Mr. Andrew Howard reports

DIAMOND ESTATES WINES & SPIRITS ANNOUNCES PROPOSED CONVERSION OF DEBENTURE PRINCIPAL AND INTEREST

On Nov. 9, 2026, the aggregate principal amount of $4,654,000 outstanding under Diamond Estates Wines & Spirits Inc.'s 10.0 per cent unsecured convertible debentures will be converted into common shares of the company at a price of 22 cents per common share in accordance with the terms of the debentures. The principal conversion was previously approved by the TSX Venture Exchange and the company's shareholders.

The company also announces that it intends to convert $1,470,400 of accrued and unpaid interest owing under the debentures into common shares at a price per common share equal to the closing price of the common shares on Nov. 6, 2026, being 13 cents.

The interest is payable to 3346625 Canada Inc. and Lassonde Industries Inc. The amount payable to 3346625 Canada is $1.14-million, and the amount payable to Lassonde Industries is $330,400. The total represents accrued and unpaid interest payable through Nov. 9, 2026, the maturity date of the debentures.

The number of common shares to be issued in respect of the interest will be determined using the Nov. 6, 2026, closing price. The company is seeking approval from the TSX-V for the conversion of the interest into common shares. The common shares issued to settle the interest will be subject to a statutory hold period expiring four months and one day from the date of issuance in accordance with applicable securities laws and TSX-V policies.

Multilateral Instrument 61-101 disclosure

The participation of 3346625 Canada and Lassonde Industries, each a related party of the company, in each of the principal conversion and the interest conversion, constitutes a related-party transaction for the purposes of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) and TSX-V Policy 5.9. The company is relying on the exemption from the formal valuation requirement in Subsection 5.5(b) of MI 61-101 for both the principal conversion and the interest conversion, as the company's securities are listed on the TSX-V and are not listed or quoted on any of the specified markets set out in that subsection.

In respect of the principal conversion, the minority approval required under MI 61-101 was obtained at the company's annual general and special meeting of shareholders held on Oct. 30, 2025, in connection with the approval of the debentures and their conversion terms. The resolution was approved by a majority of the votes cast by disinterested shareholders, with the votes attached to common shares held by interested shareholders excluded.

In respect of the interest conversion, the company is relying on the exemption from the minority approval requirement in Subsection 5.7(1)(a) of MI 61-101 as neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the interest conversion, insofar as it involves related parties, exceeds 25 per cent of the company's market capitalization.

About Diamond Estates Wines & Spirits Inc.

Diamond Estates 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 facilities, three in Ontario and one in British Columbia, that produce predominantly VQA wines under such 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 serves as the sales agent for a wide range of leading international beverage brands.

Early warning disclosure

Prior to the principal conversion and interest conversion, Lassonde directly owns 32,846,506 common shares, $1,804,000 in principal amount of 10.0 per cent unsecured convertible debentures of Diamond Estates and 773,288 deferred share units, which may be settled, at the discretion of Diamond Estates for up to 773,288 common shares.

Additionally, 3346625 Canada, a corporation controlled by Pierre-Paul Lassonde and a joint actor of Lassonde, directly owns 2,117,824 common shares and $2.85-million in principal amount of 10.0 per cent unsecured convertible debentures of Diamond Estates.

As such, prior to the principal conversion and interest conversion, the Lassonde group holds 34,964,330 common shares, representing approximately 50.85 per cent (on a non-diluted basis) of the issued and outstanding common shares, $4,654,000 in principal amount of 10.0 per cent unsecured convertible debentures of Diamond Estates and 773,288 deferred share units.

Following the principal conversion and, subject to TSX-V approval, the interest conversion, Lassonde will directly own 43,588,045 common shares and 773,288 deferred share units, and Lassonde Holding will directly own 23,841,601 common shares. As such, subject to approval from the TSX-V of the interest conversion, the Lassonde group will hold 67,429,646 common shares, representing approximately 66.62 per cent (on a non-diluted basis) of the issued and outstanding common shares and 773,288 deferred share units.

The principal conversion and interest conversion are being completed in accordance with the settlement terms of the debentures. Such conversions must be completed pursuant to the terms of the debentures as repayment of the principal and accrued interest amounts thereunder would not be permitted under certain restrictive covenants contained in the company's credit facility with Bank of Montreal. The Lassonde group may, from time to time, acquire additional securities of Diamond Estates for investment purposes and to assist Diamond Estates with the execution of its strategic plan, and may, from time to time, increase or decrease its beneficial ownership or control of Diamond Estates depending on market or other conditions, general economic conditions, Diamond Estates' business and financial condition, and other factors.

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 Lassonde and Lassonde Holding. Copies of the early warning reports with additional information in respect of the foregoing matters will be available under Diamond Estates' profile on the SEDAR+ website.

We seek Safe Harbor.