Diamond Estates adds details on Lassonde debenture vote

Executive Summary

• Diamond Estates Wines & Spirits Inc. is providing additional details regarding a shareholder resolution to approve the issuance of new replacement debentures to the Lassonde Group (controlled by Pierre-Paul Lassonde) and Lassonde Industries Inc.
• The transaction aims to extend payment dates on existing debentures to preserve cash and liquidity for operations.
• The Lassonde Group currently holds a controlling interest (52.28%) and would significantly increase its ownership to 65.78% (or 66.10% including all convertibles) upon conversion of the new debentures.

Key Details

• Transaction Purpose: Issuance of new replacement debentures to extend eventual payment dates, preserving cash and liquidity for operations.
• Counterparties: 3346625 Canada Inc. (entity controlled by Pierre-Paul Lassonde) and Lassonde Industries Inc.
• Existing Lassonde Holdings:
  • Convertible debentures with an aggregate principal amount of $3.35 million.
  • 34,964,330 common shares.
  • 874,603 deferred share units (DSUs).
• Current Ownership: The Lassonde Group owns 34,964,330 common shares, representing 52.28% of the 66,883,515 issued and outstanding shares.
• Post-Conversion Ownership Scenarios:
  • Debenture Conversion Only: Assuming a conversion price of 16.5 cents (closing price on Sept. 25, 2025), the Lassonde Group would acquire an additional 26,393,939 shares, bringing the total to 61,358,269 shares (65.78% of outstanding shares).
  • All Convertibles: Assuming conversion of all convertible securities (debentures, options, warrants, and DSUs), the Lassonde Group would hold 62,232,872 common shares, representing 66.10% of outstanding shares.
• Voting Exclusions: The 34,964,330 common shares held by the Lassonde Group, along with shares held by other debenture holders, are excluded from voting on this resolution. The company is unaware of other arm's-length debenture holders.
• Shareholder Meeting Details:
  • Date: Thursday, Oct. 30, 2025, at 10 a.m. ET.
  • Proxy Deadline: Votes submitted by proxy must be received by Tuesday, Oct. 28, 2025, at 10 a.m. ET.
  • Voting Methods: Electronic means, via intermediaries, online (using 12-digit control number), or by facsimile (416-595-9593).
  • Context: Company encourages early voting due to ongoing Canada Post service disruptions.

Notable Quotes

• "The company is seeking to extend the eventual payment dates of its debentures in order to preserve cash and liquidity for operations."