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Of San Francisco, Engaged To Help Us Identify New Strategic Opportunities.

“From March 1, 2009 through to the end of our last reported quarter we have (all amounts in Cdn$): Purchased almost $4,000,000 in new capital equipment, primarily to invest in our bottling plant and equipment to make us a more attractive partner to our customers, and new technology that facilitated the launch of the WaterBox(TM); Eliminated our long term debt of approximately $6,500,000; Repurchased almost 30% of Leading Brand’s issued and outstanding shares; Returned 85% of our net income to shareholders through the repurchase of shares; Increased the Company’s working capital by more than $2,000,000; and All while we developed an exciting new brand and packaging format for the Company, accomplished using existing cash flow. “As a result, we are in a strong position to grow Leading Brands and create value for all shareholders. We are focused on realizing the benefits of our new contract with our largest customer, ensuring a successful North American-wide roll-out of HappyWater(R) and the careful consideration of potential new strategic initiatives utilizing the expertise of an experienced investment banker. Considering New Initiatives “With our business strengthened and positioned for growth, our investment banker’s broad mandate includes, as a top priority, finding us an acquisition target involving one or more healthy, fast-growing food or beverage brands that have a strong foothold in the US market and a proven ability to execute there. “We have structured the contract with Merriman & Co. so that virtually all of their compensation is tied to results. While there is no certainty that a transaction will take place, we believe that we should be searching for good fits that will supplement our current business and accelerate our market penetration and development, particularly in the United States.

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