UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 7, 2021
| DAVIDsTEA Inc. |
| (Exact name of registrant as specified in its charter) |
| Canada |
| 98-1048842 |
| (State or other jurisdiction of incorporation) |
| (I.R.S. Employer Identification Number) |
001-37404
(Commission File Number)
| 5430 Ferrier, Town of Mount-Royal, |
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| Québec, Canada |
| H4P 1M2 |
| (Address of principal executive offices) |
| (Zip Code) |
(888) 873-0006
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common shares, no par value per share | DTEA | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.03 Bankruptcy or Receivership.
On May 7, 2021, DAVIDsTEA Inc. (the “Company”), a corporation incorporated under the Canada Business Corporations Act, announced that and it obtained an order (the “Order”) from the Québec Superior Court (the “Canadian Court”) authorizing the Company to file its Plan of Arrangement (the “Plan”) under the Companies’ Creditors Arrangement Act (Canada) (“CCAA”) and to call a creditors’ meeting to be held on June 11, 2021. The Plan to be submitted to the creditors for approval provides that the Company will distribute an aggregate amount of approximately CDN $18 million to its creditors and those of DAVIDsTEA (USA) Inc. (the “Subsidiary”), the Company’s wholly-owned U.S. subsidiary, in full and final settlement of all claims affected by the Plan. Under the CCAA, the Plan must be approved by a simple majority of creditors of the Company and of the Subsidiary, voting separately, whose claims are affected by the Plan, representing in each case at least two-thirds in dollar value of all such claims duly filed in accordance with the CCAA proceedings. The Order also extended to July 16, 2021 the stay of proceedings issued by the Canadian Court on July 8, 2020.
Item 7.01 Regulation FD Disclosure.
On May 7, 2021, the Company issued a press release announcing that the Canadian Court issued the Order.
A copy of the press release related to this announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference to this Item 7.01. The information contained in this Item, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for any purpose, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, regardless of any general incorporation language in any such filing.
Cautionary Forward-Looking Statements
This Current Report on Form 8-K includes statements that express our opinions, expectations, beliefs, plans or assumptions regarding future events or future results and there are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes”, “expects”, “may”, “will”, “should”, “approximately”, “intends”, “plans”, “estimates” or “anticipates” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our restructuring plan, the COVID-19 pandemic, our strategy of transitioning to e-commerce and wholesale sales, future sales through our e-commerce and wholesale channels, the closing of certain of our retail stores, future lease liabilities, our results of operations, financial condition, liquidity and prospects, the impact of the COVID-19 pandemic on the global macroeconomic environment, and our ability to avoid the delisting of the Company’s common stock by Nasdaq due to the restructuring or our inability to maintain compliance with Nasdaq listing requirements.
While we believe these opinions and expectations are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us, including the risk factors set forth in our annual report on Form 10-K for the fiscal year ended January 30, 2021, filed with the United States Securities and Exchange Commission (the “SEC”) on April 30, 2021.
These statements are based upon information available to us as of the date of this Current Report on Form 8-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially-available relevant information. In light of these risks, uncertainties and assumptions, investors are cautioned not to unduly rely upon these statements.
Except as required under federal securities laws and the rules and regulations of the SEC, we do not have any intention to update any forward-looking statements to reflect events or circumstances arising after the date of this Current Report on Form 8-K, whether as a result of new information, future events or otherwise.
| 2 |
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit No. |
| Description |
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| 3 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DAVIDsTEA INC. |
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| Date: May 11, 2021 | By: | /s/ Frank Zitella |
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| Name: | Frank Zitella |
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| Title: | President, Chief Financial and Operating Officer |
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| 4 |
EXHIBIT 99.1
DAVIDsTEA to Hold Creditors’ Meeting on June 11, 2021 for CCAA Plan of Arrangement
MONTREAL, May 7, 2021 - DAVIDsTEA Inc. (Nasdaq:DTEA) (“DAVIDsTEA” or the “Company”), a leading tea merchant in North America, announces that it today obtained an order from the Québec Superior Court authorizing the Company to file its Plan of Arrangement under the Companies’ Creditors Arrangement Act (“CCAA”) and to call a creditors’ meeting to be held on June 11, 2021 at 10 a.m. in virtual mode. The Court order also extended to July 16, 2021 the previously-announced stay of all proceedings against the Company under the CCAA.
As previously announced, the Plan of Arrangement to be submitted to creditors for approval on June 11, 2021 provides that DAVIDsTEA will distribute an aggregate amount of approximately CDN $18 million to its creditors and those of DAVIDsTEA (USA) Inc., the Company’s wholly-owned U.S. subsidiary, in full and final settlement of all claims affected by the Plan of Arrangement.
Under the CCAA, the Plan of Arrangement must be approved by a simple majority of creditors of DAVIDsTEA and of DAVIDsTEA (USA) Inc., voting separately, whose claims are affected by the Plan of Arrangement, representing in each case at least two-thirds in dollar value of all such claims duly filed in accordance with the CCAA proceedings.
PwC is acting as Court-appointed Monitor in the CCAA proceedings. All documents relating to the CCAA proceedings, including the Plan of Arrangement, are available at www.pwc.com/ca/davidstea. The Company will continue to provide updates throughout the CCAA restructuring process as events warrant.
DAVIDsTEA can provide no assurance that the proposed Plan of Arrangement will be accepted by the respective creditors of DAVIDsTEA Inc. and DAVIDsTEA (USA) Inc. on the terms set out therein, or at all.
Caution Regarding Forward-Looking Statements
This press release includes statements that express our opinions, expectations, beliefs, plans or assumptions regarding future events or future results and there are, or may be deemed to be, in this press release “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”). The following cautionary statements are being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the “safe harbor” provisions of the Act. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes”, “expects”, “may”, “will”, “should”, “approximately”, “intends”, “plans”, “estimates” or “anticipates” or, in each case, their negatives or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our proceedings under the CCAA, approval of the Plan of Arrangement by the creditors of DAVIDsTEA Inc. and DAVIDsTEA (USA) Inc., respectively, by the requisite majorities, the COVID-19 pandemic, our strategy of transitioning to e-commerce and wholesale sales, future sales through our e-commerce and wholesale channels, future lease liabilities, our results of operations, financial condition, liquidity and prospects, the impact of the COVID-19 pandemic on the global macroeconomic environment, and our ability to avoid the delisting of the Company’s common stock by Nasdaq due to the restructuring or our inability to maintain compliance with Nasdaq listing requirements.
While we believe these opinions and expectations are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about us, including the risk factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended January 30, 2021, filed with both the United States Securities and Exchange Commission and with the Autorité des marchés financiers, which could materially affect our business, financial condition or future results.
About DAVIDsTEA
DAVIDsTEA offers a specialty branded selection of high-quality proprietary loose-leaf teas, pre-packaged teas, tea sachets, tea-related accessories and gifts through its e-commerce platform at www.davidstea.com and the Amazon Marketplace, its wholesale customers which include over 2,500 grocery stores and pharmacies, and 18 company-owned stores across Canada. We offer primarily proprietary tea blends that are exclusive to DAVIDsTEA, as well as traditional single-origin teas and herbs. Our passion for and knowledge of tea permeates our culture and is rooted in an excitement to explore the taste, health and lifestyle elements of tea. With a focus on innovative flavours, wellness-driven ingredients and organic tea, the Company launches seasonally driven “collections” with a mission of making tea accessible to a wide audience. The Company is headquartered in Montréal, Canada.
| Investor Contact | Media Contact |
| Maison Brison Communications | PELICAN PR |
| Pierre Boucher | Lyla Radmanovich |
| 514-731-0000 | 514-845-8763 |
| investors@davidstea.com | media@rppelican.ca |
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