DAVIDsTEA (DTEAF) 10-Q 14 Sep 21 2022 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Jul. 31, 2021	Sep. 10, 2021
Cover [Abstract]
Entity Registrant Name	DAVIDsTEA Inc.
Entity Central Index Key	0001627606
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--02-02
Entity Small Business	false
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jul. 31, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Entity Common Stock Shares Outstanding		26,359,969
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
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

INTERIM CONSOLIDATED BALANCE SH

INTERIM CONSOLIDATED BALANCE SHEETS - CAD ($)	Jul. 31, 2021	Jan. 30, 2021
Current
Cash	$ 12,051,000	$ 30,197,000
Accounts and other receivables	6,986,000	6,157,000
Inventories	38,055,000	23,468,000
Income tax receivable	55,000	55,000
Prepaid expenses and deposits	5,580,000	14,470,000
Total current assets	62,727,000	74,347,000
Property and equipment	1,566,000	2,309,000
Intangible assets	3,041,000	3,929,000
Right-of-use assets	3,587,000	657,000
Total assets	70,921,000	81,242,000
Current liabilities
Trade and other payables	12,533,000	4,152,000
Deferred revenue	6,476,000	7,080,000
Liabilities subject to compromise	0	100,550,000
Current portion of lease liabilities	768,000	396,000
Total current liabilities	19,777,000	112,178,000
Non-current portion of lease liabilities	2,919,000	355,000
Total liabilities	22,696,000	112,533,000
Equity
Share capital	113,406,000	113,167,000
Contributed surplus	1,806,000	1,747,000
Deficit	(69,862,000)	(148,068,000)
Accumulated other comprehensive income	2,875,000	1,863,000
Total equity (deficiency)	48,225,000	(31,291,000)
Total liabilities and equity	$ 70,921,000	$ 81,242,000

INTERIM CONSOLIDATED STATEMENTS

INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Unaudited) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2021CAD ($)$ / sharesshares	Aug. 01, 2020CAD ($)$ / sharesshares	Jul. 31, 2021CAD ($)$ / sharesshares	Jul. 31, 2021USD ($)shares	Aug. 01, 2020CAD ($)$ / sharesshares
INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Unaudited)
Sales	$ 18,743,000	$ 23,031,000	$ 41,992,000		$ 55,273,000
Cost of sales	10,748,000	14,694,000	23,229,000		32,263,000
Gross profit	7,995,000	8,337,000	18,763,000		23,010,000
Selling, general and administration expenses	9,085,000	7,409,000	18,279,000		29,042,000
Restructuring plan activities, net	(75,557,000)	(3,172,000)	(77,159,000)		34,228,000
Results from operating activities	74,467,000	4,100,000	77,643,000		(40,260,000)
Finance costs	23,000	1,559,000	33,000		3,226,000
Finance income	(34,000)	(68,000)	(89,000)		(308,000)
Net income (loss) before income taxes	74,478,000	2,609,000	77,699,000		(43,178,000)
Recovery of income taxess	(1,000,000)	0		$ (1,000)	0
Net income (loss)	75,478,000	2,609,000	78,699,000		(43,178,000)
Other comprehensive income (loss):
Cumulative translation adjustment	200,000	1,451,000	1,012,000		(18,000)
Other comprehensive income (loss), net of tax	200,000	1,451,000	1,012,000		(18,000)
Total comprehensive income (loss)	$ 75,678,000	$ 4,060,000	$ 79,711,000		$ (43,196,000)
Net earnings (loss) per share:
Basic | $ / shares	$ 2.87	$ 0.10	$ 3		$ (1.65)
Fully diluted | $ / shares	$ 2.75	$ 0.10	$ 2.87		$ (1.65)
Weighted average number of shares outstanding:
Weighted average number of shares outstanding Basic | shares	26,299,094	26,128,971	26,270,284	26,270,284	26,108,499
Weighted average number of shares outstanding Fully diluted | shares	27,455,005	26,925,264	27,422,066	27,422,066	26,108,499

INTERIM CONSOLIDATED STATEMEN_2

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - CAD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2021	Aug. 01, 2020	Jul. 31, 2021	Aug. 01, 2020
OPERATING ACTIVITIES
Net income (loss)	$ 75,478,000	$ 2,609,000	$ 78,699,000	$ (43,178,000)
Items not affecting cash:
Depreciation of property and equipment	407,000	301,000	795,000	1,544,000
Amortization of intangible assets	484,000	571,000	887,000	1,083,000
Amortization of right-of-use assets	135,000	454,000	294,000	2,693,000
Gain on modification of lease liabilities	0	(54,735,000)	0	(54,735,000)
Gain (loss) on liabilities subject to compromise	(77,713,000)	47,818,000	(79,861,000)	47,818,000
Interest on lease liabilities	23,000	1,559,000	33,000	3,187,000
Loss on disposal of property and equipment and right-of-use assets	0	1,542,000	0	1,542,000
Impairment of property and equipment and right-of-use assets	0	0	0	39,960,000
Stock-based compensation expense	363,000	267,000	545,000	580,000
Sub-total	(823,000)	386,000	1,392,000	494,000
Net change in other non-cash working capital balances related to operations	(18,256,000)	(4,209,000)	(19,164,000)	(8,373,000)
Cash flows used in operating activities	(19,079,000)	(3,823,000)	(17,772,000)	(7,879,000)
FINANCING ACTIVITIES
Proceed from issuance of common shares pursuant to exercise of stock options	0	3,000	0	3,000
Payment of lease liabilities	(139,000)	(1,198,000)	(322,000)	(5,574,000)
Cash flows used in financing activities	(139,000)	(1,195,000)	(322,000)	(5,571,000)
INVESTING ACTIVITIES
Additions to property and equipment	(52,000)	(40,000)	(52,000)	(312,000)
Additions to intangible assets	0	0	0	(317,000)
Repayment of loan from a Company controlled by an executive employee	0	0	0	2,026,000
Cash flows provided by (used in) investing activities	(52,000)	(40,000)	(52,000)	1,397,000
Decrease in cash during the period	(19,270,000)	(5,058,000)	(18,146,000)	(12,053,000)
Cash, beginning of the period	31,321,000	39,343,000	30,197,000	46,338,000
Cash, end of the period	12,051,000	34,285,000	12,051,000	34,285,000
Cash received for:
Interest	39,000	68,000	94,000	279,000
Income taxes (classified as operating activity)	$ 0	$ 563,000	$ 0	$ 870,000

INTERIM CONSOLIDATED STATEMEN_3

INTERIM CONSOLIDATED STATEMENTS OF EQUITY (Deficiency) (Unaudited) - CAD ($)	Total	Share capital [Member]	Contributed surplus [member]	Deficit [member]
Balance, amount (Accumulated other comprehensive income [member]) at Feb. 01, 2020	$ 1,207,000
Balance, amount at Feb. 01, 2020	23,349,000	$ 112,843,000	$ 1,577,000	$ (92,278,000)
Statement [Line Items]
Net loss | Accumulated other comprehensive income [member]	0
Net loss	(43,178,000)	0	0	(43,178,000)
Other comprehensive loss | Accumulated other comprehensive income [member]	(18,000)
Other comprehensive loss	(18,000)	0	0	0
Total comprehensive loss | Accumulated other comprehensive income [member]	(18,000)
Total comprehensive loss	(43,196,000)	0	0	(43,178,000)
Issuance of common shares | Accumulated other comprehensive income [member]	0
Issuance of common shares	3,000	4,000	(1,000)	0
Common shares issued on vesting of restricted stock units | Accumulated other comprehensive income [member]	0
Common shares issued on vesting of restricted stock units	(108,000)	272,000	(554,000)	174,000
Stock-based compensation expense | Accumulated other comprehensive income [member]	0
Stock-based compensation expense	580,000	0	580,000	0
Balance, amount (Accumulated other comprehensive income [member]) at Aug. 01, 2020	1,189,000
Balance, amount at Aug. 01, 2020	(19,372,000)	113,119,000	1,602,000	(135,282,000)
Balance, amount (Accumulated other comprehensive income [member]) at Jan. 30, 2021	1,863,000
Balance, amount at Jan. 30, 2021	(31,291,000)	113,167,000	1,747,000	(148,068,000)
Statement [Line Items]
Net loss | Accumulated other comprehensive income [member]	0
Net loss	78,699,000	0	0	78,699,000
Other comprehensive loss | Accumulated other comprehensive income [member]	1,012,000
Other comprehensive loss	1,012,000	0	0	0
Total comprehensive loss | Accumulated other comprehensive income [member]	1,012,000
Total comprehensive loss	79,711,000	0	0	78,699,000
Issuance of common shares | Accumulated other comprehensive income [member]	0
Issuance of common shares	0	0	0	0
Common shares issued on vesting of restricted stock units | Accumulated other comprehensive income [member]	0
Common shares issued on vesting of restricted stock units	(740,000)	239,000	(486,000)	(493,000)
Stock-based compensation expense | Accumulated other comprehensive income [member]	0
Stock-based compensation expense	545,000	0	545,000	0
Balance, amount (Accumulated other comprehensive income [member]) at Jul. 31, 2021	2,875,000
Balance, amount at Jul. 31, 2021	$ 48,225,000	$ 113,406,000	$ 1,806,000	$ (69,862,000)

CORPORATE INFORMATION

CORPORATE INFORMATION	6 Months Ended
	Jul. 31, 2021
1. 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 six-month periods ended July 31, 2021 were authorized for issue in accordance with a resolution of the Board of Directors on September 14, 2021. 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 2,500 grocery stores and pharmacies, and 18 company-owned stores across Canada. We offer 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. 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. In March 2020, the outbreak of a novel strain of coronavirus (“COVID-19”) was declared a global pandemic by the World Health Organization and on March 17, 2020, in response to the COVID-19 pandemic, the Company announced the temporary closure of all of its retail stores in Canada and the United States. On August 21, 2020, the Company re-opened 18 stores across Canada. The Company qualifies for the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy under the COVID-19 Economic Response Plan of the government of Canada. The Company recognized payroll subsidies for the three and six-month periods ended July 31, 2021 of $1.7 million and $2.8 million, respectively (August 1, 2020 - $1.2 million and $2.0 million). The Company recognized rent subsidies for the three and six-month periods ended July 31, 2021 of $0.8 million and $0.8 million, respectively (August 1, 2020 – $nil and $nil). The wage and rent subsidy programs were recognized in Selling, general and administration expenses. CCAA Proceedings 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 and that during the restructuring process, the Company would continue to operate its online business through its e-commerce platform and the Amazon Marketplace as well as its wholesale distribution channel. Following a careful review of available options to stem the losses from its brick-and-mortar footprint, the Company’s management and Board of Directors determined that the formal Restructuring Plan was the best option in the context of an increasingly challenging retail environment, further exacerbated by the COVID-19 pandemic. On July 8, 2020, the Company obtained an Initial Order pursuant to the CCAA from the Québec Superior Court in order to implement the Restructuring Plan (the “Initial Order”). On July 9, 2020, the United States Bankruptcy Court for the District of Delaware entered an order in favor of the Company under Chapter 15 of the United States Bankruptcy Code. The order of the United States Bankruptcy Court provisionally recognized the proceedings under the CCAA and enforced the Initial Order, in effect providing protection to the Company from creditor action against its assets in the United States. As part of its Restructuring Plan and further to obtaining the Initial Order, the Company, on July 10, 2020, sent notices to terminate leases for 82 of its stores in Canada and all 42 of its stores in the United States. These lease terminations were effective on August 9, 2020. On July 16, 2020, the Company obtained an Amended and Restated Initial Order from the Québec Superior Court, extending to September 17, 2020 the application of the Initial Order. The Amended and Restated Initial Order also dealt with certain administrative matters, particularly with regards to the lease terminations. On July 30, 2020, the Company sent notices to terminate leases for an additional 82 of its stores in Canada. These lease terminations were effective on August 29, 2020. On September 17, 2020, the Québec Superior Court extended the stay of all proceedings against the Company to December 15, 2020 and issued a claims process order (the “Claims Process Order”) establishing the claims procedures for the Company’s creditors under the CCAA. The Claims Process Order, among other things, set November 6, 2020 (the “Claims Bar Date”) as the time by which creditors had to submit their claims to PricewaterhouseCoopers (“PwC”), the Court-appointed Monitor. On December 15, 2020, the Québec Superior Court extended the stay of all proceedings against the Company to March 19, 2021. The Court also approved a retention plan for certain key employees (“KERP”) and created a priority charge over the debtors’ assets for the KERP in addition to extending the Claims Bar Date for certain Canadian employees until December 31, 2020. On March 19, 2021, the Québec Superior Court extended the stay of all proceedings against the Company to June 4, 2021, and addressed certain administrative matters. On May 7, 2021, the Company obtained an order from the Québec Superior Court authorizing the Company to file its plan of arrangement (the “Plan of Arrangement” or the “Plan”) under the CCAA and to call a creditors’ meeting to be held on June 11, 2021. The Court order also extended to July 16, 2021 the stay of all proceedings against the Company under the CCAA. At the creditors’ meeting held on June 11, 2021, the Plan of Arrangement was approved by the requisite majorities of creditors of DAVIDsTEA Inc. and its subsidiary, DAVIDsTEA (USA) Inc., respectively, in accordance with the CCAA, that is, a simple majority of creditors of DAVIDsTEA Inc. and of DAVIDsTEA (USA) Inc., voting separately, whose claims were affected by the Plan of Arrangement, representing in each case at least two-thirds in dollar value of all such claims duly filed in accordance with the CCAA proceedings. The Plan of Arrangement approved by the Company’s creditors on June 11, 2021 required that DAVIDsTEA Inc. distribute an aggregate amount of approximately $17.6 million to its creditors and those of DAVIDsTEA (USA) Inc. in full and final settlement of all claims affected by the Plan of Arrangement. On June 16, 2021, the Company was granted a sanction order (the “Sanction Order”) for the Plan of Arrangement from the Québec Superior Court and obtained recognition of the Sanction Order from the United States Bankruptcy Court for the District of Delaware under Chapter 15 of the United States Bankruptcy Code. On June 18, 2021, the Monitor issued a Certificate of Implementation in accordance with paragraph 16 of the Sanction Order, in which it certified that all the conditions precedent to the implementation of the Plan, as set forth in section 7.2 of the Plan, had been fulfilled or waived by the debtors; Upon issuance of the Certificate of Implementation, the Monitor began distributing funds to the creditors who had duly proven their claims as part of the claims process. 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.

BASIS OF PREPARATION and GOING

BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY	6 Months Ended
	Jul. 31, 2021
2. BASIS OF PREPARATION AND GOING CONCERN UNCERTAINTY	2. BASIS OF PREPARATION AND GOING CONCERN UNCERTAINTY 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 of 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 30, 2021, 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 30, 2021. Going Concern Uncertainty In December 2019, a novel strain of coronavirus, responsible for COVID-19, was first reported and was subsequently declared a pandemic by the World Health Organization in March 2020. The measures adopted by the federal, provincial and state governments in order to mitigate the spread of the outbreak required the Company to temporarily close all of its retail locations across North America effective March 17, 2020. On July 8, 2020, the Company announced that it was implementing the Restructuring Plan under applicable laws in both Canada and the United States in order to accelerate its transition to predominantly an online retailer and wholesaler of high-quality tea and accessories. As part of the Restructuring Plan, in July 2020, the Company sent notices to terminate leases for 164 of its stores in Canada and all 42 of its stores in the United States. On August 21, 2020, the Company re-opened 18 of its stores throughout Canada. Although the Company continues to offer its products directly to consumers through its online store and in supermarkets and drugstores across Canada, it is unlikely that customers will purchase its products at previous volumes through these alternative channels. Furthermore, the duration and impact of the COVID-19 pandemic is unknown and may influence consumer shopping behavior and consumer demand including online shopping. The Plan of Arrangement required approximately $17.6 million to be paid to the Company’s creditors in order to legally emerge from the formal restructuring process. This is expected to place increased risk on the Company’s available liquidity, especially considering the Company does not currently have access to any debt or financing arrangements. For the three and six-month periods ended July 31, 2021, the Company reported a net income of $75.5 million and $78.7 million, respectively which includes a gain on settlement of $77.7 million for the three and six-month periods ended July 31, 2021. The Company’s current liabilities total $19.8 million as at July 31, 2021. As at July 31, 2021, the Company held cash and accounts and other receivables of $19.0 million. The Company does not currently have any third-party financing available with which to meet any future financial obligations. The Company’s ability to continue as a going concern is dependent on its ability to stabilize its business from unfavorable trend lines, and by focusing on how to grow its product portfolio including sales and customer service execution. The Company transitioned to a digital-first organization with a leaner, more sustainable physical presence that complements a growing world-class online and grocery business, supported by a right-sized support organization. Management believes that there is material uncertainty surrounding the Company’s ability to execute the strategy necessary to return to sustained profitability in the current environment, including the unpredictability surrounding the recovery from the COVID-19 pandemic, and changes in consumer behavior. As a result, these events and conditions indicate that a material uncertainty exists that raises substantial doubt about the Company’s ability to continue as a going concern and, therefore, realize its assets and discharge its liabilities in the normal course of business. These interim condensed consolidated financial statements have been prepared on a going concern basis, which assumes the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. These interim condensed consolidated financial statements as at and for the three and six-months ended July 31, 2021 do not include any adjustments to the carrying amounts and classification of assets, liabilities and reported expenses that may otherwise be required if the going concern basis was not appropriate. Such adjustments could be material.

CHANGES IN ACCOUNTING PRINCIPLE

CHANGES IN ACCOUNTING PRINCIPLES	6 Months Ended
	Jul. 31, 2021
3. CHANGES IN ACCOUNTING PRINCIPLES	3. CHANGES IN ACCOUNTING PRINCIPLES Change in the pattern of consumption of intangible assets Intangible assets are initially recorded at cost. Intangible assets with finite lives are amortized over their useful economic life. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates. In the first quarter of 2021 the Company reviewed the pattern of consumption of its intangible assets. The Company previously used the declining method at the rate of 30% per annum. The Company changed the method of depreciation for intangible assets to a straight-line basis over the assets’ useful economic life to better reflect the underlying pattern of consumption. Recently Issued Accounting Pronouncements Costs necessary to sell inventories (IAS 2) agenda decision At its June 2021 meeting, the IFRS Interpretations Committee finalised an agenda decision about the costs an entity includes as the “estimated costs necessary to make the sale” when determining the net realizable value of inventories. The IFRS Interpretations Committee concluded that when determining the net realizable value of inventories, an entity estimates the costs necessary to make the sale in the ordinary course of business, which requires the exercise of judgment. The Company is assessing the impact of this agenda decision on its results of operations, financial position and disclosures. COVID-19 related rent concessions On May 28, 2020, the IASB issued an amendment to IFRS 16, “Leases” to make it easier for lessees to account for COVID-19-related rent concessions such as rent holidays and temporary rent reductions. In April 2021, the IASB extended the relief to cover rent concessions that reduce lease payments due on or before June 30, 2022. The amendment exempts lessees from having to consider individual lease contracts to determine whether rent concessions occurring as a direct consequence of the COVID-19 pandemic are lease modifications and allows lessees to account for such rent concessions as if they were not lease modifications. It applies to COVID-19-related rent concessions that reduce lease payments due on or before June 30, 2021. The amendment was effective as of June 1, 2020 but could be applied immediately in any financial statements; interim or annual, not yet authorized for issue. The Company applied the practical expedient to all rent concessions meeting the criteria as set out in the amendment, as of February 2, 2020. With respect to rent concessions not meeting the definition of a lease modification, the Company elected to account for such concessions by continuing to account for the lease liability and right-of-use asset using the rights and obligations of the existing lease and recognizing a separate lease payable in the period in which the allocated lease cash payment is due. As a result of the Initial Order obtained from the Québec Superior Court on July 8, 2020, any rent concessions provided by landlords were accordingly nullified.

SIGNIFICANT ACCOUNTING JUDGEMEN

SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS	6 Months Ended
	Jul. 31, 2021
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS	4. SIGNIFICANT ACCOUNTING JUDGMENTS, 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 5 of the consolidated financial statements for the year ended January 30, 2021.

PROPERTY AND EQUIPMENT AND RIGH

PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS	6 Months Ended
	Jul. 31, 2021
5. PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS	5. PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS As a result of the impairment assessment and the Company’s decision to implement its Restructuring Plan and to accelerate its transition to predominately an online retailer, the Company recorded an impairment loss of $13.0 million and $nil in the first and second quarters of 2020, respectively, related to property and equipment, and $27.0 million and $nil in the first and second quarters of 2020, respectively, related to right of use assets. Included in the amount above of $40.0 million, $37.4 million relates to the 206 stores permanently closed as a result of the Restructuring Plan, and is recorded in Restructuring Plan activities, net (Note 10) in the interim consolidated statement of income (loss) and comprehensive income (loss). The remaining $2.6 million of impairment loss was determined by comparing the carrying amount of the cash-generating units’ net assets with their respective recoverable amounts based on value in use, and is recorded in Selling, general and administration expenses (Note 9) in the interim consolidated statement of income (loss) and comprehensive income (loss). For these stores, a value in use of $791 was determined based on management’s best estimate of expected future cash flows from use over the remaining lease terms, considering historical experience and economic conditions, including the expected reopening date and the timeframe to foot traffic recovery in those locations, and was then discounted using a pre-tax discount rate of 13.0%. Depreciation of property and equipment for the three and six-month periods ended July 31, 2021 was $407 and $795, respectively (August 1, 2020 - $301 and $1,544, respectively), and is recorded in Selling, general and administration expenses (Note 9) in the interim consolidated statement of income (loss) and comprehensive income (loss). Amortization of right-of-use assets for the three and six-month periods ended July 31, 2021 was $135 and $294 respectively (August 1, 2020 - $454 and $2,693, respectively), and is recorded in Selling, general and administration expenses (Note 9) in the interim consolidated statement of income (loss) and comprehensive income (loss).

LIABILITIES SUBJECT TO COMPROMI

LIABILITIES SUBJECT TO COMPROMISE	6 Months Ended
	Jul. 31, 2021
6. LIABILITIES SUBJECT TO COMPROMISE	6. LIABILITIES SUBJECT TO COMPROMISE As a result of the Initial Order obtained on July 8, 2020 and subsequent amendments (Note 1), the payment of liabilities owing as of July 8, 2020 was stayed, and the outstanding liabilities, as well as any additional outstanding claims by creditors were subject to compromise pursuant to the Company’s Plan of Arrangement. Obligations for goods and services provided to the Company after the filing date of July 8, 2020 are discharged based on negotiated terms and are excluded from liabilities subject to compromise. The Plan of Arrangement was approved by the Company’s creditors on June 11, 2021 and required that the Company distribute an aggregate amount of approximately $17.6 million to its creditors in full and final settlement of all claims affected by the Plan of Arrangement. On June 18, 2021, the Monitor issued a Certificate of Implementation in which it certified that all the conditions precedent to the implementation of the Plan, including, among other things, remittance of funds to the Monitor for distribution to creditors, had been fulfilled or waived by the debtors. As a result of the final settlement, the Company recorded a gain on the settlement of liabilities subject to compromise of $77.7 million and was reduced by $1.2 million of professional fees in connection with the CCAA proceedings. This net gain is presented in the interim consolidated statements of income (loss) and comprehensive income (loss) in Restructuring Plan activities, net and Recovery of income taxes as a net gain of $76.7 million and $1.0 million, respectively. 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. As of July 31, 2021, liabilities subject to compromise are broken down as follows: Disclaimed and modified leases Trade and other payables Severance Costs Liabilities subject to compromise $ $ $ $ Balance as at January 30, 2021 75,310 20,699 4,541 100,550 Reversals (1,771 ) (377 ) - (2,148 ) Balance as at May 1, 2021 73,539 20,322 4,541 98,402 Adjustments (1,309 ) (2,558 ) - (3,867 ) Additions - 742 - 742 Reversals (72,230 ) (18,506 ) (4,541 ) (95,277 ) Balance as at July 31, 2021 - - - -

SHARE CAPITAL

SHARE CAPITAL	6 Months Ended
	Jul. 31, 2021
7. SHARE CAPITAL	7. SHARE CAPITAL Authorized An unlimited number of common shares. Issued and outstanding July 31, January 30, 2021 2021 $ $ Share Capital - 26,359,969 Common shares (January 30, 2021 - 26,234,582) 113,406 113,167 In addition, during the three and six-month periods ended July 31, 2021, 104,200 and 125,387 common shares, respectively, (August 1, 2020 – 104,652 and 117,967 common shares, respectively) were issued in relation to the vesting of restricted stock units (“RSU”), resulting in an increase in share capital of $70 and $239, net of tax (August 1, 2020 — $198 and $272, net of tax respectively) and a reduction in contributed surplus of $142 and $486, respectively (August 1, 2020 — $398 and $554, respectively). Stock-based compensation As at July 31, 2021, 937,868 (August 1, 2020, 1,042,285) common shares remain available for issuance under the 2015 Omnibus Plan. No stock options were granted during the three and six-month periods ended July 31, 2021 and August 1, 2020. A summary of the status of the Company’s stock option plan and changes during the six-month periods are presented below. For the six months ended July 31, August 1, 2021 2020 Weighted Weighted average average Options exercise Options exercise outstanding price outstanding price # $ # $ Outstanding, beginning of year 17,490 6.32 76,350 8.96 Exercised - - (4,000 ) 0.77 Outstanding, end of year 17,490 6.32 72,350 9.41 Exercisable, end of year 17,490 6.32 72,350 9.41 A summary of the status of the Company’s RSU plan and changes during the six-month periods are presented below. For the six months ended July 31, August 1, 2021 2020 Weighted Weighted average average RSUs fair value RSUs fair value outstanding per unit (1) outstanding per unit (1) # $ # $ Outstanding, beginning of year 1,306,101 1.70 749,522 2.17 Granted 425,764 4.64 1,177,222 1.44 Forfeitures (32,747 ) 1.50 (275,162 ) 1.66 Vested (125,387 ) 1.91 (117,967 ) 2.22 Vested, withheld for tax (130,562 ) 1.91 (120,383 ) 2.26 Outstanding, end of period 1,443,169 2.53 1,413,232 1.65 _____________ (1) Weighted average fair value per unit as at date of grant. During the three and six-month periods ended July 31, 2021, the Company recognized a stock-based compensation expense of $363 and $545, respectively (August 1, 2020 — $267 and $580).

INCOME TAXES

INCOME TAXES	6 Months Ended
	Jul. 31, 2021
8. INCOME TAXES	8. INCOME TAXES Income tax expense is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full fiscal year. A reconciliation of the statutory income tax rate to the effective tax rate is as follows: For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 % $ % $ % $ % $ Income tax provision (recovery) — statutory rate 26.4 19,663 26.8 699 26.4 20,513 26.8 (11,572 ) Increase (decrease) in income tax provision (recovery) resulting from: Non-deductible items 0.1 98 3.9 103 0.2 150 (0.3 ) 126 Unrecognized deferred income tax assets (26.5 ) (19,761 ) (30.7 ) (802 ) (26.6 ) (20,663 ) (26.5 ) 11,446 Recovery of income taxes (1.3 ) (1,000 ) - - (1.3 ) (1,000 ) - - Income tax provision (recovery) — effective tax rate (1.3 ) (1,000 ) - - (1.3 ) (1,000 ) - -

SELLING, GENERAL AND ADMINISTRA

SELLING, GENERAL AND ADMINISTRATION EXPENSES	6 Months Ended
	Jul. 31, 2021
9. SELLING, GENERAL AND ADMINISTRATION EXPENSES	9. SELLING, GENERAL AND ADMINISTRATION EXPENSES For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Wages, salaries and employee benefits 3,547 3,270 7,113 12,663 Depreciation of property and equipment 407 301 795 1,544 Amortization of intangible assets 484 571 887 1,083 Amortization right-of-use asset 135 454 294 2,693 Marketing expenses 1,419 597 2,364 1,639 Stock-based compensation 363 267 545 580 Government emergency wage and rent subsidy (2,532 ) (1,156 ) (3,596 ) (1,999 ) Software implementation costs 1,592 - 2,454 - IT expenses 1,231 758 2,580 1,455 Credit card fees 443 573 979 1,189 Professional fees 658 457 895 1,071 Other selling, general and administration 1,338 1,316 2,969 4,563 Impairment of property and equipment and right-of-use assets - - - 2,561 9,085 7,409 18,279 29,042

RESTRUCTURING PLAN ACTIVITIES

RESTRUCTURING PLAN ACTIVITIES	6 Months Ended
	Jul. 31, 2021
10. RESTRUCTURING PLAN ACTIVITIES	10. RESTRUCTURING PLAN ACTIVITIES For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Liabilities subject to compromise (76,713 ) (48,566 ) (78,861 ) (48,566 ) Professional fees 1,156 974 1,702 974 Income tax recovery (1,000 ) - (1,000 ) - Lease Terminations - 42,878 - 42,878 Loss on disposal of property and equipment and right-of-use assets - 1,542 - 1,542 Impairment of property and equipment and right-of-use assets - - - 37,400 (76,557 ) (3,172 ) (78,159 ) 34,228 Presented in: Restructuring plan activities, net (75,557 ) (3,172 ) (77,159 ) 34,228 Recovery of income taxes (1,000 ) - (1,000 ) - (76,557 ) (3,172 ) (78,159 ) 34,228

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE	6 Months Ended
	Jul. 31, 2021
11. EARNINGS (LOSS) PER SHARE	11. EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share (“EPS”) amounts are calculated by dividing the net income (loss) 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 income (loss) 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 earnings (loss) and share data used in the basic and diluted EPS computations: For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Net earnings (loss) for basic EPS 75,478 2,609 78,699 (43,178 ) Weighted average number of shares outstanding: Basic 26,299,094 26,128,971 26,270,284 26,108,499 Fully diluted 27,455,005 26,925,264 27,422,066 26,108,499 Net earnings (loss) per share: Basic 2.87 0.10 3.00 (1.65 ) Fully diluted 2.75 0.10 2.87 (1.65 )

RELATED PARTY DISCLOSURES

RELATED PARTY DISCLOSURES	6 Months Ended
	Jul. 31, 2021
RELATED PARTY DISCLOSURES
12. RELATED PARTY DISCLOSURES	12. 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 six-month periods ended July 31, 2021, the Company purchased merchandise for resale amounting to $153 and $199, respectively (August 1, 2020 - $3 and $26, respectively) and provided infrastructure and administrative services of $5 and $10, respectively (August 1, 2020 - $8 and $75, respectively) to a company controlled by one of its executive employees. As of July 31, 2021, an amount of $110 was outstanding and presented in Trade and other payables. The Company also spent $nil and $nil, respectively (August 1, 2020 — $9 and $53, respectively) for consulting services from a related party of the principal shareholder. Loan to a Company controlled by one of the Company’s executive employees During the second quarter of 2019, the Company entered into a secured loan agreement with Oink Oink Candy Inc., doing business as “Squish,” as borrower, and Rainy Day Investments Ltd. (“RDI”), as guarantor pursuant to which the Company agreed to lend to Squish an amount of up to $4.0 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2.0 million. RDI guaranteed all of Squish’s obligations to the Company and, as security in full for the guarantee, gave a movable hypothec (or lien) in favor of the Company on its shares of the Company. Squish is a company controlled by Sarah Segal, the Chief Executive Officer and Chief Brand Officer of the Company. RDI, the principal shareholder of the Company, is controlled by Herschel Segal, Chairman of the Board and Strategic Advisor and a director of the Company. The Company and Squish previously entered into a Collaboration and Shared Services Agreement pursuant to which they collaborate on and share various services and infrastructure. During the first quarter of 2020, the loan of $2.0 million and accrued interest of $45, including $19 which was earned in the first quarter of 2020, was fully repaid.

SEGMENT INFORMATION

SEGMENT INFORMATION	6 Months Ended
	Jul. 31, 2021
SEGMENT INFORMATION
13. SEGMENT INFORMATION	13. 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. During the year ended January 30, 2021, the Company has reviewed its operations and determined that its operating segments are geographic components. The Company has concluded that it has two operating segments, Canada and the United States, that derive their revenues from the online, retail and wholesale sale of tea, tea accessories and food and beverages. The Company’s Chief Executive and Brand Officer and President, Chief Financial and Operations Officer (the chief operating decision makers or “CODM”) make decisions about resources to be allocated and assesses performance of these segments, and for which discrete financial information is available. In the prior year the operating segments were the retail premises, and the reportable segments were Canada and the United States (the “U.S.”). As a result, there is no impact on prior period information as reportable segments were previously Canada and the U.S. The Company derives revenue from the following products: For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Tea 16,117 19,921 36,586 46,016 Tea accessories 2,626 3,065 5,406 7,685 Food and beverages - 45 - 1,572 18,743 23,031 41,992 55,273 Property and equipment, right-of-use assets and intangible assets by country are as follows: July 31, January 30, 2021 2021 $ $ Canada 8,194 6,895 US - - 8,194 6,895 Results from operating activities before corporate expenses per country are as follows: For the three months ended For the six months ended July 31, 2021 July 31, 2021 Canada US Consolidated Canada US Consolidated $ $ $ $ $ $ Sales 15,046 3,697 18,743 33,175 8,818 41,992 Cost of sales 8,725 2,023 10,748 18,589 4,640 23,229 Gross profit 6,321 1,674 7,995 14,586 4,178 18,763 Selling, general and administration expenses (allocated) 2,458 545 3,003 4,722 1,045 5,767 Results from operating activities before corporate expenses 3,863 1,129 4,992 9,864 3,133 12,996 Selling, general and administration expenses (non-allocated) 6,082 12,512 Restructuring plan activities, net (75,557 ) (77,159 ) Results from operating activities 74,467 77,643 Finance costs 23 33 Finance income (34 ) (89 ) Net income before income taxes 74,478 77,699 For the three months ended For the six months ended August 1, 2020 August 1, 2020 Canada US Consolidated Canada US Consolidated $ $ $ $ $ $ Sales 16,773 6,258 23,031 41,033 14,240 55,273 Cost of sales 11,446 3,248 14,694 24,857 7,406 32,263 Gross profit 5,327 3,010 8,337 16,176 6,834 23,010 Selling, general and administration expenses (allocated) 2,059 865 2,924 11,658 3,389 15,047 Impairment of property and equipment and right-of-use assets - - - 2,561 - 2,561 Results from operating activities before corporate expenses 3,268 2,145 5,413 1,957 3,445 5,402 Selling, general and administration expenses (non-allocated) 4,485 11,434 Restructuring plan activities, net (3,172 ) 34,228 Results from operating activities 4,100 (40,260 ) Finance costs 1,559 3,226 Finance income (68 ) (308 ) Net Income (loss) before income taxes 2,609 (43,178 )

FINANCIAL RISK MANAGEMENT

FINANCIAL RISK MANAGEMENT	6 Months Ended
	Jul. 31, 2021
FINANCIAL RISK MANAGEMENT
14. FINANCIAL RISK MANAGEMENT	14. FINANCIAL RISK MANAGEMENT The Company’s activities expose it to a variety of financial risks, including risks related to foreign exchange, interest rate, liquidity and credit. Currency Risk — Foreign Exchange Risk Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. Given that some of its purchases are denominated in U.S. dollars, the Company is exposed to foreign exchange risk. The Company’s foreign exchange risk is largely limited to currency fluctuations between the Canadian and U.S. dollars. The Company is exposed to currency risk through its cash, accounts receivable and accounts payable denominated in U.S. dollars. Assuming that all other variables remain constant, a revaluation of these monetary assets and liabilities due to a 5% rise or fall in the Canadian dollar against the U.S. dollar would have resulted in an increase or decrease to net income (loss) in the amount of $253 (August 1, 2020 - $155). The Company’s foreign exchange exposure is as follows: July 31, January 30, 2021 2021 US$ US$ Cash 284 630 Accounts and other receivables 182 465 Prepaid expenses and deposits 676 5,394 Trade and other payables 6,203 750 The Company’s U.S. subsidiary’s transactions are denominated in U.S. dollars. Market Risk — Interest Rate Risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Financial instruments that potentially subject the Company to cash flow interest rate risk include financial assets and liabilities with variable interest rates and consist primarily of cash on hand. Liquidity Risk Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s approach to managing liquidity risk is to ensure, to the extent possible, that it will always have sufficient liquidity to meet liabilities when due. The Company’s liquidity follows a seasonal pattern based on the timing of inventory purchases and capital expenditures. The Company is exposed to this risk mainly in respect of its trade and other payables, lease and purchase obligations. As at July 31, 2021, the Company had $12.1 million in cash. The Company expects to finance its working capital needs and investments in infrastructure through cash flows from operations and cash on hand. At July 31, 2021, trade and other payables amounted to $12.5 million (January 30, 2021 - $4.2 million) and purchase obligations amounted to $9.9 million, net of $0.8 million of advances (January 30, 2021 - $14.1 million, net of $6.8 million of advances). All trade and other payables are expected to be paid according to negotiated vendor terms. Refer to Note 2 for details with respect to the going concern uncertainty. Credit Risk The Company is exposed to credit risk resulting from the possibility that counterparties may default on their financial obligations to the Company. The Company’s maximum exposure to credit risk at the reporting date is equal to the carrying value of receivables. Accounts receivable primarily consist of receivables from retail customers who pay by credit card, receivables from our wholesale channel sales, recoveries of credits from suppliers for returned or damaged products, and receivables from other companies for sales of products, gift cards and other services. Credit card payments have minimal credit risk and the limited number of corporate receivables is closely monitored. As a result, expected credit loss on these financial assets is not significant.

LIABILITIES SUBJECT TO COMPRO_2

LIABILITIES SUBJECT TO COMPROMISE (Tables)	6 Months Ended
	Jul. 31, 2021
Schedule of liability subject to compromise	Disclaimed and modified leases Trade and other payables Severance Costs Liabilities subject to compromise $ $ $ $ Balance as at January 30, 2021 75,310 20,699 4,541 100,550 Reversals (1,771 ) (377 ) - (2,148 ) Balance as at May 1, 2021 73,539 20,322 4,541 98,402 Adjustments (1,309 ) (2,558 ) - (3,867 ) Additions - 742 - 742 Reversals (72,230 ) (18,506 ) (4,541 ) (95,277 ) Balance as at July 31, 2021 - - - -

SHARE CAPITAL (Tables)

SHARE CAPITAL (Tables)	6 Months Ended
	Jul. 31, 2021
SHARE CAPITAL (Tables)
Summary of authorized, issued, and outstanding shares	July 31, January 30, 2021 2021 $ $ Share Capital - 26,359,969 Common shares (January 30, 2021 - 26,234,582) 113,406 113,167
Summary of stock option plan and periodic changes	For the six months ended July 31, August 1, 2021 2020 Weighted Weighted average average Options exercise Options exercise outstanding price outstanding price # $ # $ Outstanding, beginning of year 17,490 6.32 76,350 8.96 Exercised - - (4,000 ) 0.77 Outstanding, end of year 17,490 6.32 72,350 9.41 Exercisable, end of year 17,490 6.32 72,350 9.41
Summary of the status of the RSU plan and periodic changes	For the six months ended July 31, August 1, 2021 2020 Weighted Weighted average average RSUs fair value RSUs fair value outstanding per unit (1) outstanding per unit (1) # $ # $ Outstanding, beginning of year 1,306,101 1.70 749,522 2.17 Granted 425,764 4.64 1,177,222 1.44 Forfeitures (32,747 ) 1.50 (275,162 ) 1.66 Vested (125,387 ) 1.91 (117,967 ) 2.22 Vested, withheld for tax (130,562 ) 1.91 (120,383 ) 2.26 Outstanding, end of period 1,443,169 2.53 1,413,232 1.65

INCOME TAXES (Tables)

INCOME TAXES (Tables)	6 Months Ended
	Jul. 31, 2021
INCOME TAXES (Tables)
Schedule of the reconciliation of the statutory income tax rate to the effective tax rate	For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 % $ % $ % $ % $ Income tax provision (recovery) — statutory rate 26.4 19,663 26.8 699 26.4 20,513 26.8 (11,572 ) Increase (decrease) in income tax provision (recovery) resulting from: Non-deductible items 0.1 98 3.9 103 0.2 150 (0.3 ) 126 Unrecognized deferred income tax assets (26.5 ) (19,761 ) (30.7 ) (802 ) (26.6 ) (20,663 ) (26.5 ) 11,446 Recovery of income taxes (1.3 ) (1,000 ) - - (1.3 ) (1,000 ) - - Income tax provision (recovery) — effective tax rate (1.3 ) (1,000 ) - - (1.3 ) (1,000 ) - -

SELLING GENERAL AND ADMINISTRAT

SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)	6 Months Ended
	Jul. 31, 2021
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)
Schedule of selling, general and administrative expenses	For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Wages, salaries and employee benefits 3,547 3,270 7,113 12,663 Depreciation of property and equipment 407 301 795 1,544 Amortization of intangible assets 484 571 887 1,083 Amortization right-of-use asset 135 454 294 2,693 Marketing expenses 1,419 597 2,364 1,639 Stock-based compensation 363 267 545 580 Government emergency wage and rent subsidy (2,532 ) (1,156 ) (3,596 ) (1,999 ) Software implementation costs 1,592 - 2,454 - IT expenses 1,231 758 2,580 1,455 Credit card fees 443 573 979 1,189 Professional fees 658 457 895 1,071 Other selling, general and administration 1,338 1,316 2,969 4,563 Impairment of property and equipment and right-of-use assets - - - 2,561 9,085 7,409 18,279 29,042

RESTRUCTURING PLAN ACTIVITIES (

RESTRUCTURING PLAN ACTIVITIES (Tables)	6 Months Ended
	Jul. 31, 2021
Summary of restructuring activities	For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Liabilities subject to compromise (76,713 ) (48,566 ) (78,861 ) (48,566 ) Professional fees 1,156 974 1,702 974 Income tax recovery (1,000 ) - (1,000 ) - Lease Terminations - 42,878 - 42,878 Loss on disposal of property and equipment and right-of-use assets - 1,542 - 1,542 Impairment of property and equipment and right-of-use assets - - - 37,400 (76,557 ) (3,172 ) (78,159 ) 34,228 Presented in: Restructuring plan activities, net (75,557 ) (3,172 ) (77,159 ) 34,228 Recovery of income taxes (1,000 ) - (1,000 ) - (76,557 ) (3,172 ) (78,159 ) 34,228

EARNINGS (LOSS) PER SHARE (Tabl

EARNINGS (LOSS) PER SHARE (Tables)	6 Months Ended
	Jul. 31, 2021
Schedule of reconciliation of basic and diluted EPS	For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Net earnings (loss) for basic EPS 75,478 2,609 78,699 (43,178 ) Weighted average number of shares outstanding: Basic 26,299,094 26,128,971 26,270,284 26,108,499 Fully diluted 27,455,005 26,925,264 27,422,066 26,108,499 Net earnings (loss) per share: Basic 2.87 0.10 3.00 (1.65 ) Fully diluted 2.75 0.10 2.87 (1.65 )

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	6 Months Ended
	Jul. 31, 2021
SEGMENT INFORMATION
Schedule of revenue by product	For the three months ended For the six months ended July 31, August 1, July 31, August 1, 2021 2020 2021 2020 $ $ $ $ Tea 16,117 19,921 36,586 46,016 Tea accessories 2,626 3,065 5,406 7,685 Food and beverages - 45 - 1,572 18,743 23,031 41,992 55,273
Schedule of property and equipment and intangible assets by country	July 31, January 30, 2021 2021 $ $ Canada 8,194 6,895 US - - 8,194 6,895
Schedule of gross profit per country	For the three months ended For the six months ended July 31, 2021 July 31, 2021 Canada US Consolidated Canada US Consolidated $ $ $ $ $ $ Sales 15,046 3,697 18,743 33,175 8,818 41,992 Cost of sales 8,725 2,023 10,748 18,589 4,640 23,229 Gross profit 6,321 1,674 7,995 14,586 4,178 18,763 Selling, general and administration expenses (allocated) 2,458 545 3,003 4,722 1,045 5,767 Results from operating activities before corporate expenses 3,863 1,129 4,992 9,864 3,133 12,996 Selling, general and administration expenses (non-allocated) 6,082 12,512 Restructuring plan activities, net (75,557 ) (77,159 ) Results from operating activities 74,467 77,643 Finance costs 23 33 Finance income (34 ) (89 ) Net income before income taxes 74,478 77,699 For the three months ended For the six months ended August 1, 2020 August 1, 2020 Canada US Consolidated Canada US Consolidated $ $ $ $ $ $ Sales 16,773 6,258 23,031 41,033 14,240 55,273 Cost of sales 11,446 3,248 14,694 24,857 7,406 32,263 Gross profit 5,327 3,010 8,337 16,176 6,834 23,010 Selling, general and administration expenses (allocated) 2,059 865 2,924 11,658 3,389 15,047 Impairment of property and equipment and right-of-use assets - - - 2,561 - 2,561 Results from operating activities before corporate expenses 3,268 2,145 5,413 1,957 3,445 5,402 Selling, general and administration expenses (non-allocated) 4,485 11,434 Restructuring plan activities, net (3,172 ) 34,228 Results from operating activities 4,100 (40,260 ) Finance costs 1,559 3,226 Finance income (68 ) (308 ) Net Income (loss) before income taxes 2,609 (43,178 )

FINANCIAL RISK MANAGEMENT (Tabl

FINANCIAL RISK MANAGEMENT (Tables)	6 Months Ended
	Jul. 31, 2021
FINANCIAL RISK MANAGEMENT
Summary of foreign exchange exposure	July 31, January 30, 2021 2021 US$ US$ Cash 284 630 Accounts and other receivables 182 465 Prepaid expenses and deposits 676 5,394 Trade and other payables 6,203 750

CORPORATE INFORMATION (Details

CORPORATE INFORMATION (Details Narrative) $ in Millions	Jun. 11, 2021CAD ($)	Jul. 31, 2021CAD ($)	Aug. 01, 2020CAD ($)	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)
Recognized payroll subsidies		$ 1,700,000	$ 1,200,000		$ 2.8	$ 2,000,000
Settlement amount to creditors	$ 17,600,000	17,600,000		$ 17,600,000
Recognized rent subsidies		$ 800,000			$ 0.8

BASIS OF PREPARATION and GOIN_2

BASIS OF PREPARATION and GOING CONCERN UNCERTAINTY (Details Narrative) - CAD ($)	Jun. 11, 2021	Jul. 31, 2021	Jul. 31, 2021
Statement [Line Items]
Total current liabilities		$ 19,800,000	$ 19,800,000
Net Income (loss)		75,500,000	78,700,000
Gain on settlement		77,700,000	79,861,000
Settlement amount to creditors	$ 17,600,000	17,600,000	17,600,000
Going Concern Uncertainty [Member]
Statement [Line Items]
Settlement amount to creditors	$ 17,600,000	17,600,000	$ 17,600,000
Cash and accounts and other receivables		$ 19,000,000

PROPERTY AND EQUIPMENT AND RI_2

PROPERTY AND EQUIPMENT AND RIGHT-OF-USE ASSETS (Details Narrative) - CAD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2021	Aug. 01, 2020	Jul. 31, 2021	Aug. 01, 2020
Impairment loss of property and equipment		$ 13,000,000		$ 13,000,000
Impairment loss of right-of-use assets		27,000,000		27,000,000
Value in use	$ 791,000		$ 791,000
Pre-tax discount rate	13.00%		13.00%
Depreciation	$ 407,000	301,000	$ 795,000	1,544,000
Amortization of right-of-use assets	$ 135,000	454,000	$ 294,000	2,693,000
Impairment of property, equipment and right-of-use assets		2,600,000		2,600,000
Impairment of property and equipment and right-of-use assets		$ 37,400,000		$ 34,400,000

LIABILITIES SUBJECT TO COMPRO_3

LIABILITIES SUBJECT TO COMPROMISE (Details) - CAD ($)	1 Months Ended	6 Months Ended
	Jan. 30, 2021	Jul. 31, 2021
Disclaimed And Modified Leases [Member]
Statement [Line Items]
Balance, January 30, 2021	$ 75,310,000
Reversals	(1,771,000)	$ (72,230,000)
Adjustments		(1,309,000)
Balance, May 1, 2021	73,539,000
Balance as at July 31, 2021		0
Additions		0
Trade and Other Payables [member]
Statement [Line Items]
Balance, January 30, 2021	20,699,000
Reversals	(377,000)	(18,506,000)
Adjustments		(2,558,000)
Balance, May 1, 2021	20,322,000
Balance as at July 31, 2021		0
Additions		742,000
Severance Costs [member]
Statement [Line Items]
Balance, January 30, 2021	4,541,000
Reversals	0	(4,541,000)
Adjustments		0
Balance, May 1, 2021	4,541,000
Balance as at July 31, 2021		0
Additions		0
Liabilities Subject To Compromise [Member]
Statement [Line Items]
Balance, January 30, 2021	100,550,000
Reversals	(2,148,000)	(95,277,000)
Adjustments		(3,867,000)
Balance, May 1, 2021	$ 98,402,000
Balance as at July 31, 2021		0
Additions		$ 742,000

LIABILITIES SUBJECT TO COMPRO_4

LIABILITIES SUBJECT TO COMPROMISE (Details Narrative) $ in Millions	Jun. 11, 2021CAD ($)	Jul. 31, 2021CAD ($)	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)
Gain on settlement		$ 77,700,000	$ 79,861,000
Reduced professional fees		1,200,000	1,702,000
Gain recovery of income taxes		1,000,000		$ 1
Restructuring Plan activities, net		75,557,000	77,159,000
Settlement amount to creditors	$ 17,600,000	17,600,000	17,600,000
Recovery of income taxes, net		$ 1,000,000	$ 1,000,000

SHARE CAPITAL (Details)

SHARE CAPITAL (Details) - CAD ($) $ in Thousands	Jul. 31, 2021	Jan. 30, 2021
Share Capital - 26,359,969 Common shares (January 30, 2021 - 26,234,582)	$ 113,406	$ 113,167

SHARE CAPITAL (Details 1)

SHARE CAPITAL (Details 1) - $ / shares	6 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
SHARE CAPITAL (Tables)
Outstanding, beginning of year	17,490	76,350
Options outstanding
Outstanding, end of period	17,490	72,350
Exercisable, end of period	17,490	72,350
Outstanding, exercised		(4,000)
Weighted average exercise price
Weighted average exercise price, beginning	$ 6.32	$ 8.96
Weighted average exercise price, exercised		0.77
Weighted average exercise price, ending	6.32	9.41
Weighted average exercise price, exercisable	$ 6.32	$ 9.41

SHARE CAPITAL (Details 2)

SHARE CAPITAL (Details 2) - $ / shares	6 Months Ended
	Jul. 31, 2021	Aug. 01, 2020
SHARE CAPITAL (Tables)
Granted	425,764	1,177,222
RSUs outstanding
Outstanding, beginning of year	1,306,101	749,522
Forfeitures	(32,747)	(275,162)
Vested	(125,387)	(117,967)
Vested, withheld for tax	(130,562)	(120,383)
Outstanding, end of year	1,443,169	1,413,232
Weighted average fair value per unit
Outstanding, beginning of year	$ 1.70	$ 2.17
Granted	4.64	1.44
Forfeitures	1.50	1.66
Vested	1.91	2.22
Vested, withheld for tax	1.91	2.26
Outstanding, end of year	$ 2.53	$ 1.65

SHARE CAPITAL (Details Narrativ

SHARE CAPITAL (Details Narrative) $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 31, 2021CAD ($)shares	Jul. 31, 2021USD ($)shares	Aug. 01, 2020CAD ($)shares	Aug. 01, 2020USD ($)shares	Jul. 31, 2021CAD ($)shares	Jul. 31, 2021USD ($)shares	Aug. 01, 2020CAD ($)	Aug. 01, 2020CAD ($)shares	Aug. 01, 2020USD ($)shares
Statement [Line Items]
Stock-based compensation expense		$ 363		$ 267		$ 545			$ 580
Common shares issued on vesting of restricted stock units, value					$ (740,000)		$ (108,000)	$ (108,000)
Restricted Stock Units (RUS) [Member]
Statement [Line Items]
Common shares issued on vesting of restricted stock units, value	$ 70,000		$ 198,000		$ 239,000			$ 272,000
Common shares issued on vesting of restricted stock units, shares | shares	104,200	104,200	104,652	104,652	125,387	125,387		117,967	117,967
Options [Member]
Statement [Line Items]
Reduction in the contributed surplus	$ 142,000		$ 398,000		$ 486,000			$ 554,000
2015 Omnibus Plan [Member]
Statement [Line Items]
Maximum number of shares available for issuance | shares					937,868	937,868		1,042,285	1,042,285

INCOME TAXES (Details)

INCOME TAXES (Details) $ in Thousands, $ in Thousands	3 Months Ended			6 Months Ended
	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)	Jul. 31, 2021CAD ($)	Aug. 01, 2020CAD ($)
INCOME TAXES (Tables)
Income tax recovery - statutory rate (as a percent)	(1.30%)	(1.30%)	0.00%	(1.30%)	0.00%
Statutory income tax rate reconciliation, percent
Non-deductible items (as a percent)	0.10%	0.10%	3.90%	0.20%	(0.30%)
Unrecognized (recognized) deferred income tax assets (as a percent)	(26.50%)	(26.50%)	(30.70%)	(26.60%)	(26.50%)
Income tax provision (recovery) - effective tax rate (as a percent)	26.40%	26.40%	26.80%	26.40%	26.80%
Income tax provision (recovery) - effective tax rate (as a percent)	(1.30%)	(1.30%)	0.00%	(1.30%)	0.00%
Statutory income tax rate reconciliation, amount
Income tax provision - statutory rate	$ 19,663		$ 699	$ 20,513	$ (11,572)
Non-deductible items	98		103	150	126
Income tax provision (recovery) - effective tax rate		$ (1,000)		(1,000)
Unrecognized (recognized) deferred income tax asset	(19,761)		802	(20,663)	11,446
Income tax recovery - effective tax rate	$ (1,000)		$ 0	$ (1,000)	$ 0

SELLING GENERAL AND ADMINISTR_2

SELLING GENERAL AND ADMINISTRATION EXPENSES (Details 1) $ in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)
SELLING GENERAL AND ADMINISTRATION EXPENSES (Tables)
Wages, salaries and employee benefits	$ 3,547			$ 3,270		$ 7,113		$ 12,663
Depreciation of property and equipment	407		$ 301		$ 795		$ 1,544
Amortization of intangible assets	484		571		887		1,083
Amortization right-of-use asset	135		454		294		2,693
IT expenses	1,231		758		2,580		1,455
Impairment of property and equipment and right-of-use asset		$ 0	0		0		2,561
Marketing expenses	1,419		597		2,364		1,639
Software implementation costs		$ 1,592	0		2,454		0
Credit card fees	443		573		979		1,189
Professional fees	658		457		895		1,071
Stock-based compensation	363		267		545		580
Government emergency wage subsidy	(2,532)		(1,156)		(3,596)		(1,999)
Other selling, general and administration	1,338		1,316		2,969		4,563
Selling, general and administrative expenses	$ 9,085		$ 7,409		$ 18,279		$ 29,042

RESTRUCTURING PLAN ACTIVITIES_2

RESTRUCTURING PLAN ACTIVITIES (Details) $ in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)
Liabilities subject to compromise	$ (76,713)		$ (48,566)		$ (78,861)		$ (48,566)
Loss on disposal of property and equipment and right-of-use assets	0			$ 1,542	0		1,542
Income tax recovery	(1,000)		0			$ (1,000)	0
Lease Terminations	0		42,878		0			$ 42,878
Professional fee	1,156		974		1,702		974
Restructuring plan activities amount		$ (76,557)	(3,172)		(78,159)		34,228
Impairment of property and equipment, right-of-use assets	0		0		0		37,400
Presented in:
Restructuring plan activities, net	$ (75,557)		(3,172)		(77,159)		34,228
Recovery of income taxes		(1,000)	0		(1,000)		0
Total net		$ (76,557)	$ (3,172)		$ (78,159)		$ 34,228

EARNINGS (LOSS) PER SHARE (Deta

EARNINGS (LOSS) PER SHARE (Details) $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 31, 2021USD ($)shares	Jul. 31, 2021$ / shares	Aug. 01, 2020USD ($)shares	Aug. 01, 2020$ / shares	Jul. 31, 2021USD ($)shares	Jul. 31, 2021$ / shares	Aug. 01, 2020USD ($)shares	Aug. 01, 2020$ / shares
Net earnings (loss) for basic EPS | $	$ 75,478		$ 2,609		$ 78,699		$ (43,178)
Weighted average number of shares outstanding:
Basic | shares	26,299,094		26,128,971		26,270,284		26,108,499
Fully diluted | shares	27,455,005		26,925,264		27,422,066		26,108,499
Net earnings (loss) per share: Basic | $ / shares		$ 2.87		$ 0.10		$ 3		$ (1.65)
Net earnings (loss) per share: Diluted | $ / shares		$ 2.75		$ 0.10		$ 2.87		$ (1.65)

RELATED PARTY DISCLOSURES (Deta

RELATED PARTY DISCLOSURES (Details Narrative) $ in Thousands	3 Months Ended			6 Months Ended
	Jul. 31, 2021CAD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)	Jul. 31, 2021CAD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)	May 01, 2020CAD ($)
Statement [Line Items]
Merchandise purchased from related party	$ 153,000		$ 3	$ 199,000		$ 26
Infrastructure and administrative services	5,000	$ 8,000		10,000	$ 75,000
Trade and other payables	110,000			110,000
Consulting services	$ 0	$ 9,000		$ 0	53,000
Revolving loan interest rate Description				the Company agreed to lend to Squish an amount of up to $4.0 million, amended on September 13, 2019 to reflect a maximum amount available under the facility of $2.0 million.
Squish [Member]
Statement [Line Items]
Earned in first quarter					19,000
Accrued interest					$ 45,000
Loan amount repaid							$ 2,000,000

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) $ in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jul. 31, 2021CAD ($)	Jul. 31, 2021USD ($)	Aug. 01, 2020CAD ($)	Aug. 01, 2020USD ($)	Jul. 31, 2021CAD ($)	Aug. 01, 2020CAD ($)
Statement [Line Items]
Sales		$ 18,743		$ 23,031	$ 41,992	$ 55,273
Tea [Member]
Statement [Line Items]
Sales	$ 16,117		$ 19,921		36,586	46,016
Tea Accessories [Member]
Statement [Line Items]
Sales	2,626		3,065		5,406	7,685
Food And Beverages [Member]
Statement [Line Items]
Sales	$ 0		$ 45		$ 0	$ 1,572

SEGMENT INFORMATION (Details 1)

SEGMENT INFORMATION (Details 1) - CAD ($) $ in Thousands	Jul. 31, 2021	Jan. 30, 2021
Statement [Line Items]
Property and equipment and intangible assets	$ 8,194	$ 6,895
Canada Segment [Member]
Statement [Line Items]
Property and equipment and intangible assets	8,194	6,895
United States Segment [Member]
Statement [Line Items]
Property and equipment and intangible assets	$ 0	$ 0

SEGMENT INFORMATION (Details 2)

SEGMENT INFORMATION (Details 2) - CAD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2021	Aug. 01, 2020	Jul. 31, 2021	Aug. 01, 2020
Statement [Line Items]
Sales	$ 18,743	$ 23,031	$ 41,992	$ 55,273
Cost of sales	10,748	14,694	23,229	32,263
Gross profit	7,995	8,337	18,763	23,010
Results from operating activities	74,467	4,100	77,643	(40,260)
Net Income (loss) before income taxes	74,478	2,609	77,699	(43,178)
Operating Segments [Member] | Consolidated Segments [Member]
Statement [Line Items]
Sales	18,743	23,031	41,992	55,273
Cost of sales	10,748	14,694	23,229	32,263
Gross profit	7,995	8,337	18,763	23,010
Selling, general and administration expenses (allocated)	3,003	2,924	5,767	15,047
Impairment of property, equipment and right-of-use assets		0		2,561
Results from operating activities before corporate expenses	4,992	5,413	12,996	5,402
Selling, general and administration expenses (non-allocated)	6,082	4,485	12,512	11,434
Restructuring plan activities, net	(75,557)	(3,172)	(77,159)	34,228
Results from operating activities	74,467	4,100	77,643	(40,260)
Finance costs	23	1,559	33	3,226
Finance income	(34)	(68)	(89)	(308)
Net Income (loss) before income taxes	74,478	2,609	77,699	(43,178)
Operating Segments [Member] | Canada Segment [Member]
Statement [Line Items]
Sales	15,046	16,773	33,175	41,033
Cost of sales	8,725	11,446	18,589	24,857
Gross profit	6,321	5,327	14,586	16,176
Selling, general and administration expenses (allocated)	2,458	2,059	4,722	11,658
Impairment of property, equipment and right-of-use assets		0		2,561
Results from operating activities before corporate expenses	3,863	3,268	9,864	1,957
Operating Segments [Member] | United States Segment [Member]
Statement [Line Items]
Sales	3,697	6,258	8,818	14,240
Cost of sales	2,023	3,248	4,640	7,406
Gross profit	1,674	3,010	4,178	6,834
Selling, general and administration expenses (allocated)	545	865	1,045	3,389
Impairment of property, equipment and right-of-use assets		0	0
Results from operating activities before corporate expenses	$ 1,129	$ 2,145	$ 3,133	$ 3,445

FINANCIAL RISK MANAGEMENT (Deta

FINANCIAL RISK MANAGEMENT (Details) - Estimate For Allowed Claims [Member] - CAD ($) $ in Thousands	Jul. 31, 2021	Jan. 30, 2021
Statement [Line Items]
Foreign exchange exposure, cash	$ 284	$ 630
Foreign exchange exposure, accounts and other receivable	182	465
Foreign exchange exposure, prepaid expense and deposits	676	5,394
Foreign exchange exposure, Trade and other payable	$ 6,203	$ 750

FINANCIAL RISK MANAGEMENT (De_2

FINANCIAL RISK MANAGEMENT (Details Narrative) $ in Thousands, $ in Millions	6 Months Ended		12 Months Ended
	Jul. 31, 2021CAD ($)	Aug. 01, 2020CAD ($)	Jan. 30, 2021CAD ($)	Jul. 31, 2021USD ($)
Statement [Line Items]
Trade and other payable			$ 4,200	$ 12.5
Purchase obligations	$ 9,900		14,100
Purchase obligations, Advances	800		$ 6,800
Cash in hand	$ 12,100
Estimate For Allowed Claims [Member]
Statement [Line Items]
Change in assets and liabilities due currency translation, percentage	5.00%
Increase (decrease) in net loss due to change in exchange rate	$ 253	$ 155