Subsequent Events:

• In May, 2024, the Company agreed to purchase D’Ont Poke the Bear inventory from Generations Wine Company Limited and entered into a licensing agreement with 3346625 Canada Inc., a corporation controlled by Mr. Pierre-Paul Lassonde which acquired the brand names and trademarks associated with D’Ont Poke the Bear.

• In May, 2024, the Ontario government updated to its December 2023 announcement with respect to significant policies and changes to an existing program intended to provide economic support to enhance the Ontario wine industry for the next five years. Under the revised Ontario VQA Support Program, the Company recorded $2.2 million in Q4 2024. In addition, this announcement is focused on improving and increasing distribution of beer, wine and cider in grocery, convenience and big box grocery stores across Ontario.

• On June 6, 2024, in accordance with the terms of the agreement, the Agency gave written notice to Renaissance to exercise a put-option, which the Company currently estimates will generate proceeds in the range of $3 million. The Company continues to work collaboratively with Renaissance and continues with its discussions around a potential merger.

"The Company has made considerable progress over the past year against its strategic and restructuring plans. We have been laser focused on the repayment of our long-term debt through the sale of non-strategic assets and ensuring a path to positive EBITDA and lower interest expense in the near future. We are adjusting our business model in response to the recent government announcements around the VQA program and its more recent retail modernization initiatives while preserving the long-term value of the Company. The agreement for the distribution rights of D’Ont Poke the Bear is the most recent demonstration of our core business focus driving increased EBITDA through significant capacity utilization and retail sales for our company," said Andrew Howard, President and CEO.

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, EastDell, Lakeview Cellars, Mindful, Shiny Apple Cider, Fresh, 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, Gabriel Meffre, and Andre Lurton wines from France, Merlet and Larsen Cognacs from France, Kaiken wines from Argentina, Blue Nun and Erben wines from Germany, Calabria Family Estate Wines, McWilliams Wines and Joiy Wines from Australia, Saint Clair Family Estate Wines and Yealands Family Wines from New Zealand, Cofradia Tequila from Mexico, Maverick Distillery spirits (including Tag Vodka and Barnburner Whisky) from Ontario, Talamonti, Cavit and Cielo wines from Italy, Catedral and Cabeca de Toiro wines from Portugal, Edinburgh Gin, Tamdhu, Glengoyne and Smokehead single-malt Scotch whiskies from Ian McLeod Distillers in Scotland, Islay Mist, Ryelaw, and Waterproof whiskies from MacDuff International in Scotland, C. Mondavi & Family wines including C.K Mondavi, Charles Krug, and Flat Top Hills from Napa Valley, Wize Spirits, Hounds Vodka, Walter Caesars, Glen Breton Whisky and Valley of Mother of God Gins from Canada, Bols Vodka from Amsterdam, Warsteiner Beers from Germany, Koyle Family Wines from Chile, Rossi D’Asiago Limoncello from Italy and Becherovka from Czechia.

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.

Non IFRS Financial Measure

Management uses net income (loss) and comprehensive income (loss) as presented in the unaudited interim condensed consolidated statements of net income (loss) and comprehensive income (loss) as well as "gross margin", "EBITDA" and "Adjusted EBITDA" as a measure to assess performance of the Company. The Company defines "gross margin" as gross profit excluding depreciation. EBITDA and "Adjusted EBITDA" are other financial measures and are reconciled to net income (loss) and comprehensive income (loss) below under "Results of Operations".

EBITDA and Adjusted EBITDA are supplemental financial measures to further assist readers in assessing the Company’s ability to generate income from operations before considering the Company's financing decisions, depreciation of property, plant and equipment and amortization of intangible assets. EBITDA comprises gross margin less operating costs before financial expenses, depreciation and amortization, non-cash expenses such as share-based compensation, one-time and other unusual items, and income tax. Adjusted EBITDA comprises EBITDA before non- recurring expenses including cost of sales adjustments related to inventory acquired in business combinations, EWG transaction costs expensed, cost of sales adjustment to fixed production overheads, and other non-recurring adjustments included in the calculation of EBITDA. Gross margin is defined as gross profit excluding depreciation on property, plant and equipment used in production. Operating expenses exclude interest, depreciation on property, plant and equipment used in selling and administration, and amortization of intangible assets.

EBITDA does not represent the actual cash provided by the operating activities nor is it a recognized measure of financial performance under IFRS. Readers are cautioned that this measure should not be considered as a replacement for those as per the consolidated financial statements prepared under IFRS. The Company's definitions of this non- IFRS financial measure may differ from those used by other companies.

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.

¹ See definition of selected terms under the heading "Non-IFRS Financial Measures"

View source version on businesswire.com: https://www.businesswire.com/news/home/20240704453013/en/

Contacts

Andrew Howard
President & CEO, Diamond Estates Wines & Spirits Inc.
[email protected]

Ryan Conte, CPA, CA, CBV
CFO, Diamond Estates Wines & Spirits Inc.
[email protected]