React Gaming Group Inc. — Interim / Quarterly Report 2021

Nov 19, 2021

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INTEMA SOLUTIONS INC.

Financial Statements

Three months and nine months ending September 30, 2021

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MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The interim financial statements of Intema Solutions inc. are the responsibility of management and have been approved by the Board of Directors on November 18, 2021. The management responsibility in this respect includes the selection of appropriate accounting policies as well as the exercise of some judgment in establishing reasonable and fair estimates in accordance with International Financial Reporting Standards (IFRS) appropriate in the circumstances.

The Company, through its President and CEO during his tenure has maintained accounting systems and internal controls designed to provide reasonable assurance that assets are safeguarded against loss or unauthorized use and that we can rely on the accounting records for the preparation of annual financial statements.

The Board of Directors assumes its responsibilities for the interim financial statements principally through its Audit Committee. The Audit Committee reviews the interim financial statements and recommends their approval to the Board of Directors.

______ _____ Laurent Benezra Scott Meyers Chef Executive Officer Chief Financial Officer

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TABLE OF CONTENTS

Interim Statements of Changes in Financial Position	4
Interim Consolidated Statements of Loss and Comprehensive Loss	5
Interim Consolidated Statements of Changes in Shareholders’ Equity	6
Interim Consolidated Statement of Cash Flows	7
Notes to the Interim Consolidated Financial Statements	8 – 44

INTEMA SOLUTIONS Inc.

Unaudited Consolidated Interim Statements of Financial Position (in Canadian dollars)

in Canadian dollars)
		**September 30 **	December 31
Assets	Note	2021	2020
Cash and cash equivalents	9	2,423,850	301,087
Trade and other receivables	10	876,447	555,442
Prepaid expenses		97,088	11,103
Research and Development Tax Credit Recoverable		30,653	30,653
Current assets		3,428,038	898,285
Deposit		8,825	8,825
Property, plant, and equipment	11	30,379	32,234
Lease asset - rental office	12	51,810	85,117
Other intangible assets	13	889,448	75,120
Goodwill	14	438,604	-
Non-current assets		1,419,066	201,296
Total assets		4,847,104	1,099,581
Liabilities
Employee benefits		145,672	300,175
Trade and other payables	16	514,376	193,062
Short-term debt	17	125,000	125,000
Current portion of long-term debt	18	206,409	206,409
Current liabilities		991,457	824,646
Long-term debt	18	53,183	86,196
Long-term liabilities		53,183	86,196
Total liabilities		1,044,640	910,842
Equity
Share capital	19	12,165,236	8,409,109
Warrants	19	2,353,535	43,027
Contributed surplus		2,548,943	1,944,134
Deficit		(13,265,250)	(10,207,531)
Total equity		3,802,464	188,739
Total liabilities and equity		4,847,104	1,099,581

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INTEMA SOLUTIONS Inc.

Unaudited Consolidated Interim Statements of Loss and Comprehensive Loss (in Canadian dollars)

		For the three	For the three	For the nine	For the nine
		months ended	months ended	months ended	months ended
	Note	September 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020
Revenue		32,918	38,970	95,925	100,892
Direct costs	6	9,236	38,787	37,732	131,546
Direct labour	6	-	-	-	84,371
Gross profit		23,682	183	58,193	(115,025)
Administration and sales	6	1,883,659	149,807	2,852,762	761,195
Research and development	6	133,534	(6,948)	218,419	106,751
Operating loss		(1,993,511)	(142,676)	(3,012,988)	(982,971)
Financial expenses	7	21,952	2,659	44,731	11,124
Net loss		(2,015,463)	(145,335)	(3,057,719)	(994,095)
Weighted average number of	8	120,284,335	68,754,789	112,849,888	68,754,789
shares – basic and diluted
Net loss per share – basic	8	(0.017)	(0.002)	(0.027)	(0.014)
and diluted

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INTEMA SOLUTIONS Inc.

Unaudited Consolidated Interim Statements of Changes in Shareholders’ Equity (in Canadian dollars)

		Number of				Contributed					Total	shareholders'
	Note	Common shares		Share capital		surplus		Warrant reserve		Deficit		equity
Balance as at December 31, 2019		68,754,790	$	7,625,161	$	1,113,255	$	830,879	$	(9,101,764)	$	467,531
Issuance of capital stock	19	22,999,000		862,975		-		44,640		-		907,615
Cost of capital stock issuance	19	-		(79,027)		-		(1,613)		-		(80,640)
Expired warrants	19	-		-		830,879		(830,879)		-		-
Net loss		-		-		-		-		(1,105,767)		(1,105,767)
Balance as at December 31, 2020		91,753,790	$	8,409,109	$	1,944,134	$	43,027	$	(10,207,531)	$	188,739
Issuance of capital stock	19	28,580,516		3,957,191		-		2,529,155		-		6,486,346
Cost of capital stock issuance	19	-		(227,564)		-		(209,259)		-		(436,823)
Exercised warrants	19	100,000		26,500		9,388		(9,388)		-		26,500
Issuance of stock options	19	-		-		595,421		-		-		595,421
Expired warrants	19	-		-		-		-		-		-
Net loss		-		-		-		-		(3,057,719)		(3,057,719)
Balance as at September 30, 2021		120,434,306	$	12,165,236	$	2,548,943	$	2,353,535	$	(13,265,250)	$	3,802,464

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INTEMA SOLUTIONS Inc.

Unaudited Consolidated Interim Statements of Cash Flows (in Canadian dollars)

		For the three	For the three	For the nine	For the nine
		months ended	months ended	months ended	months ended
	Note	September 30, 2021	September 30, 2020	September 30, 2021	September 30, 2020
Net loss		(2,015,463)	(145,335)	(3,057,719)	(994,090)
Adjustments for:
Depreciation		(1,119)	9,477	6,610	28,228
Amortization		61,913	24,431	75,505	73,248
Loss on assets write-off		53,909	-	53,909	-
Stock compensation expense		595,421	-	595,421	-
Changes in non-cash working capital items	20	343,430	41,092	(300,679)	233,817
Net cash flow used in opearting activities		(961,909)	(70,335)	(2,626,953)	(658,797)
Acquisition of businesses		(38,159)	-	(148,159)	-
Acquisition of Property, Plant and Equipment		(11,280)	-	(23,664)	-
Acquisition of intangible assets and goodwill		1	(7,669)	(4,778)	(3,049)
Leasehold improvements		11,280	-	-	-
Net cash flow used in investing activities		(38,158)	(7,669)	(176,601)	(3,049)
Advance to subsidiary		152,754	-	-	-
Oversubscribed shares		(198,325)	-	-	-
Short term debt		-	-	-	40,000
Long term debt		294	100,000	294	150,000
Issuance of share capital		(2,192,809)	-	2,807,191	-
Issuance of warrants		2,395,233	-	2,395,233	-
Cost of issuance of shares		133,003	-	(157,797)	-
Cost of issuance of warrants		(145,104)	-	(145,104)	-
Exercise of warrants		26,500	-	26,500	-
Net cash flow from financing activities		171,546	100,000	4,926,317	190,000
Net increase(decrease) in cash and cash equivalents		(828,521)	21,996	2,122,763	(471,846)
Cash and cash equivalents at beginning of period		3,252,371	8,045	301,087	501,887
Cash and cash equivalents at end ofperiod	9	2,423,850	30,041	2,423,850	30,041

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN

Intema Solutions Inc., incorporated under the Canada Business Corporation Act, is a Company which provides mainly email campaign deployment services to companies and Web services. The Company’s registered office is located at 15 Marie-Anne St W., Suite 200, Montreal, Quebec, Canada, H2W 1B6. The Company is traded publicly on the TSX Venture Exchange under the symbol «ITM» and has no controlling shareholders.

Going concern

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and based on the going concern assumption, meaning the Company will be able to realize its assets and discharge its liabilities in the normal course of operations. Considering the operating losses and unfulfilled financial ratios, those material uncertainties raise significant doubt about the Company’s ability to continue as a going concern. The Company’s ability to realize its assets and discharge its liabilities depends on the continued support of its lenders and shareholders. As at September 30, 2021 the Company has accumulated a deficit of $13,271,254 ($10,207,531 as at December 31, 2020) and a net loss of $2,021,467 during the period ended September 30, 2021 (net loss of $1,105,767 in fiscal 2020). Going concern of the Company depends on, among other things, its ability to achieve a satisfactory level of revenue, the support of its customers, the conclusion of new financial agreements and its ability to raise new sources of funds.

Management believes that obtaining additional financing, reorienting its activities, and relying on the continued support of its existing customers and its shareholders, will help the Company to operate normally. However, there is no certainty that those measures will be sufficient to allow the continuation of the Company in the normal course of business.

The carrying amounts of assets, liabilities, revenues, and expenses presented in the financial statements and the statements of financial position classification have not been adjusted as would be required if the going concern assumption was not appropriate.

NOTE 2 – STATEMENT OF COMPLIANCE WITH IFRS

The Company’s financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations currently issued and outstanding. These financial statements were approved by the Board of Directors on November 18, 2021.

Presentation of financial statements

Financial Statements are disclosed according to IAS 1 Presentation of Financial Statements. The Company discloses Income Statements and Statements of Comprehensive Income together.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 3 – ADOPTION OF NEW AND REVISED STANDARDS AND INTERPRETATIONS

Accounting standards adopted in the current year

IFRS 3 Definition of a business

Amendments were made to IFRS 3 on the definition of a business. The new definition clarifies that to constitute a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output. The amendments apply to asset acquisitions and business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020. The application of these amendments had no impact on the Company’s profit, loss, or financial position.

COVID-19-Related Rent Concessions (Amendment to IFRS 16)

IFRS 16 Leases has been revised to incorporate an amendment issued by the International Accounting Standards Board (IASB) in May 2020. The amendment permits lessees not to assess whether COVID-19related rent concessions are lease modifications and, instead, account for those rent concessions as if they were not lease modifications. In addition, the amendment to IFRS 16 provides specific disclosure requirements regarding COVID-19-related rent concessions.

The amendment in April 2021 extends the availability of the exemption for COVID-19-related rent concessions by one year to June 30, 2022. This means that the exemption applies to rent concessions for which any reduction in lease payments affects only payments originally due on or before June 30, 2022, provided the other conditions in IFRS 16 for applying the exemption are met. The amendment is effective for annual reporting periods beginning on or after April 1, 2021. The Company used the earlier application permitted.

Accounting standards issued but not yet applied

At the date of authorization of these financial statements, certain new standards, interpretations and amendments to existing standards have been published but are not yet effective and have not been adopted early by the Company. Management anticipates adopting these new standards as of its effective date. The Company is currently analyzing the possible impact of this standard on its financial statements.

Annual Improvements to IFRS Standards 2018-2020

The standard IFRS 9 Financial Instrument has been revised to incorporate amendments issued by the IASB in May 2020. The amendment clarifies the fees an entity includes when assessing whether the terms of a new or modified financial liability are substantially different from the terms of the original financial liability. The amendment is effective for annual reporting periods beginning on or after January 1, 2022. Earlier application is permitted.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

IAS 1 Presentation of Financial Statements

This standard has been revised to incorporate amendments issued by the International Accounting Standards Board (IASB) in January 2020. The amendments clarify the criterion for classifying a liability as non-current relating to the right to defer settlement of the liability for at least 12 months after the reporting period. The amendments are effective for annual reporting periods beginning on or after January 1, 2023. Earlier application is permitted.

NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES

Basis of measurement

The financial statements as at September 30, 2021 and December 31, 2020 have been prepared on a going concern assumption and on the historical cost basis, except for the revaluation of certain financial instruments at fair value. In addition, these financial statements are on an accrual basis, except for cash flow information, and have been prepared according to significant accounting policies as described below.

Functional and presentation currency

The financial statements are presented in Canadian dollars (CDN), which is the functional currency.

Foreign currency translation of transactions

Transactions in foreign currency other than the entity’s functional currency (foreign currencies) are recorded in functional currency at the rates of exchange prevailing at the dates of the transactions.

Financial instruments

Recognition and initial measurement

The Company initially recognizes a financial asset or a financial liability on the date it becomes a party to the contractual provisions of the instrument. Except for trade receivables that do not contain a significant financing component, a financial asset or financial liability is initially measured at fair value. If a financial asset or financial liability is not subsequently recognized at fair value through profit or loss, the initial measurement includes transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Trade receivables that do not contain a significant financing component are initially recognized at their transaction price.

Classification and subsequent measurement – non-derivative financial assets

On initial recognition, the Company classifies its financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss based on the Company's business model for managing financial assets and the contractual cash flow characteristics of the financial assets.

Financial assets are reclassified subsequently to their initial recognition when, and only when, the Company changes its business model for managing financial assets.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Financial assets measured at amortized cost

The Company classifies cash and cash equivalents as well as trade and other receivables as financial assets measured at amortized cost. A financial asset is subsequently measured at amortized cost using the effective interest method, less impairment losses, if:

• the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest.

Interest income, foreign exchange gains or losses, and impairment losses are recognized in profit or loss. Upon derecognition, all gains or losses are also recognized in profit or loss.

Financial assets measured at fair value through other comprehensive income

The Company does not have financial assets in this category. A financial asset is subsequently measured at fair value through other comprehensive income if:

• the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest.

The Company may make an irrevocable election at initial recognition for investments in equity instruments that would otherwise be measured at fair value through profit or loss to present subsequent changes in fair value in other comprehensive income. This election is made for each separate investment.

These assets are subsequently measured at fair value. For debt instruments measured at fair value through other comprehensive income, interest calculated using the effective interest method, foreign exchange gains and losses, and impairment gains or losses are recognized in profit or loss. Other gains or losses are recognized in other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified to profit or loss as a reclassification adjustment.

For equity instruments measured at fair value through other comprehensive income, dividends are recognized in profit or loss, unless the dividend represents a recovery of part of the cost of the investment. Gains or losses are recognized in other comprehensive income and are never reclassified to profit or loss.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Financial assets measured at fair value through profit or loss

The Company classifies investments in this category. All financial assets not classified as measured at amortized cost or fair value through other comprehensive income are measured at fair value through profit or loss. This includes all derivative financial assets. The Company may, at initial recognition, irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise from measuring assets or liabilities or recognizing the gains and losses on them on different bases.

These assets are subsequently measured at fair value, and gains or losses, including interest income or dividend income, are recognized in profit or loss.

Classification and subsequent measurement – non-derivative financial liabilities

Financial liabilities are classified as financial liabilities measured at amortized cost or as financial liabilities measured at fair value.

Financial liabilities measured at amortized cost

The Company currently classifies trade and other payables, short-term debt and long-term debt as financial liabilities measured at amortized cost. A financial liability is subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains or losses are recognized in profit or loss. Upon de-recognition, all gains or losses are also recognized in profit or loss.

Financial liabilities measured at fair value through profit or loss

Financial liabilities are classified as measured at fair value through profit or loss if they are held for trading, are derivative financial liabilities or are designated as such on initial recognition. Financial liabilities at fair value through profit or loss are subsequently measured at fair value, and gains or losses, including interest expense, are recognized in profit or loss. The Company does not have financial liabilities in this category.

Derecognition

Financial assets

The Company derecognizes financial assets when the contractual rights to the cash flows from the financial asset expire or when the Company transfers contractual rights to receive the cash flows of the financial asset in a transaction where substantially all the risks and rewards of ownership of the financial asset have been transferred or in a transaction where the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset but does not retain control of the asset. Any rights and obligations created or retained in the transfer by the Company are recognized as separate assets or liabilities.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Financial liabilities

The Company derecognizes a financial liability when the obligation specified in the contract is discharged or cancelled or expires.

The Company also derecognizes a financial liability when there is a substantial modification of the terms of an existing financial liability or a part of it. In this situation, a new financial liability under the new terms is recognized at fair value, and the difference between the carrying amount of the financial liability or a part of the financial liability extinguished and the new financial liability under the new terms is recognized in profit or loss.

Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets measured at amortized cost or fair value through other comprehensive income. The Company uses a matrix to determine the lifetime expected credit losses for trade receivables.

The Company uses historical patterns for the probability of default, the timing of collection, and the amount of the incurred credit loss, which is adjusted based on management’s judgment about whether current economic conditions and credit terms are such that actual losses may be higher or lower than what the historical patterns suggest.

The amount of the impairment loss on a financial asset measured at amortized cost is the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in profit or loss and applied against trade and other receivables through a loss allowance account.

Compound financial instruments

Compound financial instruments issued by the Company are classified separately as financial liabilities and equity based on the substance of the contractual agreement. On the date of issue, the fair value of the liability component is measured using the effective market rate of interest for a similar non-convertible instrument. This amount is accounted for as a liability at amortized cost using the effective interest method until the instrument is extinguished or reaches maturity. The equity component is determined by deducting the amount of the liability component from the total fair value of the compound instrument. This amount is recognized in equity, net of any tax effects, and is not subsequently re-measured.

Other comprehensive income

Other comprehensive income is the change in the Company's net assets that results from translations, events, and circumstances from sources other than the Company's shareholders and includes items that would not normally be included in the net earnings such as foreign currency gains or losses on the translation of the financial statements of foreign operations. The Company's other comprehensive income, components of other comprehensive income and cumulative translation adjustments are presented in the statements of net earnings and comprehensive income and the statements of changes in shareholder's equity.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Revenue recognition

Revenue from continuing operations

The Company's revenue comes mainly from deployment of email marketing campaigns and web services.

Email marketing campaigns deployment are recognized when there is persuasive evidence of an agreement, as the services are rendered, the price is determinable, and collectability is reasonably assured.

The license revenue comes from licenses granted to permanent use of the Company's software products. Hosting drawn products spanning a period of over a month are amortized over the term of the contract. The unrecognized portion is presented in liabilities as deferred revenue.

Government assistance

The income tax credits related to scientific research and development activities are accounted for in reduction of the related expenses incurred during the year. Government assistance is recognized when there is reasonable assurance that the Company has met the requirements of the approved grant program or, with regards to tax credits, when there is reasonable assurance that they will be realized.

During the COVID-19 pandemic, the Company receive government assistance to maintain its operations. This assistance was recognized when there is reasonable assurance that the Company will comply with the conditions attaching to it, and that assistance will be received. Government assistance was applied against the qualifying expense to which the grants relate or recorded to other income (COVID-19 loan subsidies, COVID-19 rent concessions). When government assistance is repayable, a liability is created except when there is reasonable assurance that the entity will meet the conditions prescribed for not repaying the amounts received. This liability is recorded at the discounted value of the repayments due.

Accounted income tax credits and subsidies must be reviewed and approved by Government Tax Authority, and tax credit and subsidies allowed could differ from tax credit accounted.

Research and development costs

Research and development costs are recorded as expenses in the year in which they are incurred. Development costs of new products are accounted for capitalization in accordance with criteria generally accepted, to the amount which recovery may be considered as certain. Deferred development costs are amortized on a useful life basis, beginning in the first year of the commercialization.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Share-based payment

The Company applies IFRS 2 Share based Payment to transactions whose award and settlement are share-based and to cash-settled share-based transactions. In applying this standard, stock options and bonus shares granted to employees are measured at fair value. The amount of such fair value is recognized in profit or loss over the vesting period, with a corresponding increase in equity.

Share appreciation rights, which will be settled in cash, are measured at fair value and recognized loss with a corresponding entry to the liability incurred. The liability is re-measured at each reporting date until settlement. The fair value of options and rights is determined using the Black-Scholes valuation model considering the features of the plan and market data as at the grant date and on the basis of the Company’s management assumptions.

The Company offers an incentive stock option plan. This plan is considered as equity. Any consideration paid on the exercise of stock options is credited to common share capital and no compensation expense is recognized for this plan when stock and stock options are exercised.

The Company uses the fair value method of accounting for all stock options granted to its employees and to continued services providers to the Company, whereby a compensation expense is recognized over the vesting period of the options, with a corresponding increase to contributed surplus. When stock options are exercised, capital stock is credited by the sum of the consideration paid together with the related portion previously recorded to contributed surplus. The fair value of stock options at the grant date is determined according to the Black & Scholes options pricing model. Compensation expense is recognized over the vesting period of the stock options.

Income taxes

The Company accounts for its tax expense using the deferred tax assets and liabilities method. Deferred income tax assets and liabilities are determined based on the difference between the carrying amount and the tax basis of the assets and liabilities. Any change in the net amount of deferred income tax assets and liabilities is included in profit or loss. Deferred income tax assets and liabilities are determined based on enacted or substantively enacted tax rates and laws which are expected to apply to taxable profit for the periods in which the assets and liabilities will be recovered or settled. Deferred income tax assets are recognized when it is likely they will be realized. Deferred tax assets and liabilities are not discounted.

The tax expense includes current and deferred tax. This expense is recognized in profit or loss, except for income tax related to the components of other comprehensive income or equity, in which case the tax expense is recognized in other comprehensive income or equity respectively.

Current income tax assets and liabilities are obligations or claims for the current and prior periods to be recovered from (or paid to) taxation authorities that are still outstanding at the end of the reporting period. Current tax is computed based on tax profit which differs from net profit. This calculation was made using tax rates and laws enacted or substantively enacted at the end of the reporting period.

The Company recognizes a deferred tax asset or liability for all deductible temporary differences arising from equity securities of subsidiaries, unless it is probable that the temporary difference will reverse in the foreseeable future and the Company is able to control the timing of the reversal.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Basic and diluted earnings per share

Basic and diluted net earnings per share are calculated using the weighted average number of outstanding shares. The calculation of diluted earnings per share considers the potential impact of the exercise of all dilutive instruments (such as stock options and convertible bonds, etc.). When funds are obtained at the date of exercise of the dilutive instruments, the “treasury stock” method is used to determine the theoretical number of shares to be considered. If necessary, net profit is also adjusted for the finance cost, net of tax, relating to these instruments.

Cash and cash equivalents

Cash and cash equivalents include cash, bank balances and short-term, highly liquid investments with original maturities of three months or less, and that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.

Property, plant, and equipment

All items of property, plant and equipment are stated at historical cost, less any income tax credits, any accumulated depreciation and any accumulated impairment losses. Historical cost includes all costs directly attributable to the acquisition.

Depreciation of property and equipment is calculated based on useful lives, beginning at operating, deducting the residual value of property and equipment by using the following methods as described below:

Asset type	Amortization method	Amortization term
Computer Hardware	Straight-line	4 years
Furniture	Straight-line	3 - 8 years
Leasehold improvements	Straight-line	Life of lease

Useful lives, residual values and depreciation methods are reviewed annually. Such a review takes into consideration the nature of the assets, their intended use and technological changes.

Gains or losses on disposals of property and equipment, are determined as the difference between the disposal proceeds and the carrying amount of the assets and are presented distinctly in net income.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Lease

The Company leases some items of property, plant and equipment.

As is permitted under IFRS 16, the Company elected to expense its short-term leases (term of 12 months or less) and leases of low-value assets, on a straight-line basis over the lease term.

For its other contracts, the Company assesses whether its new or amended contracts contain a lease.

A lease represents the right to control the use of an identified asset for a period of time in exchange for consideration. To determine whether a contract conveys the right to control the use of an identified asset, the Company assesses the following:

• Is the identified asset directly or indirectly specified in the contract, or does it represent substantially all of the capacity of an asset that is physically distinct?

• Does the right of use cover substantially all of the economic benefits from use of the identified asset for a period of time?

• Does the Company have the right to direct the use of the identified asset? In cases where the use is predetermined, does the Company operate the asset or did the Company design the asset in a way that predetermines how and for what purpose the asset will be used?

When a lease is identified, the Company allocates the consideration in the contract to each of the lease components, separately from the non-lease components, based on their relative stand-alone price. However, as is permitted under IFRS 16, the Company elected to account for all contracts of land and buildings it occupies as leases.

A right-of-use asset (a “lease asset”) and a lease liability are recognized in the statement of financial position at the lease commencement date.

Lease asset

A lease asset is initially recognized at cost, which comprises the amount of the initial measurement of the lease liability, adjusted for any lease payments made or any lease incentives received at or before the commencement date, plus any initial direct costs incurred by the Company and an estimate of costs to be incurred in dismantling, removing or restoring the asset or site, as required by the terms and conditions of the lease.

The lease asset is subsequently depreciated on a straight-line basis from the commencement date to the earlier of the end of the useful life of the lease asset or the end of the lease term. The useful life of a lease asset is measured on the same basis as the Company’s other property, plant, and equipment.

The Company presents its lease asset distinctly in statements of financial position.

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INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Lease liability

A lease liability is initially measured at the present value of the lease payments that are not paid at that date using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company uses its incremental borrowing rate, which is generally the case. The lease payments comprise the following: fixed payments; variable lease payments that depend on an index or a rate, using the index or rate as at the commencement date; an estimate of the amounts to be payable under residual value guarantees; as well as amounts the Company is reasonably certain to pay as the exercise price of a purchase or extension option, or as a penalty to exercise a termination option.

The lease liability is subsequently re-measured at amortized cost using the effective interest method.

When there is a change in lease payments resulting from a change in an index or a rate or a change in an estimated amount, the amount of such an adjustment is offset in the unamortized cost of the lease asset or reported in the statement of profit or loss when the lease asset is fully impaired.

The Company presents its lease liability with its other long-term debt (see Note 18) and the interest on its lease liability (calculated at the effective interest rate) with its other financial expenses in the statement of profit or loss.

Intangible assets

Patents

Patents are accounted for at cost. Patents are amortized on their useful life on a straight-line basis over 20 years beginning from when the product is marketed.

Software

Software is accounted for at cost. Software is amortized based on their useful life using the straight-line method over a period of three years.

18

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Intangible assets generated internally by incurring research and development expenditures

Expenditures related to research activities are recognized as an expense in the period in which they are incurred. An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, the entity can demonstrate all of the following:

• the technical feasibility of completing the intangible asset so that it will be available for use or sale;

• its intention to complete the intangible asset and use or sell it;

• its ability to use or sell the intangible asset;

• how the intangible asset will generate probable future economic benefits. Among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;

• the availability of adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset; and

• its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development costs are capitalized as an asset as the above criteria are met. Where no internally generated intangible asset can be recognized, development expenditures are expensed in the period in which they are incurred.

After initial recognition, internally generated intangible assets are carried at cost less accumulated amortization and any accumulated impairment losses. They are amortized on a straight-line basis over their useful life, and an impairment loss is recognized in profit or loss when their recoverable amount is less than their net carrying amount.

Domain names

Domain names purchased by the Company are accounted for at cost. Domain names are not amortized since their useful life is unlimited.

Business combinations and goodwill

The Company applies the acquisition method of accounting for all business combinations. The consideration transferred in connection with a business combination consists of the sum of the fair values of the assets transferred by the acquirer, the liabilities incurred by the acquirer to the former owners of the acquired business and equity interests issued by the acquirer. The consideration transferred includes any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, liabilities, and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date.

The acquisition-related costs are expensed in the periods in which the costs are incurred and the services received.

19

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

All potential counterparties are recognized at fair value at the acquisition date. Changes in the fair value of contingent consideration resulting from events after the acquisition date which are classified as an asset or liability are recognized in accordance with IAS 39 Financial Instruments: Recognition and Measurement, either in net income or in other comprehensive income. Contingent considerations classified as equity are not re-measured and subsequent settlement is recognized in equity.

Goodwill with indefinite useful life is initially measured as the excess of the consideration transferred over the net of the amounts, at the acquisition date, the identifiable assets acquired and liabilities assumed.

Goodwill is not amortized but is subject to a systematic annual impairment test during the fourth quarter or whenever there is an indication of impairment. Rising interest rates, lower turnover, and operating income include loss ratios that management monitors.

Impairment of assets

Non-current assets that have indefinite useful lives, for example goodwill, are not subject to amortization and are tested annually for impairment. Non-current assets with definite useful lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss is recognized when the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the fair value less costs to sell and value in use.

If at the end of each period there is any indication that an impairment loss recognized in prior periods for an asset other than goodwill may no longer exist or has decreased, the loss is reversed up to the asset’s recoverable amount. However, the carrying amount after the reversal must not exceed the carrying amount that would have been determined (net of amortization or depreciation) if no impairment loss had been recognized for the asset in prior periods.

For purposes of impairment testing, if an asset does not generate cash inflows that are largely independent of the cash inflows from other assets or groups of assets, it is grouped with other assets to create a cash generating unit (CGU), which correspond to the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. CGUs relate to the Company’s brand assets and are allocated based on the three geographic segments that are subject to internal monitoring.

If the recoverable amount of a CGU exceeds its carrying amount, the unit and the goodwill allocated to it are regarded as not impaired. If the carrying amount of the unit exceeds its recoverable amount, the Company first allocates the impairment loss to reduce the carrying amount of any goodwill allocated to the CGU and secondly to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Moreover, when goodwill and another asset (or asset group) of a CGU are tested for impairment at the same time, the other asset (or asset group) is tested for impairment before goodwill. When the other asset (or asset group) is impaired, the impairment loss is recognized prior to goodwill being tested for impairment.

The recoverable amount of an asset or a CGU is the higher of its fair value less costs to sell and its value in use. Value in use is determined based on profit or loss projections over the useful life of the asset or CGU using management’s forecast tools (for the 3 first years) and an estimate over the subsequent years based on long-term market trends for the asset or CGU involved. The calculation considers net cash flows to be received on disposal of the asset or CGU at the end of its useful life based on the growth and profitability profile of each asset or CGU.

20

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

An impairment loss recognized in prior periods for an asset or a CGU other than goodwill is reversed when there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset is increased to its recoverable amount, without exceeding the carrying amount that would have been determined (net of amortization or depreciation) if no impairment loss had been recognized for the asset in prior periods. An impairment loss recognized for goodwill cannot be reversed.

Nature of provisioned liabilities

In accordance with IAS 37 Provisions, Contingent Liabilities, and Contingent Assets, provisions for risks and expenses are recognized to cover probable outflows of resources that can be estimated and that result from present obligations resulting from past events.

In the case where a potential obligation resulting from past events exists, but where occurrence of the outflow of resources is not probable or the estimate is not reliable, these contingent liabilities are disclosed in unrecognized commitments and litigation. The provisions are measured based on management’s best estimate of the outcome based on facts known at the reporting date. The provisions include provisions for litigation (legal, employee-related), for the environment and others.

A provision is recorded when it becomes probable that a present obligation arising from a past event will require an outflow of resources that can be reliably estimated. The amount of the provision is the best estimate of the outflow of resources required to settle this obligation.

Employee benefits

Wages, contributions to government pension plans, paid annual leave, paid sick leave, bonuses and nonmonetary benefits are short-term employee benefits, which are recognized in the period during which the Company’s employees render the related services.

Convertible debentures

Convertible debentures are classified according to their components. The financial liability representing the obligation to make the interest payments is classified as a long-term liability, and the equity component representing the conversion option and warrants held by the holder is disclosed in shareholders' equity under "Portion of Convertible Debentures included in Equity”.

The value of the liability component of convertible debentures is obtained by discounting future interest and principal payments by using a rate equal to the rate of similar debentures having no conversion right. The book value of the equity component of the convertible debentures is obtained by deducting the liability component value from the consideration received for the convertible debentures.

Equity

The share capital is presented at the value at which the shares were issued. Costs related to the issuance of shares, share purchase warrants or options are shown in equity as a deduction from the issue proceeds allocated in proportion of units issued.

21

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Share capital and warrants

The common shares and warrants are classified to equity. The issue proceeds are allocated between shares and warrants issued using the relative fair value method. The issued proceeds are allocated in proportion to the fair value of shares based on the stock prices at the time of issue and the fair value of the warrants.

The fair value of the warrants is determined using the Black & Scholes valuation model based on the characteristics of market data at the grant date and on assumptions determined by management of the Company.

Contributed surplus

Contributed surplus includes, among others, expenses related to stock options until exercise of the options, amounts related to cancellations of warrants and options to purchase shares recorded as a reduction of contributed surplus during the expiration period.

Contributed surplus includes the difference between the share price and the fair value at a share issue given the valuation of financial instruments related.

The fair value of stock options is determined using the Black & Scholes valuation model based on the characteristics of market data at the grant date and on the basis of a hypothesis determined by the direction of the Company.

NOTE 5 – MAIN SOURCES OF ESTIMATION, UNCERTAINTY, AND CRITICAL JUDGEMENTS BY MANAGEMENT

The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the carrying amount of assets and liabilities, and disclosures of contingent assets and liabilities as at the date of the financial statements, and the carrying amount of revenues and expenses for the reporting period. The Company also makes estimates and assumptions concerning the future. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience and current and expected economic conditions.

Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results are likely to differ from the judgments, estimates and assumptions made by management, and will seldom equal the estimated results.

The significant accounting policies subject to such judgment and the key sources of estimation uncertainty that, in the Company’s opinion, could significantly affect the reported results or financial position, are as follows:

22

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Research and development tax credit

Management has made a number of estimates and assumptions in determining the expenditures eligible for the research and development investment tax credit claim. Tax credits are available based on eligible research and development expenses consisting of direct expenditures and including a reasonable allocation of overhead expenses. It is possible that the allowed amount of the research and development investment tax credit claim could be materially different from the recorded amount upon assessment by the Canada Revenue Agency and Revenue Québec. Tax credits are recognized when there is reasonable assurance that they will be realized.

Stock-based compensation and other stock-based payments

The Company has a stock option plan which is described in Note 19 to the financial statements. As regards to stock option grants, the Company uses the fair value-based method of accounting. The fair value of stock options is determined using the Black & Scholes option pricing model, which requires the use of certain assumptions, including future stock price volatility and expected life of the instruments.

The expected life is estimated using historical data and current expectations. The expected volatility is estimated using the historical volatility of the Company's stock over the same period as the expected life.

The expected life and future volatility are uncertain and the option pricing model has limitations.

Lease

In determining lease terms, the Company used its judgment to determine that the extension options were not significant. Furthermore, the Company does not believe the interest rate implicit in its leases can be readily determined. It therefore used its judgment to determine the incremental borrowing rate and use it as the discount rate to establish its lease liability.

For every lease, management makes a judgment to determine the appropriate lease term. Management considers all relevant facts and circumstances that create an economic incentive for the Company to exercise a renewal option or not to exercise a termination option, including, for example, investments in extensive leasehold improvements. The periods covered by the renewal options are included in the lease term only if management deems them reasonable.

Management considers reasonable certainty to be a high threshold. Changes in the economic environment can have an impact on management’s lease term assessments, and any changes in the estimates that management makes for lease terms could have a significant impact on the Company’s statement of financial position and statement of profit or loss.

To determine the carrying amount of right-of-use asset and lease liability, the Company must estimate the incremental borrowing rate for each leased asset if the interest rate implicit in the lease cannot be readily determined. Management determines the incremental borrowing rate for each leased asset by considering the Company’s credit standing, the guarantee, the term and the value of the underlying leased asset, as well as the economic environment in which the leased asset is operated. Incremental borrowing rates can be changed due to macroeconomic changes in the environment.

23

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Income taxes

Deferred tax assets and liabilities are due to temporary differences between the carrying amount for accounting purposes and the tax basis of certain assets and liabilities, as well as tax losses not yet deducted. Estimation is required for the timing of the reversal of these temporary differences and the tax rate applied. The carrying amounts of assets and liabilities are based on amounts recorded in the financial statements and are subject to the accounting estimates inherent in those balances. The tax basis of assets and liabilities and the amount of un-deducted tax losses are based on the applicable income tax legislation, regulations, and interpretations. The timing of the reversal of the temporary differences and the timing of deduction of tax losses are based on estimations of the Company’s future financial results.

However, actual amounts of income tax expense only become final upon filing and acceptance of the tax return by the relevant authorities, which occur after the issuance of the financial statements. Additionally, estimation of income taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the ability to use the underlying future tax deductions before they expire against future taxable income, in which case deferred tax assets are recognized for all deductible temporary differences.

The assessment is based upon enacted or substantively enacted tax laws and estimates of future taxable income. Changes in the expected operating results, enacted tax rates, legislation or regulations, and the Company’s interpretations of income tax legislation, will result in adjustments to the expectations of future timing difference reversals, and may require material deferred tax adjustments. To the extent that forecasts differ from actual results, adjustments are recognized in subsequent periods.

Useful lives of non-current assets

Management estimates the useful life of each component of an asset. Management relies on an analysis of all relevant factors including, without limitation, the expected use of its fixed assets, contractual terms allowing the renewal or extension of the legal or contractual useful life of an asset without substantial cost, as well as the history of renewals when it comes to intangible assets.

If the estimated useful life is revised, an increase or decrease of the annual depreciation charge will result.

Impairment losses

An impairment loss is recorded for the amount by which an asset's or cash-generating unit's (CGU) carrying amount exceeds its recoverable amount. The recoverable amount is the greater of its fair value less costs to sell and value in use. Management determines value in use by estimating the expected future cash flows from each asset or CGU and determines a suitable interest rate in order to calculate the present value of those cash flows. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. On measurement of expected future cash flows, management uses assumptions pertaining to future operating results, such as obtaining new contracts and their profitability. Those assumptions relate to future events and circumstances.

24

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Business combinations and goodwill

For business combinations, the Company must make assumptions and estimates to determine the purchase price allocation of the business being acquired. To do so, the Company must determine the acquisition-date fair value of the identifiable assets acquired and liabilities assumed. Goodwill is the difference between the identified items acquired and the fair value of the consideration transferred on the acquisition date. These assumptions and estimates have an impact on the asset and liability amounts recorded in the statement of financial position on the acquisition date. In addition, the estimated useful lives of the acquired property, plant and equipment, the identification of other intangible assets, and the determination of indefinite or finite useful lives of other intangible assets acquired will have an impact on the Company’s profit or loss.

Fair value

All financial instruments are required to be recognized at fair value on initial recognition. Subsequent measurement of these instruments is at amortized cost or at fair value depending on their classification.

Fair value is the amount of consideration that would be agreed upon in an arm’s length transaction between knowledgeable willing parties who are under no compulsion to act. This is a point-in-time measurement that may be changed in subsequent reporting periods due to market conditions or other factors.

Fair value of a financial instrument is determined by reference to quoted prices in the most advantageous active market to which the Company has immediate access. In the absence of an active market, fair value is determined on the basis of internal or external valuation models, including discounted cash flow models. Fair value determined using these valuation models, requires the use of assumptions concerning the amount and timing of estimated future cash flows, as well as number of variables. In determining these assumptions, external readily observable market inputs are considered, as applicable. When such data is unavailable, the Company uses the best possible estimate. Since they are based on estimates, these fair values may not be realized in an actual sale or immediate settlement of the instruments.

Note 23 provides details on these bases of calculation and on the estimates used.

Provisions and contingent liabilities

Judgments are made as to whether a past event has led to a liability that should be recognized in the financial statements or disclosed as a contingent liability. Quantifying any such liability often involves judgments and estimations. These judgments are based on a number of factors including the nature of the claims or dispute, the legal process and potential amount payable, legal advice received, previous experience and the probability of a loss being realized. Several of these factors are sources of estimation and uncertainty.

25

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Convertible debentures

The Company reports separately in the statement of financial position liability component and the equity component of convertible debentures. The fair value of the compound instrument at issuance is split between the liability component and the equity component and is determined using an interest rate for a similar debt instrument devoid of equity component. The Company must first establish the fair value of the conversion option and warrants that are presented in equity which is then deducted from the fair value of the compound instrument of the liability component. Thus, the estimates used to determine the fair value of the liability component included in the convertible debentures could affect the performance of the interest expense recognized in the financial statements if it were inadequate.

NOTE 6 – OPERATING EXPENSES

	For the three	For the three	For the nine	For the nine
	months ended	months ended	months ended	months ended
Operatingexpenses include :	**September 30, 2021 **	**September 30, 2020 **	**September 30, 2021 **	September 30, 2020
Employees expenses	434,250	57,115	832,473	438,464
Production expenses	2,464	4,879	9,639	30,097
Consulting fees and subcontracts	61,022	-	179,772	-
Rent	33,884	12,750	63,842	29,093
Office expenses	294,973	29,915	457,000	173,133
Professional fees	455,167	43,078	798,197	311,627
Stock compensation expenses	595,421	-	595,421	-
Advertising and promotion	36,545	-	36,545	-
Write off of fixed assets	18,909	-	18,909	-
Impairment of intangible asset	35,000	-	35,000	-
Depreciation / amortization	60,794	33,908	82,115	101,476
Total operating expenses	2,028,429	181,645	3,108,913	1,083,890

NOTE 7 – FINANCIAL INCOME AND EXPENSES AND GAIN ON DEBT SETTLEMENT

	For the three	For the three	For the nine	For the nine
Financial income and expense	months ended	months ended	months ended	months ended
is detailed as follows:	**September 30, 2021 **	**September 30, 2020 **	**September 30, 2021 **	September 30, 2020
Interest on current liabilities	10,386	-	28,161	-
Loss (gain) on foreign exchange	11,566	-	16,570	-
Subtotal	21,952	-	44,731	-
Interest and financial expenses on long-term debt	-	2,659	-	11,124
Total financial expenses	21,952	2,659	44,731	11,124

NOTE 8 – LOSS PER SHARE

Dilutive potential instruments (convertible debentures, warrants, stock options) have not been included in the calculation of dilutive earnings per share because of their anti-dilutive effect.

26

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 9 – CASH AND CASH EQUIVALENTS

	September 30	December 31
	2021	2020
$ Can	2,422,856	300,437
$ US converted	994	650
Cash	2,423,850	301,087
Net cash and cash equivalents	2,423,850	301,087

NOTE 10 – TRADE AND OTHER RECEIVABLES

	September 30	December 31
	2021	2020
Trade accounts receivable	12,543	24,272
Advance to an officer without interest	-	11,585
CEWS subsidy receievable	-	35,720
Subscriptions receiveable held in trust	710,700	434,985
Sales tax receivable	153,204	48,880
Trade and other receivables	876,447	555,442

All amounts are due in the short term. The net carrying amounts represent a reasonable approximation of their fair value.

The net book value of outstanding receivables of the Company is $12,543 ($24,272 in 2020) at the end of the period. The aging of these receivables is detailed in the following table:

	September 30	December 31
Agingof receivables	2021	2020
Not impaired and past due by:
0 to 30 days	10,129	22,675
31 to 60 days	-	-
61 to 90 days	-	-
Over 90 days	2,414	1,597
Trade and other receivables	12,543	24,272

Before accepting a new customer, the Company evaluates the credit quality of the potential customer and sets credit limits for that customer. Credit limits and credit quality assessments are reviewed each year. To determine the collectability of a trade receivable, the Company considers any change in credit quality from the date the credit was initially granted to the reporting date.

The Company has not set up any allowance for the accounts presented in the preceding table since the credit quality of these receivables has not changed significantly, and they are still considered collectible.

Trade receivables are normally recovered in 68 days (62 days in 2020). The Company does not hold any collateral in respect of these receivables.

27

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 11 – PROPERTY, PLANT, AND EQUIPMENT

		Computer				Leasehold		Total property,
Cost		hardware		Furniture		improvements	plant, and equipment
As at December 31, 2019	$	176,808	$	98,286	$	-	$	275,094
Additions		4,816		3,751		-		8,567
Transfers		-		-		-		-
Disposals		-		(80,517)		-		(80,517)
Effect of foreign exchange		-		-		-		-
As at December 31, 2020	$	181,624	$	21,520	$	-	$	203,144
Additions		12,680		8,280		2,704		23,664
Transfers		-		-		-		-
Disposals		(166,642)		(17,769)		-		(184,411)
Effect of foreign exchange		-		-		-		-
As at September 30, 2021	$	27,662	$	12,031	$	2,704	$	42,397
		Computer				Leasehold		Leasehold
Accumulated depreciation		hardware		Furniture		improvements		improvements
As at December 31, 2019	$	145,860	$	13,300	$	-	$	159,160
Additions		10,107		1,643		-		11,750
Disposals		-		-		-		-
Effect of foreign exchange		-		-		-		-
As at December 31, 2020	$	155,967	$	14,943	$	-	$	170,910
Additions		4,447		1,217		946		6,610
Disposals		(151,028)		(14,474)		-		(165,502)
Effect of foreign exchange		-		-		-		-
As at September 30, 2021	$	9,386	$	1,686	$	946	$	12,018
		Computer				Leasehold		Total property,
Net book value		hardware		Furniture		improvements	plant, and equipment
As at December 31, 2020	$	25,657	$	6,577	$	-	$	32,234
As at September 30, 2021	$	18,276	$	10,345	$	1,758	$	30,379

28

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 12 – LEASE ASSET – RENTAL OFFICE

		Lease asset
Cost		rental office
As at December 31, 2019	$	133,226
Additions		-
Transfers		-
Disposals		-
Effect of foreign exchange		-
As at December 31, 2020	$	133,226
Additions		-
Transfers		-
Disposals		-
Effect of foreign exchange		-
As at September 30, 2021	$	133,226
		Lease asset
Accumulated depreciation		rental office
As at December 31, 2019	$	3,701
Additions		44,408
Disposals		-
Effect of foreign exchange		-
As at December 31, 2020	$	48,109
Additions		33,307
Disposals		-
Effect of foreign exchange		-
As at September 30, 2021	$	81,416

		Lease asset
Net book value		rental office
As at December 31, 2020	$	85,117
As at September 30, 2021	$	51,810

29

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 13 – INTANGIBLE ASSETS

							Domain			Trade			Total
Cost		Patents			Software		name			name			intangibles
As at December 31, 2019	$		42,004	$	1,163,865	$		3,928	$		-	$	1,209,797
Additions			10,198		29,757			-			-		39,955
Transfers			-		-			-			-		-
Disposals			-		-			-			-		-
Effect of foreign exchange			-		-			-			-		-
As at December 31, 2020	$		52,202	$	1,193,622	$		3,928	$		-	$	1,249,752
Additions			-		255,991			-			668,842		924,833
Transfers			-		-			-			-		-
Disposals			-		-			-			(35,000)		(35,000)
Effect of foreign exchange			-		-			-			-		-
As at September 30, 2021	$		52,202	$	1,449,613	$		3,928	$		633,842	$	2,139,585
							Domain			Trade			Total
Accumulated amortization		Patents			Software		name			name			intangibles
As at December 31, 2019	$		7,873	$	1,122,525	$		-	$		-	$	1,130,398
Additions			2,425		41,809			-			-		44,234
Disposals			-		-			-			-		-
Effect of foreign exchange			-		-			-			-		-
As at December 31, 2020	$		10,298	$	1,164,334	$		-	$		-	$	1,174,632
Additions			1,957		73,548			-			-		75,505
Disposals			-		-			-			-		-
Effect of foreign exchange			-		-			-			-		-
As at September 30, 2021	$		12,255	$	1,237,882	$		-	$		-	$	1,250,137
							Domain			Trade			Total
Net book value		Patents			Software		name			name			intangibles
As at December 31, 2020	$		41,904	$	29,288	$		3,928	$		-	$	75,120
As at September 30, 2021	$		39,947	$	211,731	$		3,928	$		633,842	$	889,448

30

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 14 – BUSINESS ACQUISITIONS AND GOODWILL

Acquisition of HypeX.gg Plateforme de Jeux Sociaux Inc.

On February 8, 2021, the Company signed a purchase agreement to acquire 100% of the issued and outstanding shares of HypeX.gg Plateforme de Jeux Sociaux Inc. (“HypeX”). The purchase price was cash consideration of $75,000 and 1,625,000 shares of the Company valued at $0.40 for a value of $650,000. The acquisition closed on February 8, 2021.

Through the acquisition of HypeX, the Company provides the ability to offer esports tournaments to venues of small to arena sizes. HypeX also allows for many different esports to be played through its tournament platform.

The table below summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date:

Consideration
Cash	$	75,000
Shares of The Company		650,000
Total consideration	$	725,000
Net assets acquired
Cash		183
Software		251,213
Tradename		35,000
Goodwill		438,604
Total assets		725,000
Total net assets acquired	$	725,000

Acquisition of Champion eSports Inc.

On April 20, 2021, the Company signed a purchase agreement to acquire 100% of the issued and outstanding shares of Champion eSports Inc. The purchase price was cash consideration of $35,000. The acquisition closed on April 20, 2021.

Through the acquisition of Champion eSports Inc., the Company has access to a merchandizing operation. The intent is to merchandize the Company’s current and future planned acquisitions through this acquisition.

The table below summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date:

31

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Consideration

Consideration
Cash	$	35,000
Total consideration	$	35,000
Net assets acquired
Tradename		35,000
Total assets		35,000
Total net assets acquired	$	35,000

Acquisition of Team Bloodhounds Inc.

On September 21, 2021, the Company signed a purchase agreement to acquire 100% of the issued and outstanding shares of Team Bloodhounds Inc. The purchase price was cash consideration of $54,834, 1,000,000 shares of the Company valued at $0.50 for a value of $500,000, along with a payable to the owners of Team Bloodhounds Inc. due 3 months after the acquisition date of $60,500. The acquisition closed on September 21, 2021.

Team Bloodhounds Inc. is the second largest esports team in Canada. Through this acquisition, the Company has access to the Team Bloodhounds brand and marketing.

The table below summarizes the fair value of the assets acquired and the liabilities assumed at the acquisition date:

Consideration
Cash	$	54,834
Note payable		60,500
Shares of The Company		500,000
Total consideration	$	615,334
Net assets acquired
Cash		16,492
Brand		598,842
Total assets		615,334
Total net assets acquired	$	615,334

Goodwill is comprised of:

Goodwill is comprised of:
	September	30, 2021	December 31, 2020
HypeX goodwill	$	438,604	$	-
Totalgoodwill	$	438,604	$	-

32

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 15 – BANK INDEBTEDNESS

The Company has no credit loan or bank loan as at September 30, 2021 and December 31, 2020.

NOTE 16 – TRADE AND OTHER PAYABLES

	September 30	December 31
	2021	2020
Trade and accrued payables	500,661	191,564
Accrued interest	5,250	-
Sales tax	8,465	1,498
Trade and otherpayables	514,376	193,062

NOTE 17 – SHORT-TERM DEBT

	September 30	December 31
	2021	2020
Loans from private companies, bearing interest at 14%, without guarantee	125,000	125,000
Total short-term debt	125,000	125,000

NOTE 18 – LONG-TERM DEBT

NOTE18 – LONG-TERMDEBT
	September 30	December 31
	2021	2020
Loans from previous officer (1)	161,723	161,723
Lease liability (2)	57,869	90,882
COVID load (3)	40,000	40,000
Total debt	259,592	292,605
Current portion	206,409	206,409
Total long-term debt	53,183	86,196

• (1) The loan without interest from a previous officer, whose repayment conditions are to be renegotiated, (formerly, will be payable at $5,000 per month once the following conditions have been fulfilled: 1) relisting of the common shares of the Company on the TSX Venture Exchange and, 2) the warrants included in the March 2019 special warrants financing are exercised). The loan was previously secured by a $500,000 mortgage, which has been cancelled on November 12, 2019.

• (2) The lease liability is related to Lease asset – rental office. The interest expense in the income statement includes an amount of $10,981 ($11,252 in 2020) in interest on the lease liability. The Company’s total cash payment for its leases is $38,745 ($50,505 in 2020). Maturities on borrowings are $51,767 due in 2021 and $48,538 due in 2022.

33

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

• (3) The Canada Emergency Business Account (CEBA) is intended to provide financial support to businesses struggling to cover their expenses that are not able to defer through this pandemic. The loan is for $60,000 and is interest-free with the potential of up to $20,000 of loan forgiveness, if the balance of the loan is repaid on or before December 31, 2022. If the loan is not repaid by this date, it will be converted into a three-year term loan at an annual interest rate of 5% with the entire loan to be repaid. The Company intends to reimburse the $40,000 in December 2022.

NOTE 19 – EQUITY

Share capital

The Company’s authorized capital stock consists of an unlimited number of voting and participating common shares par value.

common shares par value.
		September 30		December 31
Issued(amount)		2021		2020
Opening balance	$	8,409,109	$	7,625,161
Private placement (a)		2,604,767		508,973
Shares issued in lieu of finder's fees (a)		202,424			-
Cost of share issuance (a)		(227,564)			-
Debt conversion (b)		-		274,975
Warrants exercised (c)		26,500			-
Purchase of HypeX.gg (d)		650,000			-
Purchase of Team Bloodhounds Inc. (e)		500,000			-
Ending balance	$	12,165,236	$	8,409,109

	September 30	December 31
Issued(number of shares)	2021	2020
Opening balance	91,753,790	68,754,790
Private placement (a)	25,000,000	12,000,000
Shares issued in lieu of finder's fees (a)	1,012,120
Debt conversion (b)	-	10,999,000
Warrants exercised (c)	100,000		-
Purchase of HypeX.gg (d)	1,625,000		-
Purchase of Team Bloodhounds Inc. (e)	943,396		-
Ending balance	120,434,306	91,753,790

(a) Private placement

• a. On March 8, 2021, in connection with a non-brokered private placement the Company issued 25,000,000 common shares at $0.20 per share and 25,000,000 warrants for a total of $5,000,000. The transaction involved a payment of $92,000 in cash for finder’s fees and of $202,424 in shares issued (1,012,120 shares at $0.20) and $133,922 of finder’s fee warrants issued (1,397,796 warrants with a strike price of $0.2650). Total finders fees amounted to $302,901, of which $157,797 was allocated to shares, and $145,104 was allocated to warrants.

34

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

• b. On December 18, 2020, in connection with a non-brokered private placement the Company issued 12,000,000 common shares at $0.05 per share and 12,000,000 warrants for a total of $600,000. The amount accounted for is net of warrants value of $12,000. A share issue expense totaling $79,027, including warrants issued as finder’s fees valued at $32,640, was recorded as a reduction of the value of the private placement.

• (b) Debt conversion

• a. On November 6, 2020, as debt settlement agreements, the Company issued, at a price of $0.025 per common share: 4,599,000 common shares to a creditor and 6,400,000 common shares to two borrowers, for a total value of $274,975.

• (c) Warrants exercised

• a. On July 29, 2021, 100,000 warrants were exercised at a price of $0.265 per warrant for a total value of $26,500.

• (d) Purchase of HypeX.gg Plateforme de Jeux Sociaux Inc.

• a. As part of the purchase of HypeX.gg, the Company issued 1,625,000 shares at a price of $0.40 for a total value of $650,000 to the former owners. 406,250 shares vested at closing, 406,250 vest 6 months after the purchase, 406,250 vest 9 months after the purchase, and the remainder vest 12 months after the purchase.

• (e) Purchase of Team Bloodhounds Inc.

• a. As a part of the purchase of Team Bloodhounds Inc., the Company issued 1,000,000 shares at a price of $0.50 for a total value of $500,000 to the former owners. 250,000 shares vest 4 months from the purchase date, 250,000 vest 9 months after the purchase, 406,250 vest 12 months after the purchase, and the remainder vest 14 months after the purchase.

Shares issued to brokers and finders

		Weighted average	Weighted average
	Number		exerciseprice
Issued for March 8, 2021 private	1,012,120	$	0.20
placement announced on April 30,
2021

35

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Warrants issued to shareholders

		Weighted average	Weighted average
Issued	Number		exerciseprice
Balance as at December 31, 2019	27,693,667	$	0.1320
Issued (a)	12,000,000	$	0.1200
Expired warrants of shareholders (b)	(27,693,667)	$	0.1320
Balance as at December 31, 2020	12,000,000	$	0.1200
Issued (a)	25,000,000	$	0.2650
Exercised warrants (c)	(100,000)	$	0.2650
Balance as at September 30, 2021	36,900,000	$	0.2178

• (a) Warrants issued

• a. On February 17, 2021, 25,000,000 warrants were issued pursuant to a private placement. They are recorded as a reduction of the share capital in the amount of $2,395,233. Each whole warrant entitles its holder to purchase an additional common share at $0.20 per share for a period of 18 months following the closing of the private placement.

• b. On December 18, 2020, 12,000,000 warrants were issued pursuant to a private placement. They are recorded as a reduction of the share capital in the amount of $12,000. A warrant issue expense totaling $1,613 was recorded as a reduction of the value of the private placement. Each whole warrant entitles its holder to purchase an additional common share at $0.12 per share for a period of 12 months following the closing of the private placement. The warrants may be accelerated by the Company, at its sole option, at any time if the closing volume-weighted average price of the Company‘s common shares on the TSX Venture Exchange, or such other exchange on which the common shares may primarily trade from time to time is greater than or equal to $0.14.

• (b) Warrants expired

• a. On March 15, 2020, 2,693,667 warrants expired without being exercised. The fair value of $154,203 allocated to these warrants has been reclassified to contributed surplus.

• b. On March 26, 2020, 15,000,000 warrants expired without being exercised. The fair value of $360,000 allocated to these warrants has been reclassified to contributed surplus.

• c. On October 3, 2020, 10,000,000 warrants expired without being exercised. The fair value of $316,676 allocated to these warrants has been reclassified to contributed surplus.

• (c) Warrants exercised

• a. On July 29, 2021, 100,000 warrants were exercised at a price of $0.265 per warrant for a total value of $26,500.

36

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Summary table of outstanding and exercisable warrants as at September 30, 2021:

	Number of	Average remaining	Weighted average	Weighted average
Expiry date	warrants	term(years)		exerciseprice
December 2021	12,000,000	0.25	$	0.1200
September 2022	25,000,000	1.00	$	0.2650

Summary table of outstanding and exercisable warrants as at December 31, 2020:

	Number of	Average remaining	Weighted average	Weighted average
Expiry date	warrants	term(years)		exerciseprice
December 2021	12,000,000	1.00	$	0.1200

Warrants issued to brokers and finders

		Weighted average	Weighted average
Issued	Number		exerciseprice
Balance as at December 31, 2019	-	$	-
Issued (a)	320,000	$	0.1200
Balance as at December 31, 2020	320,000	$	0.1200
Issued (a)	1,397,796	$	0.2650
Balance as at September 30, 2021	1,717,796	$	0.2380

(a) Warrants issued

• a. On April 30, 2021 the Company issued 1,397,796 finder’s warrants. Each finder’s warrant entitles the holder to acquire one common share of the Company at a price of $0.265 for a period of 18 months following the closing.

• b. On December 18, 2020, 320,000 warrants were issued as finder’s fees pursuant to a private placement. The fair value of $32,640 allocated to these warrants has been reclassified to Cost of issuance of capital stock.

Incentive stock option plan

The shareholders of the Company have adopted stock option plan (the “Plan”) under which members of the Board of Directors may award stock options for common shares to directors, officers, employees and consultants. The conditions and the exercise price of each option are determined by the Board of Directors.

The maximum number of shares issuable under the plan is 2,600,000. The total number of common shares reserved for stock option plan to directors, officers and employees shall not represent, over a 12month period, more than 5% of the Company’s common shares issued and outstanding, that number being calculated on the grant date.

The TSX Venture Exchange (the “Exchange”) has conditionally accepted the Company’s notice for filing in connection with the amendments made to the Plan, including but not limited to the adoption of a 10% rolling limit, subject to shareholders’ approval.

37

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

The stock option grant is also subject to regulatory and shareholder approval with respect to the expansion of the Company’s stock option plan.

The total number of common shares reserved pursuant to the stock option plan to consultants and investor relations services providers shall not represent, over a 12-month period, more than 2% of the Company’s common shares issued and outstanding, that number being calculated on the grant date.

The purchase price of the common shares upon the exercise of each option granted under the stock option plan will be the price determined by the Board of Directors or the Compensation Committee at the time of each option grant, but that price may not be less than the “Expected price” which means the market price at the time of each option grant less a discount according to the accepted rules by TSX Venture Exchange, subject to a minimum price of $0.10. The market price at the time of each option grant means the TSX Venture Exchange market closing price on the day before they are granted. If there is no trading on the day before, the closing price is replaced by the average of the bid and offered price.

The stock options are exercisable at any time and expire 90 days after the departure date of the holder for directors and officers, and 30 days for consultants.

The Company recognized a share-based compensation expense of $595,421 during the period ended September 30, 2021 (2020 – nil), related to stock options. The total fair value of options granted during the year was $1,179,057 (2020 – nil).

Change in the stock options are detailed as follows:

	September 30, 2021	September 30, 2021		**December 31, **	**December 31, **	2020
		Weighted				Weighted
	Number of	average exercise		Number of	average exercise
	options	price		options		price
Outstanding, beginning of period	2,600,000	$	0.2350	-	$	-
Exercised during the period	-	$	-	-	$	-
Issued during the period	2,920,000	$	0.3654	2,600,000	$	0.2350
Forfeited during the period	(1,070,000)	$	0.2550	-	$	-
Expired during the period	-	$	-	-	$	-
Outstanding, end ofperiod	4,450,000	$	0.3158	2,600,000	$	0.2350
Exerciseable, end ofperiod	-	$	-	-	$	-

The outstanding option details of the Company are as follows:

		Weighted
	average exercise		Number of	Vested and
Expiry date		price	options	exerciseable
September 17, 2022	$	0.9000	500,000		-
December 17, 2025	$	0.2350	2,600,000		-
February 8, 2026	$	0.2550	1,350,000		-
Total	$	0.3158	4,450,000		-

38

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 20 – INFORMATION ON CASH FLOWS

NOTE20 – INFORMATION ONCAS	HFLOWS	HFLOWS
	For the three		For the three		For the nine	For the nine
	months ended		months ended		months ended	months ended
Working capital items	**September 30, 2021 **		**September 30, 2020 **		**September 30, 2021 **	September 30, 2020
Decrease (increase) in:
Trade and other receiveables		(94,922)		19,673	(321,005)	54,818
Prepaid expensees		58,912		-	(85,985)	2,095
Professional fees
Employee benefits		23,473		9,825	(154,503)	92,248
Trade and other payables		355,967		11,594	260,814	88,510
Deferred revenue		-		-	-	(3,854)
Net changes in working capital items		343,430		41,092	(300,679)	233,817

NOTE 21 – COMMITMENTS

The Company is committed to pay under long-term leases agreements, an amount of $61,561 before November 2025. The payments are as follows over the next five years 2021 - $13,023; 2022 - $48,539; 2023 - $nil, 2024 - $nil, and 2025 - $nil.

NOTE 22 – RELATED PARTY TRANSACTIONS

Company's key management personnel are members of the Board of Directors, the President and Chief Executive Officer, and the Chief Financial Officer. Key management personnel remuneration includes the following expenses:

following expenses:
	For the three	For the three	For the nine	For the nine
	months ended	months ended	months ended	months ended
	**September 30, 2021 **	**September 30, 2020 **	**September 30, 2021 **	September 30, 2020
Salaries and benefits	30,268	37,500	260,418	112,500
Share based compensation	45,547	-	45,547	-
Professional fees	34,493	-	34,493	42,490
Total	110,307	37,500	340,457	154,990

An officer of the Corporation subscribed for a total of 500,000 units in the $5,000,000 private placement dated March 8, 2021.

NOTE 23 – FINANCIAL RISKS AND FINANCIAL INSTRUMENTS

Fair value hierarchy

Financial instruments carried at fair value in the statement of financial position are classified using a hierarchy that reflects the significance of the inputs used in making the measurements. Hierarchy for fair value consists of the following levels:

Level 1 – fair value based on the quoted price within the bid-ask spread that is most representative of fair value in the circumstance.

39

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 – valuations techniques based on a significant part of data for the asset or liability that are not based on observable market data (unobservable inputs).

The hierarchy that applies as part of the determination of fair value requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

The carrying value of current financial assets and liabilities approximate their fair value due to their expected realization in the short term.

The fair value of the investment is classified according to level 2 of the hierarchy for fair value.

The fair value of short-term debt and long-term debt is determined based on future cash flows.

The following tables show the classification of financial instruments as well as their carrying amount and fair value at September 30, 2021 and December 31, 2020:

				As	at September 30, 2021
	Financial assets	Assets and			Financial liabilities	Total carrying
	at amortized cost	liabilities at fair value			at amortized cost	value	Fair value
Financial assets
Cash and cash equivalents	2,423,850		-		-	2,423,850	2,423,850
Trade and other receivables	876,447		-		-	876,447	876,447
Total financial assets	3,300,297		-		-	3,300,297	3,300,297
Financial liabilities
Trade and other payables	-		-		514,376	514,376	514,376
Short-term debt	-		-		125,000	125,000	125,000
Long-term debt	-		-		53,183	53,183	53,183
Total financial liabilities	-		-		692,559	692,559	692,559
				As at December 31, 2020
	Financial assets	Assets and			Financial liabilities	Total carrying
	at amortized cost	liabilities at fair value			at amortized cost	value	Fair value
Financial assets
Cash and cash equivalents	301,087		-		-	301,087	301,087
Trade and other receivables	506,562		-		-	506,562	506,562
Total financial assets	807,649		-		-	807,649	807,649
Financial liabilities
Trade and other payables	-		-		191,564	191,564	191,564
Short-term debt	-		-		125,000	125,000	125,000
Long-term debt	-		-		292,605	292,605	292,605
Total financial liabilities	-		-		609,169	609,169	609,169

The Company operates in an industry with a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. To minimize the negative effects on its financial performance, the Company has centralized cash management for defining, assessing, and hedging financial risks. The Company does not enter contracts for financial instruments including financial derivatives for speculative purposes.

The following analysis assesses the nature and extent of the risks to the balance sheet date, September 30, 2021.

40

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

Market risk

Currency risk

The Company makes most of its revenues and expenses in local currency, which minimizes market risks associated with fluctuations in foreign currencies. Therefore, the Company does not use derivative financial instruments to minimize its foreign exchange risk.

Consequently, some assets and liabilities are exposed to foreign exchange fluctuations. Those assets and liabilities denominated in foreign currency and converted into Canadian dollars are the following:

	September 30	December 31
	2021	2020
$ Can	2,422,856	300,437
$ US converted	994	650
Cash	2,423,850	301,087
Net cash and cash equivalents	2,423,850	301,087

Interest rate risk

Interest rate risk to which the Company is exposed arises from its short and long-term debts. Borrowing at floating interest rates exposes the Company to fluctuations in cash flows due to changes in interest rates, while borrowing at fixed interest rates exposes the Company to the risk of changes in fair value.

The short and long-term debt bears interest at fixed rates and therefore exposes the Company risk of changes in fair value.

An increase / decrease of 50 basis points in interest rates would have increased / decreased the net income and comprehensive income by $nil.

The Company continuously analyzes its exposure to interest rate risk and examines the renewal and refinancing options that are available to minimize that risk.

Price risk

The Company is exposed to limited price risk given the nature of its activities.

Credit risk

Cash and cash equivalents are held or issued by Canadian chartered financial institutions. Thus, the Company considers the risk of non-performance of those instruments to be negligible.

The Company's credit risk is primarily attributable to its trade and other receivables. The Company provides credit to its customers in the normal course of business. It carries out ongoing credit evaluations regarding its customers and closely monitors outstanding balances. As at September 30, 2021 there were no doubtful accounts receivable.

Accounts receivables are recognized in the statement of financial position net of allowance for doubtful accounts. This provision is based on the best estimates of the Company regarding the ultimate recovery

41

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

of balances for which collection is uncertain. The uncertainty about the probability of perception can arise from various indicators such as deterioration in the creditworthiness of a customer or deferral of perception when the aging of invoices exceeds the normal payment terms. Management regularly reviews accounts receivables, monitors past due balances and assesses the appropriateness of the allowance for doubtful accounts. Given the above, the Company believes that the credit risk is not significant.

For other receivables, the Company continuously evaluates the probable losses and establishes a provision for losses based on their estimated realizable value.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations as they come due. Management reviews the level of liquidity of the Company to continuously ensure they have sufficient cash to meet its commitments. To ensure sufficient liquidity to meet its current obligations, the Company maintains payment terms with its customers similar to those it has with its suppliers. In addition, the financing of the Company is ensured by short-term and long-term borrowings and short-term credit facilities to ensure adequate financial resources to meet its obligations as they come due.

The Company has renewed its credit facilities during the quarter. The following table summarizes the contractual maturities of financial liabilities:

	Carrying	Contractual		6 to 12	12 to 24
As at September 30, 2021	value	cash flow	0 to 6 months	months	months
Trade and accrued payables	514,376	511,451	511,451	-	-
Short-term debt	125,000	125,000	125,000	-	-
Long-term debt	259,592	263,284	187,983	26,476	48,825
Total	898,968	899,735	824,434	26,476	48,825
	Carrying	Contractual		6 to 12	12 to 24
As at December 31, 2020	value	cash flow	0 to 6 months	months	months
Trade and accrued payables	191,564	191,564	191,564	-	-
Short-term debt	125,000	125,000	-	125,000	-
Long-term debt	292,605	302,030	187,553	25,938	88,539
Total	609,169	618,594	379,117	150,938	88,539

42

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 24– INFORMATION ON THE MANAGEMENT OF CAPITAL

As part of managing its capital, the Company's objectives are to ensure that sufficient liquidity is available to pursue its organic growth or to make strategic acquisitions, to ensure that the external requirements imposed by under its credit facilities are complied with, provide services to its clients, and provide a satisfactory return to shareholders. The Company defines capital as the sum of its equity.

On September 30, 2021, the total equity increased to $3,802,464 ($188,739 in 2020).

The change in total equity during the period ended September 30, 2021, was $3,613,725 ($278,792 in 2020).

The Company manages its capital structure to ensure that cash flows from operations and cash flows in the statement of financial position are greater than the interest expense and principal payments to be paid.

The Board of Directors reviews and approves all significant transactions outside the ordinary course of business, including proposals on acquisitions or other major investments or provisions, long-term debt payments and operating budgets and capital expenditures.

NOTE 25 – CONTINGENCIES

The Company has contention with four former employees: they are threatening actions before the Commission des normes, de l’équité, de la santé et de la sécurité du travail (CNESST) in connection with their termination of employment and their employment contract. The Company has contested these claims, and, in management's opinion, they are groundless. Neither the possible outcome nor the amount of possible settlement can be foreseen. Therefore, no provision has been recognized in the financial statements.

NOTE 26 – SEGMENT REPORTING

The Company has reviewed its activities and determined that it leads them in a single reportable operating segment. This single reportable operating segment derives its revenues from the deployment of email campaigns to large companies and web services. Almost all activities are carried out in Canada.

The assets of the Company are in Canada.

NOTE 27 – SUBSEQUENT EVENTS

On October 6, 2021, the Company announced it completed the second round of a private placement. This private placement brought total gross proceeds of $10,007,000 for both rounds. The Company issued 11,420,000 subscription units in the first round and 8,594,000 units in the second round. Each unit was issued at $0.50 and included one share of the Company and one warrant with a strike price of $0.50.

43

INTEMA SOLUTIONS Inc. Notes to the Consolidated Interim Financial Statements For the three and nine months ended September 30, 2021 (in Canadian dollars)

NOTE 28 – COVID-19

The Company has taken actions to mitigate the impacts from COVID-19. During 2020, the Company did furlough some employees for a variable period. Also, for 2021 and 2020, the Company has utilized the Canada Emergency Wage Subsidy (CEWS), the Canada Emergency Business Subsidy (CEBS), and the Canada Emergency Rent Subsidy (CERS). The Company has taken and will continue to take actions to mitigate the impacts of COVID-19. However, it is impossible to determine the financial implications of these events.

44