Mr. Steven McAuley reports

EMPOWER CLINICS SIGNS DEFINITIVE AGREEMENT TO ACQUIRE MOMENTUM HEALTH WITH 7 CANADIAN CLINICS. BEGINS PLANNING FOR NATIONWIDE ROLLOUT

Empower Clinics Inc. has executed a definitive share purchase agreement dated Dec. 16, 2020, to acquire Lawrence Park Health and Wellness Clinic Inc., 1100900 Canada Inc., doing business as Atkinson, and Momentum Health Inc.

Steven McAuley, chairman and chief executive officer of Empower, stated: "The acquisition of Momentum Health will be a significant milestone for both Empower and its shareholders that we expect will provide Empower with a growing accretive business, as well as a winning business model with plans for immediate expansion across the Greater Toronto Area, the province of Ontario and then nationwide in very rapid succession. It is anticipated that this immediate and rapid nationwide expansion plan will be made possible by combining the winning Momentum Health model with the financial, marketing and operational control resources already successfully deployed by Empower in building its U.S. operations, including the successful win of a $1.2-million testing contract with a film and television studio within just 45 days of acquiring our KAI Medical Lab. Significant discussions are already under way with potential nationwide partners, and we expect to have developments in the very near future."

Acquisition includes seven clinics in Greater Toronto Area with immediate plans to expand clinic-in-clinic model across Canada

Momentum Health operates a network of medical clinics with a team of health care professionals who provide paramedical care by applying a holistic and hands-on approach, working with patients to unlock potential well-being. Key services include physiotherapy, chiropractic, massage therapy, traditional Chinese medicine, athletic therapy and others. The full range of services can be viewed at the Momentum Health website.

The acquisition will include two stand-alone wellness clinics and five new co-located clinics in the Greater Toronto Area of Ontario, Canada, with immediate access to in excess of 20,000 patients.

More importantly, it is expected that expansion will be at a very attractive and cost-effective model of opening clinics within clinics, in which the company proposes to partner with large-care facilities to provide paramedical clinics inside the physical location of the primary care facility. This model results in a win-win for both Empower and the primary care facility partner as follows:

• Substantially improved care for patients of the primary care facility;
• Significantly reduced start-up costs for Empower;
• Immediate access to the large patient base of the primary care facility;
• Immediate rental income for the primary care facility.

With this proven winning model, the nationwide rollout is planned to commence immediately upon closing of the acquisition with expansion in the Greater Toronto Area, followed by expansion throughout Ontario and finally in the west through all provinces with a standardized brand and technology platform.

Moreover, the acquisition includes incentives for the two co-founders of Momentum Health to open an additional 30 clinics across Canada.

Mr. McAuley added, "Having Dr. Rabinowitz and Dr. Tsimerman join me in leadership to rapidly expand Empower's clinic footprint across Canada will be invaluable toward meeting our ambitious objectives."

Momentum co-founder Dr. Jordan Rabinowitz commented: "Joining Empower provides us with the opportunity to scale an intricately designed health care model alongside the outstanding professionals currently on their team. This transaction will not only allow our current patients to have increased access to integrative care, we also strive to exponentially increase our patient base with strategic, nationwide expansion."

Momentum co-founder Dr. Aviv Tsimerman commented: "I am thrilled to be joining Empower Clinics with a shared vision of nationwide, truly integrative medical care based on patient-centric services. This unique opportunity allows us to provide an unparalleled patient experience and create a leading approach to modernized health care."

Terms of acquisition

Pursuant to the terms of the agreement, Empower will pay the vendors of Momentum Health $275,000 in cash at closing (including $44,648 to settle an outstanding debt of Momentum Health) with an additional $75,000 to be withheld as a holdback for adjustments, for an aggregate cash payment of $350,000. In addition, at closing, Empower will issue Dr. Rabinowitz and Dr. Tsimerman or their affiliates 5,128,204 common shares in the capital of Empower (at a deemed price of 9.75 cents per share), 2,564,102 of which will be subject to contractual resale restrictions resulting in them being released quarterly from the date of closing in eight equal instalments.

Performance incentives to open 30 additional locations

The acquisition also includes long-term performance incentives for Dr. Rabinowitz and Dr. Tsimerman. If, within 18 months from the closing date, the company or its affiliates have opened and have operating an aggregate of 10 new clinic locations in Canada (milestone one), each of Dr. Rabinowitz and Dr. Tsimerman shall be entitled to receive incentive stock options of Empower to purchase 1,875,000 common shares of Empower, vesting as follows:

1. One-third immediately;
2. One-third upon the company or its affiliates having opened and operating an aggregate of 20 new clinic locations in Canada;
3. One-third upon the company or its affiliates having opened and operating an aggregate of 30 new clinic locations in Canada.

Additional details

Empower has agreed to enter into employment agreements with Dr. Rabinowitz and Dr. Tsimerman on closing of the acquisition to lead the Canadian clinic expansion strategy.

Completion of the acquisition contemplated by the agreement is subject to customary closing conditions, which the company anticipates being completed on or before Dec. 21, 2020.

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.