0001477932-22-009260 | 10-Q | XBRL Viewer

NET (LOSS) EARNINGS PER SHARE

9 Months Ended

Oct. 29, 2022

7. NET (LOSS) EARNINGS PER SHARE

Basic Net (loss) earnings per share (“EPS”) amounts are calculated by dividing the Net (loss) income for the period attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period. Diluted EPS amounts are calculated by dividing the Net (loss) income attributable to ordinary equity holders by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares, unless these would be anti‑dilutive.

The following reflects the Net (loss) income and share data used in the basic and diluted EPS computations:

	For the three-months ended						For the nine-months ended
	October 29,			October 30,			October 29,			October 30,
	2022			2021			2022			2021
	$			$			$			$
Net (loss) income for basic EPS		(4,717	)		(1,864	)		(11,526	)		76,836
Weighted average number of shares outstanding:
Basic		26,566,441			26,359,969			26,493,484			26,300,289
Fully diluted		26,566,441			26,359,969			26,493,484			27,584,128
Net (loss) earnings per share:
Basic		(0.18	)		(0.07	)		(0.44	)		2.92
Fully diluted		(0.18	)		(0.07	)		(0.44	)		2.79

NET (LOSS) EARNINGS PER SHARE (Details) $ / shares in Units, $ in Thousands	3 Months Ended				9 Months Ended
	Oct. 29, 2022 CAD ($) $ / shares shares	Oct. 29, 2022 $ / shares	Oct. 30, 2021 CAD ($) $ / shares shares	Oct. 30, 2021 $ / shares	Oct. 29, 2022 CAD ($) $ / shares shares	Oct. 29, 2022 $ / shares	Oct. 31, 2021 CAD ($) shares	Oct. 31, 2021 $ / shares	Oct. 30, 2021 $ / shares shares
Net Earnings (loss) For Basic Eps \| $	$ (4,717)		$ (1,864)		$ (11,526)		$ 76,836
Basic	26,566,441		26,359,969		26,493,484		26,300,289		26,300,289
Fully Diluted	26,566,441		26,359,969		26,493,484		27,584,128		27,584,128
Net Earnings (loss) Per Share:
Basic \| (per share)	$ (0.18)	$ (0.18)	$ (0.07)	$ (0.07)	$ (0.44)	$ (0.44)		$ 2.92	$ 2.92
Fully Diluted \| (per share)	$ (0.18)	$ (0.18)	$ (0.07)	$ (0.07)	$ (0.44)	$ (0.44)		$ 2.79	$ 2.79

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - CAD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 30, 2021
OPERATING ACTIVITIES
Net (loss) income	$ (4,717)	$ (1,864)	$ (11,526)	$ 76,836
Items not affecting cash:
Depreciation of property and equipment	90	398	254	1,193
Amortization of intangible assets	138	403	415	1,290
Amortization of right-of-use assets	656	242	1,975	536
Impairment of property and equipment and right-of-use assets	258	0	258	0
Gain on liabilities subject to compromise, including the recovery of income taxes	0	0	0	(79,861)
Interest on lease liabilities	156	50	490	83
Amortization of Financing Fees	31	0	31	0
Stock-based compensation expense	355	392	1,063	937
Sub-total	(3,033)	(379)	(7,040)	1,014
Net change in non-cash working capital balances related to operations	869	1,932	463	(17,233)
Cash flows (used in) provided by operating activities	(2,164)	1,553	(6,577)	(16,219)
FINANCING ACTIVITIES
Payment of lease liabilities	(753)	(237)	(2,271)	(559)
Cash flows used in financing activities	(753)	(237)	(2,271)	(559)
INVESTING ACTIVITIES
Additions to property and equipment	0	0	(128)	(52)
Cash flows used in investing activities	0	0	(128)	(52)
(Decrease) increase in cash during the period	(2,917)	1,316	(8,976)	(16,830)
Cash, beginning of the period	19,048	12,051	25,107	30,197
Cash, end of the period	16,131	13,367	16,131	13,367
Cash paid for:
Interest (other than lease liabilities)	0	0	0	0
Income taxes (classified as operating activity)	0	0	0	0
Cash received for:
Interest	92	7	203	101
Income taxes (classified as operating activity) 1	$ 0	$ 0	$ 0	$ 0

CONTINGENCIES (Details Narrative)	Jul. 08, 2020 USD ($)
CONTINGENCIES (Details Narrative)
Claim amount from third party	$ 350,000

Cover - shares	9 Months Ended
Cover - shares	Oct. 29, 2022	Dec. 09, 2022
Cover [Abstract]
Entity Registrant Name	DAVIDsTEA Inc.
Entity Central Index Key	0001627606
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--01-29
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Oct. 29, 2022
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		26,571,035
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-37404
Entity Incorporation State Country Code	Z4
Entity Tax Identification Number	98-1048842
Entity Address Address Line 1	5430 Ferrier
Entity Address Address Line 2	Mount-Royal
Entity Address City Or Town	Québec
Entity Address Country	CA
Entity Address Postal Zip Code	H4P 1M2
City Area Code	888
Local Phone Number	873-0006
Security 12b Title	Common shares, no par value per share
Security Exchange Name	NASDAQ
Trading Symbol	DTEA
Entity Interactive Data Current	Yes

SELLING GENERAL AND ADMINISTRATION EXPENSES (Details) - CAD ($)	3 Months Ended		9 Months Ended
	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 30, 2021
Wages, Salaries And Employee Benefits	$ 3,542,000	$ 3,589,000	$ 10,493,000	$ 10,413,000
IT ongoing expenses	1,726,000	1,815,000	5,017,000	4,639,000
Marketing Expenses	1,229,000	1,618,000	4,893,000	4,263,000
Software Implementation and configuration costs	1,142,000	641,000	3,222,000	3,095,000
Credit Card Fees	329,000	447,000	1,006,000	1,426,000
Director & officer and other insurance	214,000	362,000	904,000	927,000
Professional and consulting fees	477,000	380,000	1,153,000	1,635,000
Depreciation Of Property And Equipment	90,000	398,000	254,000	1,193,000
Amortization Of Intangible Assets	138,000	403,000	415,000	1,290,000
Amortization Right-of-use Asset	656,000	242,000	1,975,000	536,000
Impairment of property and equipment and right-of-use assets	258,000	0	258,000	0
Stock-based Compensation	355,000	392,000	1,063,000	937,000
Other Selling, General And Administration	769,000	713,000	2,131,000	2,521,000
Sub-total	10,925,000	11,000,000	32,784,000	32,875,000
Government Emergency Wage And Rent Subsidies	0	(758,000)	0	(4,354,000)
SELLING, GENERAL AND ADMINISTRATION EXPENSES	$ 10,925	$ 10,242	$ 32,784	$ 28,521

RELATED PARTY DISCLOSURES (Details Narrative) - CAD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 30, 2021
Merchandise purchased for resale	$ 92	$ 77	$ 136	$ 306
Administrative services	2	$ 11	12	$ 23
Accounts and other receivables	4		4
Trade and other payables Outstanding	$ 118		$ 118

SHARE CAPITAL (Details Narrative) - CAD ($)	3 Months Ended		9 Months Ended
SHARE CAPITAL (Details Narrative) - CAD ($)	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 30, 2021
Statement [Line Items]
Stock-based compensation expense	$ 355,000	$ 392,000	$ 1,063,000	$ 937,000
Common shares issued on vesting of restricted stock units, value			(341,000)	(740,000)
Options [Member]
Statement [Line Items]
Reduction in the contributed surplus	62,000	0	$ 732,000	$ 485,000
2015 Omnibus Plan [Member]
Statement [Line Items]
Maximum number of shares available for issuance			397,974	777,709
Restricted Stock Units (RUS) [Member]
Statement [Line Items]
Common shares issued on vesting of restricted stock units, value	$ 30,000	$ 0	$ 358,000	$ 239,000
Common Shares Issued On Vesting Of Restricted Stock Units, Shares	9,291	0	147,318	125,387

SHARE CAPITAL Parenthetical (Details) - shares shares in Thousands	Oct. 29, 2022	Jan. 29, 2022
Common shares	26,571,035	26,423,717

SELLING GENERAL AND ADMINISTRATION EXPENSES

9 Months Ended

Oct. 29, 2022

SELLING, GENERAL AND ADMINISTRATION EXPENSES

5. SELLING, GENERAL AND ADMINISTRATION EXPENSES

The Company qualified in Fiscal 2021 for the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy under the COVID-19 Economic Response Plan of the Government of Canada. During the three and nine-month periods ended October 29, 2022, the Company recognized payroll and rent subsidies of $nil (October 30, 2021 - $0.8 and $4.4 million, respectively).

	For the three-months ended					For the nine-months ended
	October 29,		October 30,			October 29,		October 30,
	2022		2021			2022		2021
	$		$			$		$
Wages, salaries and employee benefits		3,542		3,589			10,493		10,413
IT ongoing expenses		1,726		1,815			5,017		4,639
Marketing expenses		1,229		1,618			4,893		4,263
Software implementation and configuration costs		1,142		641			3,222		3,095
Credit card fees		329		447			1,006		1,426
Director & officer and other insurance		214		362			904		927
Professional and consulting fees		477		380			1,153		1,635
Depreciation of property and equipment		90		398			254		1,193
Amortization of intangible assets		138		403			415		1,290
Amortization right-of-use asset		656		242			1,975		536
Impairment of property and equipment and right-of-use assets		258		—			258		—
Stock-based compensation		355		392			1,063		937
Other selling, general and administration		769		713			2,131		2,521
Sub-total		10,925		11,000			32,784		32,875
Government emergency wage and rent subsidy		—		(758	)		—		(4,354	)
		10,925		10,242			32,784		28,521

CORPORATE INFORMATION

9 Months Ended

Oct. 29, 2022

CORPORATE INFORMATION

1. CORPORATE INFORMATION

The unaudited condensed interim consolidated financial statements of DAVIDsTEA Inc. and its subsidiary DAVIDsTEA (USA) Inc. (collectively, the “Company”) for the three and nine-month periods ended October 29, 2022 and October 30, 2021 were authorized for issue by the Board of Directors on December 13, 2022. The Company is incorporated and domiciled in Canada and its shares are publicly traded on the Nasdaq Global Market under the symbol “DTEA”. The registered office is located at 5430 Ferrier St., Town of Mount-Royal, Québec, Canada, H4P 1M2.

The Company 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 3,800 grocery stores and pharmacies, and 18 Company-owned stores across Canada. The Company offers primarily proprietary tea blends that are exclusive to the Company, 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 fun and accessible to all.

Sales fluctuate from quarter to quarter. Sales are traditionally highest in the fourth fiscal quarter due to the year-end holiday season and tend to be lowest in the second and third fiscal quarters because of lower customer engagement during the summer months.

SHARE CAPITAL

9 Months Ended

Oct. 29, 2022

SHARE CAPITAL

4. SHARE CAPITAL

Authorized

An unlimited number of common shares.

Issued and outstanding

	October 29,		January 29,
	2022		2022
	$		$
Share Capital - (26,571,035) Common shares (January 29, 2022 - 26,423,717)		113,892		113,534

During the three and nine-month periods ended October 29, 2022, 9,291 and 147,318 common shares, respectively (October 30, 2021 – nil and 125,387 common shares, respectively), were issued in relation to the vesting of restricted stock units (“RSU”), resulting in an increase in share capital of $30 and $358, net of tax (October 30, 2021 – $nil and $239, net of tax, respectively) and a reduction in contributed surplus of $62 and $732, respectively (October 30, 2021 – $nil and $485, respectively).

Stock-based compensation

As at October 29, 2022, 397,974 (October 30, 2021, 777,709) common shares remain available for issuance under the 2015 Omnibus Plan.

No stock options were granted during the three and nine-month periods ended October 29, 2022 and October 30, 2021. A summary of the status of the Company’s stock option plan and changes during the nine-month periods is presented below.

For the nine-months ended

October 29,

October 30,

2022

2021

Weighted

average

Options

exercise

Options

exercise

outstanding

price

outstanding

price

Outstanding and exercisable - beginning and end of period

3,490

14.39

9,490

8.01

A summary of the status of the Company’s RSU plan and changes during the nine-month periods are presented below.

For the nine-months ended

October 29,

October 30,

2022

2021

Weighted

average

RSUs

fair value

RSUs

fair value

outstanding

per unit (1)

outstanding

per unit (1)

Outstanding, beginning of period

1,282,790

2.60

1,306,101

1.70

Granted

833,764

1.99

727,217

4.55

Forfeitures

(43,857

)

1.66

(174,041

)

(2.56

)

Vested

(147,318

)

2.40

(125,387

)

(1.91

)

Vested, withheld for tax

(153,382

)

2.40

(130,562

)

(1.91

)

Outstanding, end of period

1,771,997

2.35

1,603,328

2.86

_____________

(1)	Weighted average fair value per unit as at date of grant.

During the three and nine-month periods ended October 29, 2022, the Company recognized a stock-based compensation expense of $355 and $1,063, respectively (October 30, 2021 – $392 and $937, respectively).

SHARE CAPITAL (Details) - CAD ($) $ in Thousands	Oct. 29, 2022	Jan. 29, 2022
Share Capital - (26,561,744) Common shares (January 29, 2022 - 26,423,717)	$ 113,892	$ 113,534

SEGMENT INFORMATION (Tables)

9 Months Ended

Oct. 29, 2022

Schedule of derives revenue

For the three-months ended

For the nine-months ended

October 29,

October 30,

October 29,

October 30,

2022

2021

2022

2021

Tea

14,084

19,054

45,159

55,192

Tea accessories

1,859

2,723

5,442

8,129

Food and beverages

233

426

1,069

874

16,176

22,203

51,670

64,195

Schedule of operating activities before corporate expenses

For the three-months ended

For the nine-months ended

October 29, 2022

Canada

Consolidated

Canada

Consolidated

Sales

12,899

3,277

16,176

42,302

9,368

51,670

Cost of sales

7,968

1,926

9,894

24,539

5,577

30,116

Gross profit

4,931

1,351

6,282

17,763

3,791

21,554

Selling, general and administration expenses (allocated)

2,818

377

3,195

9,156

1,364

10,520

Results from operating activities before corporate expenses

2,113

974

3,087

8,607

2,427

11,034

Selling, general and administration expenses (non-allocated)

7,730

22,264

Results from operating activities

(4,643

)

(11,230

)

Finance costs

194

532

Finance income

(120

)

(236

)

Net loss before income taxes

(4,717

)

(11,526

)

	For the three-months ended							For the nine-months ended
	October 30, 2021							October 30, 2021
	Canada		US		Consolidated			Canada		US		Consolidated
	$		$		$			$		$		$
Sales		17,948		4,255		22,203			51,124		13,071		64,195
Cost of sales		10,891		2,696		13,587			29,480		7,336		36,816
Gross profit		7,057		1,559		8,616			21,644		5,735		27,379
Selling, general and administration expenses (allocated)		3,129		430		3,559			8,020		1,519		9,539
Results from operating activities before corporate expenses		3,928		1,129		5,057			13,624		4,216		17,840
Selling, general and administration expenses (non-allocated)						6,683							18,982
Restructuring plan activities, net						195							(76,964	)
Results from operating activities						(1,821	)						75,822
Finance costs						71							104
Finance income						(28	)						(118	)
Net (loss) income before income taxes						(1,864	)						75,836

SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)

9 Months Ended

Oct. 29, 2022

Schedule of selling, general and administrative expenses

	For the three-months ended					For the nine-months ended
	October 29,		October 30,			October 29,		October 30,
	2022		2021			2022		2021
	$		$			$		$
Wages, salaries and employee benefits		3,542		3,589			10,493		10,413
IT ongoing expenses		1,726		1,815			5,017		4,639
Marketing expenses		1,229		1,618			4,893		4,263
Software implementation and configuration costs		1,142		641			3,222		3,095
Credit card fees		329		447			1,006		1,426
Director & officer and other insurance		214		362			904		927
Professional and consulting fees		477		380			1,153		1,635
Depreciation of property and equipment		90		398			254		1,193
Amortization of intangible assets		138		403			415		1,290
Amortization right-of-use asset		656		242			1,975		536
Impairment of property and equipment and right-of-use assets		258		—			258		—
Stock-based compensation		355		392			1,063		937
Other selling, general and administration		769		713			2,131		2,521
Sub-total		10,925		11,000			32,784		32,875
Government emergency wage and rent subsidy		—		(758	)		—		(4,354	)
		10,925		10,242			32,784		28,521

NET (LOSS) EARNINGS PER SHARE (Tables)

9 Months Ended

Oct. 29, 2022

Schedule of reconciliation of basic and diluted EPS

	For the three-months ended						For the nine-months ended
	October 29,			October 30,			October 29,			October 30,
	2022			2021			2022			2021
	$			$			$			$
Net (loss) income for basic EPS		(4,717	)		(1,864	)		(11,526	)		76,836
Weighted average number of shares outstanding:
Basic		26,566,441			26,359,969			26,493,484			26,300,289
Fully diluted		26,566,441			26,359,969			26,493,484			27,584,128
Net (loss) earnings per share:
Basic		(0.18	)		(0.07	)		(0.44	)		2.92
Fully diluted		(0.18	)		(0.07	)		(0.44	)		2.79

INTERIM CONSOLIDATED STATEMENTS OF EQUITY (Deficiency) (Unaudited) - CAD ($) $ in Thousands	Total	Contributed Surplus [Member]	Retained Earnings (Accumulated Deficit)	Accumulated other comprehensive loss	Share Capital [Member]
Balance, Amount at Jan. 30, 2021	$ (31,291)	$ 1,747	$ (148,068)	$ 1,863	$ 113,167
Statement [Line Items]
Net income for the nine months ended October 30, 2021	76,836	0	76,836	0	0
Other comprehensive income	999	0	0	999	0
Total comprehensive income	77,835	0	76,836	999	0
Common shares issued on vesting of restricted stock units	(740)	(485)	(494)	0	239
Stock-based compensation expense	937	937	0	0	0
Balance, amount at Oct. 30, 2021	46,741	2,199	(71,726)	2,862	113,406
Balance, Amount at Jan. 29, 2022	48,315	2,507	(70,671)	2,945	113,534
Statement [Line Items]
Other comprehensive income	316	0	0	316	0
Total comprehensive income	(11,210)	0	(11,526)	316	0
Common shares issued on vesting of restricted stock units	(341)	(732)	33	0	358
Stock-based compensation expense	1,063	1,063	0	0	0
Net loss for the nine months ended October 29, 2022	(11,526)	0	(11,526)	0	0
Balance, amount at Oct. 29, 2022	$ 37,827	$ 2,838	$ (82,164)	$ 3,261	$ 113,892

- Definition

The amount of change in equity resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners.

+ References + Details

- Definition

The amount of residual interest in the assets of the entity after deducting all its liabilities.

+ References + Details

CONTINGENCIES

9 Months Ended

Oct. 29, 2022

CONTINGENCIES

CONTINGENCIES

11. CONTINGENCIES

The Company is subject to a claim amounting to $350,000 from a third-party service provider for which services were rendered prior to July 8, 2020, when the Company announced it was implementing the Restructuring Plan under the Companies’ Creditors Arrangement Act. At this stage, it is too early to determine whether the claim has a legal merit and the final amount of settlement, if any.

SEGMENT INFORMATION

9 Months Ended

Oct. 29, 2022

SEGMENT INFORMATION

10. SEGMENT INFORMATION

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. The Company has two operating segments, Canada, and the U.S., that derive their revenues from various distribution channels including online, retail and wholesale. The Company’s Chief Executive and Brand Officer and President, Chief Financial and Operating Officer (the chief operating decision makers or “CODM”) make decisions about resources to be allocated to the segments and assesses performance, and for which discrete financial information is available.

The Company derives revenue from the following products:

For the three-months ended

For the nine-months ended

October 29,

October 30,

October 29,

October 30,

2022

2021

2022

2021

Tea

14,084

19,054

45,159

55,192

Tea accessories

1,859

2,723

5,442

8,129

Food and beverages

233

426

1,069

874

16,176

22,203

51,670

64,195

All property and equipment, right-of-used assets and intangible assets are located in Canada.

Results from operating activities before corporate expenses per country are as follows:

For the three-months ended

For the nine-months ended

October 29, 2022

Canada

Consolidated

Canada

Consolidated

Sales

12,899

3,277

16,176

42,302

9,368

51,670

Cost of sales

7,968

1,926

9,894

24,539

5,577

30,116

Gross profit

4,931

1,351

6,282

17,763

3,791

21,554

Selling, general and administration expenses (allocated)

2,818

377

3,195

9,156

1,364

10,520

Results from operating activities before corporate expenses

2,113

974

3,087

8,607

2,427

11,034

Selling, general and administration expenses (non-allocated)

7,730

22,264

Results from operating activities

(4,643

)

(11,230

)

Finance costs

194

532

Finance income

(120

)

(236

)

Net loss before income taxes

(4,717

)

(11,526

)

	For the three-months ended							For the nine-months ended
	October 30, 2021							October 30, 2021
	Canada		US		Consolidated			Canada		US		Consolidated
	$		$		$			$		$		$
Sales		17,948		4,255		22,203			51,124		13,071		64,195
Cost of sales		10,891		2,696		13,587			29,480		7,336		36,816
Gross profit		7,057		1,559		8,616			21,644		5,735		27,379
Selling, general and administration expenses (allocated)		3,129		430		3,559			8,020		1,519		9,539
Results from operating activities before corporate expenses		3,928		1,129		5,057			13,624		4,216		17,840
Selling, general and administration expenses (non-allocated)						6,683							18,982
Restructuring plan activities, net						195							(76,964	)
Results from operating activities						(1,821	)						75,822
Finance costs						71							104
Finance income						(28	)						(118	)
Net (loss) income before income taxes						(1,864	)						75,836

SHARE CAPITAL (Tables)

9 Months Ended

Oct. 29, 2022

Summary of authorized, issued, and outstanding shares

	October 29,		January 29,
	2022		2022
	$		$
Share Capital - (26,571,035) Common shares (January 29, 2022 - 26,423,717)		113,892		113,534

Summary of stock option plan and periodic changes

For the nine-months ended

October 29,

October 30,

2022

2021

Weighted

average

Options

exercise

Options

exercise

outstanding

price

outstanding

price

Outstanding and exercisable - beginning and end of period

3,490

14.39

9,490

8.01

Summary of the status of the RSU plan and periodic changes

For the nine-months ended

October 29,

October 30,

2022

2021

Weighted

average

RSUs

fair value

RSUs

fair value

outstanding

per unit (1)

outstanding

per unit (1)

Outstanding, beginning of period

1,282,790

2.60

1,306,101

1.70

Granted

833,764

1.99

727,217

4.55

Forfeitures

(43,857

)

1.66

(174,041

)

(2.56

)

Vested

(147,318

)

2.40

(125,387

)

(1.91

)

Vested, withheld for tax

(153,382

)

2.40

(130,562

)

(1.91

)

Outstanding, end of period

1,771,997

2.35

1,603,328

2.86

SIGNIFICANT ACCOUNTING JUDGEMENTS ESTIMATES AND ASSUMPTIONS

9 Months Ended

Oct. 29, 2022

SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

3. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of condensed interim consolidated financial statements requires management to make estimates and assumptions using judgments that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense during the reporting period. Estimates and other judgments are continually evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. Actual results may differ from those estimates.

In preparing these unaudited condensed interim consolidated financial statements, critical judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those referred to in Note 5 of the consolidated financial statements for the year ended January 29, 2022.

SHARE CAPITAL (Details 1) - $ / shares	9 Months Ended
SHARE CAPITAL (Details 1) - $ / shares	Oct. 29, 2022	Oct. 30, 2021
Outstanding and exercisable - beginning and end of period	3,490	9,490
Outstanding and exercisable, weighted average exercise price	$ 14.39	$ 8.01

RESTRUCTURING PLAN ACTIVITIES Net (Details Narrative)	3 Months Ended			6 Months Ended	9 Months Ended
RESTRUCTURING PLAN ACTIVITIES Net (Details Narrative)	Oct. 29, 2022 CAD ($)	Oct. 30, 2021 CAD ($)	Oct. 30, 2021 CAD ($)	Jul. 31, 2021 CAD ($)	Oct. 29, 2022 CAD ($)	Oct. 30, 2021 CAD ($)	Oct. 30, 2021 USD ($)	Jul. 08, 2020 CAD ($)
Statement [Line Items]
Professional fees	$ 477,000		$ 380,000		$ 1,153,000	$ 1,635,000
Companies CreditorArrangement Act [Member]
Statement [Line Items]
Gain on the settlement of liabilities				$ 76,900,000
Net (loss) gain on settlement of restructuring liability		$ (195)					$ (76,964)
Company creditor								$ 17,600,000
Professional fees		195					1,897
Gain from recovery of income taxes		$ 0					$ 1,000

SEGMENT INFORMATION (Details) - CAD ($) $ in Thousands	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details) - CAD ($) $ in Thousands	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 30, 2021
Statement [Line Items]
Revenue	$ 16,176	$ 22,203	$ 51,670	$ 64,195
Tea [Member]
Statement [Line Items]
Revenue	14,084	19,054	45,159	55,192
Tea accessories [Member]
Statement [Line Items]
Revenue	1,859	2,723	5,442	8,129
Food and beverages [Member]
Statement [Line Items]
Revenue	$ 233	$ 426	$ 1,069	$ 874

RELATED PARTY DISCLOSURES

9 Months Ended

Oct. 29, 2022

RELATED PARTY DISCLOSURE

8. RELATED PARTY DISCLOSURES

Transactions with related parties are measured at the exchange amount, being the consideration established and agreed to by the related parties.

During the three and nine-month periods ended October 29, 2022, the Company purchased merchandise for resale amounting to $92 and $136, respectively (October 30, 2021 - $77 and $306, respectively) and provided infrastructure and administrative services of $2 and $12, respectively (October 30, 2021 - $11 and $23, respectively) to a company controlled by one of its executive employees. As of October 29, 2022, an amount of $4 was outstanding and presented in Accounts and other receivables. As of October 29, 2022, an amount of $118 was outstanding and presented in Trade and other payables.

REVOLVING LINE OF CREDIT (Details Narrative)	1 Months Ended
REVOLVING LINE OF CREDIT (Details Narrative)	Aug. 23, 2022
REVOLVING LINE OF CREDIT (Details Narrative)
Revolving line of credit description	on demand with the Bank of Nova Scotia was established for up to $15.0 million, less a reserve of $0.5 million for credit cards based on eligible accounts receivable and inventory balances and subject to financial covenants required to be calculated and met starting January 28, 2023.

REVOLVING LINE OF CREDIT

9 Months Ended

Oct. 29, 2022

REVOLVING LINE OF CREDIT

9. REVOLVING LINE OF CREDIT

On August 23, 2022, a revolving line of credit on demand with the Bank of Nova Scotia was established for up to $15.0 million, less a reserve of $0.5 million for credit cards based on eligible accounts receivable and inventory balances and subject to financial covenants required to be calculated and met starting January 28, 2023. The credit facility will bear interest at the prime rate plus 1%, renewable annually at the lender’s option. In addition, Investissement Québec has provided a loan loss guarantee under its “Loan Loss Program”, securing 50% of any loss incurred by the Bank of Nova Scotia with respect to the recovery of indebtedness under the line of credit.

BASIS OF PREPARATION

9 Months Ended

Oct. 29, 2022

BASIS OF PREPARATION

2. BASIS OF PREPARATION

These unaudited condensed interim consolidated financial statements have been prepared in accordance with IAS 34, “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”). Accordingly, these financial statements do not include all the financial statement disclosures required for annual financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the year ended January 29, 2022, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB. In management’s opinion, the unaudited condensed interim consolidated financial statements reflect all the adjustments that are necessary for a fair presentation of the results for the interim period presented. These unaudited condensed interim consolidated financial statements have been prepared using the accounting policies and methods of computation as outlined in Note 3 of the consolidated financial statements for the year ended January 29, 2022.

Certain comparatives figures related to current and prior year’s quarters have been reclassified to conform with the current quarter’s presentation.

CORPORATE INFORMATION (Details Narrative)	9 Months Ended
CORPORATE INFORMATION (Details Narrative)	Oct. 29, 2022
Address Of Entity's Registered Office	5430 Ferrier St., Town of Mount-Royal, Québec, Canada, H4P 1M2

SEGMENT INFORMATION (Details 1) - CAD ($)	3 Months Ended		9 Months Ended
SEGMENT INFORMATION (Details 1) - CAD ($)	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 31, 2021	Oct. 30, 2021
Statement [Line Items]
Sales	$ 16,176,000	$ 22,203,000	$ 51,670,000		$ 64,195,000
Cost Of Sales	9,894,000	13,587,000	30,116,000		36,816,000
Gross profit	6,282,000	8,616,000	21,554,000		27,379,000
Selling, General And Administration Expenses (allocated)	10,925	10,242	32,784		28,521
Results from operating activities	(4,643,000)	(1,821,000)	(11,230,000)		$ 75,822,000
Operating Segments [Member] \| Canada Segment [Member]
Statement [Line Items]
Sales	12,899,000	17,948,000	42,302,000	$ 51,124,000
Cost Of Sales	7,968,000	10,891,000	24,539,000	29,480,000
Gross profit	4,931,000	7,057,000	17,763,000	21,644,000
Selling, General And Administration Expenses (allocated)	2,818,000	3,129,000	9,156,000	8,020,000
Results From Operating Activities Before Corporate Expenses	2,113,000	3,928,000	8,607,000	13,624,000
Operating Segments [Member] \| Consolidated Segments [Member]
Statement [Line Items]
Sales	16,176,000	22,203,000	51,670,000	64,195,000
Cost Of Sales	9,894,000	13,587,000	30,116,000	36,816,000
Gross profit	6,282,000	8,616,000	21,554,000	27,379,000
Selling, General And Administration Expenses (allocated)	3,195,000	3,559,000	10,520,000	9,539,000
Results From Operating Activities Before Corporate Expenses	3,087,000	5,057,000	11,034,000	17,840,000
Selling, General And Administration Expenses (non-allocated)	7,730,000	6,683,000	22,264,000	18,982,000
Restructuring Plan Activities, Net		195,000		(76,964,000)
Results from operating activities	(4,643,000)	(1,821,000)	(11,230,000)	75,822,000
Finance Costs	194,000	71,000	532,000	104,000
Finance Income	(120,000)	(28,000)	(236,000)	(118,000)
Net Income (loss) Before Income Taxes	(4,717,000)	(1,864,000)	(11,526,000)	75,836,000
Operating Segments [Member] \| United States Segment [Member]
Statement [Line Items]
Sales	3,277,000	4,255,000	9,368,000	13,071,000
Cost Of Sales	1,926,000	2,696,000	5,577,000	7,336,000
Gross profit	1,351,000	1,559,000	3,791,000	5,735,000
Selling, General And Administration Expenses (allocated)	377,000	430,000	1,364,000	1,519,000
Results From Operating Activities Before Corporate Expenses	$ 974,000	$ 1,129,000	$ 2,427,000	$ 4,216,000

RESTRUCTURING PLAN ACTIVITIES NET

9 Months Ended

Oct. 29, 2022

RESTRUCTURING PLAN ACTIVITIES, NET

6. RESTRUCTURING PLAN ACTIVITIES, NET

On July 8, 2020, the Company announced that it was implementing a restructuring plan (the “Restructuring Plan”) under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”) in order to accelerate its transition to predominantly an online retailer and wholesaler of high-quality tea and accessories. At the creditors’ meeting held on June 11, 2021, the Plan of Arrangement was approved by the requisite majorities of creditors of the Company. As a result, the Company was required to and paid approximately $17.6 million to its creditors in full and final settlement and recorded a net gain of $76.9 million in the second quarter of Fiscal 2021.

The Plan of Arrangement was approved by the Company’s creditors on June 11, 2021 and on September 9, 2021, the Monitor filed a Certificate of Termination with the Québec Superior Court in accordance with paragraph 24 of the Sanction Order and declared the CCAA proceedings were terminated without further act or formality.

During the three-and nine-month periods ended October 30, 2021, the Company recorded a net (loss) gain on the settlement of liabilities subject to compromise of negative $195 and $76,964, respectively net of professional fees in connection with the CCAA proceedings of $195 and $1,897, respectively and before a gain from the recovery of income taxes of $nil and $1,000, respectively. This net gain is presented in the interim consolidated statement of income (loss) and comprehensive income (loss) in Restructuring Plan activities, net and Recovery of income taxes.

SHARE CAPITAL (Details 2) - $ / shares	9 Months Ended
SHARE CAPITAL (Details 2) - $ / shares	Oct. 29, 2022	Oct. 30, 2021
Outstanding, beginning of year	1,282,790	1,306,101
Granted	833,764	727,217
Forfeitures	(43,857)	(174,041)
Vested	(147,318)	(125,387)
Vested, withheld for tax	(153,382)	(130,562)
Outstanding, end of year	1,771,997	1,603,328
Weighted average fair value per unit, beginning of period	$ 2.60	$ 1.70
Granted	1.99	4.55
Forfeitures	1.66	(2.56)
Vested	2.40	(1.91)
Vested, withheld for tax	2.40	(1.91)
Weighted average fair value per unit, end of period	$ 2.35	$ 2.86

SELLING GENERAL AND ADMINISTRATION EXPENSES (Details Narrative) - CAD ($)	3 Months Ended		9 Months Ended
	Oct. 29, 2022	Oct. 30, 2021	Oct. 29, 2022	Oct. 30, 2021
Recognized payroll and rent subsidies	$ 0	$ 800,000	$ 0	$ 4,400,000

INTERIM CONSOLIDATED BALANCE SHEETS - CAD ($) $ in Thousands	Oct. 29, 2022	Jan. 29, 2022
Current
Cash	$ 16,131	$ 25,107
Accounts and other receivables	3,937	3,209
Inventories	29,985	31,048
Prepaid expenses and deposits	6,137	4,142
Total current assets	56,190	63,506
Property and equipment	576	775
Intangible assets	1,818	2,234
Right-of-use assets	9,990	12,087
Total assets	68,574	78,602
Current
Trade and other payables	14,445	12,300
Deferred revenue	5,472	5,434
Current portion of lease liabilities	2,540	2,364
Total current liabilities	22,457	20,098
Non-current portion of lease liabilities	8,290	10,189
Total liabilities	30,747	30,287
Equity
Share capital	113,892	113,534
Contributed surplus	2,838	2,507
Deficit	(82,164)	(70,671)
Accumulated other comprehensive income	3,261	2,945
Total equity	37,827	48,315
Total liabilities and equity	$ 68,574	$ 78,602

INTERIM CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME (Unaudited) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 29, 2022 CAD ($) $ / shares shares	Oct. 30, 2021 CAD ($) $ / shares shares	Oct. 29, 2022 CAD ($) $ / shares shares	Oct. 30, 2021 CAD ($) $ / shares shares
INTERIM CONSOLIDATED STATEMENTS OF NET (LOSS) INCOME AND COMPREHENSIVE (LOSS) INCOME (Unaudited)
Sales	$ 16,176	$ 22,203	$ 51,670	$ 64,195
Cost of sales	9,894	13,587	30,116	36,816
Gross profit	6,282	8,616	21,554	27,379
Selling, general and administration expenses	10,925	10,242	32,784	28,521
Restructuring plan activities, net	0	195	0	(76,964)
Results from operating activities	(4,643)	(1,821)	(11,230)	75,822
Finance costs	194	71	532	104
Finance income	(120)	(28)	(236)	(118)
Net income (loss) before income taxes	(4,717)	(1,864)	(11,526)	75,836
Recovery of income taxes	0	0	0	(1,000)
Net (loss) income	(4,717)	(1,864)	(11,526)	76,836
Other comprehensive income:
Cumulative translation adjustment	286	(13)	316	999
Other comprehensive income, net of tax	286	(13)	316	999
Total comprehensive (loss) income	$ (4,431)	$ (1,877)	$ (11,210)	$ 77,835
Net (loss) earnings per share:
Basic \| (per share)	$ (0.18)	$ (0.07)	$ (0.44)	$ 2.92
Fully diluted \| (per share)	$ (0.18)	$ (0.07)	$ (0.44)	$ 2.79
Weighted average number of shares outstanding:
Basic 1 \| shares	26,566,441	26,359,969	26,493,484	26,300,289
Fully diluted 2 \| shares	26,566,441	26,359,969	26,493,484	27,584,128