DAVIDsTEA INC. — Interim / Quarterly Report 2025

Jun 17, 2025

1

DAVIDsTEA

DAVIDsTEA Inc.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

May 3, 2025 and May 4, 2024

NOTICE

The accompanying unaudited condensed interim consolidated financial statements of DAVIDsSTEA Inc. (the "Company") have been prepared by and are the responsibility of the Company's management. The Company's independent auditor has not performed a review of these financial statements in accordance with standards established by the CPA Canada for a review of interim financial statements by an entity's auditor.

---

DAVIDsTEA Inc.

Interim Consolidated Balance Sheets

(Unaudited, and amounts in thousands of Canadian dollars)

	Note	As at
		May 3, 2025 $	February 1, 2025 $
ASSETS
Current
Cash		10,402	16,187
Accounts and other receivables		2,237	1,775
Inventories		12,989	12,736
Prepaid expenses and deposits		1,965	1,468
Total current assets		27,593	32,166
Property and equipment		2,611	2,738
Right-of-use assets		12,118	12,662
Total assets		42,322	47,566
LIABILITIES AND EQUITY
Current
Trade and other payables		7,527	11,814
Deferred revenue		3,376	3,688
Current portion of lease liabilities		3,993	3,899
Total current liabilities		14,896	19,401
Non-current portion of lease liabilities		9,179	9,769
Total liabilities		24,075	29,170
Commitments
EQUITY
Share capital	4	115,130	115,015
Contributed surplus		1,482	1,641
Deficit		(101,613)	(101,491)
Accumulated other comprehensive income		3,248	3,231
Total equity		18,247	18,396
Total liabilities and equity		42,322	47,566

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

---

DAVIDsTEA Inc.

Interim Consolidated Statements of Loss and Comprehensive Loss

(Unaudited and amounts in thousands of Canadian dollars, except share and per share information)

	Note	For the three-months ended
		May 3, 2025 $	May 4, 2024 $
Sales	5,9	13,518	13,435
Cost of sales	6	6,615	7,615
Gross profit		6,903	5,820
Selling, general and administration expenses	7	6,932	8,447
Results from operating activities		(29)	(2,627)
Finance costs		217	146
Finance income		(80)	(124)
Net loss		(166)	(2,649)
Other comprehensive income (loss):
Cumulative translation adjustment		17	(11)
Other comprehensive income (loss), net of tax		17	(11)
Total comprehensive loss		(149)	(2,660)
Net loss per share:
Basic	8	(0.01)	(0.10)
Fully diluted	8	(0.01)	(0.10)
Weighted average number of shares outstanding:
Basic	8	26,948,879	26,849,269
Fully diluted	8	26,948,879	26,849,269

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

---

DAVIDsTEA Inc.

Interim Consolidated Statements of Cash Flows
(Unaudited and amounts in thousands of Canadian dollars)

	For the three-months ended
	May 3, 2025 $	May 4, 2024 $
OPERATING ACTIVITIES
Net loss	(166)	(2,649)
Items not affecting cash and other reconciling items:
Depreciation of property and equipment	161	—
Amortization of right-of-use assets	1,006	647
Impairment of property and equipment and intangible assets	—	461
Interest on lease liabilities	217	121
Amortization of financing fees	—	25
Stock-based compensation expense	76	88
Sub-total	1,294	(1,307)
Net change in non-cash working capital balances related to operations	(5,869)	(1,280)
Cash flows used in operating activities	(4,575)	(2,587)
FINANCING ACTIVITIES
Payment of lease liabilities	(1,176)	(780)
Cash flows used in financing activities	(1,176)	(780)
INVESTING ACTIVITIES
Additions to property and equipment	(34)	(461)
Cash flows used in investing activities	(34)	(461)
Decrease in cash during the year	(5,785)	(3,828)
Cash, beginning of the year	16,187	12,600
Cash, end of the period	10,402	8,772
Supplemental Information
Cash paid for:
Interest (classified as financing activities)	217	141
Cash received for:
Interest (classified as operating activities)	80	124

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

---

DAVIDsTEA Inc.

Interim Consolidated Statements of Equity (Deficiency)

(Unaudited and amounts in thousands of Canadian dollars)

	Share capital $	Contributed surplus $	Deficit $	Accumulated other comprehensive income $	Total equity $
Balance, February 1, 2025	115,015	1,641	(101,491)	3,231	18,396
Net loss for the three-months ended May 3, 2025	—	—	(166)	—	(166)
Other comprehensive loss	—	—	—	17	17
Total comprehensive loss	—	—	(166)	17	(149)
Common shares issued on vesting of restricted stock units	115	(235)	44	—	(76)
Stock-based compensation expense	—	76	—	—	76
Balance, May 3, 2025	115,130	1,482	(101,613)	3,248	18,247
Balance, February 3, 2024	114,786	1,936	(98,486)	3,272	21,508
Net loss for the three-months ended May 4, 2024	—	—	(2,649)	—	(2,649)
Other comprehensive loss	—	—	—	(11)	(11)
Total comprehensive loss	—	—	(2,649)	(11)	(2,660)
Common shares issued on vesting of restricted stock units	74	(151)	66	—	(11)
Stock-based compensation expense	—	88	—	—	88
Balance, May 4, 2024	114,860	1,873	(101,069)	3,261	18,925

The accompanying notes are an integral part of these unaudited interim consolidated financial statements.

---

DAVIDsTEA Inc.
Notes to Interim Consolidated Financial Statements
For the three-month periods ended May 3, 2025 and May 4, 2024
(Unaudited and amounts in thousands of Canadian dollars, except share and per share information)

1. CORPORATE INFORMATION

The unaudited interim consolidated financial statements of DAVIDsTEA Inc. and its subsidiary, DAVIDsTEA (USA) Inc., (collectively, the "Company") for the three-month periods ended May 3, 2025 and May 4, 2024 were approved and authorized for issue in accordance with a resolution of the Board of Directors on June 17, 2025. The Company is incorporated and domiciled in Canada and its shares are publicly traded on the TSX Venture Exchange under the symbol "DTEA". The registered office is located at 5775, Ferrier Street, Town of Mount-Royal, Québec, Canada, H4P 1N3.

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 4,000 grocery stores and pharmacies, over 1,500 convenience stores in Canada and over 900 grocery stores in the United States, as well as 20 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 the Company's 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.

All monetary amounts shown, unless otherwise noted, are in thousands of Canadian dollars except share and per share information.

1. BASIS OF PREPARATION

These unaudited 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 February 1, 2025, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB. In management's opinion, the unaudited 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 interim consolidated financial statements have been prepared using the accounting policies and methods of computation as outlined in Note 3 of the audited consolidated financial statements for the year ended February 1, 2025.

6

---

7

3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of condensed interim consolidated financial statements requires management to make estimates and assumptions using judgment 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 4 of the audited consolidated financial statements for the year ended February 1, 2025.

4. SHARE CAPITAL

Issued and Outstanding

	As at
	May 3, 2025	May 4, 2024
Share Capital	$ 115,130	$ 114,860
Common Shares	26,985,738	26,872,678

During the three-month period ended May 3, 2025, 37,273 common shares (May 4, 2024 – 23,941 common shares) were issued in relation to the vesting of restricted stock units (“RSU”), resulting in an increase in share capital of $115, net of tax (May 4, 2024 – $74) and a reduction in contributed surplus of $235 (May 4, 2024 – $151).

Stock-based compensation

As at May 3, 2025, 1,124,936 (May 4, 2024 – 984,944) common shares remain available for issuance under the 2015 Omnibus Plan.

No stock options were granted during the three-month periods ended May 3, 2025 and May 4, 2024.

A summary of the status of the Company's 2015 Omnibus plan and changes during the three-month period are presented below.

	For the three-months ended
	May 3, 2025		May 4, 2024
	Units outstanding #	Weighted average fair value per unit (1) $	Units outstanding #	Weighted average fair value per unit (1) $
Outstanding, beginning of period	747,707	1.74	935,872	1.93
Forfeitures	(37,684)	(1.80)	—	—
Vested	(37,273)	(3.09)	(23,941)	3.09
Vested, withheld for tax	(38,805)	(3.09)	(24,934)	3.09
Outstanding, end of period	633,945	1.59	886,997	1.87

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

---

8

5. REVENUE

	For the three-months ended
	May 3, 2025	May 4, 2024
	$	$
Online	6,419	6,740
Retail	5,047	4,528
Wholesale	2,052	2,167
	13,518	13,435

6. COST OF SALES

Included in cost of sales are the following expenses:

	For the three-months ended
	May 3, 2025	May 4, 2024
	$	$
Cost of goods sold	3,524	4,260
Retail occupancy costs (1)	903	758
Delivery costs	936	1,170
Warehouse salaries, handling and other costs	1,252	1,427
	6,615	7,615

(1) As at May 3, 2025, includes variable rent of $333 and amortization of right-of-use assets of $567 (May 4, 2024 – $269 and $486, respectively).

---

9

7. SELLING, GENERAL AND ADMINISTRATION EXPENSES

Included in selling, general and administration expenses are the following expenses:

For the three-months ended
	May 3, 2025
$	May 4, 2024
$
Ongoing expenses
Wages, salaries and employee benefits	3,082	3,165
IT expenses	811	1,872
Marketing expenses	1,308	941
Director & officer and other insurance	181	251
Professional and consulting fees	178	163
Credit card fees	260	210
Selling supplies	121	134
Stock-based compensation	76	88
Depreciation of property and equipment	161	—
Amortization right-of-use asset	30	—
Other ongoing selling, general and administration	362	551
Sub-total	6,570	7,375
Non-recurring expenses
Impairment of property and equipment and intangible assets	—	461
Software implementation and configuration costs	73	—
Professional fees incurred to secure financing	—	611
Employee separation costs	289	—
Sub-total	362	1,072
	6,932	8,447

---

10

8. LOSS PER SHARE

The following reflects the loss and share data used in the basic and diluted EPS computations:

	For the three-months ended
	May 3, 2025 $	May 4, 2024 $
Net loss for basic EPS	(166)	(2,649)
Weighted average number of shares outstanding:
Basic	26,948,879	26,849,269
Fully diluted	26,948,879	26,849,269
Net loss per share:
Basic	(0.01)	(0.10)
Fully diluted	(0.01)	(0.10)

For the quarters ended May 3, 2025, and May 4, 2024, because of the net loss recorded during the period, the stock options and RSUs as disclosed in note 4 are anti-dilutive.

9. SEGMENT INFORMATION

The Company defines an operating segment on the same basis that it uses to evaluate performance internally and to allocate resources by the Chief Operating Decision Maker (the "CODM"). The Company has determined that the Chief Executive and Brand Officer is the CODM. In fiscal 2024, the Company has determined that it operates in one operating segment which includes all three sales channels; Online, Retail and Wholesale, based on how the CODM manages and evaluates the Company's performance for decision-making and to allocate resources.

All property and equipment and right-of use assets are located in Canada.

The following tables summaries revenue by geographic location of the Company's customers.

	For the three-months ended
	May 3, 2025 $	May 4, 2024 $
Canada	11,639	11,729
USA	1,879	1,706
	13,518	13,435