Niagara-on-the-Lake, Ontario--(Newsfile Corp. - November 11, 2024) - Diamond Estates Wines & Spirits Inc. (TSXV: DWS) ("Diamond Estates" or the "Company") announces the replacement of $4.759 million aggregate principal amount of 10.0% unsecured convertible debentures of the Company, which includes the $2,850,000 aggregate principal amount of 10.0% unsecured convertible debentures of the Company issued to 3346625 Canada Inc. ("Lassonde Holding") and the $500,000 aggregate principal amount of 10.0% unsecured convertible debentures of the Company issued to Lassonde Industries Inc. ("Lassonde Industries", a joint actor of Lassonde Holding and together with Lassonde Holding, the "Lassonde Group") (the "2023ReplacementDebentures") with new debentures (the "2024 Replacement Debentures") maturing on November 9, 2025, the whole in accordance with the terms of the 2023 Replacement Debentures.
The material terms of the 2024 Replacement Debentures, including their principal amounts, are the same as the 2023 Replacement Debentures, other than (i) the conversion price, which is now $0.24, and (ii) the maturity date, which is now November 9, 2025.
Insiders of the Company subscribed for an aggregate of $3,350,000 in principal amount of 2024 Replacement Debentures. The issuance of the 2024 Replacement Debentures to such insiders (the "Insider Issuance") may be considered related party transactions within the meaning of TSXV Policy 5.9 and Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). As the Company's securities are listed on the TSXV, the Insider Issuance is exempt from the formal valuation requirements of MI 61-101 and is exempt from the minority shareholder approval requirements of MI 61-101 pursuant to subsection 5.5(a) of MI 61-101 because neither the fair market value of the Insider Issuance issued to such insiders nor the consideration to be paid by such insiders is expected to exceed 25% of the Company's market capitalization as determined in accordance with MI 61-101.
All securities issued in connection with the 2024 Replacement Debentures are subject to a four month and one day hold period from the date of issuance in accordance with Canadian securities laws. The issuance of the 2024 Replacement Debentures is subject to the final approval of the TSXV.
About Diamond Estates Wines and Spirits Inc.
Diamond Estates Wines and Spirits Inc. is a producer of high-quality wines and ciders as well as a sales agent for over 120 beverage alcohol brands across Canada. The Company operates four production facilities, three in Ontario and one in British Columbia, that produce predominantly VQA wines under such well-known brand names as 20 Bees, Creekside, D'Ont Poke the Bear, EastDell, Lakeview Cellars, Mindful, Shiny Apple Cider, Fresh Wines, Red Tractor, Seasons, Serenity and Backyard Vineyards.
Through its commercial division, 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 Fat Bastard, Meffre, Pierre Chavin and Andre Lurton wines from France, Brimincourt Champagne from France, Merlet and Larsen Cognacs from France, Kaiken wines from Argentina, Blue Nun and Erben wines from Germany, Calabria Family Estate Wines and McWilliams Wines from Australia, Saint Clair Family Estate Wines and Yealands Family Wines from New Zealand, Storywood and Cofradia Tequilas from Mexico, Maverick Distillery spirits (including Tag Vodka and Barnburner Whisky) from Ontario, Talamonti and Cielo wines from Italy, Catedral and Cabeca de Toiro wines from Portugal, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies from Scotland, Islay Mist, Grand MacNish and Waterproof whiskies from Scotland, C. Mondavi & Family wines including C.K Mondavi & Charles Krug from Napa and Hounds Vodka from Canada, Bols Vodka from Amsterdam, Koyle Family Wines from Chile, Pearse Lyons whiskies and gins from Ireland and McCormick Distilling International including Tequila Rose Strawberry Cream, Five Farms Irish Cream Liqueur, Broker's Gin, Hussong's Tequila, Tarantula Tequila, 360 Vodka and Holliday Bourbon.
Ryan Conte, CPA, CA, CBV Chief Financial Officer Diamond Estates Wines & Spirits Inc. rconte@diamondwines.com
Early Warning Disclosure
On November 8, 2024, Lassonde Holding, a corporation controlled by Mr. Pierre-Paul Lassonde, Chairman of the Board of Lassonde Industries, was issued a 2024 Replacement Debenture in the aggregate principal amount of $2,850,000 and Lassonde Industries was issued a 2024 Replacement Debenture in the aggregate principal amount of $500,000.
Prior to the issuance of the 2024 Replacement Debentures, Lassonde Industries directly owned 32,846,506 Common Shares, 1,123,958 warrants convertible into 1,123,958 Common Shares, $500,000 in principal amount of 2023 Replacement Debentures, 80,000 options exercisable for 80,000 Common Shares and 446,830 deferred share units which may be settled, at the discretion of the Company, for up to 446,830 Common Shares. Prior to the issuance of the 2024 Replacement Debentures, Lassonde Holding directly owned 2,117,824 Common Shares, $2,850,000 in principal amount of 2023 Replacement Debentures and 250,000 warrants convertible into 250,000 Common Shares. As such, prior to the issuance of the 2024 Replacement Debentures, the Lassonde Group, directly or indirectly, owned or controlled, 34,964,330 Common Shares, representing approximately 53.58% of the then issued and outstanding Common Shares, $3,350,000 in principal amount of 2023 Replacement Debentures, 80,000 options, 1,373,958 warrants and 446,830 deferred share units.
Following the issuance of the 2024 Replacement Debentures, based on the number of the issued and outstanding Common Shares and without additional issuance or conversion of securities (including the 2024 Replacement Debentures), the security holdings of the Lassonde Group in the Company have not changed, except that the Lassonde Group now owns $3,350,000 in principal amount of 2024 Replacement Debentures in lieu of the 2023 Replacement Debentures.
The 2024 Replacement Debentures are convertible into Common Shares. If Lassonde Holding was to convert all of its 2024 Replacement Debentures (exclusive of accrued interest), it would own, directly or indirectly, 14,242,824 Common Shares, representing approximately 19.21% of the issued and outstanding Common Shares (based on the then current number of issued and outstanding Common Shares, assuming no additional issuance or conversion) and if Lassonde Industries was to convert all of its 2024 Replacement Debentures (exclusive of accrued interest), it would own, directly or indirectly, 34,929,840 Common Shares, representing approximately 54.29% of the issued and outstanding Common Shares (based on the then current number of issued and outstanding Common Shares, assuming no additional issuance or conversion). Accordingly, the Lassonde Group would own, directly or indirectly, 49,172,664 Common Shares, representing approximately 64.52% of the issued and outstanding Common Shares (based on the then current number of issued and outstanding Common Shares, assuming no additional issuance or conversion).
The participation by Lassonde Group in the issuance of the 2024 Replacement Debentures was undertaken for investment purposes and to assist the Company with the execution of its strategic plan. The Lassonde Group may, from time to time, acquire additional securities of the Company for investment purposes and may, from time to time, increase or decrease its beneficial ownership or control of the Company depending on market or other conditions.
This news release is being issued as required by National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues and National Instrument 62-104 - Take-Over Bids and Issuer Bids and relates to: (a) Lassonde Holding, whose head office is located at 54 rang de la Montagne, Rougemont, Québec, J0L 1M0; and (b) Lassonde Industries, whose head office is located at 755 rue Principale, Rougemont, Québec, J0L 1M0. Copies of the early warning reports with additional information in respect of the foregoing matters will be available under the Company's profile on the SEDAR+ website at www.sedarplus.ca or by contacting:
For Lassonde Holding: Pierre Boulais, Financial Director 3346625 Canada Inc. 54 Rang de la Montagne, Rougemont, Québec, J0L 1M0 450-469-2912
For Lassonde Industries: Éric Gemme, Chief Financial Officer Lassonde Industries Inc. 755 rue Principale, Rougemont, Québec, J0L 1M0 450-469-4926, ext 10456
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. 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.
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.
THIS NEWS RELEASE IS NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. WIRE SERVICES
