Liquid Avatar Technologies : Management Discussion & Analysis for the Quarter ended September 30, 2022

Liquid Avatar Technologies Inc.

MANAGEMENT'S DISCUSSION AND ANALYSIS

for the three and nine month period ended September 30, 2022

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the unaudited interim condensed consolidated financial statements and the notes thereto for the three and nine month period ended September 30, 2022 of Liquid Avatar Technologies Inc. (the "Company"). Such financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS").

All dollar amounts are expressed in Canadian dollars, unless otherwise indicated.

DATE

This MD&A is prepared as of November 29, 2022.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this report contain forward-looking information under applicable Canadian securities legislation that may not be based on historical fact. Such statements reflect management's expectations regarding future events, results of operations, performance and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future and include certain anticipated progress, costs and anticipated completion and commercial launch dates for the Company's projects, as described under the heading "Description of Business - Discussion of Significant Projects Without Revenue", the estimated launch dates pertaining to Aftermath Islands and that revenues from Aftermath Islands are expected to be the majority of the Company's consolidated revenues in upcoming quarters. Such statements are subject to risks and uncertainties that may cause actual events, results, performance, or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits we will obtain from them. These forward-looking statements reflect management's current views and are based on certain assumptions and speak only as of the date of this report. Timelines under the heading "Description of Business - Discussion of Significant Projects Without Revenue" are based on the best estimates to complete from third parties, as all technical development is complete. Assumptions made in regard to launch for Aftermath Islands include the required operational execution performed by vendors and internal teams will be effective and timely and can result in the program meeting a viable minimum standard without technical, design or other delays.

A number of risks and uncertainties could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a downturn in general economic conditions, (2) delays in technology development, (3) industry competition, (4) the uncertainty of market acceptance, (5) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges, (6) inability to finance, and (7) other factors beyond the control of the Company, including the risks set out under the heading "Risk Factors" below. Material risks to the achieving the timelines under the heading "Description of Business - Discussion of Pre-Revenue Project Status" include delays or functional network challenges that may delay or frustrate a pilot, leading to resulting additional time to do so, leading to timing expectations being missed. Material risks to the achieving a launch program for Aftermath Islands and or it forming the majority of consolidated revenue in upcoming quarters include the risk that development activities will require more iterations than expected, vendors will be delayed in their processes, and liquidity issues do not allow for the timeline to remain as planned.

There is a significant risk that such forward-looking statements will not prove to be accurate. Investors are cautioned not to place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future results. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

THE COMPANY

The Company was incorporated under the laws of the province of British Columbia on September 10, 2014 as Torino Ventures Inc. The Company changed its name to Torino Power Solutions on November 13, 2016. The Company changed its name to KABN Systems NA Holdings Corp. on June 4, 2020 and on March 1, 2021 the Company changed

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its name to Liquid Avatar Technologies Inc. and its ticker symbol on the Canadian Securities Exchange from KABN to LQID. The Company wholly owns Liquid Avatar Operations Inc. (formerly KABN Systems North America Inc. and referred to herein as "KABN NA"). KABN NA wholly owns Oasis Digital Studios Limited ("Oasis"). Oasis holds a 50% interest in Aftermath Islands Metaverse Barbados Limited ("Aftermath Islands"), with the other 50% held by an arm's length individual.

On January 13, 2020, the Company and its newly formed wholly owned subsidiary 2733668 Ontario Inc. entered into a Business Combination Agreement with KABN NA, an arm's length private company, providing for a transaction (the "RTO Transaction") whereby the Company would acquire all of the issued and outstanding shares of KABN NA in exchange for issuance of common shares of the Company following the Consolidation (as defined below) ("Common Shares"). Immediately prior to the completion of the RTO Transaction, the Company completed a 1-for- 10 share consolidation (the "Consolidation"). The RTO Transaction closed on June 4, 2020 and resulted in the business of KABN NA becoming the business of the Company.

References to the Company herein mean Liquid Avatar Technologies Inc. and its subsidiaries, unless otherwise noted, from June 4, 2020 to present, and mean KABN NA prior thereto.

DESCRIPTION OF BUSINESS

The Company is a global blockchain, digital identity and fintech solutions company focused on empowering individuals, who are referred to as "Holders" or "Customers", to verify, manage, control, and create value from their online identity and public, permission-based data through Self-Sovereign Identity solutions delivered through the Company's solutions.

The Company operates across 3 business lines: Digital Identity, Digital Items Agency and Mixed Reality.

Digital Identity

The Company offers Issuers and Verifiers (as defined below) a suite of financial and related services through the Liquid Avatar Mobile App, the Liquid Avatar Verifiable Credentials Ecosystem, or "LAVCE", and proprietary services and programs that are targeted to generate revenues to the Company. Together, these services are referred to as the "Liquid Avatar Platform". LAVCE supports the W3C (World Wide Web Consortium) open standards and a "trust triangle" model which services the three distinct parties in a verifiable credential transaction, being the individual user or "Holder", the author or "Issuer" of a verifiable credential, and the validator or "Verifier" of the transaction. This is similar to everyday banking and now traditional point of purchase debit or credit transactions, which also include a Holder, an Issuer, and a Verifier in a similar "triangle". Issuers could include entities such as a government or other certifying entity. Verifiers could include entities such as a retailer seeking age verification or an event venue looking for access rights.

The Company intends to provide its products and services at no cost to Holders and seeks to generate revenues through permission-based partner and merchant fee-based programs with Issuers and Verifiers. The Liquid Avatar Platform provides Holders a more seamless compliance of online identity verification in combination with participation in online services and opportunities together with a developing suite of financial and other consumer services.

The Company is the exclusive licensee, in the United States and Canada, of KABN (Gibraltar) Ltd.'s ("KABN Gibraltar") digital identity and financial services platform, which provides organizations with a digitally enabled identity validation and verification based on industry standard KYC and AML processes (previously KABN ID), and which now forms part of LAVCE. The Company has utilized KABN Gibraltar, as the licensor of the technology, as a development partner. The Company also licenses for use in North America the "know how" for the KABN Gibraltar Loyalty program, which consists of KABN KASH (now LiquidShopz) and KABN Card (now LQID Card).

The proprietary technology suite that is the Liquid Avatar Platform includes three key products:

• LAVCE: LAVCE is a verified Self Sovereign Identity platform that empowers Holders to create high-quality digital icons representing their online personas, referred to as "Liquid Avatars". These Liquid Avatars allow Holders to manage and control their digital identity and their verifiable access and identity credentials and to use these Liquid Avatars to share public and permission based private data when they want and with whom they want. This is all done by Holders primarily through the Liquid Avatar Mobile App. The Liquid Avatar Mobile App is available for download on the Apple App Store and the Google Play Store. Digital identity validation and verification for Liquid Avatars is provided through LAVCE. LAVCE is an "Always Active", biometrically based and blockchain powered digital identity validation and verification ecosystem that will

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allow Customers to continuously and confidently prove themselves throughout physical and online communities using their Self Sovereign Identity consisting of verifiable credentials and a digital wallet controlled by the individual. These credentials can be requested by a Verifier, like a merchant, government, or another application that requires the validation of a trustworthy digital identity, which is where biometrics become relevant. The credential is provided by Holder through the LAMA and the Holder can validate themselves with a Verifier that requires such validation. KABN ID has been merged into LAVCE and is no longer used from a brand perspective. There are currently no revenues associated with LAVCE. LAMA is free to download and use and will not generate revenue directly. Please see "Description of Business - Discussion of Significant Projects Without Revenue".

• LQID Card (formerly KABN Card): LQID Card is a physical prepaid debit card powered by OptimizeFT's Engage360 payment card and digital banking solutions platform that will potentially generate revenues from merchant transaction fees, as well as new, existing, and evolving financial services, and provides increased loyalty and engagement opportunities. Through partner managed platforms, the LQID Card allows Customers to hold a digital payment method, without needing a credit card account, and the ability to earn cashback and other loyalty incentives. The Company will share in transaction fees and commissions with the applicable card network. LQID Card will integrate seamlessly with the Liquid Avatar Mobile App, providing Customers with an easy way to apply for and access their LQID Card directly from their Liquid Avatar Mobile App. Applications for LQID Card accounts have not commenced to date. LQID Card is not currently operational and there are no revenues to date. Please see "Description of Business - Discussion of Significant Projects Without Revenue".
• LiquidShopz (formerly KABN KASH): is an exclusive and customized consumer experience where Customers will be able to earn cash back on transactions with over 600 major online merchants, such as Samsung, Sportchek and Nike Canada, that the Company has signed up through the Company's affiliate program. In an affiliate program, there is a broker for various online merchants. The Company has to be approved as a merchant for each brand. LiquidShopz has recently been rebranded as LiquidShopz to better align with the LQID Card branding. The Company has been approved by 600 major online merchants. LiquidShopz is a cashback, loyalty and engagement program offered to LQID Card holders that is a primary potential revenue program. Customers that obtain a LQID Card following launch will be able to shop at some of North America's top online merchants and receive cashback directly on their LQID Card. Customers will also receive updates on special offers and unique deals exclusive to LiquidShopz. Customers will be offered incentives to shop by way of discounts and cash back to the LQID Card based on spending volumes. When a registered LiquidShopz user purchases from a LiquidShopz retailer, the Company will earn a commission that it splits with the purchaser in the form of cash rebates paid to the LQID Card. Unlike points and many other loyalty programs, users receive real money as the reward for shopping and will also be able to earn points towards digital products and service for redemption. Since Holders are verified individuals as LAMA users, over time it can become potentially easier to create custom baskets of offers to suit an individual's needs, based on an individual's express permissions. LiquidShopz is not operational and any immaterial revenues to date have been from pilot transactions with some of the online merchants. LiquidShopz has no development to complete, as it is simply dependent on LQID Card being operational.

During Q1 and Q2 2021 the Company shifted its core focus from KABN ID to LAVCE, a far more robust platform and product offering as described above. Original components of KABN ID were incorporated into LAVCE, however new technologies and services have also been incorporated into the Liquid Avatar Platform. The Liquid Avatar Platform has a much larger scope to support identity, access and qualification verifiable credentials. LAVCE is made up of three "pillars", which are products and services to support Holders, Issuers and Verifiers of digital identity verifiable credentials, as explained herein.

LAVCE has various components from which revenue is expected to be derived. The Company can earn revenue from activities related to Customer (Holder) engagement with businesses (Issuers and Verifiers) and may potentially earn revenue through subscriptions by businesses or sponsorships from businesses (Issuers and Verifiers). When a Customer engages with the business, revenue is generated from affiliate fees and other fees, sponsorships and commissions that are paid by the business to the Company when a Customer, on a permission basis, engages with the business (Issuer or Verifier) within the Liquid Avatar Mobile App. In the event a business uses a LAVCE service like age verification, they may pay for those services by way of sponsorship, cost per action or through a 3rd party sponsorship that covers the cost per action or subscription fee. When the LQID Card is used by a consumer, certain interchange and banking fee shares will be earned by the Company.

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To have access to LAVCE, Verifiers and Issuers will have to be authenticated and will subscribe to a monthly SaaS plan for a monthly fee, which fee may be supplemented with usage charges, such as pay per use. Monthly fees may be offset or supplemented by fees from sponsors who have an interest in making sure that Holders meet the requirements of verification. LAVCE has currently not generated any revenues and is dependant on the combination of the adoption of Holders, Verifiers and Issuers being signed up and /or onboarded. There is therefore risk to the extent and timing of any revenues generated through LAVCE related to the rate at which Holders, Verifiers and Issuers are signed up and/or onboarded.

LAVCE and LAMA are expected to earn revenue from activities related to consumer engagement with businesses and may potentially earn revenue through subscriptions by businesses or sponsorships from businesses. When a consumer engages with a business within the LAMA. Potential revenue would be generated from affiliate fees and other fees, sponsorships and commissions that are paid to the Company by businesses when a consumer, on a permission basis, engages with the business. As mentioned above, when a retail partner sells products to a Holder, a potential portion of the sale is expected to be paid to the Company through its relationship with the vendor, affiliate program and / or sponsor. The precise arrangements will vary between retail partners and may be in the form of an affiliate fee - which is revenue sharing, or commission fee from a sale, if a Holder buys a product from a vendor associated with the LAMA program. The Company is anticipating revenue sharing of up to 20%. Sponsorships are an alternative source of revenue where, instead of paying a portion of the purchase price, a Vendor, organization or association may have an interest in one or more groups of Holders and may pay a fee to interact or support retailers on a permission-basis with the Holder. In the event a business uses a LAVCE-based services like age verification they may pay for those services by way of sponsorship, cost per action or through a 3rd party sponsorship that covers the cost per action or subscription fee.

The Company's Digital Identity business line is not subject to any special regulatory or quasi-regulatory requirements for approvals, licences or permits.

The Company's license with KABN Gibraltar (the "KABN Gibraltar License") enables the Company to exclusively operate LQID Card and LiquidShopz and use the KABN ID software service (now incorporated into LAVCE) for the North American region (Canada and the United States of America). KABN Gibraltar licensed components of this intellectual property from Crypto KABN Holdings Inc. to enable one direct license between KABN Gibraltar and the Company. As at September 30, 2022, Crypto KABN Holdings Inc. held 7.70% and KABN Gibcan Inc. held 7.92%, respectively, of the outstanding Common Shares of the Company. KABN Gibraltar controls KABN Gibcan Inc. and is beneficially owned by the Company's CEO and President.

Digital Items Agency

On March 9, 2021, the Company launched Oasis Digital Studios Limited ("Oasis"), an agency supporting artists and IP holders ("Talent"). Oasis is engaged to provide management, digital marketing, creative services, and work with producers of digital items, being those offered inside an online environment, such as a game, enhanced Non-Fungible Tokens ("NFTs"), avatars and related digital credentials on behalf of such Talent. Oasis deals exclusively with digital items and NFTs that are digital collectibles, and not with NFTs that could be securities. Oasis' services also include assistance with platform listing, management, and other creative, and avatar and digital icon services. Oasis is focused on program management for Talent, and only had one of its own projects late in 2021 being Aftermath Islands, which is not an Agency relationship (see below). Oasis is not the owner of the collectible being sold, which is owned by the Talent, and does not interact with purchasers of digital items and / or NFTs. Games, Metaverses and other platforms will sell the digital items and NFTs and will take fees for their services. Oasis does not own or operate, and is not affiliated, with any third party NFT sales platforms, outside of its ownership of Aftermath Islands. For 3rd party programs, a portion of the proceeds of any sale are paid to Oasis by the Talent as program management fees, with the Talent receiving the balance of the proceeds once hard costs of the specific project are paid. Oasis manages payments to Talent for the sale of a digital item or NFT following deductions by an independent third party NFT platform. Oasis earns its revenue out of the proceeds of the sale of digital items and / or NFTs for its support and management of various programs, avatar and other creative services, including digital marketing services to Talent and other agencies. Oasis' mandate is to provide agency services only, it does not directly mint, publish or activate digital items or NFTs.

The Oasis Digital Studios AR viewer app reveals hidden, and bonus content distributed by Talent. This technology supports AR enabled Digital Collectibles, NFTs, fan event experiences, scavenger hunts and contests. This is a feature that, on behalf of Oasis clients and other Company activities, is intended to help increase interest in the purchase from Talent of NFTs, and in other Oasis and promotional programs.

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To date, Oasis has been engaged by 9 clients, including, but not limited to May Pang, Ron Campbell, Lynn Mara, and the Outer Space Men, who have previously sold their NFTs across a number of NFT Platforms, including Wax and Sweet. Oasis' Digital Items Agency operations are considered an operating business although historical revenues have been limited. Oasis is also working to pursue other opportunities in the digital marketing and creative services arena to increase its potential opportunity for revenues, however most of its activities will continue to shift to support the efforts of Aftermath Islands and the growth if its Metaverse platform.

The Company's Digital Items Agency business line is not subject to any special regulatory or quasi-regulatory requirements for approvals, licences or permits.

Mixed Reality

Aftermath Islands was originally a project managed by Oasis during 2021. Aftermath Islands Metaverse Barbados Limited commenced activities as of January 1, 2022, and the intellectual property of Aftermath Islands was transferred to it. Through Oasis, the Company holds 50% of the equity of Aftermath Islands Metaverse Barbados Limited and has effective control.

Aftermath Islands Metaverse Limited is a controlled subsidiary of Oasis Digital Studios Limited with a 50% ownership interest and with a 50% non-controlling interest shareholder. The business and activities of Aftermath Islands continue to be fully controlled and operated by Oasis Digital Studios Limited as governed by the shareholder agreement entered into between Oasis Digital Studios Limited and the non-controlling interest shareholder. The fair value of the non- controlling interest was $nil on inception. There have been cumulative net losses in Aftermath Islands Metaverse Limited. Since these losses are the responsibility of the controlling shareholder, no non-controlling interest balance exists as at September 30, 2022. While not the responsibility of the non-controlling shareholder, total comprehensive loss attributable to the non-controlling interest is displayed on the interim condensed consolidated statement of loss and comprehensive loss.

Aftermath Islands is a planned metaverse, which will ultimately provide online users with theme-basedfirst-person, Augmented Reality (AR), Extended Reality (XR) and Virtual Reality (VR) experiences, quests, games, and integrated eCommerce activities, creating a virtual world supported by users and brands. While the sale of VL commenced in November 2021, to satisfy demand from users to acquire their initial holdings, full gameplay had not commenced, however early stage live Metaverse and gaming activity testing both internally and with invited independent individuals has commenced. Additional items such as thematic dwellings, accessories, avatars, wearables, etc. designed for each island, community and estate and users are in the planning stage and under development, along with other interactive items, which will also ultimately be available for sale as digital items connected to NFTs as part of the inventory control process of the Aftermath Islands Metaverse platform.

In Aftermath Islands' virtual world, users can buy, develop, trade, and sell Virtual Land (VL) and items like buildings, crafted items, transport, and other items all through in game marketplaces. Ownership of virtual and other items are recognized through blockchain technology and supported by an NFT, unique to each digital item. Each plot or parcel of VL is unique and owners are expected to have the opportunity to choose what content they want to publish on their VL based on future published guidelines. This can range from simple scenery and structures to an interactive game, store, warehouse, dwelling, facility, or destination. Users can also acquire VL through the existing website using fiat and approved other currencies through our third-party service providers. Aftermath Islands will "charge" users for certain services and in-game utility programs, including but not limited to professions creation and leveling, access to events and activities and other goods and services that can potentially enhance their in-game experiences.

Users can purchase VL as well as all other items and services in Aftermath Islands with "DUBS", the name for Aftermath Islands' in-game currency. DUBs are for in-game use only and cannot be transferred outside of the game. DUBs are not a cryptocurrency but use blockchain to record ownership and the unique nature of each collectible. Users can pay for virtual items and containers that contain DUBS through the Company's third party vendor with fiat currency or other select non fiat payments. What is permitted to be used is determined by such third-party vendors, however Aftermath Islands receives only fiat currency from these sales from such third-party vendors. DUBs can also be earned through game-play or exchanged between players within the game for certain articles (as contemplated by the in-game marketplace). The only currency that can be used in-game is DUBs.

All Aftermath Islands' players will also have to prove that they are a "real person" and have only a single account per person, through the creation of a Liquid Avatar account allowing them to manage their digital footprint and certain 'cross-over' assets and activities connecting their in-game activities to their real-world activities and engagement. Liquid Avatar's "Meta Park Pass", an innovative Web 3 based digital identity credential that allows