Mr. Steven McAuley reports

EMPOWER CLINICS DOUBLING KAI MEDICAL LABORATORY SIZE IN ANTICIPATION OF TEST VOLUMES BY END OF Q1. FILES MDEL APPLICATION WITH HEALTH CANADA TO IMPORT AND SELL KAI SALIVA PCR TEST IN CANADA

Empower Clinics Inc. has made a significant expansion of its Kai medical laboratory in Dallas, Tex., in anticipation of projected growth in COVID-19 testing requirements in the United States, Canada and international markets.

In addition, Empower has filed a medical device establishment licence (MDEL) with Health Canada for the purposes of importing, distributing and selling its Kai Medical COVID-19 saliva test, which has experienced immediate success since its launch on Dec. 15, 2020, in the United States and reported on Jan. 7, 2021.

Kai Medical laboratory expanding to at least double current size in anticipation of anticipated growth in volume

Kai Medical laboratory, a state-of-the-art diagnostics laboratory in Dallas, was acquired by Empower Clinics on Oct. 6, 2020, to further advance the company's COVID-19 national testing programs for enterprise clients, including movie and television studios, businesses, and the travel industry. Kai experienced significant growth in its first quarter under Empower, with fourth quarter COVID-19 test kit volumes exceeding 6,000 units, far surpassing the 1,300 total units prior to acquisition.

Current run rate projections now indicate as follows:

• January, 2021, is expected to exceed 8,000 tests, surpassing all of Q4 2020.
• February, 2021, could see daily rates hit 1,000 tests per day.
• March, 2021, could see daily rates hit 2,000 tests per day.

These run rates do not include the recent 25,000-unit order for Kai Saliva test kits, nor do they include any test kits from the launch of the Kai tests website.

Empower Clinics chief executive officer Steven McAuley stated: "Our investment in R&D is really starting to pay off for Kai Medical, starting with a new state-of-art laboratory information system to automate processes for the anticipated growth in volume. Next, we have hired three new scientists, increased administrative staff and are activating a call centre to provide world-class customer support. Further, the investment in new test protocols such as the Kai Saliva test kit, combined with our Health Canada medical device licence, positions us to be a leader in the reactivation of travel for Canadians."

Empower files MDEL application with Health Canada to import, distribute and sell Kai Saliva

Empower has filed a medical device establishment licence with Health Canada for the purposes of importing, distributing and selling its Kai Medical COVID-19 saliva test, which experienced immediate success upon its launch on Dec. 15, 2020, in the United States, with an initial soft launch order of 5,000 units and an order for the next 25,000 Kai Saliva PCR test kits with a sales value of approximately $5.5-million.

The filing of the MDEL application is a very important milestone as the integrated health care model of the company developments in Canada. Having the MDEL licence approved by Health Canada opens up the ability for Empower to import and sell the Kai Saliva COVID-19 RT-PCR (reverse transcription polymerase chain reaction) test kits to all Canadians, providing a legitimate and predictable method to solve the dilemma of travel for Canadians and those that want or need to travel to or back into Canada.

Highly viable solution for airline passengers, both domestic and foreign, to travel to Canada

Moreover, if successful with the company's application, Kai Saliva COVID-19 test kit provides travellers from around the world with a simple, yet fully compliant method to obtain an RT-PCR test and laboratory provided result prior to travel to Canada.

Furthermore, if successful with the company's application, Kai Saliva test kits provide Canada's major airlines with a legitimate and viable solution for Canadian travellers who leave Canada on a round trip but have no credible means of sourcing a compliant, self-administered COVID-19 test in a foreign country. This has become a serious challenge for travellers, leading to major losses for airlines, cruise lines, hotels and hospitality.

Kai Saliva RT-PCR test kits, if successful with the company's application, would provide Canada's major airlines with an ability to provide one solution for both foreign and domestic travellers by simply making a Kai Saliva test kit a part of the ticketing purchase process. Foreign travellers could receive and take the test in their home countries, while Canadian travellers could take Kai Saliva test kits with them on their trip to administer prior to return travel, then a result will be provided prior to boarding flights back to Canada.

Initial demand for first run Kai Saliva test kits came from existing commercial customers. Direct-to-consumer channel launch has commenced.

Initial and overwhelming demand for Kai Saliva test kits stemmed from the company's existing customers in the commercial sector and concierge testing. Given the early and significant success of Kai Saliva since its launch on Dec. 15, 2020, Empower is extremely confident in the continued success of Kai Saliva test kits with both existing and expanded commercial customers in this next run.

To this end, the next important milestone for Kai Medical is the pending launch of the company's direct-to-consumer, home-based Kai Saliva tests, which will launch using the company's new platform. The company's platform will enable consumers, businesses, and the private and public sector to order the test kit on-line, have it shipped to them for simple specimen collection and then returned to Kai Medical laboratory for processing and provision of the test results.

FDA-approved at home/work saliva test is a game changer. Discussions are under way with major Canadian airlines in response to recent testing requirements for returning Canadian travellers.

Kai Saliva is the direct result of investing in scientific R&D (research and development) through Kai, empowering Kai to deliver clinical trial data and validation. This gives Empower a strong upper hand nationally and now potentially on an international stage.

The power of the saliva test is in its simplicity, in which users merely spit into a funnel, then close the funnel with a lid containing a liquid to be mixed with the saliva by simply shaking it for five seconds. This saliva-based PCR test does not require a medical technician to administer the specimen collection, which can be done by the individual, a parent or an administrator. The specimen is returned to Kai Medical labs from anywhere for processing. Kai will analyze and provide a response using its compliant IT (information technology) system.

This simplicity of use, yet sophistication in processing, analyzing and responding, represents a viable solution for the new travel policy instituted by the Canadian government and serves as the basis for discussions that are now under way with major Canadian airlines.

Specifically, every traveller to Canada over the age of five, including Canadians returning from vacation, must show a negative test result from a PCR or RT-LAMP (reverse transcription loop-mediated isothermal amplification) test administered in the 72 hours before their flight's departure. The test must be conducted in the flight's country of origin. Kai Saliva is able to provide returning Canadians with the ability to purchase a PCR test prior to leaving for vacation, self-administer the non-invasive specimen collection from their travel destination 72 hours prior to returning to Canada and receive a result prior to departure. Foreign travellers to Canada using a major Canadian airline can order Kai Saliva directly to their home almost anywhere in the world and go through the same process. As a CE-approved test kit, it can be sent to travellers coming from South America, Caribbean and European countries.

Other types of tests -- such as rapid antigen tests -- will not be accepted. The government has directed airlines to turn away travellers who do not present a test result at the time of boarding. As such, the simplicity of Kai Saliva test kit represents one of the most viable solutions available anywhere on the planet and a major opportunity for Empower.

Global tourism industry losses to cost over $1-trillion and 100 million jobs

In a featured story on AWS Amazon titled "Restarting the Travel and Hospitality Industry: An AI-powered Solution," Loop Insight chief executive officer Rob Anson stated: "There's no doubt that the pandemic has devastated the travel and hospitality industry. A recent policy brief from the United Nations reports the COVID-19 pandemic will cost the global tourism industry over $1-trillion in losses and threaten 100 million jobs. Today, 50 countries are completely closed and another 92 are partially open with mandatory quarantine upon arrival, according to Kayak. Even as measures and lockdowns around the world ease up, many travellers are postponing their plans or cancelling altogether. The complexities of reopening stretch far beyond navigating the restrictions. We need to get the world back to travelling soon, and to do that we must prioritize both guest and operator safety."

About Empower Clinics Inc.

Empower is an integrated health care company that provides body and mind wellness for patients through its clinics, with digital and telemedicine care and world-class medical diagnostics laboratories. Supported by an experienced leadership team, Empower is aggressively expanding its clinical and digital presence across North America. Its health and wellness and diagnostics and technology business units are positioned to positively impact the integrated health of patients while simultaneously providing long-term value for shareholders.

We seek Safe Harbor.