HIRE Technologies Inc. — Interim / Quarterly Report 2021

May 26, 2021

HIRE Technologies Inc.

Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

In accordance with National Instrument 51-102 released by the Canadian Securities Administrators, HIRE Technologies Inc. discloses that its auditors have not reviewed the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2021 and March 31, 2020.

HIRE Technologies Inc. Condensed Consolidated Interim Statements of Financial Position

Assets Current assets Cash Trade and other receivables (notes 3 and 20) Prepaid expenses Non-current assets Property and equipment (note 4) Other receivables (note 3) Goodwill (note 5) Intangible assets (note 6) Investments (note 7) Liabilities Current liabilities Bank indebtedness (note 8) Trade and other payables (note 10) Lease liability (note 11) Convertible debentures (note 13) Derivatives (note 13) Long-term liabilities Loans (note 9) Lease liability (note 11) Long-term payables (note 12) Deferred tax liabilities Shareholders’ equity (deficit) Share capital(note 14) Reserves(note 15) Deficit Basis of measurement and going concern(note 2(b))	March 31, 2021 $ December 31, 2020 $ 303,767 340,638 3,427,353 2,541,315 286,644 322,956
	4,017,764 3,204,909
	388,185 410,993 473,463 473,463 5,100,078 5,100,078 3,631,161 3,755,373 261,759 254,640
	9,854,646 9,994,547
	13,872,410 13,199,456
	1,385,000 465,000 2,231,278 2,232,611 159,401 175,374 1,632,307 2,288,726 2,208,660 6,763,040
	7,616,646 11,924,751
	199,827 141,851 178,931 215,308 1,452,424 1,368,815 856,758 884,891
	2,687,940 2,610,865
	10,304,586 14,535,616
	19,678,520 17,541,250 1,836,872 1,317,628 (17,947,568) (20,195,038)
	3,567,824 (1,336,160)
	13,872,410 13,199,456

Approved by the Board of Directors

"Sean Cleary" "Jonson Sun" _____ Director ________ Director

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

HIRE Technologies Inc.

Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)

(Unaudited)

For the three months ended March 31, 2021 and March 31, 2020

Revenue(note 16) Cost of services(note 21) Gross profit Expenses Selling, general and administrative (note 17) Amortization of intangible assets Interest Realized gain on convertible debenture derivatives (note 13) Unrealized gain on mark-to-market (notes 7 and 13) Income (loss) before income taxes Current income tax expense Deferred income tax expense (recovery) Income tax expense (recovery) Net income (loss) and comprehensive income (loss) for the period Supplemental disclosure Basic earnings (loss) per share Weighted number of shares Fully diluted earnings (loss) per share Weighted number of shares	2021 $ 2020 $ 5,490,329 2,902,786 3,162,926 2,212,049
	2,327,403 690,737
	2,763,275 1,401,153 124,212 22,650 73,298 16,559
	2,960,785 1,440,362
	(633,382) (749,625) 421,461 - 2,570,662 -
	2,358,741 (749,625)
	139,407 - (28,136) (4,660)
	111,271 (4,660)
	2,247,470 (744,965)
	0.04 (0.02) 58,678,642 48,087,333 0.03 84,674,714

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

HIRE Technologies Inc.

Condensed Consolidated Interim Statements of Changes in Equity (Deficit) (Unaudited)

For the three months ended March 31, 2021 and March 31, 2020

Balance – January 1, 2020 Net loss and comprehensive loss for the period Balance – March 31, 2020 Balance – January 1, 2021 Issuance of common shares from warrants Issuance of common shares from debenture conversion Issuance of common shares to settle acquisition holdback Share-based compensation expense Net income and comprehensive income for the period Balance – March 31, 2021	Common shares Amount $ 48,087,333 12,561,500 - -	Reserves $ 827,314 -	Deficit $ (9,478,816) (744,965)	Total $ 3,909,998 (744,965)
	48,087,333 12,561,500	827,314	(10,223,781)	3,165,033
	56,888,479 17,541,250 466,918 285,374 2,443,332 1,711,896 206,709 140,000 - - - -	1,317,628 (113,549) 549,837 - 82,956 -	(20,195,038) - - - - 2,247,470	(1,336,160) 171,825 2,261,733 140,000 82,956 2,247,470
	60,005,438 19,678,520	1,836,872	(17,947,568)	3,567,824

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

HIRE Technologies Inc. Condensed Consolidated Interim Statements of Cash Flows (Unaudited) For the three months ended March 31, 2021 and March 31, 2020

Cash provided by (used in) Operating activities Net income (loss) and comprehensive income (loss) for the period Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities Depreciation Amortization of intangible assets Income tax expense (recovery) Share-based compensation expense Interest expense Realized gain on convertible debenture derivatives Unrealized gain on mark-to-market Changes in non-cash working capital balances Trade and other receivables Prepaid expenses Trade and other payables Interest paid Investing activities Purchase of property and equipment Investment in New Wave Holdings Corp. Financing activities Increase in bank indebtedness Increase in CEBA loans (note 9) Lease payments Earn-out and contingent payments Issuance of common shares Change in cash during the period Cash – Beginning of period Cash – End of period	2021 $ 2020 $ 2,247,470 (744,965) 33,291 69,452 124,212 22,650 111,271 (4,660) 82,956 - 73,298 16,559 (421,461) - (2,570,662) - (873,398) (927,694) 36,312 (19,693) 278,667 (2,472) (95,448) (8,630)
	(973,492) (1,599,453)
	(10,483) - (10,347) -
	(20,830) -
	920,000 - 57,977 - (52,350) (75,831) (140,000) (20,334) 171,824 -
	957,451 (96,165)
	(36,871) (1,695,618) 340,638 2,304,024
	303,767 608,406

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

HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

1 Nature of business

HIRE Technologies Inc. (the “Company” or “HIRE Technologies”), formerly known as Danacore Industries Inc. (“Danacore”), was incorporated under the Business Corporations Act (British Columbia) on January 10, 2018. The Company’s registered office is 595 Howe St 10th floor, Vancouver, British Columbia V6C 2T5.

The Company, through its direct and indirect wholly owned subsidiaries PTC Accounting and Finance Inc. (“PTC”), ProVision IT Resources Ltd. (“ProVision”), The Headhunters Recruitment Inc. (“The Headhunters”), 2449983 Ontario Inc. (“The Kavin Group”), Taylor Ryan Inc. and TR Partners Inc. (collectively “Taylor Ryan”) and BTG Holdco Inc. (together the “Subsidiaries”) provides human resources services, which are comprised of recurring contract and on-occurrence permanent placement services.

2 Basis of preparation and going concern

a) Statement of compliance

These condensed consolidated interim financial statements were prepared by management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and interpretations as issued by the International Financial Reporting Interpretations Committee (“IFRIC”), and as applicable to the preparation of condensed consolidated interim financial statements, including IAS 34, Interim Financial Reporting. These condensed consolidated interim financial statements should be read in conjunction with the December 31, 2020 consolidated financial statements authorized for issue on April 28, 2021.

These condensed consolidated interim financial statements were authorized for issue by the Company’s Board of Directors on May 25, 2021.

b) Basis of measurement and going concern

These condensed consolidated interim financial statements have been prepared on a going concern basis under the historical cost convention, except for certain financial instruments, which are recorded at fair value. The going concern basis assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. For the three months ended March 31, 2021, the Company incurred negative cash flows from operations of $973,492 and has an accumulated deficit of $17,947,568.

The Company’s ability to continue as a going concern is dependent on the achievement of a profitable level of operations and may require the Company to raise additional funds. Although the Company has previously been successful in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company. Furthermore, during the year the outbreak of the novel strain of coronavirus specifically identified as COVID-19 was declared a pandemic by the World Health Organization. This situation is dynamic and the

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

ultimate duration and magnitude of the impact on the economy and on the Company’s ability to achieve revenue growth organically, or through the completion of acquisitions as has been done previously, is unknown. These conditions result in material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern. These condensed consolidated interim financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments would be material.

c) Basis of consolidation

These condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries as noted above. Subsidiaries are consolidated from the date of acquisition, being the date on which the Company obtains control. All intercompany balances and transactions are eliminated in full on consolidation.

d) Functional and presentation currency

These condensed consolidated interim financial statements are presented in Canadian dollars, which is also the functional currency of all the entities within the Company.

e) Use of estimates

The preparation of condensed consolidated interim financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated interim financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the following:

• determination of the recoverable amount for purposes of assessing impairment of goodwill and intangible assets with an indefinite useful life (notes 5 and 6);

• useful life of intangible assets (note 6);

• fair value of Atlas ID (note 7);

• fair value of contingent consideration payable (note 12);

• fair value of derivatives (note 13); and

• fair value of options and warrants (notes 14 and 15).

Actual results could differ from management’s best estimates as additional information becomes available in the future, which may have an impact on future periods.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

f) Acquisitions

i) Acquisition of The Headhunters

On September 1, 2020, the Company acquired 100% of the issued and outstanding shares of The Headhunters for total consideration of $955,036, consisting of $400,000 in cash, $64,062 paid in cash as a working capital adjustment and $490,974 in contingent consideration payable. The cash investment in The Headhunters, net of cash acquired, was $239,232.

The fair value of the assets acquired and liabilities assumed was as follows and will be finalized within one year:

Assets Cash acquired in business combination Trade and other receivables Prepaid expenses Property and equipment Deferred income tax assets Intangible assets Brand Customer relationships Goodwill Liabilities Bank indebtedness Trade and other payables Deferred income tax liabilities on intangible assets Net Consideration Cash Working capital adjustment Contingent consideration Total	$ 160,768 506,186 56,738 6,362 39,557 184,000 345,243 398,918
	1,697,772
	21,905 580,582 140,249
	742,736
	955,036
	400,000 64,062 490,974
	955,036

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

ii) Acquisition of The Kavin Group

On December 11, 2020, the Company acquired 100% of the issued and outstanding shares of The Kavin Group for total consideration of $1,590,636, consisting of $1,026,586 in cash, $200,000 in common shares of the Company (321,543 shares at $0.622 per share), $473,462 to be received as working capital adjustment and $837,512 in contingent consideration payable. The cash investment in The Kavin Group, net of cash acquired, was $983,619.

The provisional fair value of the assets acquired and liabilities assumed was as follows and will be finalized within one year:

Assets Cash acquired in business combination Trade and other receivables Prepaid expenses Property and equipment Deferred income tax assets Intangible assets Brand Customer relationships Goodwill Liabilities Trade and other payables Deferred income tax liabilities on intangible assets Net Consideration Cash Issuance of common shares Working capital adjustment Contingent consideration Total	$ 42,968 20,668 23,888 10,211 48,078 451,000 309,000 1,148,171
	2,053,984
	261,948 201,400
	463,348
	1,590,636
	1,026,586 200,000 (473,462) 837,512
	1,590,636

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

iii) Acquisition of Taylor Ryan

On December 17, 2020, the Company acquired 100% of the issued and outstanding shares of Taylor Ryan for total consideration of $4,438,912, consisting of $3,290,000 in cash, $822,000 in common shares of the Company (1,031,368 shares at $0.797 per share), and $326,912 to be paid in cash as a working capital adjustment. The cash investment in Taylor Ryan, net of cash acquired, was $3,290,659. Additionally, a contingent remuneration of $1,206,404 was calculated.

The provisional fair value of the assets acquired and liabilities assumed was as follows and will be finalized within one year:

Assets Trade and other receivables Property and equipment Deferred rent receivable Intangible assets Brand Customer relationships Goodwill Liabilities Bank indebtedness Trade and other payables Lease liabilities Deferred income tax liabilities on intangible assets Net Consideration Cash Issuance of common shares Working capital adjustment Contingent consideration Total	$ 521,475 79,254 83,456 444,000 1,377,000 2,643,441
	5,148,626
	46,028 87,000 85,016 491,670
	709,714
	4,438,912
	3,290,000 822,000 326,912 -
	4,438,912

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2021 and March 31, 2020

3 Trade and other receivables

Trade and other receivables Allowance for credit losses Current portion Long-term portion	March 31, 2021 $ 3,941,901 (41,085)	December 31, 2020 $ 3,032,942 (18,164)
	3,900,816	3,014,778
	3,427,353 473,463	2,541,315 473,463
	3,900,816	3,014,778

Included in trade and other receivables is $87,539 in Canada Emergency Wage Subsidy (“CEWS”) program receivables (note 21).

The Company measures the allowance for credit losses on its trade receivables using a simplified approach, where the allowance is measured at an amount equal to the lifetime ECLs.

Balance – Beginning of year Provision for credit losses Writeoffs Balance – End of year	March 31, 2021 $ 18,164 25,055 (2,134)	December 31, 2020 $ 63,229 53,467 (98,532)
	41,085	18,164

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2021 and March 31, 2020

4 Property and equipment

Cost As at December 31, 2020 Additions As at March 31, 2021 Accumulated depreciation As at December 31, 2020 Depreciation As at March 31, 2021 Net book value As at December 31, 2020 As at March 31, 2021	Right-of-use assets $ 459,823 -	Computer equipment $ 104,424 10,483	Furniture and equipment $ 123,994 -	Leasehold improvements $ Total $ 12,541 700,782 - 10,483
	459,823	114,907	123,994	12,541 711,265
	224,524 20,506	49,759 6,967	15,211 4,207	295 289,789 1,611 33,291
	245,030	56,726	19,418	1,906 323,080
	235,299	54,665	108,783	12,246 410,993
	214,793	58,181	104,576	10,635 388,185

5 Goodwill

As at January 1, 2020 Acquisition of The Headhunters Acquisition of The Kavin Group Acquisition of Taylor Ryan As at December 31, 2020 As at January 1, 2021 As at March 31, 2021	$ 909,549 398,917 1,148,171 2,643,441
	5,100,078
	5,100,078
	5,100,078

The Company assessed for indicators of impairment and determined that no indications existed as at March 31, 2021.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

Carrying value of goodwill by CGU

PTC ProVision The Headhunters The Kavin Group Taylor Ryan Intangible assets Cost As at December 31, 2020 Additions As at March 31, 2021 Accumulated amortization As at December 31, 2020 Amortization As at March 31, 2021 Net book value As at December 31, 2020 As at March 31, 2021	Customer relationships $ Candidate database $ 2,141,243 343,000 - -	March 31, 2021 $ December 31, 2020 $ 297,625 297,625 611,923 611,923 398,918 398,918 1,148,171 1,148,171 2,643,441 2,643,441
		5,100,078 5,100,078
		Brand names $ Total $ 1,542,000 4,026,243 - -
	2,141,243 343,000	1,542,000 4,026,243
	88,686 182,184 107,062 17,150	- 270,870 - 124,212
	195,748 199,334	- 395,082
	2,052,557 160,816	1,542,000 3,755,373
	1,945,495 143,666	1,542,000 3,631,161

6 Intangible assets

7 Investments

Investment in Atlas ID

On September 29, 2020, the Company invested US$200,000 in a convertible note maturing on September 30, 2022, bearing interest at 10% with Atlas ID Systems Inc. (“Atlas ID”). All outstanding principal, and, at Atlas ID’s option, all accrued but unpaid interest on the convertible note, may automatically convert into equity securities of Atlas ID at a price calculated based on the future equity financing price of Atlas ID securities. The note may also convert into securities of Atlas ID at the option of HIRE Technologies or on an Atlas ID liquidity event.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

The Company valued the note using net present value of estimated future cash flows, at a cost of capital of 5.05% for the software (System & Applications) industry and a probability of default of 5% and included the impact of foreign exchange in its estimation of fair value. The fair value of the investment in Atlas ID was determined to be $251,412 as at March 31, 2021.

Investment in New Wave Holdings Corp.

On February 1, 2021, The Headhunters were granted 114,963 restricted share units (RSUs) of New Wave Holdings Corp. (“New Wave”), in exchange for recruitment services. The Company accounts for the investment in New Wave as fair value through profit or loss. New Wave is trading on the Canadian Securities Exchange under the stock symbol SPOR. The investment is classified as level 1 in the fair value hierarchy as at March 31, 2021.

The RSUs were initially assessed at $12,646 on the grant date and adjusted to fair value of $10,347 as at March 31, 2021.

8 Bank indebtedness

The Company has a revolving demand operating facility with a credit limit of the lesser of $1,500,000 and percentages of certain qualified receivables calculated at $2,072,552 as at March 31, 2021. The balance outstanding on the facility was $1,385,000 as at March 31, 2021 (December 31, 2020 – $465,000). The facility bears interest at the prime rate plus 1.25% per annum and is secured by general security agreements representing a first charge on the Company’s assets.

9 Canada Emergency Business Account (“CEBA”) loans

On May 12, 2020, HIRE Technologies and ProVision received CEBA loans totalling $80,000. The acquisitions of The Headhunters on September 1, 2020 and Taylor Ryan on December 17, 2020 added another $120,000. The CEBA loans bear no interest until December 31, 2022 and bear interest at 5% per annum thereafter and to their December 31, 2025 maturity date. If 75% of the principal is repaid by December 31, 2022, the remaining 25% will be forgiven.

In October 2020, the Government of Canada announced its intention to expand CEBA loans to $60,000, of which $20,000 will be forgiven if repaid by December 31, 2022. HIRE Technologies, ProVision and The Headhunters received the additional $20,000, respectively. As of March 31, 2021, the total principal outstanding was $260,000 in aggregate.

As at March 31, 2021, the Company assigned a fair value to the CEBA loans assumed from The Headhunters and Taylor Ryan at $70,473, using a 15% effective rate, which was the estimated cost of capital.

The Company used the effective interest method to calculate the fair value of the CEBA loans received by HIRE Technologies and ProVision and the CEBA expansions received by HIRE Technologies, ProVision and The Headhunters. As at March 31, 2021, the carrying value was $129,354.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited)

March 31, 2021 and March 31, 2020

10 Trade and other payables

Trade payables Payroll, bonuses and sales tax payable Payable to former owner of ProVision Earn-out payable to former owner of ProVision Other accrued liabilities	March 31, 2021 $ 270,928 1,129,739 52,621 63,880 714,110	December 31, 2020 $ 309,941 851,363 316,961 61,707 692,639
	2,231,278	2,232,611

11 Lease liability

The following table presents the lease liability for the Company:

Balance – December 31, 2020 Additions Principal payments Terminations Balance – March 31, 2021	Office premises $ Office equipment $ 390,682 - - - (52,350) - - -	Total $ 390,682 - (52,350) -
	338,332 -	338,332

Interest expense on these lease obligations for the three months ended March 31, 2021 was $17,205. The total cash outflow for the three months ended March 31, 2021 was $56,613, including interest.

The minimum lease payments under the current lease agreements are as follows:

2021 2022 2023 Less: Imputed interest at average 4.9% Current portion Long-term portion	$ 132,302 142,685 80,550
	355,537 17,205
	338,332
	159,401 178,931
	338,332

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

12 Long-term payables

Earn-out payable to former owner of ProVision Contingent consideration payable	March 31, 2021 $ 23,403 1,429,021	December 31, 2020 $ 40,327 1,328,488
	1,452,424	1,368,815

13 Convertible debentures

On August 21 and 24, 2020, the Company closed a private placement of unsecured convertible debentures for gross proceeds of $2,419,000. The convertible debentures bear interest at 9% per annum, payable semiannually in arrears in cash or at the option of the Company in shares. The securities mature on July 31, 2023 and are convertible at $0.30 per unit at any time prior to the maturity date with each unit consisting of one common share and one common share purchase warrant with each warrant entitling the holder to purchase one common share at a price of $0.60 at any time prior to the maturity date. The securities can also be converted at the option of the Company after one year should the daily volume weighted average trading price of the Company exceed $0.65 for a period of 10 consecutive trading days. The convertible debentures are a compound financial instrument under IAS 32 – Financial Instruments, and have both a liability and an embedded derivative component. The convertible debentures were recognized at $2,419,000 less $56,930 in warrants and $86,072 in cash paid as finders fees.

In January 2021, 1,626,666 convertible debentures were converted into 1,626,666 common shares with a fair value of $1,259,122 and 1,626,666 warrants with a fair value of $426,647. In March 2021, 816,666 convertible debentures were converted into 816,666 common shares with a fair value of $452,774 and 816,666 warrants with a fair value of $123,190. The amounts attributed to common shares and warrants are based on relative fair values at each conversion date. The fair value of the warrants was estimated using the Black-Scholes option pricing model. Model inputs included a risk-free rate of 2.0%, volatility calculated using the weighted average of historical volatility and the S&P/TSX Small Cap Index of 37%, expected dividend yield of $nil, and expected life to July 23, 2023. The portion of transaction costs included in the convertible debentures of $43,332 related to the conversions described above have been reflected in selling, general and administrative expenses.

The convertible debenture is carried at amortized cost and as at March 31, 2021, the convertible debenture is recognized at $1,632,307. The derivative was separated as a FVTPL instrument and is remeasured at each reporting period with subsequent changes in fair value recorded in the condensed consolidated interim statements of income (loss) and comprehensive income (loss). As at March 31, 2021, the fair value of the derivative was determined to be $2,208,660. A gain of $421,461 was recorded on derivatives settled as part of the debenture conversions during the quarter, representing the difference in the fair value between January 1, 2021 and the settlement dates. An unrealized gain of $2,505,060 was recorded on derivatives related to outstanding convertible debentures as at March 31, 2021.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

14 Share capital

Authorized unlimited number of common shares:

As at December 31, 2020 Common shares issued for cash on exercise of warrants and stock options Common shares issued from debenture conversion Common shares issued to settle acquisition holdback As at March 31, 2021	Common shares 56,888,479 466,918 2,443,332 206,709	Amount $ 17,541,250 285,374 1,711,896 140,000
	60,005,438	19,678,520

15 Share-based payments

Stock options and warrants

Share purchase warrants and stock option transactions are summarized as follows:

Outstanding and exercisable as at December 31, 2020 Exercised Issued Expired Outstanding and exercisable as at March 31, 2021		Warrants Weighted average exercise price $ 0.523 0.447 0.600 -	Stock options	Stock options
	Number of warrants 9,559,517 202,475 2,443,332 -		Number of options 2,663,770 - 362,000 -	Weighted average exercise price $ 0.267 - 0.660 -
	11,800,374	0.524	3,025,770	0.314

On March 22, 2021, the Company issued 362,000 options that are exercisable at $0.66 for one common share with a maturity date of five years. The fair value of these options was estimated at $0.223 using the BlackScholes option pricing model. Model inputs included a market price of $0.66, risk-free rate of 0.99%, volatility calculated using the weighted average of historical volatility and the S&P/TSX Small Cap Index of 37%, expected dividend of yield $nil and expected life of five years. Share-based compensation expense of $82,956 was recognized in selling, general and administrative expenses.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

During the quarter ended March 31, 2021, 2,443,332 warrants were issued upon conversion of 2,443,332 convertible debenture units with each warrant exercisable at $0.60 for one common share with a maturity date of July 31, 2023.

16 Revenue

The Company has two revenue streams as follows:

Recurring contracts On-occurrence permanent placements	March 31, 2021 $ March 31, 2020 $ 3,875,685 2,712,758 1,614,644 190,028
	5,490,329 2,902,786

17 Nature of expenses

The selling, general and administrative expenses are comprised of the following:

Salaries Professional fees Office Marketing Depreciation Bad debt expenses Bank charges Travel and entertainment Government assistance (note 21)	March 31, 2021 $ March 31, 2020 $ 1,918,861 827,592 365,165 226,659 361,066 131,505 66,713 63,890 33,291 69,452 25,055 1,611 13,909 11,315 12,259 69,129 (33,044) -
	2,763,275 1,401,153

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

18 Related party transactions

Key management compensation

Key management are those persons having authority and responsibility for planning, directing and controlling activities, directly or indirectly, of the Company.

Cash compensation	March 31, 2021 $ March 31, 2020 $ 208,691 168,547

19 Capital management

The Company’s management is responsible for ensuring that entities in the Company are able to continue as a going concern while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of shareholders’ equity (deficit), which was $3,567,824 as at March 31, 2021 (December 31, 2020 – deficit of $1,336,160); bank indebtedness, which is $1,385,000 (December 31, 2020 – $465,000); CEBA loans with a face value of $260,000 and a carrying value of $199,827 as at March 31, 2021 (December 31, 2020 – face value of $200,000 and a carrying value of $141,851); and convertible debentures, with a face value of $1,686,000 and a carrying value of $1,632,307 as at March 31, 2021 (December 31, 2020 – face value of $2,419,000 and a carrying value of $2,288,726).

The Company’s management develops capital management policies and strategies that are reviewed by the Board of Directors on a quarterly basis. Based on recommendations of the Board of Directors, the Company balances its overall capital structure through the payment of dividends, new share issues and share buybacks as well as the issuance of new debt or the redemption of existing debt. There have been no changes in how the Company manages capital since its formation.

20 Financial instrument risks

The Company is exposed to risks that arise from its use of financial instruments as described below. There has been no change in the way the Company manages risk during the year.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s sensitivity to interest rates is currently low due to limited exposure to long-term investment grade interest-bearing debt as at March 31, 2021.

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s credit risk relates primarily to trade and other receivables, which are initially recognized at the stated amount of the receivable and the convertible note issued to Atlas ID. The carrying amount of financial assets represents the maximum credit exposure.

The Company’s exposure to credit risk with its customers is influenced mainly by each customer’s unique characteristics. The Company does not require collateral for sales on credit. The Company does not offer significant credit terms and has not experienced significant credit losses on its continuing operations.

The Company monitors its collection experience monthly and ensures a stringent policy is applied to all past due accounts. The Company establishes an allowance for expected credit losses that corresponds to specific customers’ credit risk, historical trends and economic circumstances. Subsequent recoveries of amounts previously written off are credited in the condensed consolidated interim statements of income (loss) and comprehensive income (loss). The Company’s maximum credit risk is the carrying value of trade and other receivables.

To limit credit risk exposure, the Company places its cash at financial institutions with high quality investment grade credit ratings.

Liquidity risk

Liquidity risk is the risk that the Company encounters difficulty in meeting its obligations associated with its financial liabilities. As at March 31, 2021, most of the Company’s liabilities are regular monthly obligations except for the earn-out consideration payable to ProVision’s shareholders, the amount payable to the former owner of ProVision and the contingent consideration payable to shareholders of The Headhunters and The Kavin Group as discussed in notes 10 and 12. The Company has the following undiscounted contractual payment obligations:

Remaining trade and other payables Payable to former owner of ProVision Earn-out payments Contingent consideration Lease liability CEBA loans Convertible debenture	2021 $ 1,994,609 52,621 51,746 - 132,302 - 1,632,307	2022 $ 2023 $ - - - - 41,052 - 1,328,487 - 142,685 80,550 199,827 - - -
	3,863,585	1,712,051 80,550

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HIRE Technologies Inc. Notes to Condensed Consolidated Interim Financial Statements (Unaudited) March 31, 2021 and March 31, 2020

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market pricing, foreign currency and interest rates. As at March 31, 2021 and 2020, the carrying value of all financial instrument carrying values approximated fair value.

21 Government assistance

The Company has participated in grants offered by the government of Canada to help offset the negative impact of the COVID-19 pandemic. The Company participated in CEWS program. CEWS provides qualifying companies with a monthly financial support grant based on payroll, subject to certain limits. Eligibility is triggered by and scaled according to the reduction in year-over-year Canadian revenue on a month-by-month basis. The Company recognized government grant income as a reduction in cost of services in the amount of $54,495 and as a reduction in selling, general and administrative expenses in the amount of $33,044.

The Company recognized $5,222 as effective interest income on CEBA loans.

22 Subsequent events

On April 1, 2021, the Company acquired all of the assets of Pulsify Inc. (“Pulsify”), the developer of a cloudbased people management application designed around data analytics, meeting facilitation, immediate feedback, predictive insights and the Net Manager Score[TM] . The purchase price included $1,908,169 in shares of HIRE Technologies, with the fair value of the shares issued pursuant to this transaction equal to $1,791,856 and up to $1,895,532 in additional share consideration based on the achievement of revenue targets over a threeyear period.

On May 12, the Company announced a brokered private placement of up to $5,000,000 convertible debenture units with each unit consisting of a $1,000 unsecured convertible debenture and a common share purchase warrant exercisable for 50% of the number of common shares issuable on conversion of the convertible debenture. The Company’s broker, Eight Capital, will be paid a cash fee equal to 7% of the gross proceeds raised (3% for President’s List) and non-transferrable warrants entitling the holder to purchase common shares equal to 7% of the gross proceeds of the private placement (3% for President’s List) divided by the conversion price with each warrant exercisable for one common share until 36 months after closing. Eight Capital also has an option to sell up to $750,000 in additional convertible debenture units. The closing is expected to occur on or about June 1, 2021.

• The Government of Canada Rapid Antigen Screening Program For Small & Medium sized Organizations announced May 7, 2021 and other government initiatives to reduce COVID-19 have impacted the commercial viability of the Atlas ID product and services, which was established to provide a mobile app to assist with detection. Accordingly, on May 14, 2021, Atlas ID provided notice that it would cease operations. The Company does not expect to recover the $251,412 recognized on the condensed consolidated interim statement of financial position as at March 31, 2021.

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