Mr. David Lucatch reports

LIQUID AVATAR TECHNOLOGIES PROVIDES CORPORATE UPDATE

Liquid Avatar Technologies Inc. has provided the following update to its shareholders.

As part of its continuing efforts to maximize available corporate resources, the company continues to dedicate efforts to its Liquid Avatar mobile app and Aftermath Islands metaverse programs. However, given the difficult market conditions, changes in government's dedicated efforts with digital identity, changing market demands for new fintech (financial technology) services, including financial card products, and despite the continuing efforts of management and the board of directors, the company continues to find itself having difficulty meeting its required capital objectives to further its program development and execution.

On Aug. 21, 2023, the company announced that it had received a non-binding offer for its controlled subsidiary, Aftermath Islands Metaverse Ltd., and its Liquid Avatar mobile app from a private Swiss-based metaverse and virtual experience organization. The offer was contingent on financing amounts and terms to be agreed between the companies. The proposed buyer has been unsuccessful in its efforts to raise the requisite financing. The company remains on cordial terms with the proposed buyer, but the non-binding offer has now expired, and it is not expected to be renewed at this time.

A continuing result of these difficulties resulted in a cease trade order issued by the Ontario Securities Commission on May 5, 2023. The company cannot raise capital directly into Liquid Avatar Technologies at this time due to both the cease trade order and its inability to file the company's financial statements for the year ended 2022 and its subsequent quarters. The company anticipates, upon raising capital, that it will have sufficient resources to file the necessary statements to apply for the removal, in part or in whole, of the cease trade order. However, currently, the company does not envisage, at least in the foreseeable short term, a revocation of the current cease trade order under the current circumstances.

On June 30, 2023, the company filed Form 51-102F6V, Statement of Director and Named Executive Officer Compensation. This statement reflected the compensation earned by each member of management and outlined the outstanding unpaid compensation owed to each as of Dec. 31, 2022. No compensation has been paid to management from the date of that filing and accrued compensation now dates back from April 1, 2022, for each member of management. Additional compensation has also been accrued and is outstanding to other employees, consultants and vendors. Despite the company's inability to provide compensation, management, employees and select vendors have largely continued to support the company's efforts, including some members of management, on a priority basis, have provided limited loans to the company for certain critical expenses, which are deemed a related party transaction.

The company would like to report the resignation of the chief financial officer, Craig McCannell, effective Nov. 1, 2023. Mr. McCannell has offered to make himself available as time allows to support the company in any future requests related to his former position and/or transition efforts, and the company thanks him for his years of service to the company and wishes him success in his future endeavours. Management intends to work with the board of directors, in due course, to create a selection committee for a new chief financial officer.

"Even under these most difficulty circumstances, the team is working to resolve the current challenges that we are facing as an organization. Further, we believe that the public markets for small- and microcap markets have greatly suffered under the current market conditions, which may include naked and short selling that has occurred across North America. It is the company's belief that it has been the victim of these manipulative trading practices, negatively impacting the company and our shareholders. We believe that this process has greatly affected the company's share price, contributing to the company's inability to raise the necessary funds to proceed with normal operations, including the regulatory requirements for the company's listing on the CSE [Canadian Securities Exchange] and compensating its management, employees and other partners. However, we remain resolved, to the best of our ability, to work to right the ship and continue to move forward," said David Lucatch, chief executive officer of Liquid Avatar Technologies.

The company continues to dedicate efforts to Aftermath Islands and its complementary programs, including Lost Kingdom of T'Sara (LKoT), its play-to-earn (P2E) platform. In its first year, LKoT users generated over 9.2 million Resource Pack NFTs (non-fungible tokens). The Aftermath Islands metaverse platform has continued to operate in beta, having achieved approximately $3-million (U.S.) in gross sales, and subject to further financing by Aftermath Islands, the company expects Aftermath Islands to continue to develop the platform.

As part of the AIM Creator program (originally Meta Hero Project), Meta Karaoke, an on-line artificial-intelligence-powered Avatar performance platform, was acquired by Aftermath Islands Metaverse, as originally announced on Aug. 3, 2022, from Pegasus (Gibraltar) Ltd., a related party of the company. Further to this agreement, given the current economic and changing market conditions, Aftermath Islands has not fulfilled its agreed upon obligations to pay the appropriate fees for program sales under the terms of the agreement as well as to continue to finance the further development of the program. The parties have agreed that, rather than terminating the agreement, the matter will be settled by transferring back up to 80-per-cent ownership of the Meta Karaoke program, which is currently in a development stage, to Pegasus (Gibraltar). Aftermath Islands Metaverse and Oasis Digital Studios will retain a combined initial minority equity interest in the new entity of approximately 20 per cent. Pursuant to Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, the transfer back to Pegasus (Gibraltar) constitutes a related party transaction. The company is relying on exemptions from the formal valuation and minority approval requirements of MI 61-101, specifically: (i) the valuation requirement of MI 61-101 by virtue of the exemption contained in Section 5.5(b) as the company's common shares are not listed on a market specified in MI 61-101; and (ii) the minority shareholder approval requirement of MI 61-101 by virtue of the exemption contained in Section 5.7(1)(a) of MI 61-101 as the fair market value of the assets being transferred back do not exceed 25 per cent of the company's market capitalization (as determined under MI 61-101). A material change report will not be filed by the company as the transfer does not constitute a material change.

About Liquid Avatar Technologies Inc.

Liquid Avatar Technologies focuses on the verification, management and monetization of self-sovereign identity, empowering users to control and benefit from the use of their on-line identity.

The Liquid Avatar mobile app, available in the Apple App Store and Google Play, is a verified self-sovereign identity platform that empowers users to create high-quality digital icons representing their on-line personas. These icons will allow users to manage and control their digital identity and verifiable access and identity credentials and to use Liquid Avatars to share public and permission-based private data when they want and with whom they want.

The Liquid Avatar Verifiable Credentials Ecosystem (LAVCE) has been developed to support all participants in a digital credential ecosystem, including the holder, issuer and verifier, using state-of-the-art blockchain and open standards technologies initially as a node on the Indicio Network. The company is a voting and steering committee member of the Trust over IP Foundation, a founding and steering committee member of Cardea, a Linux Foundation Public Health project, and a member of the Good Health Pass collaborative, DIACC (Digital Identification and Authentication Council of Canada) and the Covid Credentials Initiative (CCI).

The Meta Park Pass is a W3C verifiable credential designed for interoperability. The Meta Park Pass contains a verified phone number with country code and an AI-reviewed self-attested age and can be expanded to include other unique credentials. Users will be able to log in into multiple supported metaverses with little friction and the platform knows they are real and unique users. Additional credentials can grant access as each metaverse matures and provides additional services and experiences.

The company's subsidiary, Oasis Digital Studios Ltd., is focused on supporting the development of the Aftermath Islands metaverse and related projects.

We seek Safe Harbor.