DAVIDsTEA Inc. (NASDAQ:DTEA) Files An 8-K Bankruptcy or Receivership
Item 1.03 Bankruptcy or Receivership.
On July 16, 2020, the Québec Superior Court (the “Canadian Court”) issued an amended and restated initial order (the “Amended and Restated Initial Order”) in the proceedings of DAVIDsTEA Inc. (the “Company”), a corporation incorporated under the Canada Business Corporations Act, and its wholly-owned subsidiary, DAVIDsTEA (USA), Inc. under the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”). The Amended and Restated Initial Order, among other things, extended to September 17, 2020 the application of the first day initial order issued by the Canadian Court on July 8, 2020, and addressed certain administrative matters.
Item 7.01 Regulation FD Disclosure.
On July 16, 2020, the Company issued a press release (i) announcing the Canadian Court entered the Amended and Restated Initial Order, and (ii) at the request of Nasdaq, confirming that the Company will not issue any new shares or create any new classes of stock in its restructuring under the CCAA and that the restructuring will not have an impact on the Company’s share structure.
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.
Item 8.01 Other Events.
On July 20, 2020, the Company issued a press release (the “Press Release”). The Press Release is required under Canadian law in connection with the 45-day extension for filing its Quarterly Report on Form 10-Q for the period ended May 2, 2020, originally due June 16, 2020, as set forth in the Company’s press release dated June 15, 2020, which was furnished as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated June 15, 2020. The Company confirmed that since June 15, 2020, the only material business developments are as set out in the Company’s material change report filed on SEDAR on July 14, 2020, reporting (i) the events set forth in the Company’s press release dated July 8, 2020, which was attached as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated July 9, 2020; (ii) the events set forth in the Company’s press release dated July 9, 2020, which was filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K dated July 10, 2020; (iii) with regards to the Company’s brick and mortar network in Canada, negotiations with landlords for the remaining 100 stores have started, although at this time the outcome of such discussions remains uncertain; and (iv) that to the extent the Company cannot reach agreements with the landlords on more favorable lease terms, the Company may terminate the leases and permanently close additional stores.
A copy of the Press Release related to this announcement is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference to this Item 8.01.
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 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 process, 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 February 1, 2020, filed with the United States Securities and Exchange Commission on June 16, 2020.
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.
DAVIDsTEA Inc. Exhibit
EX-99.1 2 dtea_ex991.htm PRESS RELEASE dtea_ex991.htmEXHIBIT 99.1 DAVIDsTEA Obtains Amended and Restated Court Order under CCAA MONTREAL,…
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About DAVIDsTEA Inc. (NASDAQ:DTEA)
DAVIDsTEA Inc. is engaged in the retail and online sale of tea, tea accessories, and food and beverages in Canada and in the United States. The Company’s segments include Canada and the U.S. The Company is a branded retailer of specialty tea, offering approximately 150 loose-leaf teas, pre-packaged teas, tea sachets and tea-related gifts, accessories, and food and beverages primarily through approximately 190 DAVIDsTEA stores, which are operated by the Company, and its Website, davidstea.com. Additionally, the Company offers on-the-go tea beverages in its retail stores. The Company’s tea accessories include tea mugs, travel mugs, teacup sets, teapots, tea makers, kettles, infusers, filters, frothers, tins and spoons. The Company offers beverages range from the standard hot or iced tea to its Tea Lattes. The Company’s different flavors of loose-leaf tea span eight tea categories: white, green, oolong, black, pu’erh, mate, rooibos and herbal tea.
