CHINA NO. MED DEVICE (OTC BB:CNMV)

ITEM 1.01      ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

As used in this Current Report on Form 8-K, unless otherwise stated, all references to the “Company”, “we,” “our” and “us” refer to HCi VioCare.

On April 16, 2014, the Company, through our Scottish subsidiary, HCi VioCare Technologies Limited (“VioCare”), entered into an acquisition agreement with Dr. Christos Kapatos, a director of both the Company and VioCare (“Kapatos”), to acquire all rights and interest in and to the background IPR for a developing technology known as “Smart Insole”. Kapatos has conceived and been working on a Smart Insole System which is believed to be a state-of-the-art, pressure and shear (friction)-sensing insole with an incorporated real-time global display application and a fully featured support web-space that tells the user and his podiatrist/physiotherapist when inappropriate or dangerous conditions are developing on the feet. The product is being designed to mitigate diabetic foot complications, such as ulceration, infection and amputation, as well as improve the total health of a person with diabetes, by incorporating the readings from the insole system to a specialized web-space that will help the user monitor not just the health of his feet but also his diabetes by looking after his diet and exercise.

The competing insoles that are currently commercially available at this time can only monitor vertical pressure on the foot and not shear (friction). Also, none of these devices produce real-time data that can be of assistance to the user. The web-space “total diabetes care” concept is also unique.

As consideration for the acquisition:

· VioCare shall cause the parent Company to issue to Kapatos a total of 500,000 shares of the common stock of the Company on execution of the agreement and 500,000 shares of the common stock of the Company for each and every new version of the technology (new version to mean any update or improvement to the initial commercial product to be developed from the technology, after the commercial development of the first Market Ready Insole from the technology acquired, should the new version be developed to commercial market ready stage);
 
· a cash bonus in the amount of $10,000,000USD should the technology be sold at any stage of development for an amount equal or greater than five hundred million ($500,000,000) cash or the equivalent thereof by way of any other consideration.

A copy of the Acquisition Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K.

Further, 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) 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 two hundred thousand (200,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), five hundred thousand (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).

A copy of the Consulting Agreement is filed as Exhibit 10.2 to this Current Report on Form 8-K.

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

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

· Professor Stephan Solomonidis (“Solomonidis”) will provide services as Head of Research for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand pounds (£20,000 GBP) 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) per annum, and he shall receive two hundred thousand (200,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), five hundred thousand (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).

· Professor Martha Lucia Zequera (“Zequera”) will provide services as Director of Diabetic Foot Related Products and Services for the Company and the Company’s wholly owned subsidiaries. The contract has a term of one year, renewable for such further term as may be mutually agreed between the parties. Compensation shall be twenty thousand dollars ($20,000 USD) per year payable in equal monthly installments beginning on May 1, 2014. In the case that a research and development project is initiated and completed during the term of the agreement, Zequera’s fee will be readjusted to the amount of forty thousand dollars ($40,000 USD) per annum, and he shall receive two hundred thousand (200,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), five hundred thousand (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).

· 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) 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) per annum, and he shall receive two hundred thousand (200,000) shares of the Company’s common stock for each research project completed with a valuation less than twenty million dollars ($20,000,000 USD), five hundred thousand (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).

Management Discussion and Analysis

Results of Operations for the Year ended December 31, 2013 Compared to the Year ended December 31, 2012
 
We have experienced losses since inception.  We generated $0 in revenues from operations during the year ended December 31, 2013 and December 31, 2012.  Expenses during the year ended December 31, 2013 were $1,338,538 which consisted of office rent of $3,596, office expenses of $41,882, consultancy fees of $13,197,  share based compensation totaling $1,250,000 which amount was based on the valuation of a stock award granted to our Chief Executive Officer on grant date, professional fees of $17,862, research and development expenses of $2,739 and travel and entertainment expenses of $9,262 giving us a net loss from operations of $1,338,538.  For the same period in 2012, our expenses were $13,627, consisting of office rent of $4,800, office expenses of $2,107, and professional fees of $6,720 resulting in a net operating loss of $13,627.  Our expenses during the year ended December 31, 2013 increased substantially over the expenses of the year ended December 31, 2013 as we had increased operations due to the change in control of management of the Company and the expenses related to negotiating and acquiring assets for the proposed ongoing business of the Company. The decrease in our office rent from $4,800 for the year ended December 31, 2012 to $3,596 for the year ended December 31, 2013 is attributable to the discontinuance of the office lease in China. Office expenses increased to $42,278 (2013) from $2,107 due to the

Company purchasing office supplies, payments for administration and secretarial services and generally ramping up operations. Our professional fees increased from $6,720 for the year ended December 31, 2012 to $17,862 for the year ended December 31, 2013, as we required additional professional services and increased filing obligations for actions being undertaken to commence full operations of the Company. As well, we incurred research and development expenses of $2,739, consultancy fees of $13,197, share based compensation of  $1,250,000 which amount was based on the valuation of a stock award granted to our Chief Executive Officer on grant date and travel and entertainment expenses of $9,262 related to increased operations with no comparable expenses for December 31, 2012.  For the period of March 26, 2007 (inception) through the period ended December 31, 2013, our expenses from operations were $1,694,448 and consisted of office rent of $30,396, office expenses of $56,125, consultancy fees of$13,197, share based compensation of  $1,250,000 which amount was based on the valuation of a stock award granted to our Chief Executive Officer on grant date, professional fees of $307,729, research and development expenses of $2,739 and travel and entertainment expenses of $9,262 for a total loss of $1,338,921 which included an interest income of $219 and a loss on foreign exchange of $383.