RYU Apparel Inc. — Capital/Financing Update 2020

Feb 11, 2020

FORM 51‐102F3 Material Change Report

1. Name and Address of Company

RYU Apparel Inc. (the “ Company ”) 1672 West 2nd Avenue Vancouver, BC V6J 1H4

2. Date of Material Change

December 23, 2019

3. News Release

The news release was disseminated through CNW on December 23, 2019.

4 Summary of Material Change

The Company announced that it completed a first tranche (the “First Tranche”) of the non‐brokered private placement financing of units (the “ Units ”) at a price of $0.03 per Unit (the “ Private Placement ”). The First Tranche consisted of 45,322,731 Units of the Company for aggregate gross proceeds of approximately $1,359,681.

Each Unit consisted of one common share of the Company (a “ Share ”) and one common share purchase warrant (a “ Warrant ”). Each Warrant will entitle the holder to purchase one additional Share at a price of $0.05 on or before December 20, 2021.

The Warrants are subject to accelerated expiry in the event the daily volume weighted average trading price of the Company’s common shares equals or exceeds $0.10 on the TSX Venture Exchange (the “ Exchange ”) (or such other exchange on which the common shares may be traded) for ten (10) consecutive trading days at any time after April 21, 2020 in which case, the Company may accelerate the expiry date of the Warrants by giving notice via news release to the holders thereof and, in such case, the Warrants will expire on the 30th day after the date on which the news release is disseminated by the Company.

In connection with the First Tranche of the Private Placement, the Company paid finder’s fees of $15,574.56 to a certain finder.

Completion of subsequent tranches of the Private Placement are subject to a number of conditions, including, without limitation, receipt of all regulatory approvals, including approval of the Exchange.

All securities issued in connection with the First Tranche of the Private Placement are subject to statutory hold period of four months plus a day in accordance with applicable securities legislation expiring on April 21, 2020.

The Company will use the net proceeds from the First Tranche for the purchase of inventory, store development, and general corporate purposes.

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5. Full Description of Material Change

5.1 Full Description of Material Change

See Item 4 above and the attached news release for a full description of the material change.

5.2 Disclosure for Restructuring Transactions

Not applicable.

6. Reliance on subsection 7.1(2) of National Instrument 51‐102

Not applicable.

7. Omitted Information

None.

8. Executive Officer

Marcello Leone, CEO, President and Chairman of the Board, 604.235.2880

9. Date of Report

February 10, 2020

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RYU APPAREL ANNOUNCES CLOSING OF NON‐BROKERED PRIVATE PLACEMENT

Vancouver, BC – December 23, 2019 – /CNW/ R Y U Apparel Inc. (TSX‐V: RY U , OTCQB: R Y PPF) (“ RYU” o r the “ Company ”), creators o f urban athle t ic apparel, is pleased to a n nounce that, further to its news release dated Novembe r 20, 2019, the Company has now closed a first tranche ( t he “ First Tranche ”) of the n on‐brokered p rivate placemen t financing of u nits (the “ Units ”) at a price of $0.03 per U nit (the “ Private Placement ”). The First T r anche consisted o f 45,322,731 Units of the C o mpany for ag g regate gross p roceeds of a p proximately $ 1,359,681.

Each Unit c onsisted of o n e common s h are of the Co m pany (a “ Share ”) and one c o mmon share purchase war r ant (a “ Warrant ” ). Each Warra n t will entitle t he holder to p urchase one a dditional Share at a price o f $0.05 on or b efore December 20, 2021.

The Warrants are subject to accelerat e d expiry in th e event the da i ly volume we i ghted averag e trading price of the Company’ s common shares equals or e xceeds $0.10 on the TSX V e nture Exchan g e (the “ Exchange ”) (or suc h other exchange o n which the c ommon shares may be trad e d) for ten (10 ) consecutive t rading days a t any time aft e r April 21, 2020 in which case, the Company may accelerate the expiry date of the W arrants by gi v ing notice vi a news release to the holders t h ereof and, in such case, th e Warrants wil l expire on th e 30th day aft e r the date on which the news r elease is disseminated by the Company.

In connec t ion with the F irst Tranche o f the Private P lacement, th e Company paid finder’s fees of $15,574. 5 6 to a certain fin d er.

Completion of subsequ e nt tranches o f the Private Placement ar e subject to a number of c o nditions, including, without li m itation, recei p t of all regulatory approval s , including ap p roval of the Exchange.

All securit i es issued in c onnection wi t h the First Tr a nche of the P rivate Place m ent are subj e ct to statutor y hold period of f our months plus a day in ac c ordance with applicable sec u rities legislat i on expiring o n April 21, 202 0 .

The Company will use t h e net procee d s from the Fi r st Tranche fo r the purchas e of inventory, store develo p ment, and gener a l corporate p u rposes.

On behalf of the Board

RYU APPAREL INC. “Ma r cello Leone” M arcello Leone, CEO Tel: 604 ‐ 235‐2880

Investor Relations Cont a ct: Anna Brazier Investor Relations

1‐844‐535 ‐ 2880 investo r s@ryu.com w w w.ryu.com

Neither th e TSX Venture Exchange nor its Regulation Services Prov i der (as that t e rm is defined in the policies of the TSX Ventu r e Exchange) a ccepts respon s ibility for the a dequacy or a c curacy of thi s release.

This news release cont a ins forward‐l o oking inform a tion that in v olves various risks and un c ertainties reg a rding future ev e nts. Such forward‐looking information c an include w i thout limitat i on statemen t s based on c urrent expectations involving a number of ri s ks and uncert a inties and ar e not guarant e es of future p erformance of RYU, such as s t atements th a t RYU intend s to undertak e subsequent tranches of t he Private Placement. There are

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numerous risks and uncertainties that could cause actual results and RYU’s plans and objectives to differ materially from those expressed in the forward‐looking information, including: (i) adverse market conditions; (ii) the inability of RYU to complete subsequent tranches of Financing at all or on the amended terms announced; or (iii) the Exchange not approving subsequent tranches of the Financing. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward‐looking information are based on estimates and opinions of management on the dates they are made and are expressly qualified in their entirety by this notice. Except as required by law, RYU does not intend to update these forward‐ looking statements.