DAVIDsTEA INC. — Interim / Quarterly Report 2025

Sep 16, 2025

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DAVIDsTEA

DAVIDsTEA Inc.

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three and six-month periods ended August 2, 2025 and August 3, 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.

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DAVIDsTEA Inc.

Interim Consolidated Balance Sheets

(Unaudited, and amounts in thousands of Canadian dollars)

	Note	As at
		August 2, 2025 $	February 1, 2025 $
ASSETS
Current
Cash		7,646	16,187
Accounts and other receivables		1,797	1,775
Inventories		16,008	12,736
Prepaid expenses and deposits		2,206	1,468
Total current assets		27,657	32,166
Property and equipment		2,545	2,738
Right-of-use assets		11,112	12,662
Total assets		41,314	47,566
LIABILITIES AND EQUITY
Current
Trade and other payables		8,930	11,814
Deferred revenue		3,348	3,688
Current portion of lease liabilities		4,010	3,899
Total current liabilities		16,288	19,401
Non-current portion of lease liabilities		8,192	9,769
Total liabilities		24,480	29,170
Commitments
EQUITY
Share capital	4	115,207	115,015
Contributed surplus		1,542	1,641
Deficit		(103,168)	(101,491)
Accumulated other comprehensive income		3,253	3,231
Total equity		16,834	18,396
Total liabilities and equity		41,314	47,566

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

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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		For the six-months ended
		August 2, 2025 $	August 3, 2024 $	August 2, 2025 $	August 3, 2024 $
Sales	5,9	11,142	11,091	24,875	24,526
Cost of sales	6	5,884	5,840	12,714	13,455
Gross profit		5,258	5,251	12,161	11,071
Selling, general and administration expenses	7	6,666	6,714	13,598	15,161
Results from operating activities		(1,408)	(1,463)	(1,437)	(4,090)
Finance costs		209	119	426	265
Finance income		(55)	(95)	(135)	(219)
Net loss		(1,562)	(1,487)	(1,728)	(4,136)
Other comprehensive income (loss):
Cumulative translation adjustment		5	(8)	22	(19)
Other comprehensive income (loss), net of tax		5	(8)	22	(19)
Total comprehensive loss		(1,557)	(1,495)	(1,706)	(4,155)
Net loss per share:
Basic	8	(0.06)	(0.06)	(0.06)	(0.15)
Fully diluted	8	(0.06)	(0.06)	(0.06)	(0.15)
Weighted average number of shares outstanding:
Basic	8	27,061,525	26,910,288	27,005,094	26,879,739
Fully diluted	8	27,061,525	26,910,288	27,005,094	26,879,739

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

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DAVIDsTEA Inc.

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

	For the three-months ended		For the six-months ended
	August 2, 2025 $	August 3, 2024 $	August 2, 2025 $	August 3, 2024 $
OPERATING ACTIVITIES
Net loss	(1,562)	(1,487)	(1,728)	(4,136)
Items not affecting cash and other reconciling items:
Depreciation of property and equipment	163	—	324	—
Amortization of right-of-use assets	1,006	663	2,012	1,310
Impairment of property and equipment and intangible assets	—	312	—	773
Interest on lease liabilities	209	113	426	234
Amortization of financing fees	—	5	—	30
Stock-based compensation expense	217	38	293	126
Sub-total	33	(356)	1,327	(1,663)
Net change in non-cash working capital balances related to operations	(1,514)	(614)	(7,383)	(1,894)
Cash flows used in operating activities	(1,481)	(970)	(6,056)	(3,557)
FINANCING ACTIVITIES
Payment of lease liabilities	(1,178)	(780)	(2,354)	(1,560)
Cash flows used in financing activities	(1,178)	(780)	(2,354)	(1,560)
INVESTING ACTIVITIES
Additions to property and equipment	(97)	(312)	(131)	(773)
Cash flows used in investing activities	(97)	(312)	(131)	(773)
Decrease in cash during the period	(2,756)	(2,062)	(8,541)	(5,890)
Cash, beginning of the period	10,402	8,772	16,187	12,600
Cash, end of the period	7,646	6,710	7,646	6,710
Supplemental Information
Cash paid for:
Interest (classified as financing activities)	231	122	448	263
Cash received for:
Interest (classified as operating activities)	55	95	135	219

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

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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 six months ended August 2, 2025	—	—	(1,728)	—	(1,728)
Other comprehensive income	—	—	—	22	22
Total comprehensive (loss) income	—	—	(1,728)	22	(1,706)
Common shares issued on vesting of restricted stock units	192	(392)	51	—	(149)
Stock-based compensation expense	—	293	—	—	293
Balance, August 2, 2025	115,207	1,542	(103,168)	3,253	16,834
Balance, February 3, 2024	114,786	1,936	(98,486)	3,272	21,508
Net loss for the six-months ended August 3, 2024	—	—	(4,136)	—	(4,136)
Other comprehensive loss	—	—	—	(19)	(19)
Total comprehensive loss	—	—	(4,136)	(19)	(4,155)
Common shares issued on vesting of restricted stock units	202	(413)	188	—	(23)
Stock-based compensation expense	—	126	—	—	126
Balance, August 3, 2024	114,988	1,649	(102,434)	3,253	17,456

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

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DAVIDsTEA Inc.

Notes to Interim Consolidated Financial Statements

For the three and six-month periods ended August 2, 2025 and August 3, 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 and six-month periods ended August 2, 2025 and August 3, 2024, were approved and authorized for issue in accordance with a resolution of the Board of Directors on September 16, 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 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 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.

2. 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.

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

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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
	August 2, 2025	February 1, 2025
Share Capital	$ 115,207	$ 115,015
Common Shares	27,103,338	26,948,465

During the three and six-month period ended August 2, 2025, 117,600 and 154,873 common shares, respectively (August 3, 2024 – 46,401 and 70,342 common shares, respectively) were issued in relation to the vesting of restricted stock units ("RSU"), resulting in an increase in share capital of $77 and $192, net of tax respectively (August 3, 2024 – $128 and $202, net of tax respectively) and a reduction in contributed surplus of $157 and $392, respectively (August 3, 2024 – $262 and $413, respectively).

Stock-based compensation

As at August 2, 2025, 1,423,961 (August 3, 2024 – 1,044,497) common shares remain available for issuance under the 2015 Omnibus Plan.

No stock options were granted during the three-month periods ended August 2, 2025 and August 3, 2024.

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

	For the six-months ended
	August 2, 2025		August 3, 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
Granted	883,375	0.78	—	—
Forfeitures	(37,684)	(1.80)	(11,250)	(0.93)
Vested	(154,873)	(1.24)	(70,342)	(2.76)
Vested, withheld for tax	(161,205)	(1.24)	(73,237)	(2.76)
Outstanding, end of period	1,277,320	1.21	781,043	1.78

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

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5. REVENUE

	For the three-months ended		For the six-months ended
	August 2, 2025	August 3, 2024	August 2, 2025	August 3, 2024
	$	$	$	$
Online	5,119	5,485	11,535	12,225
Retail	4,570	4,188	9,836	8,716
Wholesale	1,453	1,418	3,504	3,585
	11,142	11,091	24,875	24,526

6. COST OF SALES

Included in cost of sales are the following expenses:

	For the three-months ended		For the six-months ended
	August 2, 2025	August 3, 2024	August 2, 2025	August 3, 2024
Cost of goods sold	3,278	3,106	7,017	7,366
Retail occupancy costs (1)	874	757	1,777	1,515
Delivery costs	679	758	1,615	1,928
Warehouse salaries, handling and other costs	1,053	1,219	2,305	2,646
	5,884	5,840	12,714	13,455

(1) During the three and six-month periods ended August 2, 2025, cost of sales includes variable rent of $302 and $635 respectively (August 3, 2024 - $251 and $519 respectively) and amortization of right-of-use assets of $567 and $1,134, respectively (August 3, 2024 - $501 and $988, respectively).

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1. SELLING, GENERAL AND ADMINISTRATION EXPENSES

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

	For the three-months ended		For the six-months ended
	August 2, 2025 $	August 3, 2024 $	August 2, 2025 $	August 3, 2024 $
Ongoing expenses
Wages, salaries and employee benefits	3,121	2,618	6,203	5,783
IT expenses (1)	684	1,788	1,568	3,660
Marketing expenses	1,117	625	2,425	1,566
Director & officer and other insurance	160	224	341	475
Professional and consulting fees	234	177	412	340
Credit card fees	258	175	518	385
Selling supplies	91	114	212	248
Stock-based compensation	217	38	293	126
Employee separation costs	55	80	344	80
Depreciation of property and equipment	163	—	324	—
Amortization right-of-use asset	29	—	59	—
Impairment of property and equipment and intangible assets	—	312	—	773
Professional fees incurred to secure financing	—	62	—	673
Other ongoing selling, general and administration	537	501	899	1,052
	6,666	6,714	13,598	15,161

(1) The Company reviewed certain previously recognized expenses and determined that $245 no longer represented obligations and were reversed.

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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		For the six-months ended
	August 2, 2025	August 3, 2024	August 2, 2025	August 3, 2024
Net loss for basic EPS	$(1,562)	$(1,487)	$(1,728)	$(4,136)
Weighted average number of shares outstanding:
Basic	27,061,525	26,910,288	27,005,094	26,879,739
Fully diluted	27,061,525	26,910,288	27,005,094	26,879,739
Net loss per share:
Basic	(0.06)	(0.06)	(0.06)	(0.15)
Fully diluted	(0.06)	(0.06)	(0.06)	(0.15)

For the quarters ended August 2, 2025, and August 3, 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 summarize revenue by geographic location of the Company's customers.

	For the three-months ended		For the six-months ended
	August 2, 2025	August 3, 2024	August 2, 2025	August 3, 2024
Canada	9,982	9,630	21,837	21,359
USA	1,160	1,461	3,038	3,167
	11,142	11,091	24,875	24,526