Diamond Estates Wines & Spirits Announces Signing of Definitive Agreements for the Acquisitions of the Equity Wine Group and the Shiny Apple Cider Brand

Niagara-on-the-Lake, Ontario--(Newsfile Corp. - September 24, 2021) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond " or "the Company") is pleased to announce that, further to its press release of August 5, 2021, it has signed definitive purchase agreements (the "Definitive Agreements") to acquire (i) all of the issued and outstanding securities of Equity Wine Group Inc., owners of the Creekside Estate Winery and Queenston Mile Vineyards wine and cider brands (the "Equity Wine Acquisition"), and (ii) the Shiny Apple craft cider brand from Stonechurch Vineyards and Winery Holdings ("Stonechurch", such acquisition being the "Stonechurch Acquisition", and together with the Equity Wine Acquisition, the ("Acquisitions"). Completion of the Acquisitions will be dependent on Diamond issuing a total of $8.5 million in equity (comprised of the conversion of approximately $1.8 million of currently outstanding convertible debentures, and the remainder to be issued through its previously announced private placement ) .

The Acquisitions are expected to be highly accretive to Diamond's current business, capture additional revenues, create brand expansion, further leverage the Company's infrastructure and deliver on cost saving synergies.

The terms and conditions of the Definitive Agreements, and the particulars of the Financing, are unchanged from those disclosed in the Company's August 5, 2021 press release, except in respect of the Stonechurch Acquisition, which terms have been modified in that transaction's Definitive Agreement as follows:

• the Company has agreed to pay Stonechurch aggregate consideration of $2.5 million, which is unchanged from the Company's prior announcement.
• However, the purchase price will now be satisfied by (i) a closing cash payment of $1.1 million; (ii) a $1.1 million earn-out payment (deposited into escrow by the Company on closing), payable quarterly over the course of 12 months following closing depending on sales targets being met, and (iii) a $300,000 inventory holdback.
• It remains a condition to closing that Diamond and Stonechurch enter into a production and co-packing agreement whereby Stonechurch will continue to produce the Shiny Apple Brand under Diamond's monitoring and oversight for a minimum period of 2 years.

The Acquisitions are subject to customary closing conditions, including of the approval of the TSX Venture Exchange and the Company's senior lender, Bank of Montreal, and closing of the private placement. The Company now expects to close the Acquisitions and the private placement on or around October 1, 2021. The Company expects the convertible debentures to be converted at the same time.

About Diamond Estates Wines and Spirits Inc.

Diamond Estates Wines and Spirits Inc. is a producer of high-quality wines and a sales agent for over 120 beverage alcohol brands across Canada. The Company operates two wineries, one in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, EastDell, Lakeview Cellars, Dan Aykroyd, Fresh, McMichael Collection, Seasons, Serenity, and Backyard Vineyards. Through its wholly owned subsidiary, Trajectory Beverage Partners, the Company is the sales agent for many leading international brands in all regions of the country as well as being a distributor in the western provinces. These recognizable brands include Josh wines from California, Fat Bastard and Andre Lurton wines from France, Kaiken wines from Argentina, Blue Nun wines from Germany, Francois Lurton wines from France and Argentina, Felix Solis wines from Spain, Waterloo Brewing from Ontario, Landshark Lager from the USA, Marston's beers from England, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies from Scotland, Barcelo Rum from the Dominican Republic, Becherovka Liqueur from the Czech Republic, C.K. Mondavi & Family wines (including Charles Krug) from Napa, Bols Vodka from Amsterdam, Koyle Family Wines from Chile, Pearse Lyons whiskies and gins from Ireland, Niagara Craft Distillers' beverages from Ontario, Fontana di Papa wines and Cielo e Terra wines from Italy.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Diamond Estates Wines and Spirits Inc. to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this press release. Such forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to the economy generally; consumer interest in the services and products of the Company; financing; competition; and anticipated and unanticipated costs. While the Company acknowledges that subsequent events and developments may cause its views to change, the Company specifically disclaims any obligation to update these forward-looking statements. These forward-looking statements should not be relied upon as representing the views of the Company as of any date subsequent to the date of this press release. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

FOFI Disclosure

This press release contains future‐oriented financial information and financial outlook information (collectively, "FOFI") about the Company's proposed acquisitions and their contributions to the Company's financial position, including future revenue and EBITDA, and components thereof, all of which are subject to the same assumptions, risk factors, limitations and qualifications as set forth above under "Forward-Looking Information". FOFI contained in this press release was approved by management as of the date of this press release and was included for the purpose of providing further information about the Company's anticipated acquisitions. The Company disclaims any intention or obligation to update or revise any FOFI contained in this press release, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained in this press release should not be used for purposes other than for which it is disclosed herein.

Not for dissemination in the United States

Not for dissemination in the United States or for distribution to U.S. newswire services. The securities offered have not been registered under the U.S. Securities Act of 1933, as amended (the " U.S. Securities Act "), or any applicable state securities laws and may not be offered or sold in the United States, or to, or for the account or benefit of, a person in the United States or a U.S. person (as defined in Regulation S under the U.S. Securities Act) absent registration under the U.S. Securities Act and any applicable state securities laws, or compliance with an exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

Not for dissemination in the United States or for distribution to U.S. newswire services.

For more information, please contact:

J. Murray Souter, President & CEO
[email protected]
905.641.1042 Ext 234

Ryan Conte, Chief Financial Officer
[email protected]
Phone: (905) 933-8244

Diamond Estates Wines & Spirits Inc.
1067 Niagara Stone Rd., Niagara-on-the-Lake, Ontario, L0S 1J0

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/97612