Mr. David Lucatch reports

LIQUID AVATAR ANNOUNCES EARLY EXERCISE WARRANT INCENTIVE PROGRAM TO FUEL BUSINESS GROWTH

Liquid Avatar Technologies Inc. has received approval from the Canadian Securities Exchange to implement an early exercise warrant incentive program designed to encourage the early exercise of the company's 34,215,573 outstanding common share purchase warrants with an exercise price of 20 cents per share with expiry dates ranging from Nov. 10, 2021, to Dec. 23, 2022.

To the extent that holders of the warrants take advantage of the opportunity to exercise their warrants during the early exercise period, this program will simplify the company's capital structure by removing a significant number of existing warrants and strengthen the company's cash position in the near term to continue to create shareholder value.

The program will commence on June 10, 2021, at 9 a.m. EDT and expire on July 16, 2021, at 5 p.m. EDT. Under the program, the company is offering an incentive for each warrant that is exercised during the early exercise period of an additional fraction of a new common share of the company, pursuant to the following terms:

• A holder exercising warrants expiring in 2021 will receive 0.35 of an incentive share for a total of 1.35 common shares.
• A holder exercising warrants expiring in 2022 will receive 0.48 of an incentive share for a total of 1.48 common shares.

If all the warrants are exercised during the early exercise period, the company expects to:

• Receive gross proceeds of approximately $6.84-million;
• Issue a total of approximately 49,917,987 common shares pursuant to the exercise of the warrants, including 34,215,573 common shares and 15,702,414 incentive shares pursuant to the exercise of the warrants during the early exercise period.

The company expects to use the net proceeds received as a result of the program to finance the continuing expansion and growth of its Liquid Avatar mobile app, continuing software-as-a-service (SaaS) initiatives for verifiable credentials issuers and verifiers, revenue programs, and general working capital programs.

The terms and conditions of the program and the method of exercising warrants pursuant to the program will be set forth in a letter to be delivered by e-mail to the registered holders and, in the event of no e-mail address available or undeliverable, to the registered address of each holder not receiving an e-mail. Warrantholders that wish to participate in the program will agree to exercise their warrants and deliver the other necessary documents in consideration of the issuance by the company of the incentive shares. Holders of warrants resident in Canada must be accredited investors under applicable Canadian securities laws or provide satisfactory evidence that they meet the requirements of an alternative exemption from the prospectus requirements of applicable Canadian securities laws in order to participate in the program. The incentive shares will be subject to a four-month hold period from the date of the incentive share issuance pursuant to applicable Canadian securities laws.

If warrants are not exercised prior to the end of the early exercise period or if a warrantholder does not qualify to receive incentive shares, the warrants will remain outstanding and continue to be exercisable on the same terms applicable to such warrants as they existed prior to the program.

The company has engaged Research Capital Corp. as its exclusive soliciting agent in connection with the program to assist warrantholders to exercise warrants. Holders of warrants held through a broker or investment dealer should contact their broker or investment dealer for additional details regarding participation in the program. Research Capital will receive a fee equal to 3.0 per cent of the gross proceeds from the exercise of warrants during the program.

Insiders of the company may participate in the program and, if they do so, the program may constitute a related-party transaction within the Meaning of Multilateral Instrument 61-101 (Protection of Minority Shareholders in Special Transactions). If this occurs, the company intends to rely on the exemptions from the formal valuation requirements of MI 61-101 contained in Section 5.5(a) and (b) of MI 61-101 on the basis that the fair market value of the transaction with insiders will not be more than 25 per cent of the market capitalization of the company and no securities of the company are listed on a specified market set out in such section and the company intends to rely on the exemption from the minority shareholder approval requirements of MI 61-101 contained in Section 5.7(1)(a) of MI 61-101 on the basis of the fair market value of the transaction with insiders will not be more than 25 per cent of the market capitalization of the company. The material change report for the program was not filed more than 21 days prior to announcing the program but will be filed more than 21 days prior to the end date of the program.

There can be no assurances as to the reception of the program by holders of warrants, the number of warrants exercised, the net proceeds to be received by the company, the impact on the financial condition of the company or any impact on the market price of the common shares.

About Liquid Avatar Technologies Inc.

Liquid Avatar Technologies, through its wholly owned subsidiary, Liquid Avatar Operations Inc., 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 app, available in the Apple App Store and on 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 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.

Liquid Avatar Technologies has a suite of revenue-generating programs that support the Liquid Avatar program, including KABN KASH, a cashback and reward program that has greater than 400 leading on-line merchants, and, coming soon, an integrated offering engine. In Canada, Liquid Avatar also has the KABN Visa Card, a card and mobile app platform that allows users to manage and control a range of financial services for traditional and digital currencies. The company is currently exploring the expansion of the KABN Visa program to other geographic regions, including the United States.

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