Rafina Innovations Inc. - FORM 10-Q

Attached files

file	filename
EX-10.54 - FORM OF GRANT NOTICE FOR STOCK AWARDS ISSUED OCTOBER 24, 2016 - Rafina Innovations Inc.	ex1054.htm
EX-32.1 - CERTIFICATION - Rafina Innovations Inc.	ex321.htm
EX-31.1 - CERTIFICATION - Rafina Innovations Inc.	ex311.htm
EX-10.56 - FORM OF PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND THE INDIVIDUAL - Rafina Innovations Inc.	ex1056.htm
EX-10.55 - THE AGREEMENT WITH KCN LTD. - Rafina Innovations Inc.	ex1055.htm
EX-10.53 - FORM OF PRIVATE PLACEMENT SUBSCRIPTION AGREEMENT BETWEEN THE COMPANY AND THE INDIVIDUAL - Rafina Innovations Inc.	ex1053.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

	For the quarterly period ended September 30, 2016

[ ] 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)

N/A
(Former name, former address and former fiscal year, if changed since last report)

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 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]

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST 5 YEARS:

Indicate by check mark whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes

[ ]

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.

192,727,104 shares of common stock issued and outstanding as of November 10, 2016

F-2

HCI VIOCARE

TABLE OF CONTENTS

		Page
	PART I – Financial Information

Item 1	Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	5
Item 3	Quantitative and Qualitative Disclosures About Market Risk	11
Item 4	Controls and Procedures	11

	PART II – Other Information

Item 1	Legal Proceedings	12
Item 1A	Risk Factors	12
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	12
Item 3	Defaults Upon Senior Securities	12
Item 4	Mine Safety Disclosures	12
Item 5	Other Information	12
Item 6	Exhibits	13
	SIGNATURES	16

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Quarterly Report on Form 10-Q (this “Report”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 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-Q. 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, 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.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by these forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

CERTAIN TERMS USED IN THIS REPORT

When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to HCi Viocare and its consolidated subsidiaries, and “SEC” refers to the Securities and Exchange Commission.

F-3

PART I -- FINANCIAL INFORMATION.

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the nine-month period ended September 30, 2016, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2016. For further information, refer to the audited financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 as filed with the Securities and Exchange Commission on March 30, 2016.

	Page
Consolidated Balance Sheets	F-1
Consolidated Statements of Operations and Comprehensive Loss	F-2
Consolidated Statements of Cash Flows	F-3
Notes to Consolidated Financial Statements	F-4 to F-25

F-4

HCi Viocare

CONSOLIDATED BALANCE SHEETS

	June 30, 2016 (Unaudited)			December 31, 2015


ASSETS
Current Assets:
Cash and cash equivalents	$	9,153		$	9,579
Accounts receivable		254,423			3,075
Other receivable		34,651			39,590
Inventory		5,407			6,346
Prepaid expenses (Note 5)		66,043			78,207
Total Current Assets		369,677			136,797

Long-term Assets
Property, plant and equipment, net (Note 6)		242,359			310,612

Total Assets	$	612,036		$	447,409

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current Liabilities:
Accounts payable and accrued expenses	$	542,729		$	355,417
Accounts payable and accrued expenses-related party (Note 10)		461,974			294,972
Advances from a related party (Note 10)		655,441			649,420
Liability for unissued shares		-			249,040
Corporate taxes		-			12,074
Total Current Liabilities		1,660,144			1,560,923

Loan from a related party (Note 8)		-			163,595
Deferred taxes		-			192

Total Liabilities		1,660,144			1,724,710

Commitments and Contingencies

Stockholders' Equity (Deficit):
Preferred stock, par value $0.0001, 5,000,000 shares authorized; none issued and outstanding as of September 30, 2016 and December 31, 2015		-			-
Common stock, par value $0.0001, 700,000,000 shares authorized; 192,477,104 shares issued and outstanding as of September 30, 2016 and 190,743,961 shares issued and outstanding as of December 31, 2015		19,248			19,074
Additional paid-in capital		30,304,703			28,767,850
Retained Deficit		(31,368,599	)		(30,153,048	)
Accumulated other comprehensive income		(3,460	)		88,823
Stockholders' equity (deficiency)		(1,048,108	)		(1,227,301	)
Total Liabilities and Stockholders' Equity (Deficiency)	$	612,036		$	447,409

See Notes to Consolidated Financial Statements

F-1

HCi Viocare

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended							For the Nine Months Ended
	September 30,			September 30,				September 30,		September 30,
	2016			2015				2016		2016
Revenues
Sales	$	463,350		$	17,539		$	652,287		$	54,748
Cost of goods sold		115,917			16,109			195,286			29,399
Gross Profit		347,433			1,430			457,001			25,349

Operating Expenses
Depreciation		18,640			14,907			55,343			27,471
Office rent		31,789			24,580			91,658			98,136
Office expenses		38,878			180,068			174,992			278,751
Consultancy Fees		(383,993	)		65,174			411,791			148,817
Professional fees		12,287			163,299			583,917			777,593
Research and development		75,723			72,324			279,658			5,194,925
Travel and entertainment		15,271			33,765			86,669			109,025
Total Operating Expenses		(191,405	)		554,117			1,684,028			6,634,718

Income (Loss) from Operations		538,838			(552,687	)		(1,227,027	)		(6,609,369	)

Other Income (Expenses)
(Loss) on debt settlement		-			-			-			(1,804,704	)
Gain (Loss) on foreign currency transaction		1,541			401			3,960			190
Interest Expenses due to related party		(328	)		(2,095	)		(4,016	)		(377,687	)
Total Other Income (Expenses)		1,213			(1,694	)		(56	)		(2,182,201	)

Income (Loss) before Provision for Income Tax		540,051			(554,381	)		(1,227,083	)		(8,791,570	)

Provision for Income Tax		(105	)		(910	)		11,532			(910	)

Net Income (Loss)	$	539,946		$	(555,291	)	$	(1,215,551	)	$	(8,792,480	)

Basic and fully diluted loss per share	$	0.00		$	(0.00	)	$	(0.01	)	$	(0.06	)

Weighted average shares outstanding		192,725,659			189,980,567			192,122,074			143,224,347

Comprehensive Income (Loss) :
Net loss	$	539,946		$	(555,291	)	$	(1,215,551	)	$	(8,792,480	)
Effect of foreign currency translation		(16,624	)		(6,121	)		(92,283	)		31,269
Comprehensive Loss	$	523,322		$	(561,412	)	$	(1,307,834	)	$	(8,761,211	)

See Notes to Consolidated Financial Statements

F-2

HCi Viocare

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended
	September 30,
	2016			2015

Operating Activities
Net loss	$	(1,215,551	)	$	(8,792,480	)
Adjustments to reconcile net loss to net cash used by operating activities:
Stock options vested		-			291,210
Shares issued for acquisition of patented technologies		-			4,550,000
Shares issued for stock award		126,250			533,335
Shares issued for services provided		715,250			193,040
Amortization of beneficial conversion feature		-			368,273
Gain (loss) on debt settlement		-			1,804,704
Gain on foreign currency transactions		(74,320	)		(30,391	)
Depreciation		55,343			27,471
Changes in operating assets and liabilities:
Decrease (Increase) in accounts receivable		(250,227	)		(12,820	)
Decrease (Increase) in prepaid expense		7,232			(29,055	)
Decrease (Increase) in other receivable		3,747			(49,620	)
Decrease (Increase) in inventory		172			87
Increase (Decrease) in accounts payable and accrued expenses		187,254			221,750
Increase (Decrease) in accounts payable and accrued expenses, related party		155,238			157,825
Increase (Decrease) in corporate taxes		(10,611	)		-
Increase (Decrease) in liability of unissued shares		(249,040	)		-
Net cash used by operating activities		(549,263	)		(766,671	)

Investing Activities
Additions to Property, plant and equipment		(12,896	)		(185,481	)
Net cash (used) by investing activities		(12,896	)		(185,481	)

Financing Activities
Advances and Loans from related parties		461,908			301,526
Repayments, advances and loans from related party		(618,277	)		-
Proceeds from private placement		709,527			356,594
Net cash provided by financing activities		553,158			658,120

Increase (decrease) in cash		(9,001	)		(294,032	)

Cash at beginning of period		8,273			408,252
Effects of exchange rates on cash		9,881			3,144
Cash at end of period	$	9,153		$	117,364

Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
Interest	$	8,750		$	-
Income taxes	$	-		$	-

Non-Cash Investing and Financing Activities:
Convertible notes converted to shares	$		-	$	326,619
Interest payable converted to shares	$		-	$	12,113

See Notes to Consolidated Financial Statements

F-3

HCi Viocare

Notes to Unaudited Consolidated 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-4

HCi Viocare

Notes to Unaudited Consolidated 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 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 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.

Note 2 - GOING CONCERN

The Company incurred net losses of $1,215,551 and $8,792,480 for the nine months ended September 30, 2016 and 2015, respectively and has a retained deficit of $31,368,599. In addition, the Company had a working capital deficiency of $1,290,467 and a stockholders' deficit of $1,048,108 at September 30, 2016. 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.

The Company has relied heavily for its financing needs on its Chief Executive Officer and President as more fully disclosed in Note 10.

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-5

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT 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 unaudited interim consolidated financial statements of the Company have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The interim unaudited consolidated financial statements should be read in conjunction with those audited financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016.

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.

F-6

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Foreign Currencies (cont’d)

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 prosthetic products are fitted to 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 parts, 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.

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 nine months ended September 30, 2016 and the year ended December 31, 2015, 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 $279,658 and $5,194,925 for the nine months ended September 30, 2016 and 2015, 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.

F-7

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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.

Income tax years for 2013, 2014 and 2015 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 nine months ended September 30, 2016 and for the year ended December 31, 2015, respectively, however, since the Company reflected a net loss in the nine months ended September 30, 2016 and the year ended December 31, 2015, 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.

F-8

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

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 January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. This new standard provides guidance on how entities measure certain equity investments and present changes in the fair value. This standard requires that entities measure certain equity investments that do not result in consolidation and are not accounted for under the equity method at fair value and recognize any changes in fair value in net income. ASU 2016-01 is effective for fiscal years beginning after December 31, 2017. The Company is currently evaluating the provisions of this guidance and assessing its impact on the Company's financial statements and disclosures.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard requires that all lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about its leasing arrangements. The new standard will be effective for us on January 1, 2019. This standard is not expected to have a material impact on our financial position, results of operations or statement of cash flows upon adoption.

In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. The new standard will be effective for us on January 1, 2017. This standard is not expected to have a material impact on our financial position, results of operations or statement of cash flows upon adoption.

F-9

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent Accounting Pronouncements (continued)

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The new standard requires financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The standard will be effective for the Company beginning January 1, 2020, with early application permitted. This standard is not expected to have a material impact on our financial position, results of operations or statement of cash flows upon adoption.

In August 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. The new standard will make eight targeted changes to how cash receipts and cash payments are presented and classified in the statement of cash flows. The standard will be effective for the Company beginning January 1, 2018, with early application permitted. The standard will require adoption on a retrospective basis unless it is impracticable to apply, in which case we would be required to apply the amendments prospectively as of the earliest date practicable.

Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact on our financial statements upon adoption.

Note 5 - PREPAID EXPENSES

Prepaid expenses consist of the following:

	September 30, 2016		December 31, 2015
Office lease	$	57,513	$	51,429
Professional fees		2,000		13,779
Travel advances and other expenses		6,530		12,999
Total prepaid expense	$	66,043	$	78,207

Note 6 - PROPERTY AND EQUIPMENT

	Leasehold Improvement			Office Furniture			Computer & Equipment			Vehicles			Plant & Machine			Lab Equipment			Total
Cost
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

Additions - purchase		489			-			4,564			-			7,843			-			12,896
Foreign exchange		(18,888	)		(2,482	)		(1,229	)		1,583			(255	)		(4,535	)		(25,806	)
At September 30, 2016		192,264			30,856			30,764			56,115			8,874			32,895			351,768

F-10

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 6 - PROPERTY AND EQUIPMENT (continued)

Amortization
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

Charge for the period		27,424		6,599		6,017		9,096		518		5,689		55,343
At September 30, 2016		52,040		13,488		12,720		20,875		652		9,634		109,409

Carrying Amounts
At December 31, 2015	$	186,047	$	26,449	$	20,726	$	42,753	$	1,152	$	33,485	$	310,612
At September 30, 2016	$	140,224	$	17,368	$	18,044	$	35,240	$	8,222	$	23,261	$	242,359

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.

Note 7 - OFFICE LEASE

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 September 30, 2016, $3,367 (EUR €3,000) is shown as deposit in the prepaid account.

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 1, 2015 and ending on October 5, 2024. The monthly rental fee is $6,996 (EUR €6,233) plus applicable taxes and the monthly operating cost estimate is $1,120 (EUR €997).

Under the term of the lease agreement, the Company paid a total of $13,991 (EUR €12,465) as deposit in the prepaid account.

F-11

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 7 - OFFICE LEASE (continued)

Clinic in Greece (cont’d)

On October 9, 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 $3,500 (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.

The Company and the Lesser are presently in negotiations with respect to the aforementioned lease in order to find suitable terms for a further extension prior to commencement of leasehold improvements.

Lease in UK

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 center, 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$26,000 (GBP £20,000) per annum (exclusive of VAT). On the second anniversary of the date of entry, the lease will increase to USD$52,000 (GBP £40,000) per annum (exclusive of VAT). In the third anniversary of the date of entry, the lease will be USD$52,000 (GBP £40,000) per annum (exclusive of VAT). In the fourth anniversary of the date of entry, the lease will decrease to USD$39,000(GBP £30,000) per annum (exclusive of VAT). In the fifth anniversary of the date of entry, the lease will be USD$52,000 (GBP £40,000) per annum (exclusive of VAT).

Under the term of the lease agreement, the Company paid a total of $28,738 (GBP £20,000) as deposit in the prepaid account.

Location	Greece		United Kingdom
As of December 31, 2015	$	16,867	$	34,562
Prepaid rental fee		-		9,181
Foreign exchange on the deposits		490		(3,587	)
As of September 30, 2016	$	17,357	$	40,156

Note 8 - LOAN

On June 11, 2015 and February 10, 2016, the Company entered into loan agreements with Mr. Leontaritis, the President of the Company, pursuant to which the Company received $163,595 (EUR €150,000) and $44,925 (EUR€40,000 as advances (collectively the “Notes”). The Notes earn simple interest accruing at five percent (5%) per annum and are due and payable within five years from the date of the agreement (“Maturity Date”).

During the nine months ended September 30, 2016 we accrued interest totaling $3,598 in respect of these loans.

During the nine months ended September 30, 2016, the Company repaid USD $222,822 (EUR €197,770) in cash in full to above notes including accrued interest expense of USD $8,750 (EUR €7,770).

F-12

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 9 - COMMITMENTS

(1)	Consulting Agreement with 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$44,890) 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).

On May 1, 2015, the Company approved a one-year extension of the consulting agreement entered into with Dr. Christos Kapatos. Further on August 2, 2016 the Company approved a further one-year extension so that the agreement will expire April 16, 2017.

(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$26,000) 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$52,000) 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. The contract has expired during fiscal 2016 and is currently under negotiation for renewal.

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$26,800) 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$53,600) 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. The contract has expired during fiscal 2016 and is currently under negotiation for renewal.

F-13

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 9 - COMMITMENTS (continued)

3)	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$39,000) per year payable monthly in arrears on the last Friday of every month by credit transfer. On October 15, 2015, the Company’s COO, Heleen Kist and wholly owned subsidiary, HCI Viocare Clinics UK, signed an Addendum to an employment contract to extend the term to September 30, 2016, with a remuneration increase to forty-five thousand GBP (£45,000) (USD$ 58,500) per year.

On August 30, 2016 the Board of Directors of the Company approved the termination of the services agreement of Mrs. Heleen Francoise Kist, Chief Operation Officer of the Company following her resignation from any and all positions with the Company and its subsidiaries.

On August 30, 2016 the Board of Directors of the Company approved the repurchase from Mrs Heleen Kist of a total of seven hundred thousand (700,000) shares of the Company at a purchase price of US$0.02 per share for total of fourteen thousand (US$14,000) USD for return to treasury and cancellation. The $14,000 was recorded as accounts payable on the balance sheet as of September 30, 2016.

(4)	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 August 1, 2016 a total of 560,000 shares had not yet been issued (December 31, 2015 – 336,000 shares) and are reflected on the Company’s balance sheet in current liabilities as Liability for Unissued Shares, in the amount of $436,640 (December 31, 2015 - $249,040). In addition, a total of $33,000 accrued for monthly service fees are included in accounts payable (December 31, 2015 - $24,000). The contract expired and on July 6, 2016 the Company and HAS S.A. entered into a Mutual Release and Waiver of Compensation Agreement where under HAS S.A. has agreed to waive all further compensation payable under the terms of the original Agreement in the total amount of $33,000 and 560,000 shares of common stock. The Company recorded total amount of $469,640 as gain on debt waiver.

F-14

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 9 - COMMITMENTS (continued)

(5)	Consulting Agreement with Sergios Katsaros

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 (USD$2,245) per month. 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.

(6)	Financing agreement with LXM Finance LLP

On February 2, 2016, the Company entered into a three month 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 Euros (50,000,000 €), 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.

LXM is entitled to the following consideration under the Agreement:

(a)

a Retainer Fee of 12,500 Euros per month, payable in arrears; and,

(b)

a Success Fee of 7% of the Investment Amount(s) accepted and closed on by the Company by any Introduced Investor; the Success Fee shall be payable to LXM Finance in cleared funds (to an account notified in writing by LXM Finance to the Company for such purpose) within 10 Business days after the date on which such funds are accepted and closed on by the Company by such Introduced Investor and irrespective of whether or not the Engagement Letter has been terminated as at such date of investment or commitment

Notwithstanding the above, LXM Finance shall be entitled (in its sole discretion), to opt (by way of written notice to the Company) to receive up to 100% of the amount of any Success Fee in the form of securities in the Company in lieu of any cash payment subject to the Company’s agreement in writing, in compliance with all applicable securities rules and regulations, without prejudice to the Company’s right to offer cash form of payment.

On August 1, 2016, the Company entered into an Extension and Amendment of Engagement Letter originally entered into on February 2, 2016 with LXM. As per the amended terms of the Extension and Amendment of Engagement Letter, the requirement for a monthly retainer fee is deleted and all prior fees accrued to the date of the amendment remain due and payable; LXM shall provide services in order to assist the Company with fund raising for a term of one (1) year as of August 1, 2016, which may be renewed subject to a written agreement of the parties. LXM shall also provide services for the possible sale of Company assets and/or parts of its business, in which case it shall receive a sale fee of 7% of the purchase amount. All other terms and conditions of the Engagement Letter of February 8, 2016, remain valid and in force.

As of September 30, 2016, €12,500 euros have been paid, and a further €25,000 euros has been accrued in respect of this agreement.

F-15

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 9 - COMMITMENTS (continued)

(7)	Agreement with Renell Wertpapierhandelsbank AG (“Renell”)

On April 22, 2016 the Company entered into an agreement with Renell Wertpapierhandelsbank AG (“Renell”) with respect to the inclusion and trading of all Company shares in the open market at the Berlin Stock Exchange in Germany. As consideration for the services rendered Renell shall receive a fee of EUR10,000 and EUR3,500 annually thereafter as listing fees.

(8)	Professional Relations and Consulting Agreement with Acorn Management Partners, LLC (“Acorn”)

On May 18, 2016 the Company entered into a Professional Relations and Consulting Agreement with Acorn Management Partners, LLC (“Acorn”), a Georgia limited liability company, for a term of 12 months. Under the terms of the agreement, Acorn will create a market awareness program and introduce financial professionals to the Company targeting the US marketplace. The program shall be designed to build long-term relationships between the Company and licensed financial professionals. In consideration of the Services, the Company agrees to pay to Acorn the following fees:

·	First 6 Month period

-	Cash: $17,500 per month, monthly payment made upon the execution of the contract

Stock: $250,000 dollars’ worth of restricted 144 common stock of the Company (“VICA”), due upon the execution of contract. 312,500 shares were issued on May 20, 2016 and was determined by dividing $250,000 by the closing price on the last trading day’s closing price on the day before the execution day.

·	Second 6 Month period

-	Cash: $17,500 per month, monthly payment made upon the execution of the contract

-	Stock: $250,000 dollars’ worth of restricted 144 common stock of the Company (“VICA”), due upon the execution of contract. The number of the shares to be determined by dividing $250,000 by the closing price on the last trading day’s closing price on the day before the execution day.

As of September 30, 2016, $30,500 has been paid, and a further $109,500 has been accrued in respect of this agreement.

Note 10 - RELATED PARTY TRANSACTIONS

The following table provides details of the Company’s related party transactions during the nine months ended September 30, 2016 and 2015:

Services provided from related parties:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Consulting fees from CEO and President (i)	$	15,000	$	15,000	$	45,000	$	45,000
Consulting fees from a Director (ii)		11,423		11,110		33,480		33,434
Professional fees from Director (iii)		3,427		3,333		10,044		10,030
Consulting fees for VP (v)		6,854		2,230		20,088		2,230
Consulting fees for COO (vi)		4,261		11,625		36,529		34,470
Stock-based compensation (VP) (v)		-		-		84,500		-
Stock award granted to Director (ii)		-		-		-		450,000
	$	40,965	$	43,298	$	229,641	$	575,164

F-16

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 10 - RELATED PARTY TRANSACTIONS

(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)
(iii)		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.
(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.

(v)

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.

On March 1, 2016 the Company approved a one-year extension to the consulting agreement. Concurrently, 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.

(vi)

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$43,180) 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$ 64,800) per year.

F-17

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 10 - RELATED PARTY TRANSACTIONS (continued)

Accounts payable and accrued liabilities from related parties:

	Balance, December 31, 2015 ($)		Services provided during the period ($)	Reimbursement on Company’s expenses and interest on loan ($)		Payments ($)			Foreign exchange ($)		Balance, September 30, 2016 ($)
Consulting fees from CEO and President (i)		293,881	45,000		107,546		(8,750	)	10,080			447,757
Consulting fees from a Director (ii)		-	33,480				(20,385	)	-			13,095
Professional fees from Director (iii)		1,091	10,044		-		(10,013	)		-		1,122
Consulting fees for VP (v)		-	20,088		-		(20,088	)		-		-
Consulting fees for COO (vi)		-	36,529		-		(36,529	)		-		-
		294,972	145,141		107,546		(95,765	)		10,080		461,974

Advances from related parties:

	Balance, December 31, 2015 ($)		Addition ($)	Payment ($)			Foreign exchange ($)			Balance, September 30, 2016 ($)
CEO and President (i)		615,898	416,983		(371,859	)		(5,581	)		655,441
COO (viii)		33,522			(32,346	)		(1,176	)		-
		649,420	416,983		(404,205	)		(6,757	)		655,441

Loan Agreement from related parties (ref Note 8 - Loan)

		Balance, December 31, 2015 ($)				Addition ($)				Payment ($)				Foreign Exchange on the Note ($)				Balance, September 30, 2016 ($)
CEO and President (i)			163,595				44,925				(214,072	)			5,552				-

F-18

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 11 - 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 during the nine months ended September 30, 2016:

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. As at March 31, 2016 100,000 shares have been issued in accordance with the terms and valued at $85,000 the fair market value on agreement date, which amount has been expensed as consulting fees.

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. As at March 31, 2016 50,000 shares have been issued in accordance with the terms and valued at $42,250 the fair market value on agreement date, which amount has been expensed as consulting fees.

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 August 18, 2016 and the Consultant shall be remunerated with 200,000 shares of the common stock. As at March 31, 2016 200,000 shares have been issued in accordance with the terms and valued at $169,000 the fair market value on agreement date, which amount has been expensed as consulting fees.

F-19

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 11 - CAPITAL STOCK (continued)

Share issuances during the nine months ended September 30, 2016: (continued)

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. As at March 31, 2016 200,000 shares have been issued in accordance with the terms and valued at $169,000 the fair market value on agreement date, which amount has been expensed as consulting fees.

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. As at March 31, 2016 100,000 shares have been issued in accordance with the terms of the award valued at $84,500, the fair market value on grant date, which amount has been expensed as stock based compensation.

On March 2, 2016, the Company entered into Private Placement Subscription Agreements with two individuals. Under the terms of the Agreements the Individuals each 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 total cumulative cash proceeds of US$50,000. 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. 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. 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 were valued at the fair market value on the date of grant totaling $46,480, which amount has been expensed as stock based compensation.

On April 4, 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 400,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$200,000. The shares are subject to applicable resale restrictions.

On May 20, 2016, the Company entered into Private Placement Subscription Agreements with two individuals. Under the terms of the Agreements the Individuals subscribed for a total of 35,355 shares of the Company’s common stock at a purchase price of US$0.60 per share for total cash proceeds of US$21,213. The shares are subject to applicable resale restrictions.

On May 20, 2016, the Company issued 312,500 common shares for services provided by Acorn Management Partners LLC under the professional relations and consulting agreement. The number of the shares to be determined by dividing $250,000 by the closing price on the last trading day’s closing price on the day before the execution day.

F-20

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 11 - CAPITAL STOCK (continued)

Share issuances during the nine months ended September 30, 2016: (continued)

On July 7, 2016, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with an individual (the “Individual”). Under the terms of the Agreement the Individual subscribed for a total of 31,320 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$15,660.00. The shares are subject to applicable resale restrictions.

On July 7, 2016, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with an individual (the “Individual”). Under the terms of the Agreement the Individual subscribed each for a total of 24,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for cash proceeds of US$12,000.00. The shares are subject to applicable resale restrictions.

On July 14, 2016, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with an individual (the “Individual”). Under the terms of the Agreement the Individual subscribed for a total of 33,468 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$16,734.00. The shares are subject to applicable resale restrictions.

On July 22, 2016, the Company entered into a Private Placement Subscription Agreement (the “Agreement”) with an individual (the “Individual”). Under the terms of the Agreement the Individual subscribed for a total of 8,000 shares of the Company’s common stock at a purchase price of US$0.69 per share for total cash proceeds of US$5,500.00. The shares are subject to applicable resale restrictions.

On August 30, the Board of Directors of the Company approved the repurchase from Mrs Heleen Kist of a total of seven hundred thousand (700,000) shares of the Company at a purchase price of US$0.02 per share for total of fourteen thousand (US$14,000) USD for return to treasury and cancellation.

On September 9, 2016, the Company entered into five Private Placement Subscription Agreements (the “Agreement”) with five individuals (the “Individual”). Under the terms of the Agreements the Individuals subscribed for a total of 420,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$210,000.00. The shares are subject to applicable resale restrictions.

As at September 30, 2016 and December 31, 2015 the Company had a total of 192,477,104 and 190,743,961 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 2015 to April 2016 respectively (ref Note 11(5)). As at June 30, 2016 a total of 560,000 shares (December 31, 2015 - 336,000 shares) had not yet been issued in the amount of $436,640 (December 31, 2015 - $249,040).

On August 1, 2016, the Company and HAS S.A. entered into a Mutual Release and Waiver of Compensation Agreement where under HAS S.A. has agreed to waive all further compensation payable under the terms of the original Agreement in the total amount of $436,640 liability for the unissued 560,000 shares of common stock.

F-21

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 11 - CAPITAL STOCK (continued)

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 12 - 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 September 30, 2016 and December 31, 2015:

	September 30, 2016				December 31, 2015
	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		25,000		0.04
Granted		-		-		-		-
Exercised		-		-		-		-
Expired or cancelled		-		-		-		-
Outstanding at the period		25,000		0.04		25,000		0.04

F-22

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 12 - STOCK OPTIONS (continued)

	Stock Options			Weighted Average Grant Date Fair Value

Unvested, end of December 31, 2014		25,000		$	0.04
Granted		-
Vested		(25,000	)		-
Forfeited		-			-
Unvested, end of December 31, 2015		-		$	-
Unvested, end of September 30, 2016		-		$	-

Valuation Assumptions

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 September 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	%

	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.

F-23

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 13– 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 September 30, 2016 was $4,587,000 in the U.S., $1,237,000 in Greece and $166,000 in the U.K and at December 31, 2015 was $3,843,000 in the U.S., $800,840 in Greece and $453,700 in the U.K.

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

	Nine months ended September 30,
	2016			2015
Current operations	$	281,500		$	534,200
Timing differences, Stock based compensation		(28,730	)		-
Less, Change in valuation allowance		(252,770	)		(534,200	)
Net refundable amount	$	-		$	-

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

	Nine months ended September 30,
	2016			2015
Current operations	$	113,500		$	92,000
Less, Change in valuation allowance		(113,500	)		(92,000	)
Net refundable amount	$	-		$	-

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

	Nine months ended September 30
		2016			2015
Current operations	$	(7,500	)	$	1,012,000
Research and development		(49,900	)		(980,600	)
Less, Change in valuation allowance		57,400			(31,400	)
Net refundable amount	$	-		$	-

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 September 30, 2016 and 2015 are as follows:

	September 30, 2016									September 30, 2015
	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	$	4,587,000		$	1,237,000		$	166,000		$	2,403,548		$	231,800		$	226,800
Less, Valuation allowance		(4,587,000	)		(1,237,000	)		(166,000	)		(2,403,548	)		(231,800	)		(226,800	)
Net deferred tax asset	$	-		$			$	-		$	-		$	-		$	-

F-24

HCi Viocare

Notes to Unaudited Consolidated Financial Statements

Note 13 – PROVISION FOR INCOME TAXES: (continued)

The Company has no tax position at September 30, 2016 and 2015 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 September 30, 2016 and 2015. 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 14 - SUBSEQUENT EVENTS

On October 11, 2016 the Company entered into Private Placement Subscription Agreement with an individual. Under the terms of the Agreements the Individual subscribed for a total of 40,000 shares of the Company’s common stock at a purchase price of US$0.50 per share for total cash proceeds of US$20,000.00. The shares are subject to applicable resale restrictions

On October 24, 2016 the Company granted a total of 25,000 stock awards to various employees of its wholly owned UK subsidiaries with a market value of $1 per share. The shares are subject to applicable resale restrictions

On November 3, 2016, the Company entered into a services agreement with a company under the name KCN Ltd. for the introduction of the Company to potential investors in the Middle East and specifically in Saudi Arabia in view of the Company project to expand its business and establish three (3) Prosthetic and Orthotic Clinics in the region. The services agreement has a six-month term ending on May 2, 2017, and the Consultant shall be remunerated with a success fee of 2% of the investment amount.

On November 4, 2016 the Company entered into a Private Placement Subscription Agreement with an individual. Under the terms of the Agreements the Individual subscribed for a total of 85,000 shares of the Company’s common stock at a purchase price of US$0.60 per share for total cash proceeds of US$51,000.00. The shares are subject to applicable resale restrictions

F-25

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

The following discussion and analysis of the results of operations and financial condition of HCi Viocare for the period ended September 30, 2016 shall be read in conjunction with the financial statements and notes. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results of the timing of events could differ materially from those projected in these forward-looking statements as a result of a number of factors, including those set forth under the Risk Factors, Special Note Regarding Forward-Looking Statements and Business sections in our Form 10-K as filed with the Securities and Exchange Commission on March 30, 2016 We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

BUSINESS OVERVIEW

We were incorporated on March 26, 2007 under the laws of Nevada. Our activities have been limited to developing our business plan. 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 February 12, 2014, the Company, through our newly incorporated Scottish subsidiary, HCi Viocare Technologies Limited, entered into an acquisition agreement with Christos Kapatos, a director of both the Company and HCi Viocare Technologies (“Kapatos”), to acquire all rights and interest in and to a patented technology known as “Socket-Fit”. Socket-Fit 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 through the acquisition of the background intellectual property rights (“IPR”) to undertake and fund, through its U.K. subsidiary, a project as defined in the Acquisition Agreement 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.

HCi Viocare Technologies intends to fund any further development on the aforementioned innovative technology, as well as to complete the development of #additional technologies in P&O and wearable devices which were acquired from Dr. Kapatos as part of the extended technology applications of the insole technology discussed below. The company is seeking to operate a technology licensing model, collaborating with Global leading companies in their respective fields, to develop innovative products and receive royalties once they are launched. It is intended that such collaboration and licensing agreements be entered into during 2015 and 2016, with some products launching during 2016. Socket-Fit, however will take a minimum of two years to get to market from the commencement of the research and development of the product.

On April 16, 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 low-cost Smart Insole system, 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.

As the Company has pursued relationships with leading sports and medical device companies, it has become clear that the Smart Insole sensing technology has even more applications, and the company now intends to also co-develop a smart mattress, to help prevent pressure ulcers, and a low-cost bicycle power meter.

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 P&O and diabetes clinics in the European market, covering Southern Europe, the Middle East and North Africa.

On July 25, 2014, the Company entered into another 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 300,000 Euros with an annual interest of 5%, and the Company agreed to repay the Facility within 5 years from the date of the loan agreement. If for any reason the Company fails to repay the loan facility on the due date, the Lender has the right to convert it into shares of the common stock of the Company at Three Cents in the lawful currency of the United States (USD $0.00429) per share.

On December 10, 2014, the Company applied for three patents arising from the Company’s development of the Smart Insole IPR, to protect the essential workings of the technology, as well as it being used in a wide range of applications. The patent applications were submitted to the UK Patent Office by the patent and trade mark attorney firm JA Kemp of London, UK, thereby cementing the filing date for future application of the patents to overseas territories.

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 July 6, 2016 the Company entered a Mutual Release and Waiver of Compensation Agreement with HAS S.A. through which HAS S.A. waived from any compensation claims against the Company as per terms of the agreement originally entered into May 7, 2015 which expired on May 7, 2016, including the accrued monthly payments totaling $33,000 and the 560,000 shares of the common stock payable, due to its non-performance.

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 August 4, 2015. t. Mr. Leontaritis received no compensation for the Trademark Assignment.

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 EUR€150,000 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 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 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 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. 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.

On April 22, 2016 the HCi Viocare (the “Company”) entered into an agreement (the “Agreement”) with Renell Wertpapierhandelsbank AG (“Renell”) with respect to the inclusion and trading of all Company shares in the open market at the Berlin Stock Exchange in Germany. The Company obtained the required data for exchange trading in Germany, that is Wertpapierkennnummer (“WKN”): A2AG73 and Ticker symbol: HCF

·	First 6 Month period

-Cash: $17,500 per month, monthly payment made upon the execution of the contract

-Stock: $250,000 dollars’ worth of restricted 144 common stock of the Company (“VICA”), due upon the execution of contract. The number of the shares to be determined by dividing $250,000 by the closing price on the last trading day’s closing price on the day before the execution day.

·	Second 6 Month period

-Cash: $17,500 per month, monthly payment made upon the execution of the contract

On August 29, 2016 the Company’s subsidiary, HCi Viocare Clinics UK Ltd. approved through a termination letter (“Termination Letter”) the termination following respective resignation (“Form of resignation”) of the services agreement originally entered into with Mrs. Heleen Francoise Kist, Chief Operating Officer, on November 7, 2014 and filed on Form 8-K with the Securities and Exchange Commission as of November 12, 2014.

The said agreement was extended on October 15, 2015, for another year ending September 30, 2016 and filed on Form 8-K with the Securities and Exchange Commission as of October 15, 2015.

As per the termination letter the Company has undertaken to repurchase a total of seven hundred thousand (700,000) shares of the Company at a purchase price of US$0.02 per share for total of fourteen thousand (US$14,000) USD for return to treasury and cancellation.

On September 23, 2016 the Company entered into a licensing agreement with respect to certain applications of its Flexisense™ Technology with Carilex Medical Inc. a leading medical mattresses manufacturer. Under the terms of the agreement the Company will receive a Technology Access Fee, as well as certain staggered success fee payments as each commercialized product under the scope of the agreement is completed. In addition, there are product based royalty fees payable to the Company on a sliding scale based on production levels for all commercial products sold into the marketplace.

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

RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30, 2016 and 2015

Revenue, Cost of Revenue, and Gross Profit - We have incurred losses since inception. We generated $463,350 in revenues from operations and $115,917 in cost of goods sold for the three months ended September 30, 2016, compared to $17,539 in revenue and $716,109 in costs of goods sold for the three month periods ended September 30, 2015. The substantive increase in revenue is due to an increase to our customer base as a direct result of marketing efforts undertaken by the Company during fiscal 2016 which has established the clinic as a key P&O service center in Glasgow. Operating expenses for the three months ended September 30, 2016 were $278,235, compared to $554,117 for the three months ended September 30, 2015.

Operating Expenses – Operating expenses totaling $(191,405) in the three months ended September 30, 2016 decreased by $ $ 745,522 in 2016 compared to $554,117 in operating expenses in 2015, a decrease of approximately over 100%. The substantial decrease period over period is almost entirely attributable to the termination of certain consulting agreements during the period, where under the service provider agreed to waive accrued fees totaling $469,640 resulting in net income from consultancy fees in the period of $(383,993). Further, there was a substantive decrease in both professional fees and office expenses during the most recent three months ended September 30, 2016 due to the fact that certain stock awards issued in the three months ended September 30, 2015 to in-house legal counsel and an administrative support assistant had no comparative charges during the most recently completed three-month period.

Loss from Operations - Due to the substantive increase in revenue and decrease in operating expenses and cancelation of fees payable under a terminated consulting contract we recorded income from operations totaling $538,838during the 3rd QTR 2016 as compared to an operating loss of $552,687during the third quarter of fiscal 2015.

Other expenses - during the three months ended September 30, 2016, the Company recorded income from other expenses of $1,213 as result of gains from foreign currency transactions as opposed to a loss from other income of $1,694 in the prior comparative period.

Net Loss - As a result of the substantial decrease in operating expenses during the current three month period and the substantive increase to gross profit, the Company recorded net income during the three months ended September 30, 2016 of $539,946 compared to a net loss of $555,291 in the prior comparative period.

Comparison of the Nine Months Ended September 30, 2016 and 2015

Revenue, Cost of Revenue, and Gross Profit - We have incurred losses since inception. We generated $652,287 in revenues from operations and $195,286 in cost of goods sold for the nine months ended September 30, 2016, compared to $54,748 in revenue and $29,399 in costs of goods sold for the nine month periods ended September 30, 2015. The substantive increase in revenue is due to an increase to our customer base as a direct result of marketing efforts undertaken by the Company during fiscal 2016 which has established the clinic as a key P&O service center in Glasgow. Operating expenses for the nine months ended September 30, 2016 were $1,684,028, compared to $6,634718 for the nine months ended September 30, 2015.

Operating Expenses – Operating expenses decreased by $4,950,690 to $1,684,028 in 2016 compared to $6,634,718 in operating expenses in 2015, decrease of approximately 75%. The substantial decrease in research and development by $4,915,267 from $5,194,925 (2015) to $279,658 (2016) is predominantly related to the issuance of 7,000,000 shares of common stock to Kapatos valued at fair market value on issuance totaling $4,550,000 during the three months ended September 30, 2015. However, consultancy fees increased substantially from $148,817 (2015) to $411,791 in the current period, predominantly related to the issuance of 700,000 shares as a result of various consulting agreement with third parties valued at $591,500, with no comparative expenses in the prior period ended September 30, 2015. The increase to consultancy fees in the current nine-month period is net $469,640 in accruals which were reversed in the current period as a certain services agreement was terminated and fees accrued waived in full. Further, there was a decrease in both professional fees and office expenses during the most recent three months ended September 30, 2016 due to the fact that certain stock awards issued in the nine months ended September 30, 2015 to in-house legal counsel and an administrative support assistant had no comparative charges during the most recently completed nine-month period.

Loss from Operations - Due to the substantive increase in revenue and decrease in operating expenses, including a dramatic reduction to fees allocated to Research and Development, as well as the cancelation of fees payable under a terminated consulting contract we recorded a loss from operations of $1,227,027 during the nine months ended September 30, 2016 as compared to $6,609,369 in the prior comparative nine month period.

Other expenses - during nine months ended September 30, 2016, a substantive decrease to interest from $377,687(2015) to $4,016 (2016). During the nine months ended September 30, 2015, a substantive loss on debt settlement of $1,804,704 was recorded, with no comparative amount in the same period in 2016.

Net Loss - As a result of the substantial decrease in operating expenses during the current nine-month period and the substantive increase to gross profit, the Company recorded a net loss during the nine-months ended September 30, 2016 of $51,215,551 compared to a net loss of $8,792,480 in the prior comparative period.

CAPITAL RESOURCES AND LIQUIDITY

At September 30, 2016, we had $9,153 cash on hand and liabilities of $1,004,703 in accounts payable and accrued expenses (including amounts due to related parties) and $655,441 in advances from related parties as compared to cash on hand of $9,579, liabilities of $650,389 in accounts payable and accrued expenses (including amounts due to related parties), $649,420 in advances from related parties, liabilities for unissued shares of $249,040 and corporate taxes of $12,074 at December 31, 2015. Accounts receivable increased substantially during the current nine months totaling $254,423 at September 30, 2016 compared to only $3,075 at December 31, 2015 as the Company’s prosthetics and orthotics clinic in Glasgow has greatly increased its patient through-put. Presently we rely on our President and director, as well as private placements from qualified investors to fund our general operating expenses. All new loans and advances secured from officers sand directors during the nine months ended September 30, 2016 have been repaid in the current period. The Company has closed private placements in the amount of $709,527 during the nine months ended September 30, 2016. 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 fiscal year 2016.

The Company expects it will need to raise a total of $5,000,000 to $15,000,000 to fund its proposed operations for the next twelve to thirty-six months, including the planned expansion of its Viocare Clinics to add up to 5 additional site locations. It intends to fund operations by a combination of related party loans, debt financing and equity placements. The Company is seeking equity private placements from qualified investors with which to fund operations until such time as it can secure alternate financing arrangements. The Company is also seeking joint venture partners for its various Insole technology applications as a further means to fund ongoing commercialization efforts.

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

GOING CONCERN

The Company incurred net losses of $1,215,551and $8,792,480 for the nine months ended September 30, 2016 and 2015, respectively and has a retained deficit of $31,368,599. In addition, the Company had a working capital deficiency of $1,290,467 and a stockholders' deficit of $1,048,108 at September 30, 2016. These factors raise substantial doubt about the Company's ability to continue as a going concern.

During the period September 2013 through September 30, 2016, the Company relied heavily for its financing needs on its CEO, President and director, Mr. Sotirios Leontaritis. The Company is actively seeking alternative financing sources.

NEED FOR ADDITIONAL FINANCING

Costs associated with being a public company are much higher than those of a private company. HCi Viocare has chosen public registration before the business has developed a predictable cash flow. There are present registration expenses and future legal and accounting expenses, future reporting requirements to the SEC, future exchange listing requirements, and future investor relations 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 registering and maintaining a public company, may make the economic viability of HCi Viocare very doubtful. In addition, the Company requires additional financing in order to continue to execute its business plan which includes the commercialization of one or more technologies, the ongoing operation of a P&O clinic in Glasgow, the opening of a new clinic planned for 2016 in Athens, as well as other strategically placed P&O clinics, as well as ongoing research and development to bring new technologies to market.

In the past we have relied on advances from our president and private placements to cover our operating costs. There can be no assurance that our president will continue to fund the Company or that any other capital will be available if and when required from qualified investors. Our need for capital may change dramatically if we acquire an interest in a business opportunity during that period. At present, we have no commitments or agreements with respect to the acquisition of any business venture, however, we are currently looking at a number of business opportunities in the medical field. There can be no assurance that we will identify a business venture suitable for acquisition in the future. Further, we cannot assure that we will be successful in consummating any acquisition on favorable terms or that we will be able to profitably manage any business venture we acquire. Should we require additional capital, we may seek additional advances from officers, sell common stock or find other forms of debt financing.

CRITICAL ACCOUNTING POLICIES

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, and revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in Note 4 of our financial statements for the period ended September 30, 2016. While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

RECENT ACCOUNTING PRONOUNCEMENTS

OFF BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

(a) Evaluation of disclosure controls and procedures. Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”), also the Chief Financial Officer (“CFO”) (the Company’s principal executive officer, principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures are effective as of September 30, 2016 to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting that occurred during the last quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, the Company may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on the Company.

Item 1A. Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no unregistered securities to report which were sold or issued by the Company without the registration of these securities under the Securities Act of 1933 in reliance on exemptions from such registration requirements, within the period covered by this report, which have not been previously included in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K other than as disclosed below:

Exemption From Registration. The shares of Common Stock referenced herein and acquired under private placement 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.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On August 2, 2016 the Company approved a further one-year extension to the Consulting Agreement with Dr. Christos Kapatos on the same terms and conditions, so that the agreement will expire April 16, 2017. (ref: Note 9 – Commitments included the Financials Statements presented herein).

The listing of Company shares in the Berlin Stock Exchange has not been completed due to the inability of the Clearing Service (Clearstream) to set up stock for clearing in the clearing system. Clearstream has not provided further details and as a result the Company's stock will be removed from the Berlin Stock Exchange effective November 15, 2016

ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibits:	Description
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

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
10.39	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
10.40	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 April 18, 2016
10.41	The Agreement with Renell Wertpapierhandelsbank AG dated April 22, 2016	Incorporated by reference to our Form 8-K filed with the SEC on April 24, 2016
10.42	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 May 23, 2016
10.43	Professional Relations and Consulting Agreement between the Company and Acorn Management Partners, LLC	Incorporated by reference to our Form 10-Q filed with the SEC on May 23, 2016
10.44	The Agreement with HAS S.A. dated July 6, 2016	Incorporated by reference to our Form 10-Q filed with the SEC on August 22, 2016
10.45	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 July 13, 2016
10.46	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 July 15, 2016
10.47	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 July 27, 2016
10.48	The Extension and Amendment of Engagement Letter with LXM Finance LLP	Incorporated by reference to our Form 10-Q filed with the SEC on August 22, 2016

10.49	The Addendum No. 2 to the Consulting Agreement of April 16, 2014 with Dr. Christos Kapatos, dated August 2, 2016	Incorporated by reference to our Form 10-Q filed with the SEC on August 22, 2016
10.50	The Addendum No. 2 to the Scientific Advisory Board Agreement of April 15, 2014 with Dr. Christos Kapatos, dated August 2, 2016	Incorporated by reference to our Form 10-Q filed with the SEC on August 22, 2016
10.51	Form of termination relating to services agreement between HCi Viocare Clinics UK Limited and Heleen Francoise Kist, dated August 29, 2016	Incorporated by reference to our Form 8-K filed with the SEC on September 22, 2016
10.52	Form of Private Placement Subscription Agreements between the Company and the Individual subscribers	Incorporated by reference to our Form 8-K filed with the SEC on September 22, 2016
10.53	Form of Private Placement Subscription Agreement between the Company and the Individual	Filed herewith
10.54	Form of grant notice for stock awards issued October 24, 2016	Filed herewith
10.55	The agreement with KCN Ltd.	Filed herewith
10.56	Form of Private Placement Subscription Agreement between the Company and the Individual	Filed herewith
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

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

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:	November 14, 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)

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