ADIRA ENERGY LTD.
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
AS OF MARCH 31, 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 - 9 |
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NOTICE TO SHAREHOLDERS
The accompanying unaudited condensed consolidated interim financial statements of Adira Energy Ltd. for the three month period ended March 31, 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.
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ADIRA ENERGY LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
U.S. dollars in thousands
March 31 | December 31 | |||||||
2017 | 2016 | |||||||
Unaudited | Audited | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 23 | $ | 19 | ||||
Loan Receivable | - | 25 | ||||||
Other receivables and prepaid expenses | 6 | 8 | ||||||
$ | 29 | $ | 52 | |||||
Liabilities | ||||||||
Current liabilities | ||||||||
Trade payables | $ | 7 | $ | 11 | ||||
Accrued liabilities | 262 | 263 | ||||||
269 | 274 | |||||||
Non-curremt Liabilities | ||||||||
Warrant liability | 58 | 67 | ||||||
327 | 341 | |||||||
Equity | ||||||||
Share capital | - | - | ||||||
Additional paid-in capital | 34,060 | 34,060 | ||||||
Accumulated deficit | (34,358 | ) | (34,349 | ) | ||||
Total deficit | (298 | ) | (289 | ) | ||||
Total liabilities and deficit | $ | 29 | $ | 52 |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
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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 | ||||||||
March 31 | ||||||||
2017 | 2016 | |||||||
Unaudited | ||||||||
Expenses: | ||||||||
General and administrative costs | $ | 21 | $ | 21 | ||||
Total expenses | 21 | 21 | ||||||
(Loss) income before financing income, (loss) gain on foreign exchange and gain on revaluation warrant liability | (21 | ) | ||||||
Gain on foreign exchange | 3 | 1 | ||||||
Gain on revaluation of warrant liability | 9 | - | ||||||
Loss before income taxes | (9 | ) | (20 | ) | ||||
Income taxes | - | - | ||||||
Net loss and comprehensive loss | $ | (9 | ) | $ | (20 | ) | ||
Basic and diluted net loss per share attributable to equity holders of the parent | $ | (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 |
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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 | Total (Deficit) | ||||||||||||||||
shares | capital | capital | deficit | equity | ||||||||||||||||
Balance as of December 31, 2015 (audited) | 17,112,022 | $ | - | $ | 34,060 | $ | (34,134 | ) | $ | (74 | ) | |||||||||
Net loss | - | - | - | (215 | ) | (215 | ) | |||||||||||||
Balance as of December 31, 2016 (audted) | 17,112,022 | $ | - | $ | 34,060 | $ | (34,349 | ) | $ | (289 | ) | |||||||||
Net loss for the period | - | - | - | (9 | ) | (9 | ) | |||||||||||||
Balance as of March 31, 2017 (unaudited) | 17,112,022 | $ | - | $ | 34,060 | $ | (34,358 | ) | $ | (298 | ) |
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, 2015 (audited) | 17,112,022 | $ | - | $ | 34,060 | $ | (34,134 | ) | $ | (74 | ) | |||||||||
Net loss | - | - | - | (20 | ) | (20 | ) | |||||||||||||
Balance as of March 31, 2016 (unaudited) | 17,112,022 | $ | - | $ | 34,060 | $ | (34,154 | ) | $ | (94 | ) |
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
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ADIRA ENERGY LTD.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
U.S. dollars in thousands
Three month period ended | Year ended | |||||||||||
March 31 | December 31 | |||||||||||
2017 | 2016 | 2016 | ||||||||||
Unaudited | Audited | |||||||||||
Cash flow from operating activities | ||||||||||||
Net (loss) income for the year | $ | (9 | ) | $ | (20 | ) | $ | (215 | ) | |||
Items not affecting cash: | ||||||||||||
Revaluation of warrants | (9 | ) | - | (45 | ) | |||||||
Changes in non‑cash working capital: | ||||||||||||
Decrease in accounts receivable, other receivables and prepaid expenses | 2 | 1 | 6 | |||||||||
Decrease in trade payables | (4 | ) | (56 | ) | (49 | ) | ||||||
Increase (decrease) in other accounts payable and accrued liabilities | (1 | ) | 6 | 198 | ||||||||
(21 | ) | (69 | ) | (105 | ) | |||||||
Cash flow from investing activities | ||||||||||||
Cash provided for loan receivable | 25 | - | - | |||||||||
25 | - | - | ||||||||||
Cash flow from financing activities | ||||||||||||
- | - | - | ||||||||||
Increase (decrease) in cash and cash equivalents | 4 | (69 | ) | (105 | ) | |||||||
Cash and cash equivalents, beginning of year | 19 | 124 | 124 | |||||||||
Cash and cash equivalents, end of year | $ | 23 | $ | 55 | $ | 19 |
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
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ADIRA ENERGY LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 1:- | GENERAL (Continued) |
b. | Financial position |
As reflected in the consolidated financial statements, as of March 31, 2017, the Company had an accumulated deficit of $34,358. The Company is an early-exploration stage company and its operating revenues are currently insufficient to finance its future operating expenses and exploration funding commitments.
The ability of the Company to continue as a going concern depends upon the discovery of economically recoverable reserves, the ability of the Company to obtain financing to complete development, and upon future profitable operations from the properties or proceeds from their disposition. There can be no assurance that the Company will be able to continue to raise funds from the aforementioned sources 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 RECIEVABLE |
In connection with the Transaction, Adira has advanced $25 to SMAART to meet it's ongoing working capital requirements pending the completion of the transaction. During the three months ended March 31, 2017, SMAART repaid the $25 loan.
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ADIRA ENERGY LTD.
NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
U.S. dollars in thousands, except share and per share data
NOTE 4:- | EQUITY |
a. | Stock Option Plan: |
There wes no movement in stock options during the three months ended March 31, 2017.
The following table summarizes information about stock options outstanding and exercisable as of March 31, 2017 (unaudited):
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 | $ | 2.26 | 236,000 | 236,000 | 0.39 | |||||||||||||||
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 March 31, 2017. |
b. | Share purchase warrants: |
The following tables summarize information applicable to warrants outstanding as of March 31, 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 March 31, 2017. |
NOTE 5:- | RELATED PARTY TRANSACTIONS |
During the three month period ended March 31, 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 $2 during the three month period ended March 31, 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.
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