Mr. Kevin O'Dowd reeports

LIBERTY DEFENSE CLARIFIES PREVIOUSLY ANNOUNCED CREDIT FACILITY AND TERM LOAN

Liberty Defense Holdings Ltd. has issued this clarifying news release requested by the TSX Venture Exchange regarding a credit facility and term loan entered into by the company with PFF LLC (Parabilis), previously announced on Aug. 22, 2024.

The company's wholly owned subsidiary, Liberty Defense Technologies Inc., and Parabilis entered into a loan and security agreement dated Aug. 19, 2024, as amended March 15, 2025, July 15, 2025, Aug. 14, 2025, and Sept. 1, 2025, pursuant to which Parabilis provided the subsidiary with a $1.8-million (U.S.) term loan and a $2.5-million (U.S.) revolving credit facility secured by substantially all of the subsidiary's assets, with the obligations of the subsidiary unconditionally guaranteed by the company. The credit facility and term loan were established to provide the company with additional working capital flexibility.

The credit facility bears interest at 14.99 per cent per annum and the term loan bears interest at 17.99 per cent per annum payable monthly in arrears. The term loan had a term of 104 weeks and was scheduled to mature on Aug. 15, 2026. The credit facility originally had a maturity date of Aug. 31, 2025, with an option to extend at Parabilis's sole discretion. On Sept. 1, 2025, the parties amended the credit facility by extending the maturity date to May 31, 2026, with automatic one-year renewals unless Parabilis provides 90 days of notice and the company agreeing to pay a 0.083-per-cent monthly commitment fee. On Aug. 14, 2025, the term loan was amended to provide for additional advances which contemplated total principal advances of approximately $2.9-million (U.S.), but only $650,000 (U.S.) in additional advances were financed, resulting in total funded principal advances of $2.45-million (U.S.) to the Subsidiary.

The borrowing base for the credit facility is determined based on the following percentages: 90 per cent of eligible billed receivables, 65 per cent of eligible unbilled receivables and 30 per cent of eligible delivery orders. The aggregate of eligible billed and unbilled receivables, along with eligible delivery orders, establishes the subsidiary's borrowing capacity under the credit facility. When invoicing occurs, payments on the invoices are applied directly to the outstanding principal and interest on the credit facility. As of the date of this news release, nil is outstanding under the credit facility, and all principal and accrued interest under the term loan has been fully repaid, and there is no outstanding balance under the term loan.

About Liberty Defense Holdings Ltd.

Liberty Defense provides multitechnology security solutions for concealed weapons detection in high-volume foot traffic areas and locations requiring enhanced security such as airports, stadiums, schools and more. Liberty'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 discrete, modular and scalable protection to provide layered, standoff detection capability of metallic and non-metallic weapons. Liberty has also recently licensed the millimeter wave-based, high-definition advanced imaging technology (HD-AIT) body scanner and shoe scanner technologies as part of its technology portfolio. Liberty is committed to protecting communities and preserving peace of mind through superior security detection solutions.

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