DAVIDsTEA Announces $3.0 Million Private Placement and $2.7 Million Revenue-Linked Financing

• Pembroke Heritage Fund Limited, Pembroke Genesis Pooled Fund and a related party subscribe for $1.5 million in private placement
• Jane Silverstone Segal, Chair of the Board of DAVIDsTEA, also subscribes for $1.5 million
• Proceeds will be used to fund new store openings in Canada, extending DAVIDsTEA’s signature in-store experience to more communities across the country
• Company further enhances liquidity through $2.7 million non-dilutive, revenue-linked financing
  
  

MONTREAL, Nov. 12, 2025 (GLOBE NEWSWIRE) -- DAVIDsTEA Inc. (TSX-Venture: DTEA) (“DAVIDsTEA” or the “Company”), a leading North American tea merchant, is pleased to announce that it has received subscription agreements for a private placement of units in an aggregate amount of $3 million (the “Private Placement”). Proceeds from the Private Placement will be used to open new stores across Canada and to support working capital requirements.

The Company is also pleased to announce that it has entered into a revenue-linked financing agreement under which an institutional partner has provided $2.7 million to DAVIDsTEA. The proceeds from this non-dilutive financing have been added to working capital, providing the Company with further financial flexibility.

“This financing signals the next chapter in DAVIDsTEA’s evolution from turnaround to growth. With a strengthened balance sheet and renewed momentum, we’re ready to expand our retail footprint, deepen customer relationships, and advance the wellness-focused shift toward specialty tea. Our Grand Plan is simple yet powerful — to bring the DAVIDsTEA experience back to more communities across Canada, where our brand story, passionate tea guides, and immersive in-store experience truly come to life,” said Sarah Segal, Chief Executive Officer and Chief Brand Officer, DAVIDsTEA.

“This combination of equity and revenue-linked financing strengthens our liquidity and financial flexibility,” said Frank Zitella, President and Chief Operating and Financial Officer of DAVIDsTEA. “It provides the capital to accelerate the execution of our store-led growth strategy while maintaining a disciplined approach to capital allocation. The proceeds will support the opening of new stores, enhance working capital, and help position DAVIDsTEA to achieve sustainable profitability, generate meaningful free cash-flow and deliver long-term value for all shareholders.”

In the Private Placement, DAVIDsTEA will issue 3,333,334 units at a price of $0.90 per unit, for proceeds of $3 million. Each unit will consist of one common share and one-half of a common share purchase warrant. Each full warrant will entitle its holder to purchase one additional common share of DAVIDsTEA at a price of $1.25 for one year from the closing date of the Private Placement and at a price of $1.50 for one year thereafter. In the event that at any time following the date that is four months and one day from the closing date of the Private Placement, the closing price of DAVIDsTEA’s common shares on the TSX Venture Exchange is at least $2.00 for a period of not less than 20 consecutive trading days, the warrants will expire, at the sole discretion of the Company, on the 30^th day after the date on which the Company sends a notice in prescribed form to the holders of the warrants. DAVIDsTEA will not pay any commissions or other fees in connection with the Private Placement.

Pembroke Heritage Fund Limited, Pembroke Genesis Pooled Fund and a related party of Pembroke Management Ltd. have subscribed for 50% of the units in the Private Placement for an aggregate amount of $1.5 million. Established by Pembroke Management, the stated investment objective of Pembroke Genesis Pooled Fund and Pembroke Heritage Fund Limited, a Guernsey-registered closed-end collective investment fund, is to provide investors with long-term capital appreciation primarily by investing in a concentrated portfolio of common shares and other equity securities of predominantly Canadian micro-cap and small-cap companies listed on a recognized exchange in Canada and/or the United States. The Funds are managed in the same entrepreneurial spirit as their manager Pembroke Management Ltd., and draw upon Pembroke’s decades-long track record of investing in Canadian emerging enterprises. Founded in 1968, Pembroke Management is an independent, Montreal-based investment manager which manages more than $3 billion of assets for a select group of institutions and high-net-worth families and has a long history of investing in entrepreneurial Canadian companies. DAVIDsTEA and the three subscribers are at arm’s length.

Jane Silverstone Segal, Chair of the Board of Directors of DAVIDsTEA, has subscribed for the other 50% of the units, for $1.5 million. Jane Silverstone Segal controls Rainy Day Investments Ltd., the principal shareholder of DAVIDsTEA. Jane Silverstone Segal and DAVIDsTEA are not at arm’s length.

The Private Placement to Jane Silverstone Segal constitutes a “related party transaction” for DAVIDsTEA under Canadian Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Jane Silverstone Segal and Sarah Segal, Chief Executive Officer, Chief Brand Officer and a director of DAVIDsTEA, disclosed their respective interests in the Private Placement to DAVIDsTEA’s Board of the Directors in accordance with the requirements of the Canada Business Corporations Act in that Jane Silverstone Segal is a subscriber in the Private Placement and Sarah Segal is her daughter. DAVIDsTEA’s Board of Directors, for the purposes thereof comprised solely of DAVIDsTEA’s three independent directors, unanimously approved the Private Placement and determined that the Private Placement is in the best interests of the Company.

As regards Jane Silverstone Segal, the Private Placement will be exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 which generally apply to a “related party transaction” in that, among other things, the subscription price of $1.5 million to be paid by Jane Silverstone Segal does not exceed 25% of DAVIDsTEA’s market capitalization and the common shares of DAVIDsTEA are not listed on a stock exchange prescribed by MI 61-101.

DAVIDsTEA will file a material change report with respect to the Private Placement on SEDAR+ after the closing thereof. DAVIDsTEA will not file the material change report at least 21 days before the closing date of the Private Placement as the terms and conditions thereof were only recently finalized. In DAVIDsTEA’s view, the shorter period is necessary to permit DAVIDsTEA to close the Private Placement on a timely basis.

There are currently 27,145,589 common shares of DAVIDsTEA issued and outstanding. Immediately following the closing of the Private Placement, DAVIDsTEA expects that there will be 30,478,923 shares outstanding. Jane Silverstone Segal currently exercises control or direction over an aggregate of 12,149,425 shares, representing 44.76% of DAVIDsTEA’s issued and outstanding shares. Immediately after the closing of the Private Placement, it is expected that Jane Silverstone Segal will exercise control or direction over 13,816,092 shares, representing 45.33% of the shares that will be issued and outstanding. It is expected that Jane Silverstone Segal’s percentage shareholdings in DAVIDsTEA will increase by 0.57% as a result of the Private Placement. It is also expected that Jane Silverstone Segal will hold 833,333 warrants following the closing of the Private Placement, each of which will entitle its holder to acquire one additional common share of DAVIDsTEA for a period of two years.

DAVIDsTEA expects to complete the Private Placement on or before November 21, 2025. The Private Placement is subject to standard closing conditions and to approval by the TSX Venture Exchange. The shares and warrants to be issued in the Private Placement will be subject to restrictions on resale for a period of four months from the closing date.

Caution Regarding Forward-Looking Statements
This press release includes statements that express DAVIDsTEA’s opinions, expectations, beliefs, plans or assumptions regarding future events or future results, and that are, or may be deemed to be, “forward-looking statements” within the meaning of applicable Canadian securities law. 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 the Company’s intentions, beliefs or current expectations concerning, among other things, the proposed Private Placement. DAVIDsTEA cannot give any assurance that the proposed Private Placement will be completed on the terms and conditions or timetable set out above or at all.

While DAVIDsTEA believes its opinions and expectations are based on reasonable assumptions, such forward-looking statements are inherently subject to risks, uncertainties and assumptions about the Company, including the risk factors discussed in Management Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended February 1, 2025, filed with the Autorité des marchés financiers on May 28, 2025, which could materially affect the Company’s business, financial condition or future results.

About DAVIDsTEA
DAVIDsTEA offers a specialty branded selection of high-quality proprietary loose-leaf teas, pre-packaged teas, tea sachets, tea-related accessories and gifts through its e-commerce platform at www.davidstea.com and the Amazon Marketplace, its wholesale customers which include over 4,000 grocery stores and pharmacies, over 1,500 convenience stores in Canada and over 900 grocery stores in the United States, as well as 20 company-owned stores across Canada. It offers primarily proprietary tea blends that are exclusive to the Company, as well as traditional single-origin teas and herbs. The team’s 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. The Company is headquartered in Montréal, Canada.

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