form 8-K filed with the SEC on March 23, 2016
14.1	Code of Ethics	Incorporated by reference to the registration statement filed with the SEC on Form 10-K dated April 6, 2009.
21	List of subsidiaries	- HCi Viocare Clinics UK Limited - HCi Viocare Technologies UK Limited - HCi Viocare Clinics (Hellas) S A

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31.1	Certification of Principal Executive Officer and Principal Financial Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase	Filed herewith
101.INS	XBRL Instance Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema	Filed herewith

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		HCi Viocare

Date:	March 30, 2016	By:	/s/ Sotirios Leontaritis
		Name:	Sotirios Leontaritis
		Title:	Chief Executive Officer and President (Principal Executive Officer) Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:	March 30, 2016	By:	/s/ Sotirios Leontaritis
		Name:	Sotirios Leontaritis
		Title:	President, Chief Executive Officer, Chief Financial Officer, Treasurer, and Director (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer)

Date:	March 30, 2016	By:	/s/ Nikolaos Kardaras
		Name:	Nikolaos Kardaras
		Title:	Secretary and Director

Date:	March 30, 2016	By:	/s/ Christos Kapatos
		Name:	Christos Kapatos
		Title:	Director

Date:	March 30, 2016	By:	/s/ Yiannis Levantis
		Name:	Yiannis Levantis
		Title:	Director

Rafina Innovations Inc. - FORM 10-K - March 30, 2016

Attached files

Rafina Innovations Inc. Reports