Mr. Bill Frain reports

LIBERTY ANNOUNCES CLOSING OF INITIAL TRANCHE OF LISTED ISSUER FINANCING EXEMPTION (LIFE) PRIVATE PLACEMENT OF UNITS

Liberty Defense Holdings Ltd. has closed the initial tranche of a non-brokered private placement of 5,900,663 units of the company at a price of 15 cents per unit for gross proceeds to the company of approximately $886,000, which was previously announced on Dec. 29, 2023.

Each unit consists of one common share in the capital of the company and one common share purchase warrant. Each warrant will entitle the holder thereof to purchase one common share of the company until Jan. 12, 2027, at an exercise price of 20 cents per warrant share.

The offering was completed pursuant to the listed issuer financing exemption under Part 5A of National Instrument 45-106 -- Prospectus Exemptions; accordingly, the securities issued in the offering are not subject to a hold period in accordance with applicable Canadian securities laws. There is an offering document related to the offering that can be accessed under the company's profile at SEDAR+ and on the company's website. Prospective investors should read this offering document before making an investment decision.

In connection with the offering, the company paid a finder's fee to Canaccord Genuity Corp. of $22,756 and issued 151,713 finder's warrants exercisable for one common share at the exercise price of 20 cents until Jan. 12, 2027.

The company plans to use the proceeds of this financing to further the production of Hexwave technology to support the increase in demand for the product and deliver units in backlog to customers.

Insiders of the company participated in the offering for $100,000, and such units issued to insiders are subject to a four-month hold period pursuant to applicable policies of the TSX Venture Exchange. The issuance of units to insiders is considered a related-party transaction within the meaning of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions (MI 61-101). The company is relying on exemptions from the formal valuation requirements of MI 61-101, pursuant to Section 5.5(a), and the minority shareholder approval requirements of MI 61-101, pursuant to Section 5.7(1)(a) in respect of such insider participation as the fair market value of the transaction, insofar as it involves interested parties, does not exceed 25 per cent of the company's market capitalization.

Two thousand twenty-two omnibus incentive plan

The company also announces that its omnibus long-term incentive plan dated March 27, 2019, as amended Oct. 25, 2022 (the 2022 omnibus plan), was filed on SEDAR+ under the company's profile and on the company's website on Nov. 7, 2022. The 2022 omnibus plan was approved by shareholders at the company's annual general meeting held on Nov. 30, 2022.

The 2022 omnibus plan was created to comply with the requirements of the new TSX Venture Exchange policy governing security-based compensation, which became effective Nov. 24, 2021. The 2022 omnibus plan provides flexibility to the company to grant equity-based incentive awards in the form of stock options (option-based awards) and restricted share units (share-based awards). One of the provisions of the 2022 omnibus plan allows option holders to exercise options on a cash-less exercise or net exercise basis, as now expressly permitted by the new TSX Venture Exchange Policy 4.4 -- Security Based Compensation.

Further amendment to 2022 omnibus plan

Effective Oct. 26, 2023, the company's board made an amendment to the 2022 omnibus plan (the 2023 omnibus plan) to adjust Section 2.4 -- Shares Subject to the Plan. This amendment, as well as the continuation of the 2023 omnibus plan, was approved by shareholders at the company's annual general meeting held on Dec. 7, 2023, and was approved by the TSX Venture Exchange. As the 2023 omnibus plan is a rolling plan, shareholders of the company are required to approve its continuation annually, as required by the policies of the TSX Venture Exchange.

All future grants of equity-based awards will be made pursuant to, or as otherwise permitted by, the 2023 omnibus plan.

A complete copy of the 2023 omnibus plan has been file on SEDAR+ and is available for viewing under the company's profile on SEDAR+.

About Liberty Defense Holdings Ltd.

Liberty Defense (TSX Venture Exchange: SCAN, OTCQB: LDDFF and Frankfurt Stock Exchange: LD2) provides multitechnology security solutions for concealed weapon detection in high-volume foot traffic areas and locations requiring enhanced security such as airports, stadiums, schools and more. Liberty Defense's Hexwave product, for which the company has secured an exclusive licence from Massachusetts Institute of Technology (MIT), as well as a technology transfer agreement for patents related to active 3-D radar imaging technology, provides discreet, modular and scalable protection to provide layered, standoff detection capability of metallic and non-metallic weapons. Liberty Defense has also recently licensed the millimetre-wave-based high-definition advanced imaging technology (HD-AIT) body scanner and shoe scanner technologies as part of its technology portfolio. Liberty Defense is committed to protecting communities and preserving peace of mind through superior security detection solutions.

We seek Safe Harbor.