----

|   Title of Each Class |   |   Name of each exchange on which registered |
|---------------------------------|--------|-------------------------------------------------------|
|  None                      |   |  Not applicable                                  |

----

|   | Yes ☐ |   | No ☒ |   |
|--------|-------------|--------|------------|--------|

|   | Yes ☐ |   | No ☒ |   |
|--------|-------------|--------|------------|--------|

|   | Yes ☒ |   | No ☐ |   |
|--------|-------------|--------|------------|--------|

|   | Yes ☐ |   | No ☐ |   |
|--------|-------------|--------|------------|--------|

|  U.S. GAAP ☐ |   |  International Financial Reporting Standards as issued by the International Accounting Standards Board ☒    |  Other ☐   |   |
|-------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|--------|

----

| GENERAL | - 1 -                                                          |
|---------|----------------------------------------------------------------|
| PART I  | - 2 -                                                          |
|    | ITEM 1 - IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | - 2 - |
|    | ITEM 2 - OFFER STATISTICS AND EXPECTED TIMETABLE               | - 2 - |
|    | ITEM 3 - KEY INFORMATION                                       | - 2 - |
|    |                                                           | A. | Selected Financial Data | - 2 - |
|    |                                                           | B. | Capitalization and Indebtedness | - 6 - |
|    |                                                           | C. | Reasons for the Offer and Use of Proceeds | - 6 - |
|    |                                                           | D. | Risk Factors | - 6 - |
|    | ITEM 4                                                         | INFORMATION ON THE COMPANY | - 12 - |
|    |                                                           | A. | History and Development of the Company | - 12 - |
|    |                                                           | B. | Business Overview | - 13 - |
|    |                                                           | C. | Organizational Structure | - 14 - |
|    |                                                           | D. | Property, Plant and Equipment | - 14 - |
|    | ITEM 5                                                         | OPERATING AND FINANCIAL REVIEW AND PROSPECTS | - 15 - |
|    |                                                           | A. | Operating Results | - 15 - |
|    |                                                           | B. | Liquidity and Capital Resources | - 17 - |
|    |                                                           | C. | Research and Development, Patents and Licences | - 19 - |
|    |                                                           | D. | Trend Information | - 19 - |
|    |                                                           | E. | Off-Balance Sheet Arrangements | - 20 - |
|    |                                                           | F. | Tabular Disclosure of Contractual Obligations | - 20 - |
|    |                                                           | G. | Safe Harbor | - 20 - |
|    | ITEM 6                                                         |  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | - 20 - |
|    |                                                           | A. | Directors and Senior Management | - 20 - |
|    |                                                           | B. | Compensation | - 23 - |
|    |                                                           | C. | Board Practices | - 25 - |
|    |                                                           | D. | Employees | - 27 - |
|    |                                                           | E. | Share Ownership | - 27 - |
|    | ITEM 7                                                         | MAJOR SHAREHOLDER AND RELATED PARTY TRANSACTIONS | - 30 - |
|    |                                                           | A. | Major Shareholders | - 30 - |
|    |                                                           | B. | Related Party Transactions | - 31 - |
|    |                                                           | C. | Interests of Experts and Counsel | - 32 - |
|    | ITEM 8                                                         | FINANCIAL INFORMATION | - 32 - |
|    |                                                           | A. | Consolidated Statements and Other Financial Information | - 32 - |
|    |                                                           | B. | Significant Changes | - 32 - |
|    | ITEM 9                                                         | THE OFFER AND LISTING | - 32 - |
|    |                                                           | A. | Offer and Listing Details – Price History | - 33 - |
|    |                                                           |   | As at December 31, 2013, none of our securities were subject to escrow. | - 34 - |
|    |                                                           | B. | Plan of Distribution | - 34 - |
|    |                                                           | C. | Markets | - 34 - |
|    |                                                           | D. | Selling Shareholders | - 34 - |
|    |                                                           | E. | Dilution | - 34 - |
|    |                                                           | F. | Expenses of the Issue | - 35 - |
|    | ITEM 10                                                        | ADDITIONAL INFORMATION | - 35 - |
|    |                                                           | A. | Share Capital | - 35 - |
|    |                                                           | B. | Memorandum and Articles of Incorporation | - 35 - |
|    |                                                           | C. | Material Contracts | - 35 - |
|    |                                                           | D. | Exchange Controls | - 35 - |
|    |                                                           | E. | Taxation | - 36 - |
|    |                                                           | F. | Dividends and Paying Agents | - 43 - |
|    |                                                           | G. | Statement by Experts | - 43 - |
|    |                                                           | H. | Documents on Display | - 43 - |
|    |                                                           | I. | Subsidiary Information | - 43 - |

----

|          | ITEM 11  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | - 43 -                                        |
|----------|----------|------------------------------------------------------------------------------|-----------------------------------------------|
|     |     | A.                                                                           | Transaction Risk and Currency Risk Management | - 43 - |
|     |     | B.                                                                           | Interest Rate Risk and Equity Price Risk      | - 43 - |
|     |     | C.                                                                           | Exchange Rate Sensitivity                     | - 43 - |
|     |     | D.                                                                           | Commodity Price Risk                          | - 43 - |
|     | ITEM 12  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       | - 44 -                                        |
| Part II  |     |                                                                         |                                          | - 44 - |
|     | ITEM 13  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | - 44 -                                        |
|     | ITEM 14  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | - 44 -                                        |
|     | ITEM 15  | CONTROLS AND PROCEDURES                                                      | - 44 -                                        |
|     | ITEM 16A | AUDIT COMMITTEE FINANCIAL EXPERTS                                            | - 45 -                                        |
|     | ITEM 16B | CODE OF ETHICS                                                               | - 45 -                                        |
|     | ITEM 16C | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       | - 45 -                                        |
|     | ITEM 16D | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | - 46 -                                        |
|     | ITEM 16E | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS        | - 46 -                                        |
|     | ITEM 16F | CHANGES TO REGISTRANT'S CERTIFYING ACCOUNTANT                                | - 46 -                                        |
|     | ITEM 16G | CORPORATE GOVERNANCE                                                         | - 46 -                                        |
|     | ITEM 16H | MINE SAFETY DISCLOSURE                                                       | - 47 -                                        |
| PART III |     |                                                                         |                                          | - 47 - |
|     | ITEM 17  | FINANCIAL STATEMENTS                                                         | - 47 -                                        |
|     | ITEM 18  | FINANCIAL STATEMENTS                                                         | - 47 -                                        |
|     | ITEM 19  | EXHIBITS                                                                     | - 47 -                                        |

----

----

| ITEM 1 | **IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS** |
|--------|-----------------------------------------------------------|

| ITEM 2 | **OFFER STATISTICS AND EXPECTED TIMETABLE** |
|--------|---------------------------------------------|

| ITEM 3 | **KEY INFORMATION** |
|--------|---------------------|

----

| (i) | Empower Healthcare Corporation (“EHC”) is an Oregon based corporation that provides physician services to patients. EHC focuses on pain management services and is a pioneer in the recommendation of cannabis based products to its patients. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The Hemp & Cannabis Company (“THCC”) is an Oregon corporation. THCC owns and leases real estate that was used to cultivate cannabis with state licenses in both Oregon and Washington. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | SMAART Inc. is an Oregon corporation that provides administrative services to SMAART owned companies. |
|-------|-------------------------------------------------------------------------------------------------------|

| (iv) | The Hemp & Cannabis Company (Washington) owns a property in Washington state that previously was used to cultivate cannabis on behalf of clinic patients. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                       |   |   |   |   | Year Ended December 31, |   |
|--------------------------------------------|--------|--------|--------|--------|-------------------------|--------|
|                                       |   | 2016   |   |   | 2015                    |   |   | 2014 |   |   | 2013 |   |   | 2012 |   |
|                                       |   |   |   |   | ($ thousands)           |   |
| Balance Sheet Data                         |   |   |   |   |                    |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents                  |   |   | 19     |   |                    |   | 124 |   |   |   | 334 |   |   |   | 617 |   |   |   | 2,394 |   |
| Total Assets                               |   |   | 52     |   |                    |   | 163 |   |   |   | 409 |   |   |   | 3,226 |   |   |   | 15,340 |   |
| Total Liabilities                          |   |   | 341    |   |                    |   | 237 |   |   |   | 223 |   |   |   | 3,803 |   |   |   | 10,330 |   |
| Total Shareholders’ Equity (deficit) |   |   | (289   | )      |                    |   | (74 | ) |   |   | 186 |   |   |   | (577 | ) |   |   | 5,010 |   |

|                                                                                                  |   |   |       |   | Year ended December 31 |   |       |    |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|------------------------|--------|------------|---------|--------|
|                                                                                                  |   | 2016   |       |   | 2015                   |   |       | 2014    |   |   | 2013 |   |   | 2012 |   |
|                                                                                                  |   |   |       |   | ($ thousands)          |   |       |    |   |
| Operating Data                                                                                        |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |
| Revenues and other income                                                                             |   |   | -          |   |                   |   | -          |    |   |   | - |   |   |   | 17 |   |   |   | 1,889 |   |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Expenses:                                                                                             |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Exploration expenses                                                                                  |   |   | -          |   |                   |   | -          |    |   |   | - |   |   |   | 677 |   |   |   | 1,026 |   |
| General and administrative expenses                                                                   |   |   | 268        |   |                   |   | 349        |    |   |   | 602 |   |   |   | 2,813 |   |   |   | 5,304 |   |
| Gain on settlement of accounts payable and others payables                                            |   |   | -          |   |                   |   | (25        | )       |   |   | (1,374 | ) |   |   | - |   |   |   | - |   |
| Impairment charge                                                                                     |   |   | -          |   |                   |   | -          |    |   |   | - |   |   |   | 5,168 |   |   |   | 7,810 |   |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total expenses                                                                                        |   |   | 268        |   |                   |   | 324        |    |   |   | (772 | ) |   |   | 8,658 |   |   |   | 14,140 |   |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit (loss)                                                                               |   |   | 268        |   |                   |   | 324        |    |   |   | 772 |   |   |   | (8,641 | ) |   |   | (12,251 | ) |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Financing income                                                                                      |   |   | -          |   |                   |   | -          |    |   |   | - |   |   |   | 3,027 |   |   |   | 2,480 |   |
| Loss on foreign exchange                                                                              |   |   | (8         | )      |                   |   | (23        | )       |   |   | (37 | ) |   |   | (30 | ) |   |   | (745 | ) |
| Gain on revaluation of warrant liability                                                              |   |   | 45         |   |                   |   | 78         |    |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Profit (loss) before income taxes                                                                     |   |   | (215       | )      |                   |   | (269       | )       |   |   | 735 |   |   |   | (5,644 | ) |   |   | (10,516 | ) |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Income taxes                                                                                          |   |   | -          |   |                   |   | -          |    |   |   | - |   |   |   | - |   |   |   | (41 | ) |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net profit (loss) and comprehensive profit (loss)                                                     |   |   | (215       | )      |                   |   | (269       | )       |   |   | 735 |   |   |   | (5,644 | ) |   |   | (10,557 | ) |
|                                                                                                  |   |   |       |   |                   |   |       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net (loss) profit per share attributable to equity holders of the parent       |   |   | (0.01      | )      |                   |   | (0.02      | )  |   |   | 0.06 |   |   |   | (0.47 | ) |   |   | (1.19 | ) |
|  Weighted average number of common shares used in computing basic and diluted net loss per share |   |   | 17,112,022 |   |                   |   | 15,439,508 |    |   |   | 12,158,302 |   |   |   | 12,052,073 |   |   |   | 2,954,241 |   |

----

| · | the cash flows, if any, generated by operations, investment activities and financing activities; and |
|--------|------------------------------------------------------------------------------------------------------|

| · | the level of taxation, particularly corporate profits and withholding taxes. |
|--------|------------------------------------------------------------------------------|

----

----

----

----

----

----

| ITEM 4 | **INFORMATION ON THE COMPANY** |
|--------|--------------------------------|

----

----

|  Notes:(1) Adira Energy Ltd. is a holding corporation and is the registered and beneficial owner of 100% of Adira Energy Holding Corp. Adira Energy Ltd.(2) Adira Energy Holding Corp. is a holding corporation and is the registered and beneficial owner of Adira’s foreign subsidiary, , Adira Energy Israel Ltd.  During 2015, the other foreign subsidiaries will have liquidated.(3) Adira Energy Israel Ltd. is currently inactive. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 5 | **OPERATING AND FINANCIAL REVIEW AND PROSPECTS** |
|--------|--------------------------------------------------|

----

----

----

| · | Share-based payment transactions; |
|--------|-----------------------------------|

| · | Impairment of financial assets; and |
|--------|-------------------------------------|

| · | Warrant liability; |
|--------|--------------------|

----

----

| ITEM 6 | **DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES** |
|--------|------------------------------------------------|

| Name(1)                                                                                                                                                                                                                                                                                                                              | Position                                                      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
| Dennis Bennie(2)(3)                                                                                                                                                                                                                                                                                                                  | Director and Chairman                                         |
| Alan Friedman(2)                                                                                                                                                                                                                                                                                                                     | Director and Executive Vice-President, Corporate Development  |
| Alan Rootenberg(2)(3)                                                                                                                                                                                                                                                                                                                | Director                                                      |
| Gadi Levin                                                                                                                                                                                                                                                                                                                           | Chief Executive OfficerChief Financial Officer Secretary           |
| Notes:(1) Neither age nor date of birth of directors or senior managers is required to be reported in our home country (Canada) nor otherwise publicly disclosed.(2) Member of Audit Committee.(3) “Independent” for purposes of National Instrument 52-110– Audit Committees (“NI 52-110”). |

----

| Name and Residence                   | Position                                            | Date First Elected/appointed | Principal Occupation During Last 5 Years                                                                                                                                                                       |
|--------------------------------------|-----------------------------------------------------|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |                                                |                         |                                                                                                                                                                                                           |
| Gadi LevinLev Hasharon, Israel  | Chief Executive Officer and Chief Financial Officer | January 11, 2011        | VP and Chief Financial Officer for two Israeli investment houses in the fields of private equity, hedge funds and real estate estate (July 2008 to December 2009 and January 2010 to June 2010, respectively). |
|                                 |                                                |                         |                                                                                                                                                                                                           |
| Alan FriedmanToronto, Canada         | President, Secretary and Director                   | April 4, 2008                | Founder, President and Chief Executive Officer of Rivonia Capital Inc., South African lawyer                                                                                                                   |
|                                 |                                                |                         |                                                                                                                                                                                                           |
| Dennis BennieToronto, Canada         | Director                                            | April 4, 2008                | Founder, XDL Venture Capital Fund and XDL Capital Invest                                                                                                                                                       |
|                                 |                                                |                         |                                                                                                                                                                                                           |

| Name and Residence             | Position                                            | Date First Elected | Principal Occupation During Last 5 Years                                                                                                                                                                       |
|--------------------------------|-----------------------------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                |               |                                                                                                                                                                                                           |
| Gadi LevinLev Hasharon, Israel | Chief Executive Officer and Chief Financial Officer | January 11, 2011   | VP and Chief Financial Officer for two Israeli investment houses in the fields of private equity, hedge funds and real estate estate (July 2008 to December 2009 and January 2010 to June 2010, respectively). |

----

|  | (a) | was subject to an order that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or  |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | was subject to an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer., other than in the case of Alan Rootenberg where in April 2008, he resigned as interim Chief Financial Officer of Talware Networx Inc., a TSXV listed company. Thirteen months later, in May 2009, the common shares of Talware Networx Inc. were the subject of a cease trade order and the company was delisted from the TSXV. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (a) | is, as at the date hereof, or has been within the 10 years before the date hereof, a director or executive officer of any corporation (including Adira) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | as, within the 10 years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  | (a) | any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|  Names and Principal Position                                     |  Salary ($)                 |  Share-Based Awards ($)  |  Option-Based Awards ($)  |  Non-Equity Incentive Plan Compensation ($)  |  Pension Value ($)  |  All Other Compensation ($)  |  Total Compensation ($)  |
|-----------------------------------------------------------------------------|---------------------------------------|------------------------------------|-------------------------------------|--------------------------------------------------------|-------------------------------|----------------------------------------|------------------------------------|
|  Annual incentive plans                                           |  Long-term incentive plans  |
|  Gadi Levin, Chief Executive Officer and Chief Financial Officer  |  -                          |  -                       |  -                        |  -                                           |  -                  |  -                           |  -                       |  -  |
|  Alan Friedman, Executive Vice President, Corporate Development   |  -                          |  -                       |  -                        |  -                                           |  -                  |  -                           |  -                       |  -  |

----

----

----

|  Holder name         |  No. of Shares held  |  Percentage of holding  |  Percentage of holding on a fully diluted basis(1)  |
|--------------------------------|--------------------------------|-----------------------------------|---------------------------------------------------------------|
|  % in capital        |  % in voting         |  % in capital           |  % in voting                                        |
|  Dennis Bennie(2)    |  2,886,929           |  16.87%                 |  16.87%                                             |  20.50%  |  20.50%  |
|  Alan Friedman(3)    |  330,273             |  1.93%                  |  1.93%                                              |  1.85%  |  1.85%  |
|  Gadi Levin(4)       |  -                   |                    |  0.00%                                              |  0.35%  |  0.35%  |
|  Alan Rootenberg(5)  |  303,333             |  1.77%                  |  1.77%                                              |  2.72%  |  2.72%  |

| (1)   | “Fully diluted basis” means with the exercise of all warrants and options.                                                                                                                                                                     |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | Mr. Dennis Bennie is an interested party in Adira by virtue of his share holdings and by virtue of him serving as the chairman of the Board. Mr. Bennie indirectly holds all of the shares through companies controlled by himself and through his spouse. |
| (3)   | Mr. Alan Friedman is an interested party in Adira by virtue of his share holdings and by virtue of him serving as a director and as Adira’s chief business development officer.                                                                      |
| (4)   | Mr. Levin is an interested party in Adira by virtue of him serving as an officer in Adira.                                                                                                                                                                 |
| (5)   | Mr. Rootenberg is an interested party in Adira by virtue of his share holdings and by virtue of him serving as a director in Adira.                                                                                                                        |

----

|  Name                                                                                                                                                                                                                                                                                                                                                                          |  Position                                                            |  Allotment Date  |  Expiration Date  |   | Exercise Price (US Dollar)(1) |   |   | Vesting Details |   |      | Total(2) |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|----------------------------|-----------------------------|--------|-------------------------------|--------|--------|-----------------|--------|-----------|----------|--------|
|  Dennis Bennie                                                                                                                                                                                                                                                                                                                                                                 |  Chairman                                                            |  Aug. 22, 2012   |  Aug. 21, 2017    |   | $                             | 2.176  |   |            | R      | (3)  |     |   | 101,333 |   |
|  Alan Rootenberg                                                                                                                                                                                                                                                                                                                                                               |  Director                                                            |  Aug. 22, 2012   |  Aug. 21, 2017    |   | $                             | 2.16   |   |            | R      | (3)  |     |   | 667 |   |
|  Alan Friedman                                                                                                                                                                                                                                                                                                                                                                 |  Executive Vice President,  Corporate Development and Director  |  Aug. 22, 2012   | Aug. 21, 2017               |   | $                             | 0.86   |   |            | R      | (3)  |     |   | 70,667 |   |
|  Gadi Levin                                                                                                                                                                                                                                                                                                                                                                    |  Chief Executive Officer and Chief Financial Officer                 |  Aug. 22, 2012   | Aug. 21, 2017               |   | $                             | 2.16   |   |            | R      | (3)  |     |   | 60,667 |   |
| Notes(1)The exercise prices of employee stock options in 2010 were set in US Dollars and as of 2011, in Canadian Dollars. The tables show all amounts in US Dollars.(2)Each stock option may be exercised to purchase one of our common shares at the exercise price.(3)Type R stock options vest 33.33% every twelve months over two years with the initial vesting on August 22, 2012. |                                                                           |

| Name            | Position                 | Allotment date | Expiration date | Exercise price | Total     |
|-----------------|--------------------------|----------------|-----------------|----------------|-----------|
| Dennis Bennie   | Co-Chairman of the Board | May 7, 2015    | May 6, 2018     | US$0.04        | 2,000,000 |
| Alan Rootenberg | Director                 | May 7, 2015    | May 6, 2018     | US$0.04        | 300,000   |

----

|   Plan Category                                                                                                                                                                                                                                                                                                                      |   Number of securities to be issued upon exercise of outstanding options, warrants and rights  |   Weighted-average exercise price of outstanding options, warrants and rights  |  Number of securities remaining available for future issuance under equity compensation plans(1) (excluding securities reflected in the second column)  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  Equity compensation plans approved by securityholders                                                                                                                                                                                                                                                                               |  5,056,00                                                                                      |  0.14                                                                          |  1,475,203                                                                                                                                              |
|  Equity compensation plans not approved by securityholders                                                                                                                                                                                                                                                                           |  N/A                                                                                           |  N/A                                                                           |  N/A                                                                                                                                                    |
|  Total:                                                                                                                                                                                                                                                                                                                              |  5,056,00                                                                                      |  0.14                                                                          |  1,475,202                                                                                                                                              |
|  Notes:(1) The number of securities remaining available for future issuance under our 10% rolling stock option plan as at the end of our most recently completed financial year is calculated on the basis of 10% of our issued and outstanding common shares as at such date (being 10% of 17,112,022 – 236,000 = 1,475,202). |

----

| ITEM 7 | **MAJOR SHAREHOLDER AND RELATED PARTY TRANSACTIONS** |
|--------|------------------------------------------------------|

| Name                            | Number of Common Shares Owned(1)(2) | Percentage(3) |
|---------------------------------|-------------------------------------|---------------|
| Dennis Bennie                   | 2,886,929(4)                        | 16.87%        |
| Goodman Investment Counsel Inc. | 1,055,180(5)                        | 6.17%         |

| (1)   | Under Rule 13d–3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of common shares actually outstanding on the date hereof. |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)   | Each of our common shares entitles the holder thereof to one vote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (3)   | Based on 17,112,022 common shares of Adira issued and outstanding as of the date of this filing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (4)   | Includes shares held by spouse.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| (5)   | Includes shares held by Goodman Investment Counsel Inc. and associated companies that are controlled by Mr. Nathan Goodman.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| Location                  | Number of Shares       | Percentage of Total Shares | Number of Registered Shareholders of Record |
|---------------------------|------------------------|----------------------------|---------------------------------------------|
|  United States  |  107,622     |  0.63            |  57                               |
|  Canada         |  16,265,784  |  95.0.5          |  40                               |
|  Other          |  738,616     |  4.32            |  21                               |
|  Total          |  17,112,022  |  100             |  118                              |

----

| (a) | During the year ended December 31, 2016, we incurred $6 thousand in consulting fees and operating expenses to private companies which are controlled by some of our directors or officers (year ended December 31, 2015 - $58 thousand). |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | Compensation of key management personnel: |
|-----|-------------------------------------------|

|                         | Year endedDecember 31,    |   |   |   |
|------------------------------|---------------------------|--------|--------|--------|
|                         | 2016                      |   | 2015   |   | 2014 |   |
|                         | U.S. dollars in thousands |   |
|                         |                      |   |   |   |   |   |
| Short-term employee benefits |                      | $      | -      |   |   | $ | 38 |   |   | $ | 212 |   |
| Share based compensation     |                      |   | -      |   |   |   | 1 |   |   |   | 22 |   |
|                         |                      |   |   |   |   |   |   |   |   |   |   |   |
|                         |                      | $      | -      |   |   | $ | 39 |   |   | $ | 234 |   |

----

|                     | Year endedDecember 31,    |   |   |   |
|--------------------------|---------------------------|--------|--------|--------|
|                     | 2016                      |   | 2015   |   | 2014 |   |
|                     | U.S. dollars in thousands |   |
|                     |                      |   |   |   |   |   |
| Share based compensation |                      | $      | 5      |   |   | $ | 45 |   |   | $ | 38 |   |

| ITEM 8 | **FINANCIAL INFORMATION** |
|--------|---------------------------|

| ITEM 9 | **THE OFFER AND LISTING** |
|--------|---------------------------|

----

|                            | High ($) | Low ($) |
|---------------------------------|----------|---------|
| Annual (fiscal year)            |     |    |
| 2016                            | 0.01     | 0.01    |
| 2015                            | 0.085    | 0.03    |
| 2014                            | 0.20     | 0.01    |
| 2013                            | 1.78     | 0.06    |
| 2012                            | 5.10     | 1.37    |
|                            |     |    |
|                            |     |    |
| Quarterly                       |     |    |
| Fiscal 2016                     |     |    |
| Fourth Quarter                  | 0.01     | 0.01    |
| Third Quarter                   | 0.01     | 0.01    |
| Second Quarter                  | 0.01     | 0.01    |
| First Quarter                   | 0.01     | 0.01    |
| Fiscal 2015                     |     |    |
| Fourth Quarter                  | 0.03     | 0.02    |
| Third Quarter                   | 0.04     | 0.02    |
| Second Quarter                  | 0.06     | 0.03    |
| First Quarter                   | 0.06     | 0.03    |
|                            |     |    |
| Monthly                         |     |    |
| April 1, 2017 to April 24, 2017 | 0.01     | 0.01    |
| March 2017                      | 0.01     | 0.01    |
| February 2017                   | 0.01     | 0.01    |
| January 2017                    | 0.01     | 0.01    |
| December 2016                   | 0.01     | 0.01    |
| November 2016                   | 0.01     | 0.01    |

----

|                            | High ($) | Low ($) |
|---------------------------------|----------|---------|
| Annual (fiscal year)            |     |    |
| 2016                            | 0.04     | 0.04    |
| 2015                            | 0.04     | 0.04    |
| 2014                            | 0.20     | 0.03    |
| 2013                            | 1.73     | 0.05    |
| 2012                            | 5.10     | 1.35    |
|                            |     |    |
|                            |     |    |
|                            |
| Quarterly                       |     |    |
| Fiscal 2016                     |     |    |
| Fourth Quarter                  | 0.04     | 0.04    |
| Third Quarter                   | 0.04     | 0.04    |
| Second Quarter                  | 0.04     | 0.04    |
| First Quarter                   | 0.04     | 0.04    |
| Fiscal 2015                     |     |    |
| Fourth Quarter                  | 0.05     | 0.04    |
| Third Quarter                   | 0.06     | 0.03    |
| Second Quarter                  | 0.08     | 0.04    |
| First Quarter                   | 0.09     | 0.04    |
|                            |     |    |
| Monthly                         |     |    |
| April 1, 2017 to April 27, 2017 | 0.04     | 0.04    |
| March 2017                      | 0.04     | 0.04    |
| February 2017                   | 0.04     | 0.04    |
| January 2017                    | 0.04     | 0.04    |
| December 2016                   | 0.04     | 0.04    |
| November 2016                   | 0.04     | 0.04    |

----

| ITEM 10 | **ADDITIONAL INFORMATION** |
|---------|----------------------------|

----

|  | (a) | the acquisition of voting shares or other voting interests by any person in the ordinary course of that person’s business as a trader or dealer in securities; |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (b) | the acquisition of control of our Company in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of this Act, if the acquisition is subject to approval under the Bank Act (Canada), the Cooperative Credit Associations Act (Canada), the Insurance Companies Act (Canada) or the Trust and Loan Companies Act (Canada); and |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (c) | the acquisition of control of our Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control of our Company, through the ownership of voting interests, remains unchanged. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| · | an individual who is a citizen or resident of the U.S.; |
|--------|---------------------------------------------------------|

| · | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the U.S., any state thereof or the District of Columbia; |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
|--------|------------------------------------------------------------------------------------------------|

| · | a trust that (1) is subject to the primary supervision of a court within the U.S. and the control of one or more U.S. persons for all substantial decisions or (2) has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| ITEM 11 | **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK** |
|---------|----------------------------------------------------------------|

----

| ITEM 12 | **DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES** |
|---------|------------------------------------------------------------|

| ITEM 13 | **DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES** |
|---------|-----------------------------------------------------|

| ITEM 14 | **MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS** |
|---------|----------------------------------------------------------------------------------|

| ITEM 15 | **CONTROLS AND PROCEDURES** |
|---------|-----------------------------|

| - | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that may have a material effect on the financial statements. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 16A | **AUDIT COMMITTEE FINANCIAL EXPERTS** |
|----------|---------------------------------------|

| ITEM 16B | **CODE OF ETHICS** |
|----------|--------------------|

----

| ITEM 16C | **PRINCIPAL ACCOUNTANT FEES AND SERVICES** |
|----------|--------------------------------------------|

|                |   | Year Ended December 31 |   |
|---------------------|--------|-----------------------------|--------|
|                |   | 2016                        |   |   | 2015 |   |
| Audit Fees:         |   | $                           | 10,000 |   |   | $ | 25,000 |   |
| Audit Related Fees: |   |                        | -      |   |   |   | - |   |
| Tax Fees:           |   |                        |   |   |   | $ | 5,000 |   |
| Total:              |   | $                           | 10,000 |   |   | $ | 30,000 |   |

| ITEM 16D | **EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES** |
|----------|----------------------------------------------------------------|

| ITEM 16E | PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
|----------|-----------------------------------------------------------------------|

| ITEM 16F | **CHANGES TO REGISTRANT’S CERTIFYING ACCOUNTANT** |
|----------|---------------------------------------------------------|

| ITEM 16G | **CORPORATE GOVERNANCE** |
|----------|--------------------------|

----

| ITEM 16H | **MINE SAFETY DISCLOSURE** |
|----------|----------------------------|

| ITEM 17 | **FINANCIAL STATEMENTS** |
|---------|--------------------------|

| ITEM 18 | **FINANCIAL STATEMENTS** |
|---------|--------------------------|

| · | Report of Independent Registered Public Accounting Firm dated April 25, 2017; |
|--------|-------------------------------------------------------------------------------|

| · | Consolidated statement of financial position for the fiscal years ended December 31, 2016 and 2015; |
|--------|-----------------------------------------------------------------------------------------------------|

| · | Consolidated statements of comprehensive profit and loss for the fiscal years ended December 31, 2016, 2015 and 2014; |
|--------|---------------------------------------------------------------------------------------------------------------------------------|

| · | Consolidated statements of changes in (deficit) equity for the fiscal years ended December 31, 2016, 2015 and 2014; |
|--------|---------------------------------------------------------------------------------------------------------------------|

| · | Consolidated statements of cash flows for the fiscal years ended December 31, 2016, 2015 and 2014; and |
|--------|--------------------------------------------------------------------------------------------------------|

| · | Notes to consolidated financial statements |
|--------|--------------------------------------------|

----

|                                                     | Page         |
|----------------------------------------------------------|--------------|
|                                                     |         |
| Independent Auditors’ Report                       | 49           |
|                                                     |         |
| Consolidated Statements of Financial Position            | 50           |
|                                                     |         |
| Consolidated Statements of Comprehensive Profit and Loss | 51           |
|                                                     |         |
| Consolidated Statements of Changes in (Deficit) Equity   | 52           |
|                                                     |         |
| Consolidated Statements of Cash Flows                    | 53           |
|                                                     |         |
| Notes to Consolidated Financial Statements               | 54 - 68 |

----

----

----

|                                        |   |   |   |   | December 31 |   |    | December 31 |   |
|----------------------------------------|--------|--------|--------|--------|-------------|--------|---------|-------------|--------|
|                                   |   | Note   |   |   | 2016        |   |    | 2015        |   |
| Assets                                 |   |   |   |   |        |   |    |        |   |
| Current assets                         |   |   |   |   |        |   |    |        |   |
| Cash and cash equivalents              |   |   | 4      |   |        | $      | 19      |        |   | $ | 124 |   |
| Loan                                   |   |   | 5      |   |        |   | 25      |        |   |   | 25 |   |
| Other receivables and prepaid expenses |   |   | 6      |   |        |   | 8       |        |   | $ | 14 |   |
|                                   |   |   |   |   |        |   |    |        |   |   |   |   |
|                                   |   |   |   |   |        | $      | 52      |        |   | $ | 163 |   |
|                                   |   |   |   |   |        |   |    |        |   |   |   |   |
| Liabilities                            |   |   |   |   |        |   |    |        |   |   |   |   |
| Current liabilities                    |   |   |   |   |        |   |    |        |   |   |   |   |
| Trade payables                         |   |   | 7      |   |        | $      | 11      |        |   | $ | 60 |   |
| Accrued liabilities                    |   |   | 8      |   |        |   | 263     |        |   |   | 65 |   |
|                                   |   |   |   |   |        |   | 274     |        |   |   | 125 |   |
|                                   |   |   |   |   |        |   |    |        |   |   |   |   |
| Non-curremt Liabilities                |   |   |   |   |        |   |    |        |   |   |   |   |
| Warrant liability                      |   |   | 9      |   |        |   | 67      |        |   |   | 112 |   |
|                                   |   |   |   |   |        |   | 341     |        |   |   | 237 |   |
| Equity                                 |   |   |   |   |        |   |    |        |   |   |   |   |
| Share capital                          |   |   | 12     |   |        |   | -       |        |   |   | - |   |
| Additional paid-in capital             |   |   | 12     |   |        |   | 34,060  |        |   |   | 34,060 |   |
| Accumulated deficit                    |   |   |   |   |        |   | (34,349 | )           |   |   | (34,134 | ) |
|                                   |   |   |   |   |        |   |    |        |   |   |   |   |
| Total deficit                          |   |   |   |   |        |   | (289    | )           |   |   | (74 | ) |
|                                   |   |   |   |   |        |   |    |        |   |   |   |   |
| Total liabilities and deficit          |   |   |   |   |        | $      | 52      |        |   | $ | 163 |   |

| April 25, 2017                               |   | “Dennis Bennie”        |   | “Alan Friedman” |
|----------------------------------------------|--------|------------------------------------|--------|-----------------------------|
| Date of approval of the financial statements |   | Dennis BennieChairman of the Board |   | Alan FriedmanDirector       |

----

----

|                                                                                                                  |   |   |   |   | Year ended  |   |
|------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|-------------|--------|
|                                                                                                             |   |   |   |   | December 31 |   |
|                                                                                                             |   | Notes  |   |   | 2016        |   |   | 2015 |   |   | 2014 |   |
| Expenses:                                                                                                        |   |   |   |   |        |   |   |   |   |   |   |   |
| General and administrative costs                                                                                 |   |   | 14,16  |   |        | $      | 268 |   |   | $ | 349 |   |   | $ | 602 |   |
| Gain on settlement of accounts payable and other payables                                                        |   |   | 14     |   |        |   | - |   |   |   | (25 | ) |   |   | (1,374 | ) |
|                                                                                                             |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |
| Total expenses                                                                                                   |   |   |   |   |        |   | 268 |   |   |   | 324 |   |   |   | (772 | ) |
| (Loss) income before financing income, (loss) gain on foreign exchange and gain on revaluation warrant liability |   |   |   |   |        |   | (268 | ) |   |   | (324 | ) |   |   | 772 |   |
| Gain (Loss) on foreign exchange                                                                                  |   |   |   |   |        |   | 8 |   |   |   | (23 | ) |   |   | (37 | ) |
| Gain on revaluation of warrant liability                                                                         |   |   | 9      |   |        |   | 45 |   |   |   | 78 |   |   |   | - |   |
| (Loss) income before income taxes                                                                                |   |   |   |   |        |   | (215 | ) |   |   | (269 | ) |   |   | 735 |   |
| Income taxes                                                                                                     |   |   | 11     |   |        |   | - |   |   |   | - |   |   |   | - |   |
| Net (loss) income and comprehensive (loss) income                                                                |   |   |   |   |        | $      | (215 | ) |   | $ | (269 | ) |   | $ | 735 |   |
|                                                                                                             |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net (loss) income per share attributable to equity holders of the parent                       |   |   |   |   |        | $      | (0.01 | ) |   | $ | (0.02 | ) |   | $ | 0.06 |   |
|                                                                                                             |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of ordinary shares used in computing basic and diluted net loss per share                |   |   |   |   |        |   | 17,112,022 |   |   |   | 15,439,508 |   |   |   | 12,158,302 |   |

----

----

|                                                                  |   |      |       |   | Attributable to equity holders of the parent |   |
|-----------------------------------------------------------------------|--------|-----------|------------|--------|----------------------------------------------|--------|
|                                                                  |   | Number of |       |   | Share                                        |   |   | Additional paid-in |   |   | Accumulated |   |   | Total (Deficit) |   |
|                                                                  |   | shares    |       |   | capital                                      |   |   | capital |   |   | deficit |   |   | equity |   |
|                                                                  |   |      |       |   |                                         |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2013                                       |   |      | 12,052,022 |   |                                         | $      | - |   |   | $ | 34,023 |   |   | $ | (34,600 | ) |   | $ | (577 | ) |
|                                                                  |   |      |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares and warrants issued in private placement, net                  |   |      | 240,000    |   |                                         |   | - |   |   |   | 60 |   |   |   | - |   |   |   | 60 |   |
| Share-based compensation recovery                                     |   |      | -          |   |                                         |   | - |   |   |   | (32 | ) |   |   | - |   |   |   | (32 | ) |
| Net income                                                            |   |      | -          |   |                                         |   | - |   |   |   | - |   |   |   | 735 |   |   |   | 735 |   |
|                                                                  |   |      |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2014                                       |   |      | 12,292,022 |   |                                         | $      | - |   |   | $ | 34,051 |   |   | $ | (33,865 | ) |   | $ | 186 |   |
|                                                                  |   |      |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares and warrants issued in private placement, net (Note 12(b)(ii)) |   |      | 4,820,000  |   |                                         |   | - |   |   |   | 7 |   |   |   | - |   |   |   | 7 |   |
| Share-based compensation (Note 12(c))                                 |   |      | -          |   |                                         |   | - |   |   |   | 2 |   |   |   | - |   |   |   | 2 |   |
| Net loss                                                              |   |      | -          |   |                                         |   | - |   |   |   | - |   |   |   | (269 | ) |   |   | (269 | ) |
|                                                                  |   |      |       |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance as of December 31, 2015                                       |   |      | 17,112,022 |   |                                         | $      | - |   |   | $ | 34,060 |   |   | $ | (34,134 | ) |   | $ | (74 | ) |
| Net loss                                                              |   |      | -          |   |                                         |   | - |   |   |   | - |   |   |   | (215 | ) |   |   | (215 | ) |
| Balance as of December 31, 2016                                       |   |      | 17,112,022 |   |                                         | $      | - |   |   | $ | 34,060 |   |   | $ | (34,349 | ) |   | $ | (289 | ) |

----

----

|                                                                    |   | Year ended  |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------|--------|-------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                    |   | December 31 |   |   |   |   |   |   |   |
|                                                                    |   | 2016        |   |   | 2015   |   |   | 2014   |   |
|                                                                    |   |        |   |   |   |   |   |   |   |
| Cash flow from operating activities                                     |   |        |   |   |   |   |   |   |   |
| Net (loss) income for the year                                          |   | $           | (215   | )      |   | $      | (269   | )      |   | $ | 735 |   |
| Items not affecting cash:                                               |   |        |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                            |   |        | -      |   |   |   | -      |   |   |   | 45 |   |
| Loss on sale of fixed assets                                            |   |        | -      |   |   |   | 2      |   |   |   | 3 |   |
| Revaluation of warrants                                                 |   |        | (45    | )      |   |   | (78    | )      |   |   | - |   |
| Share-based compensation                                                |   |        | -      |   |   |   | 2      |   |   |   | (32 | ) |
| Gain on settlement of accounts payable and other payables               |   |        | -      |   |   |   | (25    | )      |   |   | (1,374 | ) |
| Changes in non‐cash working capital:                              |   |        |   |   |   |   |   |   |   |   |   |   |
| Decrease in accounts receivable, other receivables and prepaid expenses |   |        | 6      |   |   |   | 50     |   |   |   | 2,449 |   |
| Decrease in trade payables                                              |   |        | (49    | )      |   |   | (82    | )      |   |   | (1,276 | ) |
| Increase (decrease) in other accounts payable and accrued liabilities   |   |        | 198    |   |   |   | 9      |   |   |   | (930 | ) |
|                                                                    |   |        | (105   | )      |   |   | (391   | )      |   |   | (380 | ) |
|                                                                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Cash flow from investing activities                                     |   |        |   |   |   |   |   |   |   |   |   |   |
| Proceeds from sale of equipment                                         |   |        | -      |   |   |   | 1      |   |   |   | 11 |   |
| Cash provided for loan receivable                                       |   |        | -      |   |   |   | (25    | )      |   |   | - |   |
| Decrease in restricted cash                                             |   |        | -      |   |   |   | 9      |   |   |   | 26 |   |
|                                                                    |   |        | -      |   |   |   | (15    | )      |   |   | 37 |   |
|                                                                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Cash flow from financing activities                                     |   |        |   |   |   |   |   |   |   |   |   |   |
| Proceeds from issue of shares, net of share issuance costs              |   |        | -      |   |   |   | 196    |   |   |   | 60 |   |
|                                                                    |   |        | -      |   |   |   | 196    |   |   |   | 60 |   |
|                                                                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Decrease in cash and cash equivalents                                   |   |        | (105   | )      |   |   | (210   | )      |   |   | (283 | ) |
| Cash and cash equivalents, beginning of year                            |   |        | 124    |   |   |   | 334    |   |   |   | 617 |   |
|                                                                    |   |        |   |   |   |   |   |   |   |   |   |   |
| Cash and cash equivalents, end of year                                  |   | $           | 19     |   |   | $      | 124    |   |   | $ | 334 |   |

----

| NOTE 1: | GENERAL |
|---------|---------|

|  | a. | Nature of operations |
|--|----|----------------------|

| (i) | Empower Healthcare Corporation (“EHC”) is an Oregon based corporation that provides physician services to patients. EHC focuses on pain management services and is a pioneer in the recommendation of cannabis based products to its patients. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (ii) | The Hemp & Cannabis Company (“THCC”) is an Oregon corporation. THCC owns and leases real estate that was used to cultivate cannabis with state licenses in both Oregon and Washington. |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (iii) | SMAART Inc. is an Oregon corporation that provides administrative services to SMAART owned companies. |
|-------|-------------------------------------------------------------------------------------------------------|

----

| NOTE 1: | GENERAL (Continued) |
|---------|---------------------|

|  | b. | **Going concern** |
|--|----|-------------------|

| NOTE 2: | **BASIS OF PREPARATION** |
|---------|--------------------------|

| a. | Statement of compliance |
|----|-------------------------|

|  | b. | Basis of presentation |
|--|----|-----------------------|

----

| NOTE 2: | **BASIS OF PREPARATION (Continued)** |
|---------|--------------------------------------|

|  | c. | Basis of consolidation |
|--|----|------------------------|

| NOTE 3: | SIGNIFICANT ACCOUNTING POLICIES |
|---------|---------------------------------|

|  | a. | Significant judgments and estimates |
|--|----|-------------------------------------|

|  | b. | Translation of foreign currencies |
|--|----|-----------------------------------|

|  | c. | Cash equivalents |
|--|----|------------------|

----

| NOTE 3: | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|---------|---------------------------------------------|

|  | d. | Financial instruments |
|--|----|-----------------------|

|   | Financial assets and liabilities         | Classification                     |   |
|--------|------------------------------------------|------------------------------------|--------|
|   | Cash and cash equivalents                | Loans and receivables              |   |
|   | Other receivables                        | Loans and receivables              |   |
|   | Loan receivables                         | Loans and receivables              |   |
|   | Trade payables                           | Other financial liabilities        |   |
|   | Accounts payable and accrued liabilities | Other financial liabilities        |   |
|   | Warrant liability                        | Fair value through profit and loss |   |

----

| NOTE 3: | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|---------|---------------------------------------------|

|  | e. | Financial instruments |
|--|----|-----------------------|

|   | · Level 1 ‐ Unadjusted quoted prices in active markets for identical assets and liabilities;                          |
|--------|----------------------------------------------------------------------------------------------------------------------------------|
|   | · Level 2 ‐ Inputs other than quoted prices that are observable for assets or liabilities directly or indirectly; and |
|   | · Level 3 ‐ Inputs for assets or liabilities that are not based on observable market data.                            |

|  | f. | Impairment of non-financial assets |
|--|----|------------------------------------|

----

| NOTE 3: | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|---------|---------------------------------------------|

|  | g. | Income taxes |
|--|----|--------------|

|  | i. | Warrant liability |
|--|----|-------------------|

----

| NOTE 3: | SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|---------|---------------------------------------------|

|  | j. | Loss / income per share |
|--|----|-------------------------|

|  | k. | Standards and amendments issued but not yet effective |
|--|----|-------------------------------------------------------|

----

| NOTE 4: | CASH AND CASH EQUIVALENTS |
|---------|---------------------------|

|                                       |   | December 31, |   |
|--------------------------------------------|--------|--------------|--------|
|                                       |   | 2016         |   |   | 2015 |   |
|                                       |   |         |   |   |   |   |
| In US dollars                              |   | $            | 17     |   |   | $ | 2 |   |
| In Canadian dollars                        |   |         | 1      |   |   |   | 102 |   |
| In new Israeli shekels (“NIS”) |   |         | 1      |   |   |   | 20 |   |
|                                       |   |         |   |   |   |   |   |   |
|                                       |   | $            | 19     |   |   | $ | 124 |   |

| NOTE 5: | LOAN RECIEVABLE |
|---------|-----------------|

| NOTE 6: | OTHER RECEIVABLES AND PREPAID EXPENSES |
|---------|----------------------------------------|

|                   |   | December 31, |   |
|------------------------|--------|--------------|--------|
|                   |   | 2016         |   |   | 2015 |   |
| Government authorities |   | $            | 1      |   |   | $ | 2 |   |
| Prepaid expenses       |   |         | 7      |   |   |   | 12 |   |
|                   |   | $            | 8      |   |   | $ | 14 |   |

| NOTE 7: | TRADE PAYABLES |
|---------|----------------|

| NOTE 8: | ACCRUED LIABILITIES |
|---------|---------------------|

|             |   | December 31, |   |
|------------------|--------|--------------|--------|
|             |   | 2016         |   |   | 2015 |   |
|             |   |         |   |   |   |   |
| Accrued expenses |   | $            | 263    |   |   | $ | 65 |   |
|             |   | $            | 263    |   |   | $ | 65 |   |

----

| NOTE 9: | **WARRANT LIABILITY** |
|---------|-----------------------|

|   |                            | May 7, 2015 | December 31, 2015 | December 31, 2016 |
|--------|---------------------------------|-------------|-------------------|-------------------|
|   | Expected life                   | 3 years     | 2.35 years        | 1.35 years        |
|   | Risk-free interest rate         | 0.64%       | 0.50%             | 0.87%             |
|   | Dividend yield                  | 0.00%       | 0.00%             | 0.00%             |
|   | Foreign exchange rate (USD/CAD) | 0.8276      | 0.7209            | 0.7437            |
|   | Expected volatility             | 222.04%     | 177.23%           | 147.70%           |

| NOTE 10: | **FINANCIAL INSTRUMENTS** |
|----------|---------------------------|
|  | a. | Credit risk: |
|--|----|--------------|

|  | b. | Liquidity risk: |
|--|----|-----------------|

----

| NOTE 10: | FINANCIAL INSTRUMENTS (Continued) |
|----------|-----------------------------------|

|  | c. | Market risk: |
|--|----|--------------|

|  | 2. | Foreign currency risk: |
|--|----|------------------------|

| NOTE 11: | INCOME TAXES |
|----------|--------------|

|                                   |   | 2016   |   |   | 2015   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
| Loss before recovery of income taxes   |   | $      | (215   | )      |   | $      | (269 | ) |
| Expected income tax recovery           |   | $      | (57    | )      |   | $      | (71 | ) |
| Tax rate changes and other adjustments |   |   | (1,159 | )      |   |   | (7,423 | ) |
| Non-deductible expenses                |   |   | (17    | )      |   |   | (16 | ) |
| Unrealized foreign exchange            |   |   | -      |   |   |   | 1,290 |   |
| Change in tax benefits not recognized  |   |   | 1,232  |   |   |   | 6,220 |   |
| Income tax (recovery) expense          |   | $      | -      |   |   | $      | - |   |

----

| NOTE 11: | TAXES ON INCOME (Continued) |
|----------|-----------------------------|

|                               |   | 2016   |   |   | 2015   |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|
|                               |   |   |   |   |   |   |
| Property and equipment             |   | $      | 1      |   |   | $      | 1 |   |
| Share issuance costs               |   | $      | 4      |   |   | $      | 286 |   |
| Deferred expenses                  |   | $      | 150    |   |   | $      | - |   |
| Non-capital losses carried forward |   | $      | 7,714  |   |   | $      | 2,931 |   |

| 2027   |   | $      | 76    |   |
|--------|--------|--------|-------|--------|
| 2028   |   |   | 412   |   |
| 2029   |   |   | 764   |   |
| 2030   |   |   | 963   |   |
| 2031   |   |   | 2,003 |   |
| 2032   |   |   | 591   |   |
| 2033   |   |   | 975   |   |
| 2034   |   |   | 825   |   |
| 2035   |   |   | 694   |   |
| 2036   |   |   | 411   |   |
|   |   | $      | 7,714 |   |

----

| NOTE 12: | CAPITAL |
|----------|---------|

|  | a. | Authorized |
|--|----|------------|

|  | b. | Issued and outstanding Common shares |
|--|----|--------------------------------------|

|  | (i) | As at December 31, 2016 and 2015, the Company had 17,112,022 shares issued and outstanding. |
|--|-----|---------------------------------------------------------------------------------------------|

|  | (ii) | On May 7, 2015, the Company completed a non-brokered private placement of 4,820,000 units (“Units”) for gross proceeds of $202 ($241,000 CDN). Each Unit consisted of one Common Share and one warrant. Each warrant is exercisable to acquire one Common Share at a price of CAN$0.05 per Common Share until May 6, 2018. |
|--|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | c. | Stock Option Plan |
|--|----|-------------------|

|                       |   | Number ofoptionsoutstanding |     |   | Weighted averageexercise price |   |
|----------------------------|--------|-----------------------------|----------|--------|--------------------------------|--------|
|                       |   |                        |     |   |                           |   |   |   |
| Balance, January 1, 2015   |   |                        | 416,000  |   |                           | $      | 5.37 |   |
|                       |   |                        |     |   |                           |   |   |   |
| Options forfeited          |   |                        | (144,666 | )      |                           |   | 8.34 |   |
|                       |   |                        |     |   |                           |   |   |   |
| Balance, December 31, 2015 |   |                        | 271,334  |   |                           | $      | 2.85 |   |
|                       |   |                        |     |   |                           |   |   |   |
| Options forfeited          |   |                        | (35,334  | )      |                           |   | 7.68 |   |
|                       |   |                        |     |   |                           |   |   |   |
| Balance, December 31, 2016 |   |                        | 236,000  |   |                           | $      | 2.23 |   |

----

| NOTE 12: | CAPITAL (Continued) |
|----------|---------------------|

|  | c. | Stock Option Plan (Continued) |
|--|----|-------------------------------|

| Grant date          | Expiry date     |   | Grant date fair value |   |   | Exercise price |   |   | Number of options outstanding |   |   | Number of options exercisable |   |   | Average remaining contractual life |    |
|---------------------|-----------------|--------|-----------------------|--------|--------|----------------|--------|--------|-------------------------------|--------|--------|-------------------------------|--------|--------|------------------------------------|---------|
|                |            |   |                  |   |   |           |   |   |                          |   |   |                          |   |   |                               |    |
| August 22, 2012 (*) | August 21, 2017 |   | $                     | 1.05   |   |           | $      | 2.23   |                          |   |   | 236,000                       |   |   |                               | 236,000 |   |   |   | 0.64 |   |
|                |            |   |                  |   |   |           |   |   |                          |   |   | 236,000                       |   |   |                               | 236,000 |   |   |   |   |   |

|  | (*) | The exercise price is denominated in Canadian dollars and was translated to USD in the table above using the exchange rate on December 31, 2016. |
|--|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | d. | **Share purchase warrants** |
|--|----|-----------------------------|

|                                     |   | Number of warrants (*) |        |   | Weighted average exercise price |   |
|------------------------------------------|--------|------------------------|-------------|--------|---------------------------------|--------|
|                                     |   |                   |        |   |                            |   |
| Balance as of December 31, 2014          |   |                   | 79,012,640  |   |                            | $      | 0.17 |   |
|                                     |   |                   |        |   |                            |   |   |   |
| Warrants granted during 2014             |   |                   | 4,820,000   |   |                            |   | 0.04 |   |
| Warrants expired during 2015             |   |                   | (79,012,640 | )      |                            |   | 0.14 |   |
| Balance as of December 31, 2015 and 2016 |   |                   | 4,820,000   |   |                            | $      | 0.04 |   |

| Issue date  |   | Expiry date |   | Grant date fair value |   | Exerciseprice (*) |   | Number of warrants |
|-------------|--------|-------------|--------|-----------------------|--------|-------------------|--------|--------------------|
|        |   |        |   |                  |   |              |   |               |
| May 7, 2015 |   | May 6, 2018 |   | $  0.04          |   | $ 0.04            |   | 4,820,000          |

|  | (*) | The exercise price of these warrants is denominated in Canadian dollars and was translated to USD in the table above using the exchange rate as of December 31, 2016. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| NOTE 13: | CAPITAL MANAGEMENT |
|----------|--------------------|

| NOTE 14: | RELATED PARTY TRANSACTIONS |
|----------|----------------------------|

|  | a. | For the year ended December 31, 2016, the Company recognized $6 for advisory fees and operating expenses to private companies controlled by the directors or by officers of the Company (2015 - $58). |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | b. | Compensation to directors and key management personnel: |
|--|----|---------------------------------------------------------|

|                         |   | Year ended December 31, |   |
|------------------------------|--------|-------------------------|--------|
|                         |   | 2016                    |   |   | 2015 |   |   | 2014 |   |
|                         |   |                    |   |   |   |   |   |   |   |
| Short-term employee benefits |   | $                       | -      |   |   | $ | 38 |   |   | $ | 212 |   |
| Share-based compensation     |   |                    | -      |   |   |   | 1 |   |   |   | 22 |   |
|                         |   | $                       | -      |   |   | $ | 39 |   |   | $ | 234 |   |
|                         |   |                    |   |   |   |   |   |   |   |   |   |   |
| Number of people             |   |                    | 2      |   |   |   | 2 |   |   |   | 2 |   |

|  | c. | Benefits in respect of key management persons (including directors) who are not employed by the Company: |
|--|----|----------------------------------------------------------------------------------------------------------|

|                    |   | Year ended December 31, |   |
|-------------------------|--------|-------------------------|--------|
|                    |   | 2016                    |   |   | 2015 |   |   | 2014 |   |
|                    |   |                    |   |   |   |   |   |   |   |
| Board of Directors fees |   | $                       | 5      |   |   | $ | 45 |   |   | $ | 38 |   |
|                    |   |                    |   |   |   |   |   |   |   |   |   |   |
| Number of people        |   |                    | 3      |   |   |   | 3 |   |   |   | 3 |   |

----

| NOTE 15: | COMMITMENTS AND CONTINGENCIES |
|----------|-------------------------------|

| NOTE 16: | GENERAL AND ADMINISTRATIVE EXPENSES |
|----------|-------------------------------------|

|                                |   | Year ended December 31, |   |
|-------------------------------------|--------|-------------------------|--------|
|                                |   | 2016                    |   |   | 2015 |   |   | 2014 |   |
|                                |   |                    |   |   |   |   |   |   |   |
| Payroll and related payments        |   | $                       | -      |   |   | $ | - |   |   | $ | 307 |   |
| Share-based compensation (recovery) |   |                    | -      |   |   |   | 2 |   |   |   | (32 | ) |
| Professional fees                   |   |                    | 225    |   |   |   | 247 |   |   |   | 122 |   |
| Rent and office expenses            |   |                    | 7      |   |   |   | 46 |   |   |   | 90 |   |
| Depreciation                        |   |                    | -      |   |   |   | - |   |   |   | 45 |   |
| Insurance                           |   |                    | 16     |   |   |   | 25 |   |   |   | 30 |   |
| Others                              |   |                    | 20     |   |   |   | 29 |   |   |   | 40 |   |
|                                |   |                    |   |   |   |   |   |   |   |   |   |   |
|                                |   | $                       | 268    |   |   | $ | 349 |   |   | $ | 602 |   |

| NOTE 17: | SUBSEQUENT EVENTS |
|----------|-------------------|

|  | a. | Subsequent to the year-end, SMAART repaid the $25 loan. |
|--|----|---------------------------------------------------------|

|  | b. | Subsequent to the year-end, a significant service provider has agreed to settle their accounts payable balance in the amount $155 in return for shares to be issued as part of the SMAART transaction. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ITEM 19 | **EXHIBITS** |
|---------|--------------|

|  Exhibit Number  |  Description                                                                                                                               |
|----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|  1.1             |  Articles of Conversion (1)                                                                                                                     |
|  1.2             |  Articles of Continuance (1)                                                                                                               |
|  1.3             |  By-Laws (1)                                                                                                                               |
|  1.4             |  Certificate and Articles of Amendment (3)                                                                                                 |
|  1.5             |  Certificate and Articles of Amendment (5)                                                                                                 |
|  4.1             |  2009 Stock Option Plan (2)                                                                                                                |
|  8.1             |  List of Subsidiaries (5)                                                                                                                  |
|  12.1            |  Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (5)                                  |
|  12.2            |  Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (5)                                      |
|  13.1            |  Certificate of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (5)  |

| (1) | Incorporated by reference from our current report on Form 8-K filed with the SEC on December 2, 2008. |
|-----|-------------------------------------------------------------------------------------------------------|

| (2) | Incorporated by reference from our Form 20-F shell company report filed with the SEC on September 4, 2009. |
|-----|------------------------------------------------------------------------------------------------------------|

| (3) | Incorporated by reference from our Form 20-F report filed with the SEC on January 22, 2010. |
|-----|---------------------------------------------------------------------------------------------|

| (4) | Incorporated by reference from our Form 20-F report filed with the SEC on February 3, 2011. |
|-----|---------------------------------------------------------------------------------------------|

| (5) | Filed as an exhibit hereto. |
|-----|-----------------------------|

----

----