0001171843-17-007375.txt : 20171130 0001171843-17-007375.hdr.sgml : 20171130 20171130151004 ACCESSION NUMBER: 0001171843-17-007375 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20171129 FILED AS OF DATE: 20171130 DATE AS OF CHANGE: 20171130 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Adira Energy Ltd. CENTRAL INDEX KEY: 0001109504 STANDARD INDUSTRIAL CLASSIFICATION: OIL AND GAS FIELD EXPLORATION SERVICES [1382] IRS NUMBER: 000000000 STATE OF INCORPORATION: Z4 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-30087 FILM NUMBER: 171231090 BUSINESS ADDRESS: STREET 1: SUITE 1204, 120 ADELAIDE STREET WEST CITY: TORONTO STATE: A6 ZIP: M5H 1T1 BUSINESS PHONE: 416 250 1955 MAIL ADDRESS: STREET 1: SUITE 1204, 120 ADELAIDE STREET WEST CITY: TORONTO STATE: A6 ZIP: M5H 1T1 FORMER COMPANY: FORMER CONFORMED NAME: AMG OIL LTD DATE OF NAME CHANGE: 20000317 6-K 1 f6k_112917.htm FORM 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2017

Commission File No. 000-30087

ADIRA ENERGY LTD.

(Translation of registrant's name into English)

4101 Yonge Street West, Suite 706, Toronto, Ontario, Canada M2P 1N6

(Address of principal executive office)

[Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F]

Form 20-F [X] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7) [ ]

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. 

Yes [ ] No [X]

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

SUBMITTED HEREWITH

Exhibits

99.1	Interim Financial Statements
99.2	Interim MD&A
99.3	Certification of Interim Filings - CEO
99.4	Certification of Interim Filings - CFO

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ADIRA ENERGY LTD.

Date: November 29, 2017

/s/ Gadi Levin
Gadi Levin
Chief Financial Officer

EX-99.1 2 exh_991.htm EXHIBIT 99.1

Exhibit 99.1

ADIRA ENERGY LTD.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2017

UNAUDITED

U.S. DOLLARS IN THOUSANDS

INDEX

	Page

Consolidated Statements of Financial Position	3

Consolidated Statements of Comprehensive Profit and Loss	4

Consolidated Statements of Changes in Equity	5

Consolidated Statements of Cash Flows	6

Notes to Interim Consolidated Financial Statements	7 - 10

- - - - - - - - - - - - - - - - - -

NOTICE TO SHAREHOLDERS

The accompanying unaudited condensed consolidated interim financial statements of Adira Energy Ltd. for the nine month period ended September 30, 2017 have been prepared by management in accordance with International Financial Reporting Standards applicable to consolidated interim financial statements (see note 2 to the unaudited condensed consolidated interim financial statements). Recognizing that the Company is responsible for both the integrity and objectivity of the unaudited condensed consolidated interim financial statements, management is satisfied that these unaudited condensed consolidated interim financial statements have been fairly presented.

Under National Instrument 51-102, part 4, sub-section 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The Company’s independent auditor has not performed a review of these financial statements in accordance with standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity’s auditor.

- 2 -

ADIRA ENERGY LTD.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands

	September 30 2017			December 31 2016
	Unaudited			Audited
Assets
Current assets
Cash and cash equivalents	$	13		$	19
Loan Receivable		-			25
Other receivables and prepaid expenses		-			8

	$	13		$	52

Liabilities
Current liabilities
Trade payables	$	17		$	11
Accrued liabilities		307			263
Loan Payable		4			-
		328			274

Non-current Liabilities
Warrant liability		41			67
		369			341
Equity
Share capital		-			-
Additional paid-in capital		34,060			34,060
Accumulated deficit		(34,416	)		(34,349	)

Total deficit		(356	)		(289	)

Total liabilities and deficit	$	13		$	52

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

- 3 -

ADIRA ENERGY LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE PROFIT AND LOSS

U.S. dollars in thousands, except share and per share data

	Three Months ended						Nine Months ended
	September 30						September 30
	2017			2016			2017			2016
	Unaudited						Unaudited
Expenses:
General and administrative costs	$	67		$	20		$	117		$	71
Total expenses		67			20			117			71
Loss before gain on foreign exchange and gain on revaluation warrant liability		(67	)		(20	)		(117	)		(71	)
Gain on foreign exchange		16			1			24			3
Gain on revaluation of warrant liability		11			-			26			-
Net loss and comprehensive loss	$	(40	)	$	(19	)	$	(67	)	$	(68	)
Basic and diluted net loss per share attributable to equity holders of the parent	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of ordinary shares used in computing basic and diluted net loss per share		17,112,022			17,112,022			17,112,022			17,112,022

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

- 4 -

ADIRA ENERGY LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

U.S. dollars in thousands, except share data

			Attributable to equity holders of the parent
	Number of		Share		Additional paid-in		Accumulated
	shares		capital		capital		deficit			Total Deficit

Balance as of December 31, 2015 (audited)		17,112,022	$	-	$	34,060	$	(34,134	)	$	(74	)

Net loss for the year ended December 31, 2016		-		-		-		(215	)		(215	)

Balance as of December 31, 2016 (audited)		17,112,022	$	-	$	34,060	$	(34,349	)	$	(289	)
Net loss for the nine month period ended September 30, 2017		-		-		-		(67	)		(67	)
Balance as of September 30, 2017 (		17,112,022	$	-	$	34,060	$	(34,416	)	$	(356	)

	Number of shares		Share capital		Additional paid-in capital		Accumulated deficit			Total Defacit

Balance as of December 31, 2015 (audited)		17,112,022	$	-	$	34,060	$	(34,134	)	$	(74	)
Net loss for the nine month period ended September 30, 2016		-		-		-		(68	)		(68	)
Balance as of September 30, 2016		17,112,022	$	-	$	34,060	$	(34,202	)	$	(142	)

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

- 5 -

ADIRA ENERGY LTD.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Nine month period ended
	September 30
	2017			2016
	Unaudited
Cash flow from operating activities
Net loss for the period	$	(67	)	$	(68	)
Items not affecting cash:
Revaluation of warrants		(26	)		-
Changes in non-cash working capital:
Decrease in accounts receivable, other receivables and prepaid expenses		8			(59	)
Decrease in trade payables		6			(49	)
Increase (decrease) in other accounts payable and accrued liabilities		44			89
		(35	)		(87	)

Cash flow from investing activities
Cash provided from loan received from SMAART		4			-
Cash provided from repayment of loan from SMAART		25			-
		29			-


Decrease in cash and cash equivalents		(6	)		(87	)
Cash and cash equivalents, beginning of period		19			124

Cash and cash equivalents, end of period	$	13		$	37

The accompanying notes are an integral part of the condensed consolidated interim financial statements.

- 6 -

ADIRA ENERGY LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2017

U.S. dollars in thousands, except share and per share data

NOTE 1:-

GENERAL

Nature of operations

Adira Energy Ltd. and its subsidiaries ("Adira" or "the Company"), was an oil and gas exploration company with operations in Israel. Given the increasing challenging market conditions for oil and gas exploration, the Company’s management has been looking for additional business opportunities (see below). Adira is a limited company, incorporated on April 8, 2009, and domiciled in Toronto, Ontario, Canada. The registered head office is located at 4101 Yonge Street, Suite 706, Toronto,. Ontario, M2P 1N6. The Company's shares are currently listed on the OTC market in the U.S. and the TSX Venture Exchange (“TSX”) in Canada. The condensed consolidated interim financial statements of the Company for the three and nine months ended September 30, 2017 were authorized for issue in accordance with a resolution of the directors on November 29, 2017.

Letter of intent to complete a transaction

On November 4, 2015, the Company entered into a letter of intent with SMAART Holdings Inc. (“SMAART” or “Target”) whereby the Company will acquire SMAART through a three-cornered amalgamation between the Company and its wholly owned subsidiary (the “Transaction”). On August 9, 2017, Adira, the Target and the shareholders of the Target entered into a revised letter of intent (the "Revised LOI") pursuant to which the Target and Adira will complete a transaction (the "Transaction") in which it is intended that the resulting corporation (the "Resulting Issuer") will be listed on the Canadian Securities Exchange (the "CSE"). Concurrently with the completion of the Transaction and subject to obtaining shareholder approval, Adira intends to delist its common shares from trading on the TSX Venture Exchange (the "TSXV"). It is further anticipated that the trading in Adira's common shares will remain halted during this time.

Business of the Target

The Target's business operates under the name Empower Clinics ("Empower") in the United States and is a growing national network of physician-staffed medical cannabis clinics with a primary focus on enabling patients to improve and protect their health. In addition to the clinic business, Empower also garners royalties from the sale of proprietary medical cannabis products manufactured, dispensed, and delivered by third party channel partners. Through the rapid addition of both physical clinic locations, coupled with third party manufacturer distribution relationships, Empower seeks to create a leading nationwide brand of trusted products and services for the medical cannabis industry, enabling patients to more effectively and affordably address areas such as chronic pain, Epilepsy, PTSD, and more. Empower also intends to seek merger and acquisition opportunities where possible to accelerate its business expansion plans and drive value.

- 7 -

ADIRA ENERGY LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2017

U.S. dollars in thousands, except share and per share data

NOTE 1:-

GENERAL (Continued)

Letter of intent to complete a transaction (continued)

The Transaction

Pursuant to the proposed terms of the Transaction, shareholders of the Target will exchange their common shares of the Target in exchange for common shares of Adira such that, following completion of the Transaction, shareholders of the Target will hold 95% of the outstanding common shares of the Resulting Issuer excluding any common shares issued pursuant to the Concurrent Financing (as defined below). Prior to the completion of the Transaction, Adira will seek shareholder approval for, amongst other things, the Transaction, a share consolidation and a name change to "Empower Clinics Inc."

Certain of the directors of Adira, specifically Dennis Bennie and Alan Rootenberg, are shareholders and, in the case of Mr. Rootenberg, an officer of the Target, and as such the Transaction is a non-arm's length transaction and may be a related party transaction under National Instrument 61-101. Adira has appointed Gadi Levin, currently Adira's CEO, as an additional director of Adira. Mr. Levin is considered independent for the purposes of the Transaction.

Conditions of the Transaction

The Transaction is subject to a number of conditions typical in a transaction of this nature, including, without limitation, the following approvals at an annual and special shareholder meeting to be held by Adira: majority of the minority shareholder approval for the Transaction and the delisting from the TSXV and approval by at least 66 2/3% of the votes cast by Adira shareholders to approve the change of name and share consolidation. The Transaction will also be subject to approval by the CSE. As Adira intends to delist from the TSXV, the TSXV will not have any involvement with respect to the approval of the Revised Transaction.

Private Placement

In addition, the Target intends to complete a financing to close concurrently with the completion of the Transaction (the "Concurrent Financing") whereby in it is anticipated that net proceeds of a minimum of $2,000 will be raised. Such funds will be available as working capital for the Resulting Issuer.

Management following the Completion of the Transaction

The Board of Directors of the Resulting Issuer will initially consist of four directorsthree of which shall be nominated by the Target and one of which shall be nominated by Adira. Further information with respect to these proposed directors and the management of the Resulting Issuer will be found in the listing statement to be prepared in connection with the proposed listing of the Resulting Issuer's common shares on the CSE.

- 8 -

ADIRA ENERGY LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2017

U.S. dollars in thousands, except share and per share data

NOTE 1:-

GENERAL (Continued)

Financial position:

As reflected in the consolidated financial statements, as of September 30, 2017, the Company had an accumulated deficit of $34,416. The Company’s revenues are currently insufficient to finance its future operating expenses and funding commitments.

The ability of the Company to continue as a going concern depends upon the ability of the Company to obtain financing and upon future profitable operations (See 1b above). There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. These factors raise substantial doubts about the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the carrying amounts and classifications of assets and liabilities that would result if the Company was unable to continue as a going concern.

NOTE 2:-

SIGNIFICANT ACCOUNTING POLICIES

The interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles for the preparation of financial statements for interim periods, as prescribed in IAS 34, "Interim Financial Reporting".

The significant accounting policies and methods of computation adopted in the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the annual consolidated financial statements.

NOTE 3:

LOAN RECEIVABLE AND LOANS PAYABLE

In connection with the Transaction, Adira had advanced $25 to SMAART to meet it's ongoing working capital requirements pending the completion of the transaction. During the nine months ended September 30, 2017, SMAART repaid the $25 loan and advanced the Company a loan of $4.

- 9 -

ADIRA ENERGY LTD.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2017

U.S. dollars in thousands, except share and per share data

NOTE 4:-

EQUITY

Stock Option Plan:

A summary of the stock option plan and changes during the year ended December 31, 2016 and the nine month period ended September 30, 2017, is as follows:

	Number of options outstanding			Weighted average exercise price
Balance, January 1, 2016	271,334		$	2.85

Options forfeited	(35,334	)		7.68

Balance, December 31, 2016	236,000		$	2.23

Options expired	(236,000	)		2.23

Balance, September 30, 2017	-			-

Share purchase warrants:

The following tables summarize information applicable to warrants outstanding as of September 30, 2017:

Issue date

Expiry date

Grant date
fair value

Exercise

price (*)

Number of
warrants

May 7, 2015

May 6, 2018

0.04

0.03

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 September 30, 2017.

NOTE 5:-

RELATED PARTY TRANSACTIONS

During the nine month period ended September 30, 2017, the Company incurred $2 in consulting fees and operating expenses to private companies which are controlled by directors or officers of the Company, as compared to $5 during the nine month period ended September 30, 2016.

These transactions are in the ordinary course of business and are measured at the amount of consideration set and agreed by the related parties.

- - - - - - - - - - - - - - - - - - - - -

- 10 -

EX-99.2 3 exh_992.htm EXHIBIT 99.2

Exhibit 99.2

Adira Energy Ltd.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For the nine month period ended September 30, 2017

The following is a discussion and analysis of the activities, consolidated results of operations and financial condition of Adira Energy Ltd. (“Adira”, “we”, “our”, “us”, or the “Company”) for the nine month period ended September 30, 2017, which has been prepared on the basis of information available up until November 29, 2017. This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the Company’s interim consolidated financial statements for the nine month period ended September 30, 2017, as well as the annual consolidated financial statements for the year ended December 31, 2016, together with the notes thereto, available under the Company’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.

All monetary amounts are reported in United States dollars and in accordance with IFRS unless otherwise noted. This MD&A is dated November 29, 2017.

Forward-Looking Statements

This MD&A (including, without limitation, the sections discussing Adira’s Financial Conditions and Results of Operations) contains certain forward-looking statements. All statements other than statements of historical fact that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “contemplate”, “target”, “believe”, “plan”, “estimate”, “expect” and “intend” and statements that an event or result “may”, “will”, “can”, “should”, “could” or “might” occur or be achieved and other similar expressions. These statements are based upon certain assumptions and analyses made by management in light of its experience and perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. However, whether actual results and developments will conform with management’s expectations is subject to a number of risks and uncertainties, including the considerations discussed herein and in other documents filed from time to time by the Company with Canadian security regulatory authorities, general economic, market or business conditions, the opportunities (or lack thereof) that may be presented to and pursued by management, competitive actions by other companies, changes in laws or regulations and other factors, many of which are beyond the Company’s control. These factors may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and there can be no assurance that the actual results or developments anticipated by management will be realized or, even if substantially realized, that they will have the expected results on Adira. All of the forward-looking statements made herein are qualified by the foregoing cautionary statements. The Company expressly disclaims any obligation to update or revise any such forward-looking statements.

Business overview and Significant Developments during the period

Adira was initially incorporated as an oil and gas exploration company with a focus on early-stage exploration in the State of Israel. The focus of the Company has changed as detailed below. The Company’s current trading symbol on the TSX Venture Exchange (the “Exchange”) is “ADL”. The Company also trades on the OTC Bulletin Board with the trading symbol “ADENF” and on the Frankfurt Stock Exchange with the trading symbol “OAM1”.

Letter of Intent

On November 4, 2015, the Company entered into a letter of intent with SMAART Holdings Inc. (“SMAART” or “Target”) whereby the Company will acquire SMAART through a three-cornered amalgamation between the Company and its wholly owned subsidiary (the “Transaction”). On August 9, 2017, Adira, the Target and the shareholders of the Target entered into a revised letter of intent (the "Revised LOI") pursuant to which the Target and Adira will complete a transaction (the "Transaction") in which it is intended that the resulting corporation (the "Resulting Issuer") will be listed on the Canadian Securities Exchange (the "CSE"). Pursuant to the Transaction, all of the issued and outstanding SMAART Shares and certain of the SMAART debentures will be exchanged for Resulting Issuer Shares and debentures and the Resulting Issuer will carry on the business currently carried on by SMAART. Concurrently with the completion of the Transaction and subject to obtaining shareholder approval, Adira intends to delist its common shares from trading on the TSX Venture Exchange (the "TSXV"). It is further anticipated that the trading in Adira's common shares will remain halted during this time.

Business of the Target

The Transaction

Conditions of the Transaction

Private Placement

In addition, the Target intends to complete a financing to close concurrently with the completion of the Transaction (the "Concurrent Financing") whereby in it is anticipated that net proceeds of a minimum of US$2,000,000 will be raised. Such funds will be available as working capital for the Resulting Issuer.

Management following the Completion of the Transaction

The Board of Directors of the Resulting Issuer will initially consist of four directors, three of which shall be nominated by the Target and one of which shall be nominated by Adira. Further information with respect to these proposed directors and the management of the Resulting Issuer will be found in the listing statement to be prepared in connection with the proposed listing of the Resulting Issuer's common shares on the CSE.

Capital Expenditures and Divestitures

During the nine month period ended September 30, 2017, the Company did not incur any capital expenditures or disposals.

The Company's currently has no planned capital expenditures in connection with its prior operations for the next twelve months.

Additional Disclosure for Venture Issuers without Significant Revenues:

	Three month Period Ended September 30,				Nine Month Period Ended September 30,
	2017		2016		2017		2016
	U.S. dollars in thousands

General and administrative expenses	$	67	$	20	$	117	$	71

Discussion of Operations

The following is a discussion of the results of operations which have been derived from the interim consolidated financial statements of the Company for the nine month period ended September 30, 2017 (in thousands of US Dollars, except per share data):

	Three Months ended						Nine Months ended
	September 30						September 30
	2017			2016			2017			2016
	Unaudited						Unaudited
Expenses:
General and administrative costs	$	67		$	20		$	117		$	71
Total expenses		67			20			117			71
Loss before gain on foreign exchange and gain on revaluation warrant liability		(67	)		(20	)		(117	)		(71	)
Gain on foreign exchange		16			1			24			3
Gain on revaluation of warrant liability		11			-			26			-
Net loss and comprehensive loss	$	(40	)	$	(19	)	$	(67	)	$	(68	)
Basic and diluted net loss per share attributable to equity holders of the parent	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of ordinary shares used in computing basic and diluted net loss per share		17,112,022			17,112,022			17,112,022			17,112,022

Three month period ended September 30, 2017, compared to the three month period ended September 30, 2016

Expenses

General and Administrative Expenses

For the three month period ended September 30, 2017, general and administrative expenses amounted to $67 thousand as compared to $20 thousand for the three month period ended September 30, 2016. General and administrative expenses remain relatively low as the Company seeks additional source of finance to fund its operations. The expenses incurred are primarily to advance the Transaction with the Target.

Financing Income/Expense

For the three month period ended September 30, 2017, the foreign exchange gain amounted to $16 thousand as compared to a gain of $1 thousand for the three month period ended September 30, 2016. The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. Most of the Company’s assets are held in Canadian dollars and most of its expenditures are made in Canadian dollars. However, it also has expenditures in US Dollars. The Company has not hedged its exposure to currency fluctuations.

The gain on revaluation of warrant liability for the three month period ended September 30, 2017 was $11 thousand as compares to Nil for the nine month period ended September 30, 2016 and results from the warrants issued in May 2015 that are denominated in Canadian dollars, while our functional currency is US dollars; therefore the fair value of the warrants are classified as a financial liability which is re-measured to fair value at the end of each period. The changes in fair value are included in gain on revaluation of warrant liability.

Net Profit/Loss

The Company reported a net loss and comprehensive loss for the three month period ended September 30, 2017 of $40 thousand as compared to a net loss and comprehensive loss of $19 thousand for the three month period ended September 30, 2016.

Inflation

During the three month periods ended September 30, 2017 and September 30, 2016, inflation has not had a material impact on the Company’s operations.

Nine month period ended September 30, 2017, compared to the Nine month period ended September 30, 2016

Expenses

General and Administrative Expenses

For the nine month period ended September 30, 2017, general and administrative expenses amounted to $117 thousand as compared to $71 thousand for the nine month period ended September 30, 2016. General and administrative expenses remain relatively low as the Company seeks additional source of finance to fund its operations. The expenses incurred are primarily to advance the Transaction with the Target.

Financing Income/Expense

For the nine month period ended September 30, 2017, the foreign exchange gain amounted to $24 thousand as compared to a gain of $3 thousand for the nine month period ended September 30, 2016. The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. Most of the Company’s assets are held in Canadian dollars and most of its expenditures are made in Canadian dollars. However, it also has expenditures in US Dollars. The Company has not hedged its exposure to currency fluctuations.

The gain on revaluation of warrant liability for the nine month period ended September 30, 2017 was $26 thousand as compared to Nil for the nine month period ended September 30, 2016 and results from the warrants issued in May 2015 that are denominated in Canadian dollars, while our functional currency is US dollars; therefore the fair value of the warrants are classified as a financial liability which is re-measured to fair value at the end of each period. The changes in fair value are included in gain on revaluation of warrant liability.

Net Profit/Loss

The Company reported a net loss and comprehensive loss for the nine month period ended September 30, 2017 of $67 thousand as compared to a net loss and comprehensive loss of $68 thousand for the nine month period ended September 30, 2016. The primary reason for reduction in the loss in 2016 is due to a reduction in activities.

Inflation

During the nine month periods ended September 30, 2017 and September 30, 2016, inflation has not had a material impact on the Company’s operations.

Summary of Quarterly Results

	Quarter ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016
	U.S dollars in thousands, except per share data
Revenues	$	-			-			-			-
Net loss	$	(40	)		(18	)		(9	)		(147	)
Net loss per share^*	$	(0.00	)		(0.00	)		(0.00	)		(0.01	)

	Quarter ended
	September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
	U.S dollars in thousands, except per share data
Revenues	$	-			-			-			-
Net loss	$	(19	)		(29	)		(20	)		(16	)
Net loss per share^*	$	(0.00	)		(0.00	)		(0.00	)		(0.00	)

Net loss per quarter is a function of the operational activity during that quarter. There is no seasonal trend. The loss during the last eight quarters as been in decline as the company reduced its exploration activities.

Liquidity

Liquidity is a measure of a company’s ability to meet potential cash requirements. The Company has historically met its capital requirements through the issuance of common shares.

The Company has an accumulated deficit of $34,416 thousand as of September 30, 2017 ($34,349 thousand as of December 31, 2016), and the Company had negative cash flows from operations of $6 thousand during the nine month period ended September 30, 2017 (negative cash flows of $87 thousand during the nine month period ended September 30, 2016). The ability of the Company to continue a going concern depends upon the ability of the Company to obtain financing and upon future profitable operations. The Company has not earned any significant revenues from its operations to date.

There can be no assurance that the Company will be able to continue to raise funds, in which case the Company may be unable to meet its obligations. The Company is considering various alternatives with respect to raising additional capital to remedy any future shortfall in capital, but to date has made no specific plans or arrangements.

During the nine month period ended September 30, 2017, the Company’s overall position of cash and cash equivalents decreased by $6 thousand. This decrease in cash can be attributed to the following:

The Company’s net cash used in operating activities during the nine month period ended September 30, 2017 was $35 thousand as compared of $87 thousand for the nine month period ended September 30, 2017.

Cash generated in investing activities during the nine month period ended September 30, 2017 and was $29 thousand as compared to nil during the nine month period ended September 30, 2016. In 2017, the generation of cash was as a result of the repayment of the Loan granted to SMAART in the amount of $25 thousand and the receipt of a loan from SMAART in the amount of $4 thousand.

Cash provided by financing activities for the nine month periods ended September 30, 2017and September 30, 2016, was nil.

Capital Resources

At September 30, 2017, the Company’s cash and cash equivalents were $13 thousand (December 31, 2016 - $19 thousand). The majority of this balance is being held in Canadian Dollars. Our working capital at September 30, 2017 was negative $315 thousand as compared to negative $222 thousand at December 31, 2016. A significant service provider agreed to settle their accounts payable balance in the amount $155 thousand in return for shares to be issued as part of the SMAART transaction.

Commitments

The Company no outstanding commitments other than those reflected in the balance sheet.

Disclosure of Outstanding Share Data

As of the date hereof, the Company has 17,112,022 common shares outstanding and 4,820,000 warrants.

Management of Capital

The Company currently does not generate significant cash flows from operations. The Company’s primary source of funds comes from the issuance of share capital. The Company does not use other sources of financing that require fixed payments of interest and principal and is not subject to any externally imposed capital requirements.

The Company defines its capital as share capital plus warrants. To effectively manage the Company’s capital requirements, the Company has a planning and budgeting process in place to ensure that adequate funds are available to meet its strategic goals. The Company monitors actual expenses to budget to manage its costs and commitments.

The Company’s capital management objective is to maximize investment returns to its equity-linked stakeholders within the context of relevant opportunities and risks associated with the Company’s operations. Achieving this objective requires management to consider the underlying nature of exploration activities, the availability of capital, the cost of various capital alternatives and other factors. Establishing and adjusting capital requirements is a continuous management process.

Although the Company has been successful at raising funds in the past through the issuance of share capital, there can be no assurance that future financings will be successful.

Off-Balance Sheet arrangements

The Company has no off balance sheet arrangements.

Transactions with Related Parties

No director or senior officer of the Company, and no associate or affiliate of the foregoing persons, and no insider has or has had any material interest, direct or indirect, in any transactions, or in any proposed transactions, which in either such case has materially affected or will materially affect the Company or the Company's predecessors since the beginning of the Company's last completed fiscal year except as follows:

During the nine month period ended September 30, 2017, the Company incurred $2 thousand in consulting fees and operating expenses to private companies which are controlled by directors or officers of the Company, as compared to $5 during the nine month period ended September 30, 2016.

These transactions are in the ordinary course of business and are measured at the amount of consideration set and agreed by the related parties.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Proposed Transactions

There are currently no proposed transactions other than the Transaction discussed above, that are expected to affect the financial condition, results of operations and cash flows of the Company.

Critical Accounting Policies and Estimates

Our results of operation and financial condition are based on our consolidated financial statements, which are presented in accordance with IFRS. Certain accounting principles require us to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at that time. These estimates, judgments and assumptions can affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenues and expenses during the periods presented. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. The significant accounting policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Share-based payment transactions;

Impairment of financial assets; and

Warranty liability

The key assumptions made in the financial statements concerning uncertainties at the end of the reporting period and the critical estimates computed by the Group that may result in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

Share-based payment transactions

The Company's employees and other service providers are entitled to remuneration in the form of equity-settled share-based payment transactions.

The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. Fair value measurement of all options and warrants granted is determined using an appropriate pricing model. As for other service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments. In cases where the fair value of the goods or services received as consideration of equity instruments cannot be measured, they are measured by reference to the fair value of the equity instruments granted.

The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, during the period which the performance and service conditions are to be satisfied, ending on the date on which the relevant employees become fully entitled to the award ("the vesting period"). The cumulative expense recognized for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The expense or income recognized in profit or loss represents the movement in the cumulative expense recognized at the end of the reporting period. No expense is recognized for awards that do not ultimately vest.

Impairment of financial assets

At the end of each reporting period, the Company assesses whether there is objective evidence of impairment of a financial asset or group of financial assets carried at amortized cost.

As of the date hereof, there is no objective evidence of impairment of debt instruments and receivables as a result of one or more events that has occurred after the initial recognition of the asset and that loss event has an impact on the estimated future cash flows. Evidence of impairment may include indications that the debtor is experiencing financial difficulties, including liquidity difficulty and default in interest or principal payments. The amount of the loss recorded in profit or loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not yet been incurred) discounted at the financial asset's original effective interest rate (the effective interest rate computed at initial recognition). If the financial asset has a variable interest rate, the discount rate is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account (see allowance for doubtful accounts above). In a subsequent period, the amount of the impairment loss is reversed if the recovery of the asset can be related objectively to an event occurring after the impairment was recognized. The amount of the reversal, up to the amount of any previous impairment, is recorded in profit or loss.

Warranty liability

As the warrants have an exercise and presentational price denominated in Canadian dollars which differs from the Company’s functional currency they do not qualify for classification as equity. These warrants have been classified as a warrant liability and are recorded initially at fair value and revalued at each reporting date, using the Black Scholes valuation model. Changes in fair value for each year are included in comprehensive profit and loss for the year.

Disclosure Controls and Procedures and Internal Controls over Financial Reporting

There were no changes to the Company’s internal controls over financial reporting during the period ended September 30, 2017, which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

As of September 30, 2017, the Company evaluated its disclosure controls and procedures and internal control over financial reporting, as defined by the Canadian Securities Administrators. These evaluations were carried out under the supervision of and with the participation of management, including the Company’s chief financial officer. Based on these evaluations, the chief financial officer concluded that the design of these disclosure controls and procedures and internal control over financial reporting were effective.

Financial Instruments and Other Instruments

The Company’s financial instruments have been designated as follows:

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
Accrued liabilities	Other financial liabilities
Warrant liability	Fair value through profit and loss

The carrying values of cash and cash equivalents, restricted deposits, other receivables, trade payables and accounts payable and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.

Risks and Uncertainties

Credit risk

The Company manages credit risk, in respect of cash and cash equivalents, and restricted cash, by holding them at major Canadian and Israeli financial institutions in accordance with the Company’s investment policy. The Company places its cash and cash equivalents with high credit quality Israeli and Canadian financial institutions.

Concentration of credit risk exists with respect to the Company’s cash and cash equivalents and accounts receivable.

As of September 30, 2017, the Company’s exposure is for cash held in bank accounts in the amount of $13 thousand and other receivables and prepaid expenses of Nil.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in obtaining funds to meet current obligations and future commitments. The Company's approach to managing liquidity risk is to forecast cash requirements to provide reasonable assurance that it will have sufficient funds to meet its liabilities when due. As of September 30, 2017, the Company had cash and cash equivalents of $13 thousand, and other receivables and prepaid expenses of nil against current trade and other payables in the amount of $328 thousand. A significant service provider agreed to settle their accounts payable balance in the amount $155 thousand in return for shares to be issued as part of the SMAART transaction.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of two types of risk: interest rate risk, and foreign currency risk.

(i)

Interest rate risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its cash equivalents.

(ii)

Foreign currency risk

The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. Most of the Company’s monetary assets are held in US dollars and most of the Company’s expenditures are made in US dollars. However, the Company also has expenditures in Canadian dollars. The Company has not hedged its exposure to currency fluctuations. An increase or decrease of 5% of the Canadian Dollar relative to the U.S dollar would not have a significant effect on the Company.

Environmental Risk

Environmental regulations affect the cost of exploration and development, as well as future development operations; however, management does not believe that any provision against environmental regulations is currently required.

For a complete discussion on risk factors, please refer to the Company’s Form 20-F dated April 28, 2017, filed on www.sedar.com.

Other Information

Additional information about the Company, the Company’s quarterly and annual consolidated financial statements, annual information form, technical reports and other disclosure documents, is accessible at the Company’s website www.adiraenergy.com or through the Company’s public filings at www.sedar.com.

# # # #

EX-99.3 4 exh_993.htm EXHIBIT 99.3

Exhibit 99.3

FORM 52-109FV2

CERTIFICATION OF INTERIM FILINGS

VENTURE ISSUER BASIC CERTIFICATE

I, Gadi Levin, Chief Executive Officer of Adira Energy Ltd., certify the following:

Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Adira Energy Ltd. (the “issuer”) for the interim period ended September 30, 2017.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

Date: November 29, 2017

" Gadi Levin"
_____________________

Gadi Levin

Chief Executive Officer

NOTE TO READER

In contrast to the certificate required for non-venture issuers under National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings (NI 52-109), this Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing this certificate are not making any representations relating to the establishment and maintenance of

i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

EX-99.4 5 exh_994.htm EXHIBIT 99.4

Exhibit 99.4

FORM 52-109FV2

CERTIFICATION OF INTERIM FILINGS

VENTURE ISSUER BASIC CERTIFICATE

I, Gadi Levin, Chief Financial Officer of Adira Energy Ltd., certify the following:

Date: November 29, 2017

" Gadi Levin"

_____________________

Gadi Levin

Chief Financial Officer

NOTE TO READER