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): August 6,
2020

DAVIDsTEA Inc.
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(Exact name of
registrant as specified in its charter)
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Canada
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98-1048842
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(State or other
jurisdiction of incorporation)
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(I.R.S. Employer
Identification Number)
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001-37404
(Commission File
Number)
5430
Ferrier,
Town of
Mount-Royal,
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Québec,
Canada
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H4P
1M2
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(Address of principal
executive offices)
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(Zip Code)
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(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:
☐
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Written communications pursuant to
Rule 425 under the Securities Act (17 CFR 230.425) |
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☐
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Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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☐
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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
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Trading Symbol(s)
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Name of each exchange on
which registered
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Common shares, no par
value per share
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DTEA
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NASDAQ Global Market
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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 3.01 Notice of
Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing
On
August 6, 2020, DAVIDsTEA Inc., a corporation incorporated under
the Canada Business Corporations Act (the “Company”),
received a notification letter (the “Stockholders’ Equity Notice”)
from the Listing Qualifications Staff (the “Staff”) of the Nasdaq
Stock Market LLC (“Nasdaq”) indicating that the Company’s
stockholders’ equity of $(17,604,000), as reported in its Quarterly
Report on Form 10-Q for the period ended May 2, 2020 does not
satisfy the Nasdaq Global Market continued listing requirement set
forth in Nasdaq Listing Rule 5450(b)(1)(A), which requires
companies listed on the Nasdaq Global Market to maintain a minimum
of $10,000,000 in stockholders’ equity. The Stockholders’ Equity
Notice has no immediate effect on the listing of the Company’s
common stock, and its common stock will continue to trade on the
Nasdaq Global Market under the symbol “DTEA” at this time.
The
Company has 45 calendar days from the date of the Stockholders’
Equity Notice to submit to Nasdaq a plan to regain compliance with
Nasdaq Listing Rule 5450(b)(1)(A). The Company is in the process of
reviewing potential actions and responses regarding the
non-compliance set forth in the Stockholders’ Equity Notice and
currently anticipates timely submitting such a plan to Nasdaq. If
the Company’s plan is accepted, Nasdaq may grant an extension of up
to 180 calendar days from the date of the Stockholders’ Equity
Notice for the Company to provide evidence of compliance. If the
plan is not accepted or the Company is not granted an extension,
the Company will then consider actions appropriate to the
circumstances, which may include applicable appeals to a Nasdaq
Listing Qualifications Panel. There can be no assurance that the
Company will be able to regain compliance with the Nasdaq Listing
Rule 5450(b)(1)(A); if unsuccessful, the Company’s shares will be
delisted.
On
August 10, 2020, the Company received a notification letter (the
“Bid Price Notice”) from the Staff of Nasdaq indicating that that
the closing bid price for the Company’s common stock had been below
$1.00 for the previous 30 consecutive business days and that the
Company therefore is not in compliance with the minimum bid price
requirement for continued inclusion on the Nasdaq Global Market
under Nasdaq Listing Rule 5450(a)(1). The Bid Price Notice has no
immediate effect on the listing of the Company’s common stock on
Nasdaq and its common stock will continue to trade on the Nasdaq
Global Market under the symbol “DTEA” at this time.
The
Company has a period of 180 calendar days from the date of the Bid
Price Notice to regain compliance with Nasdaq Listing Rule
5810(c)(3)(A). The Company has until February 8, 2021, to regain
compliance with the minimum bid price requirement. To regain
compliance, the closing bid price of the Company’s common stock
must be at least $1.00 or higher for a minimum of ten consecutive
business days during the 180-day compliance period, and in such
case, Nasdaq will provide the Company with written confirmation of
compliance and the matter will be closed. If the Company does not
regain compliance before February 8, 2021, the Company may be
eligible for an additional 180 calendar days, provided the Company
meets the continued listing requirement for market value of
publicly held shares and all other initial listing standards,
except for the minimum bid price requirement, and will need to
provide written notice to Nasdaq of its intention to cure the
deficiency during the second compliance period. If the Company is
not eligible or it appears to Nasdaq that the Company will not be
able to cure the deficiency during the second compliance period,
Nasdaq will provide written notice to the Company that the
Company’s common stock will be subject to delisting. In the event
of such notification, the Company may appeal Nasdaq’s determination
to delist its common stock, but there can be no assurance that
Nasdaq would grant the Company’s request for continued listing.
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 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 (the
“SEC”) on
June 16, 2020, and in our
Form 10-Q for the three-month period ended May 2, 2020 filed
with the United States Securities and Exchange Commission on
July 31, 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.
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.
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DAVIDsTEA
INC.
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Date: August 11,
2020
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By:
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/s/ Frank
Zitella
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Name:
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Frank Zitella
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Title:
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Chief Financial and
Operating Officer
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Davids Tea (NASDAQ:DTEA)
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