NOTE 2: BASIS OF PREPARATION

12 Months Ended

Dec. 31, 2019

Note 2 Basis Of Preparation

BASIS OF PREPARATION

a) Statement of compliance

These consolidated financial statements of Company have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Reporting Interpretation Committee (“IFRIC”) for all periods presented. These consolidated financial statements were approved by the Board of Directors and authorized for issue on July 23, 2020.

b) Basis of presentation

The consolidated financial statements have been prepared using the historical cost basis, except for certain financial assets and liabilities which are measured at fair value, as specified by IFRS for each type of asset, liability, income and expense as set out in the accounting policies below.

c) Functional and presentation currency

The consolidated financial statements are presented in United States (“US”) dollars, except as otherwise noted, which is the functional currency of the Company and each of the Company’s subsidiaries. References to C$ are to Canadian dollars.

d) Basis of consolidation

On April 16, 2018, the Company completed a reverse takeover transaction with Adira Energy Ltd. The transaction was structured as a series of transactions, including a Canadian three-cornered amalgamation transaction as explained further in note 4. As a result of these reorganizations described above, the accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

Control exists where the parent entity has power over the investee and is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Subsidiaries are included in the consolidated financial statements from the date control commences until the date control ceases.

All inter-company balances, transactions, revenues and expenses have been eliminated on consolidation. These consolidated financial statements incorporate the accounts of the Company and the following subsidiaries:

Name of subsidiary	Country of Incorporation		Percentage Ownership			Functional Currency	Principal Activity
S.M.A.A.R.T. Holdings Inc.		USA		100	%	USD	Holding company
Empower Healthcare Corp.		Canada		100	%	USD	Holding company
Empower Healthcare Corp.		USA		100	%	USD	Clinic operations
SMAART, Inc.		USA		100	%	USD	Holding company
The Hemp and Cannabis Co. (1)		USA		100	%	USD	Holding company
THCF Access Point (1)		USA		100	%	USD	Holding company
Empower Healthcare Assets Inc.(2)		USA		100	%	USD	Holding company
Sun Valley Heath Holdings, LLC (3)		USA		100	%	USD	Holding company
Sun Valley Health Franchising, LLC (3)		USA		100	%	USD	Clinic operations
Sun Valley Health, LLC (3)		USA		100	%	USD	Clinic operations
Sun Valley Health West, LLC (3)		USA		100	%	USD	Clinic operations
Sun Valley Health Tucson, LLC (3)		USA		100	%	USD	Clinic operations
Sun Valley Health Mesa, LLC (3)		USA		100	%	USD	Clinic operations
Sun Valley Alternative Health Centres NV, LLC (3)		USA		100	%	USD	Clinic operations

(1) These companies were inactive during the year ended December 31, 2019.

(2) This Company was incorporated on April 27, 2019.

(3) These Companies were acquired as part of the Sun Valley acquisition on April 30, 2019 (note 5)