Mr. Micah Anderson reports

LEEF BRANDS ANNOUNCES FULL EARLY CONVERSION OF CAD CONVERTIBLE DEBENTURES

Leef Brands Inc. has obtained the full early conversion of all outstanding Canadian-dollar-denominated convertible debentures, in principal amount together with accrued and unpaid interest of approximately $237,000, effective Dec. 15, 2025. This follows the full conversion of approximately $10.5-million (U.S.) in convertible debentures announced on Dec. 5, 2025.

The conversion was completed under amended incentive terms that offered debenture holders the opportunity to settle their debentures into units at a conversion price of 25 cents per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at 30 cents for a period of 36 months. Under the early settlement, approximately 946,309 units will be issued.

Strategic rationale

The full early conversion delivers several important benefits for Leef:

• Strengthens the balance sheet by eliminating the company's remaining Canadian-dollar convertible debenture debt. The company has two remaining pieces of real estate debt on its balance sheet: one note payable for $4.2-million at 4-per-cent interest and a second for $7-million at 0-per-cent interest.
• Improves financial flexibility as the company scales operations in California and New York, positioning Leef for strategic growth initiatives, including expanding Salisbury Canyon Ranch and its New York operations.
• Demonstrates continued support from long-standing debenture holders, many of whom have supported the company through multiple operating cycles.

This early conversion comes as the company's operational momentum builds, highlighted by 24-per-cent year-over-year revenue growth and a doubling of gross margins in Q3.

Management commentary

"With this milestone, the convertible debenture that originally helped capitalize the company has now been fully eliminated from our balance sheet," stated Micah Anderson, chief executive officer. "We're grateful to our debenture holders for their years of support and partnership. This marks the start of a new chapter, giving us the flexibility to strengthen and leverage our balance sheet as needed to support future growth and create long-term value."

The company has also announced that 6,081,053 restricted share units were exercised and settled in common shares of the company.

About Leef Brands, Inc.

Leef Brands is a vertically integrated, multistate cannabis operator focused on extraction, manufacturing, cultivation and product innovation. With operations in California and New York, Leef partners with top brands to deliver high-quality concentrates, ingredients and finished goods. The company's large-scale cultivation project at Salisbury Canyon Ranch and New York processing facility position Leef for sustainable growth across regulated markets.

We seek Safe Harbor.