UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): March 7, 2025 (November 6, 2024)

DEVVSTREAM CORP.
(Exact name of registrant as specified in its charter)

Alberta, Canada
001-40977
86-2433757
(State or other jurisdiction of incorporation or organization)
(Commission File Number)
(I.R.S. Employer Identification No.)

2108 N St., Suite 4254
Sacramento, California
(Address of principal executive offices)
  
95816
(Zip Code)
(647) 689-6041
(Registrant’s telephone number, including area code)

(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:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
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
Trading
Symbol(s)
Name of each exchange on
which registered
Common shares
DEVS
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
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. ☐

Introductory Note

Overview

This Amendment No. 1 to the Current Report on Form 8-K of DevvStream Corp. (“New PubCo” or the “Company”) originally filed by the Company on November 13, 2024 (such Current Report, the “Original Current Report”) is being filed for the purpose of supplementing the historical financial statements and pro forma combined financial information provided under Items 9.01(a) and 9.01(b) in the Original Current Report to include:


 •
the audited consolidated financial statements of DevvStream Holdings Inc., a company existing under the Laws of the Province of British Columbia (“DevvStream”) as of July 31, 2024 and 2023 and for the years ended July 31, 2024 and 2023, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream for the year ended July 31, 2024;


•
the unaudited condensed consolidated financial statements of DevvStream as of October 31, 2024 and for the three month period ended October 31, 2024 and 2023 and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream for the three month period ended October 31, 2024; and


•
the unaudited pro forma condensed combined financial information of the Company as of October 31, 2024, for the three month period ended October 31, 2024 and for the year ended July 31, 2024.

This Amendment No. 1 further amends the Original Current Report to reflect business updates and developments at the Company subsequent to the filing date of the Original Current Report. On February 12, 2025, the Company received notice (the “Notice”) from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share. The Company has 180 calendar days, or by August 13, 2025, to regain compliance with the minimum bid price requirement but could be eligible for an additional 180-day compliance period.

The Business Combination

On November 6, 2024 (the “Closing Date”), Focus Impact Acquisition Corp. and our predecessor company (“FIAC”) consummated the previously announced business combination with DevvStream pursuant to the Business Combination Agreement, dated as of September 12, 2023 (as amended by Amendment No. 1 to the Business Combination Agreement dated May 1, 2024, as further amended by Amendment No. 2 to the Business Combination Agreement dated August 10, 2024, and as further amended by Amendment No. 3 to the Business Combination Agreement dated October 29, 2024, the “Business Combination Agreement”), by and among FIAC, Focus Impact Amalco Sub Ltd. (“Amalco Sub”) and DevvStream.

Pursuant to the Business Combination Agreement, on the Closing Date, (a) FIAC changed its jurisdiction from the State of Delaware under the Delaware General Corporation Law to the Province of Alberta, Canada, and thereby become a company existing under the Business Corporations Act (Alberta) and changed its name to DevvStream Corp., and (b) DevvStream and Amalco Sub amalgamated to form one corporate entity (such entity, “Amalco” and such transaction, the “Amalgamation”).

On November 6, 2024, New PubCo also issued (i) 194,809 common shares of New PubCo (the “New PubCo Common Shares”) to certain investors pursuant to subscription agreements, dated October 29, 2024, including a subscription agreement with Helena Global Investment Opportunities I Ltd. (such agreements together, the “PIPE Agreements”) for $2,250,000 in the aggregate, and (ii) 3,249,877 New PubCo Common Shares to certain investors, including Karbon-X Corp, pursuant to certain carbon credit subscription agreements dated October 29, 2024 (such agreements together, the “Carbon Subscription Agreements”) (items (i) and (ii) in the foregoing together, the “PIPE Financing”). The Carbon Subscription Agreements were executed in connection with certain Carbon Credit Purchase Agreements with DevvStream (the “Carbon Credit Purchase Agreements”), pursuant to which DevvStream is purchasing carbon credits from certain sellers (“Carbon Credit Sellers”). The New PubCo Common Shares that were issued to such Carbon Credit Sellers pursuant to the Carbon Subscription Agreements were issued to the Carbon Credit Sellers in satisfaction of the purchase price owed to them under the Carbon Credit Purchase Agreements.

As previously reported prior to the consummation of the Business Combination (as defined below), on October 29, 2024, FIAC entered into an amendment (the “Amendment to the Sponsor Side Letter Agreement”) to the side letter agreement, dated September 12, 2023, which was subsequently amended on May 1, 2024, by and among FIAC and the Sponsor (as amended, the “Letter Agreement”). Pursuant to the Amendment to the Sponsor Side Letter Agreement, FIAC amended the transfer restrictions included therein to enable the Sponsor to transfer on October 29, 2024 up to 5,750,000 shares of common stock of the Company (such shares of common stock that are being transferred, the “Sponsor Shares”) to (i) certain advisor parties in full or partial satisfaction of such advisor parties’ fees and expenses incurred in connection with the Business Combination with DevvStream (approximately $15.1 million of fees and expenses are being satisfied through the transfer of Sponsor Shares to advisor parties) (the “Equitization”), (ii) certain investors subscribing to PIPE Agreements (as defined below), and (iii) Helena Global Investment Opportunities I Ltd. as consideration for the execution of an equity line of credit purchase agreement, dated October 29, 2024 with FIAC and the Sponsor (the “ELOC Agreement”). On October 29, 2024, FIAC had also determined that it was advisable and in the best interest of FIAC and its stockholders to waive the transfer restrictions to which the Sponsor Shares were subject and that were included in the certain letter agreement, dated November 1, 2021, by and between FIAC and the Sponsor. Pursuant to the Amendment to the Sponsor Side Letter Agreement, at the Closing (as defined below), the Sponsor was issued New PubCo Common Shares in an amount that is equal to the number of Sponsor Shares that the Sponsor agreed to transfer prior to the Closing, as described in the foregoing items (i) to (iii).

Further, as previously reported prior to the Closing, FIAC entered into a contribution and exchange agreement (the “Monroe Agreement”) on October 29, 2024, pursuant to which, among other things, Crestmont Investments LLC, a Delaware limited liability company, immediately following the Closing, contributed 2,000,000 units representing 50% of the limited liability company interests in Monroe Sequestration Partners LLC, a Delaware limited liability company, in exchange for 2,000,000 New PubCo Common Shares, subject to the terms and conditions described in the Monroe Agreement.

Unless the context otherwise requires, “we,” “us,” “our,” and the “Company” refer to New PubCo. All references herein to the “Board” refer to the board of directors of New PubCo. All references herein to the “Closing” refer to the closing of the transactions contemplated by the Business Combination Agreement, including the PIPE Financing (the “Transactions” or the “Business Combination”). Defined terms included in this Amendment No. 1 to Current Report on Form 8-K (this “Current Report”) shall have the same meaning as the defined terms used in the definitive proxy statement/prospectus included in FIAC’s Registration Statement on Form S-4 (File No. 333-275871) that was initially filed with the U.S. Securities and Exchange Commission on December 4, 2023 (as amended, the “Proxy Statement/Prospectus”).

Item 1.01.
Entry into a Material Definitive Agreement.

Registration Rights Agreement

On November 6, 2023, New PubCo, Focus Impact Sponsor, LLC, a Delaware limited liability company (the "Sponsor"), and certain historical holders of the Company’s securities (the “Legacy Devvstream Holders”) entered into an Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which, among other things, the Legacy Devvstream Holders and Sponsor will be granted customary registration rights with respect to the securities of New PubCo that they hold.

The foregoing description of the Registration Rights Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions thereof, copy of which is filed as Exhibit 10.13 of this Current Report and is incorporated herein by reference.

Indemnification Agreements

On November 6, 2024, in connection with the consummation of the Business Combination, New PubCo entered into indemnification agreements (the “Indemnification Agreements”) with each of its directors and executive officers. Each Indemnification Agreement provides for indemnification and advancements by New PubCo of certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of New PubCo’s directors or executive officers or as a director or executive officer of any other company or enterprise to which the person provides services at New PubCo’s request.

The foregoing description of the Indemnification Agreements does not purport to be complete and is qualified in its entirety by the terms and conditions thereof, a form of which is filed as Exhibit 10.5 of this Current Report and is incorporated herein by reference.

Strategic Consulting Agreement

On November 13, 2024, New PubCo also entered into a strategic consulting agreement with Focus Impact Partners, LLC (the “Consultant”), pursuant to which the Consultant will provide New PubCo with certain consulting services (the “Strategic Consulting Agreement”) and New PubCo will pay the Consultant an annual consulting fee of $500,000, which will be payable in quarterly installments of $125,000 starting with an initial payment for the period beginning December 31, 2023 (pro-rated based on the number of days from December 31, 2023 through and including November 13, 2024). Notwithstanding the foregoing, any fees due under the Strategic Consulting Agreement shall accrue and not be payable until (a) New PubCo has successfully raised $5.0 million in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) New PubCo has 2 or more consecutive quarters of positive cash flow from operations. New PubCo agrees to pay the Consultant additional consulting fees as to be mutually agreed consistent with market practice in connection with any acquisition, merger, consolidation, business combination, sale, divestiture, financing, refinancing, restructuring or other similar transaction for which the Consultant provides consulting services to New PubCo. Further, New PubCo has issued to the Sponsor 557,290 New PubCo Common Shares in a private placement pursuant to the Strategic Consulting Agreement in connection with the execution of the Strategic Consulting Agreement. The Strategic Consulting Agreement has a term of three (3) years unless terminated early with at least 120 days advance notice and will be automatically extended for successive one (1)-year periods at the end of each year unless New PubCo or the Consultant provide a written notice of its desire not to automatically extend at least 120 days prior to the end of each year during the term of the Strategic Consulting Agreement. Pursuant to the Strategic Consulting Agreement, New PubCo has also agreed to customary indemnification of the Consultant in connection with the performance of its services.

The foregoing description of the Strategic Consulting Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions thereof, a form of which is filed herewith as Exhibit 10.20 of this Current Report and is incorporated herein by reference.

New Convertible Notes

On January 12, 2024, DevvStream issued an unsecured convertible grid note (the “Focus Partners Convertible Note”) to the Consultant and as of the November 13, 2024, the Consultant had advanced a total of $637,150 to DevvStream under the Focus Convertible Note. Further, FIAC was indebted to Focus Impact Sponsor, LLC for $3,000,000 pursuant to a convertible promissory note dated December 1, 2023 and a convertible promissory note, dated May 9, 2023 (together, the “Focus Sponsor Convertible Notes”). The terms and conditions of the Focus Partners Convertible Note provided that, following the consummation of the Business Combination, the Consultant would have the right to convert its convertible notes or to have its convertible notes repaid at its option. As of the Closing, New PubCo is also indebted to the Consultant in the amount of $345,000 of accrued and unpaid fees under the administrative services agreement, dated October 27, 2021, by and between FIAC and the Sponsor (the “Unpaid Fees”). On November 13, 2024, New PubCo issued (i) $3,000,000 of new 5.3% convertible notes to the Sponsor, and (ii) a new $982,150 of new 5.3% convertible notes to the Consultant (together, the “New Convertible Notes”), in each case in exchange for the cancellation and conversion of the Focus Partners Convertible Note, the Focus Sponsor Convertible Notes and the Unpaid Fees. The New Convertible Bridge Notes have a maturity date that is twenty-four months from the Closing. The principal loan amount and any accrued and unpaid interest under the New Convertible Notes are convertible into New PubCo Common Shares at a 25% discount to the issuer's 20-day volume weighted average price, subject to a floor of $0.867 per share.

The foregoing description of the New Convertible Notes does not purport to be complete and is qualified in its entirety by the terms and conditions thereof,  form of which is filed as Exhibit 10.21 of this Current Report and is incorporated herein by reference.

In connection with the New Convertible Notes, the Company agreed (i) to grant the Sponsor and to the Consultant (the “Secured Parties”) a first ranking security interest in all of the carbon credits and similar environmental assets held by the Company, presently existing or hereafter created or acquired, and (ii) to execute and deliver to the Secured Parties a security agreement evidencing the Secured Parties’ security interest (the “Security Agreement”). On December 18, 2024, the Company executed and delivered to the Secured Parties the Security Agreement.

The foregoing description of the Security Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions thereof, a copy of which is filed as Exhibit 10.22 of this Current Report and is incorporated herein by reference.

Extension of Devvio and Envviron Convertible Notes

DevvStream previously issued (i) an unsecured convertible note (the “Devvio Convertible Note”) to Devvio Inc. (“Devvio”) with a principal amount of $100,000, and (ii) an unsecured convertible note (the “Envviron Convertible Note”) to Envviron SAS (“Envviron”) with a principal amount of $250,000. The terms and conditions of the Devvio Convertible Note and Envviron Convertible Note each provided that, following the consummation of the Business Combination, Devvio and Envviron has the right to convert their convertible notes or to have their convertible notes repaid. As a result of the consummation of the Business Combination, the maturity date of the Devvio Convertible Note and the Envviron Convertible Note was accelerated to the date that is 10 business days from the Closing, or November 21, 2024 (the “Maturity Date”). On November 6, 2024, New PubCo, Devvio and Envviron agreed to amend the terms of the Devvio Convertible Note and Envviron Convertible Note, respectively, to extend the Maturity Date by six (6) months.

Employment Agreements

The information relating to the employment agreements with Bryan Went, Chris Merkel, and Sunny Trinh in Item 2.01 under "Executive Compensation—Employment Agreements") is incorporated herein by reference.

Item 2.01.
Completion of Acquisition or Disposition of Assets.

The disclosure set forth in the “Introductory Note” above is incorporated into this Item 2.01 by reference. As previously reported, on September 13, 2024, FIAC held a special meeting (the “Extraordinary Special”) at which the FIAC stockholders considered and adopted, among other matters, the Business Combination Agreement. On November 6, 2024, the parties to the Business Combination Agreement consummated the Transactions.

In connection with the shareholder meeting to approve the Business Combination (the “Business Combination Approval Meeting”) and the subsequent vote on October 31, 2024 to approve the extension of the time period during which FIAC may consummate a business combination, the holders of 1,569,414 shares of Class A Common Stock exercised their right to redeem their shares for cash, as provided for, prior to the Closing, in FIAC’s amended and restate certificate of incorporation.

In connection with the Closing, (i) 3,444,686 New PubCo Common Shares were issued in the PIPE Financing, (ii) 5,148,164 shares of Class A Common Stock held by pre-Business Combination holders of FIAC were converted into 4,989,600 New PubCo Common Shares, (iii) the Sponsor forfeited 575,000 shares of Class B Common Stock of FIAC and was issued 5,000,531 New PubCo Common Shares pursuant to the Letter Agreement and upon conversion of 15,558 shares Class B Common Stock held by the Sponsor at the time of the Closing, (iv) each redeemable warrant that was issued in connection with FIAC’s initial public offering that closed November 1, 2021 (the “FIAC IPO”) and that was exercisable for one share of Class A Common Stock at an exercise price of $11.50 (collectively, the “FIAC Warrants”) and each private placement warrant which was issued to the Sponsor in connection with the FIAC IPO and which entitles the holder thereof to purchase one whole share of Class A Common Stock at $11.50 per share (the “Private Placement Warrants” and together with the FIAC Warrants, the “Warrants”), were assumed by New PubCo and converted into a warrant to purchase a number of New PubCo Common Shares equal to the Reverse Split Factor at an exercise price equal to the Adjusted Exercise Price, on substantially similar terms as the Private Placement Warrants (the “Converted Private Placement Warrants” and together with the Converted Public Warrants, the “New PubCo Warrants”), (v) each of DevvStream’s multiple voting shares (the “Multiple Voting Company Shares”) and DevvStream’s subordinate voting shares (the “Subordinated Voting Company Shares” and together with the Multiple Voting Company Shares, the “Company Shares”) issued and outstanding immediately prior to the effective time of the Amalgamation (the “Effective Time”) were automatically exchanged for that certain number of New PubCo Common Shares equal to the applicable Per Common Share Amalgamation Consideration (as defined below), (vi) each option (whether vested or unvested) to purchase Company Shares (each, a “Company Option”) granted under DevvStream’s 2022 Equity Incentive Plan, as amended and restated from time to time, and DevvStream’s 2022 Non-Qualified Stock Option Plan (together, the “Company Equity Incentive Plans”) and each restricted stock unit representing the right to receive payment in Company Shares, granted under a restricted stock unit award agreement (each, a “Company RSU”) issued and outstanding immediately prior to the Effective Time was cancelled and converted into an option to purchase a number of New PubCo Common Shares (“Converted Options”) and New PubCo restricted stock units (“Converted RSUs”), respectively, in an amount equal to the Company Shares underlying such Company Option or Company RSU, respectively, multiplied by the Common Conversion Ratio, as defined below (and, for Company Options, at an adjusted exercise price equal to the exercise price for such Company Option immediately prior to the Effective Time divided by the Common Conversion Ratio), (vii) each warrant of DevvStream (each, a “Company Warrant”) issued and outstanding immediately prior to the Effective Time became exercisable for New PubCo Common Shares in an amount equal to the Company Shares underlying such Company Warrant multiplied by the Common Conversion Ratio (“Converted Warrants”) (and at an adjusted exercise price equal to the exercise price for such Company Warrant prior to the Effective Time divided by the Common Conversion Ratio), (viii) the holder of convertible notes to be issued by DevvStream, if any, issued and outstanding immediately prior to the Effective Time (the “Company Convertible Notes”) received New PubCo Common Shares in accordance with the terms of such Company Convertible Notes, and (ix) each common share of Amalco Sub issued and outstanding immediately prior to the Effective Time was automatically exchanged for one common share of Amalco.

The “Per Common Share Amalgamation Consideration” means (i) with respect to each Multiple Voting Company Share, an amount of New PubCo Common Shares equal to (a) ten (10), multiplied by (b) the Common Conversion Ratio, and (ii) with respect to each Subordinated Voting Company Share, an amount of New PubCo Common Shares equal to the Common Conversion Ratio. The “Common Conversion Ratio” means, in respect of a Company Share, 0.152934, which is equal to the Common Amalgamation Consideration divided by the Fully Diluted Common Shares Outstanding. The “Common Amalgamation Consideration” means (a)(i) the Reverse Split Factor multiplied by (ii)(x) $145 million plus the aggregate exercise price of all in-the-money Company Options and Company Warrants outstanding immediately prior to the Effective Time (or exercised in cash prior to the Effective Time) divided by (y) $10.20, plus (b) solely to the extent any Company Shares are required to be issued to Approved Financing Sources pursuant to Approved Financings in connection with the Closing, (i) each such Company Share multiplied by (ii) the Per Common Share Amalgamation Consideration in respect of such Company Share. The “Fully Diluted Common Shares Outstanding” means, without duplication, at any measurement time (a)(i) ten (10), multiplied by (ii) the aggregate number of Multiple Voting Company Shares that are issued and outstanding, plus (b) the aggregate number of Subordinated Voting Company Shares that are issued and outstanding, plus (c) the aggregate number of Subordinated Voting Company Shares to be issued pursuant to the exercise and conversion of the Company Options in accordance therewith, plus (d) the aggregate number of Subordinated Voting Company Shares to be issued pursuant to the exercise and conversion of the Company Warrants in accordance therewith, plus (e) the aggregate number of Subordinated Voting Company Shares to be issued pursuant to the vesting of the Company RSUs in accordance therewith; provided, that “Fully Diluted Common Shares Outstanding” shall not include any Subordinary Voting Company Shares to be issued (including pursuant to the exercise and conversion of Company Warrants) to any Approved Financing Source pursuant to an Approved Financing. The “Reverse Split Factor” means 0.9692, which is equal to the lesser of (a) the quotient obtained by dividing the Final Company Share Price by $0.6316 and (b) one. The “Final Company Share Price” means the closing price of the Subordinated Voting Company Shares on the Cboe Canada stock exchange (the “Cboe Canada”), as of the end of last trading day on the Cboe Canada prior to the Closing (and if there is no such closing price on the last trading day prior to the Closing, the closing price of the Subordinated Voting Company Shares on the last trading day prior to the Closing on which there is such a closing price), converted into United States dollars based on the Bank of Canada daily exchange rate on the last business day prior to the Closing.

Each New PubCo Warrants is exercisable for 0.9692 New PubCo Common Shares for $11.86 (the "Adjusted Exercise Price"). The Converted Private Placement Warrants are also exercisable cashless pursuant to the terms of the Converted Private Placement Warrants. Pursuant to the terms of the New PubCo Warrants, the exercise price of the New PubCo Warrants will be further adjusted pursuant to a provision in the New PubCo Warrants that was triggered in connection with the financing transactions that closed in connection with consummation of the Business Combination and will be adjusted to an exercise price that is equal to 115% of the higher of the Market Value and the New Issued Price. “Market Value” as used in the foregoing shall mean the volume-weighted average trading price of the New PubCo Common Shares during the twenty (20) trading day period starting on the trading day prior to the day on which New PubCo consummated the Business Combination. “Newly Issued Price” as used in the foregoing shall mean the issue price or effective issue price (as determined in good faith by the Board), at which New PubCo (or its predecessor) issued additional shares or securities convertible into or exercisable or exchangeable for shares for capital raising purposes in connection with the consummation of the Business Combination, which has been determined to be $1.32.

Immediately after giving effect to the Transactions, there were 27,413,444 New PubCo Common Shares (excluding 557,290 New PubCo Common Shares that are issued pursuant to the Strategic Consulting Agreement after the Closing), 11,495,295 Converted Public Warrants (which are exercisable for cash for up to 11,141,239 New PubCo Common Shares), 11,200,000 Converted Private Placement Warrants (which are exercisable cashless or for cash, and if exercised for cash maybe be exercised for up to 10,855,040 New PubCo Common Shares), 199,069 Converted Warrants, 586,502 Converted Options and  1,177,300 Converted RSUs issued and outstanding. On November 7, 2024, the New PubCo Common Shares began trading on the Nasdaq Stock Market LLC (“Nasdaq”).

The material terms and conditions of the Business Combination Agreement are described in the Proxy Statement/Prospectus, in the subsection entitled “The Business Combination Agreement” of the section titled “Business Combination Proposal” beginning on page 119 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

FORM 10 INFORMATION

Item 2.01(f) of Form 8-K states that if the predecessor registrant was a shell company, as FIAC was immediately before the Business Combination, then the registrant must disclose the information that would be required if the registrant were filing a general form for registration of securities on Form 10. Accordingly, New PubCo is providing the information below that would be included in a Form 10 if New PubCo were to file a Form 10. Please note that the information provided below relates to New PubCo following the consummation of the Business Combination, unless otherwise specifically indicated or the context otherwise requires.

Forward-Looking Statements

Some of the statements contained in this Current Report constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward-looking statements reflect the current views of New PubCo with respect to, among other things, the plans, strategies and prospects, both business and financial, of New PubCo. These statements are based on the beliefs and assumptions of the management of New PubCo. Likewise, the financial statements included herein and all of the statements regarding market conditions and results of operations are forward-looking statements. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “projects,” “anticipates” or the negative version of these words or other comparable words or phrases.

The forward-looking statements contained in this Current Report reflect New PubCo’s current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause its actual results to differ significantly from those expressed in any forward-looking statement. New PubCo cannot guarantee that the transactions and events described will happen as described (or that they will happen at all). The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

• the ability of New PubCo, following the consummation of the Business Combination, to realize the benefits from the Business Combination;


•
changes in the market price of New PubCo Common Shares after the Business Combination, which may be affected by factors different from those that affected the price of shares of Class A Common Stock prior to the Business Combination;


•
the ability of New PubCo, to maintain the listing of the New PubCo Common Shares on Nasdaq following the consummation of the Business Combination;


•
future financial performance following the Business Combination;


•
the impact from the outcome of any known and unknown litigation;


•
the ability of New PubCo to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses;


•
expectations regarding future expenditures of New PubCo following the Business Combination;


•
the future mix of revenue and effect on gross margins of New PubCo following the Closing;


•
changes in interest rates, rates of inflation, carbon credit prices and trends in the markets in which we operate;


•
the attraction and retention of qualified directors, officers, employees and key personnel of New PubCo following the Closing;


•
the ability of New PubCo to compete effectively in a competitive industry;


•
the ability to protect and enhance New PubCo’s corporate reputation and brand;


•
expectations concerning the relationships and actions of New PubCo and its affiliates with third parties;


•
the impact from future regulatory, judicial and legislative changes in New PubCo’s industry;


•
the ability to locate and acquire complementary products or product candidates and integrate those into New PubCo’s business;


•
future arrangements with, or investments in, other entities or associations;


•
intense competition and competitive pressures from other companies in the industries in which New PubCo will operate;


•
the volatility of the market price and liquidity or trading of the securities of New PubCo; and


•
other factors detailed under the section titled “Risk Factors” beginning on page 66 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

While forward-looking statements reflect New PubCo’s good faith beliefs, they are not guarantees of future performance. New PubCo disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this proxy statement, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to New PubCo.

Business

We are a capex-light carbon credit generation company focused on high quality and high return technology-based projects. We offer investors exposure to carbon credits, a key instrument used to offset emissions of carbon dioxide from industrial activities to reduce the effects of global warming.

By utilizing blockchain technology to drive trust and transparency across the credit cycle and through leveraging partnerships with market leaders, we provide a turnkey solution to help companies generate, manage, and monetize environmental assets through carbon credits. The blockchain technology will be used in conjunction with DevvStream’s platform to track, manage and store data only. It will do so to keep an immutable record of the data. The blockchain technology will not be used to track any assets. The blockchain technology will not create a record of carbon credits. Carbon credits are tracked by third parties in traditional registries and those registries show ownership of the carbon credits. We will not use the blockchain technology to create or track any type of crypto asset, and our use of the blockchain does not involve or require the integration of any token or other crypto asset to support its functionality.

As explained in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream—Liquidity and Capital Resources” attached hereto as Exhibit 99.4, and which is incorporated herein by reference, New PubCo’s management does not believe its current cash and cash equivalents are sufficient to fund operations for at least the next 12 months from the issuance date of the financial statements for the year ended July 31, 2024, which management believes raises substantial doubt about its ability to continue as a going concern. For more information also see “Risk Factors — Risks Related to DevvStream’s Business and Industry — We have incurred significant losses and expect to incur additional expenses and continuing losses for the foreseeable future, and we may not achieve or maintain profitability,” which can be found beginning on page 66 of the Proxy Statement/Prospectus, which is incorporated herein by reference.

The mailing address of our principal executive offices is 2108 N St., Suite 4254 Sacramento, CA 95816 and our telephone number at such address is (647) 689-6041.

New PubCo owns no material assets other than the 100% issued and outstanding shares Amalco and does not operate any business.

Our business is further described in the Proxy Statement/Prospectus in the section titled “Information about DevvStream” beginning on page 223 of the Proxy Statement/Prospectus and that information is incorporated herein by reference.

Risk Factors

The risk factors related to New PubCo, our business and operations and the Transactions are set forth in the Proxy Statement/Prospectus in the section titled “Risk Factors” beginning on page 66 of the Proxy Statement/Prospectus and that information is incorporated herein by reference.

Financial Information

Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the financial information of DevvStream and the Company, which is incorporated herein by reference.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Reference is made to the disclosure set forth in Item 9.01 of this Current Report on Form 8-K concerning the management’s discussion and analysis of financial condition and results of operations of DevvStream, which is incorporated herein by reference.

Properties

Our corporate headquarters are located in Vancouver, British Columbia, Canada. We consider our current office space adequate for our current operations.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of New PubCo Common Shares immediately following consummation of the Transactions by:


 •
each person known by New PubCo to be the beneficial owner of more than 5% of New PubCo’s issued and outstanding common shares immediately following the consummation of the Transactions;


•
each of New PubCo’s executive officers and directors; and


•
all of New PubCo’s executive officers and directors as a group after the consummation of the Transactions.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security. Under those rules, beneficial ownership includes securities that the individual or entity has the right to acquire, such as through the exercise of stock options and warrants, within 60 days of the Closing Date. Shares subject to options or warrants that are currently exercisable or exercisable within 60 days of the Closing Date are considered outstanding and beneficially owned by the person holding such options for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Except as noted by footnote, and subject to community property laws where applicable, based on the information provided to New PubCo, New PubCo believes that the persons and entities named in the table below have sole voting and investment power with respect to all shares shown as beneficially owned by them. Unless otherwise noted, the business address of each of the directors and executive officers of New PubCo is 2108 N St., Suite 4254 Sacramento, CA 95816. The percentage of beneficial ownership of New PubCo is calculated based on 27,413,444 New PubCo Common Shares issued and outstanding immediately after giving effect to the Transactions.

Name and Address of Beneficial Owners
  
Number of Common
Shares
    
% of Total Voting Power
  
Thomas G. Anderson(1)(2)
    
7,187,895
      
26.1
%
Wray Thorn
    
—(11
)
    
—(11
)
Carl Stanton
    
—(11
)
    
—(11
)
Sunny Trinh(3)
    
926,336
      
3.3
%
Stephen Kukucha(4)
    
76,467
      
*
  
Ray Quintana(5)
    
76,467
      
*
  
Bryan Went(6)
    
71,987
      
*
  
Chris Merkel(7)
    
69,086
      
*
  
David Goertz(8)
    
58,356
      
*
  
Michael Max Buhler(9)
    
45,880
      
*
  
Jamila Piracci(10)
    
45,880
      
*
  
All directors and officers as a group (eleven individuals)
    
8,558,354
      
29.7
%
Five Percent Holders:
                
Focus Impact Sponsor, LLC(11)
    
15,870,650
(12) 
    
41.1
%
Crestmont Investments LLC
    
2,000,000
      
7.3
%
Helena Global Investment Opportunities
    
1,441,560
      
5.3
%
*    Less than 1%
(1)
Consists of (i) 7,111,428 common shares issued to Devvio, Inc. ("Devvio") in exchange for multiple voting company shares of DevvStream in connection with the closing of the Business Combination and (ii) 76,467 options to purchase subordinate voting shares of DevvStream was converted into an option to purchase common shares of the Issuer based on an exchange ratio calculated at Closing of the Business Combination, as described in Item 2.01 of this Current Report. Mr. Anderson is the founder and chief executive officer of Devvio and as a result, may be deemed to indirectly beneficially own the common shares that are directly beneficially owned by Devvio. Mr. Anderson disclaims beneficial ownership other than to the extent of any pecuniary interest he may have therein. The business address of Devvio is 6300 Riverside Plaza Ln NW, Suite 100, Albuquerque, NM 87120.
(2)
Consists of 76,467 stock options granted on January 17, 2022. 10% of the options vested on January 17, 2023 and 15% of the options vest every six months thereafter. In connection with the closing of the Business Combination, each outstanding option to purchase subordinate voting shares of DevvStream was converted into an option to purchase New PubCo Common Shares based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report. Thomas G. Anderson resigned from the Board on November 7, 2024. For more information, also see Item 5.02 of this Current Report.

(3)
Consists of 887,017 restricted stock units granted on January 17, 2022 and March 14, 2022. 25% of the restricted stock units vested on January 17, 2023, July 17, 2023, January 17, 2024 and July 17, 2024, respectively. Also consists of 39,319 of restricted stock units granted on June 6, 2024. 10% of the restricted stock units vest on the six-month anniversary of the grant date and 15% of the restricted stock units vest every six months thereafter for a period of 36 months. In connection with the closing of the Business Combination, each outstanding restricted stock unit of DevvStream was converted into restricted stock units of the New PubCo Common Shares based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report. Each restricted stock unit represents the right to receive, at settlement, one New PubCo Common Shares.
(4)
Consists of 45,880 stock options granted on March 1, 2022. 10% of the options vested on January 17, 2023 and 15% of the options vest every six months thereafter. Also consists of 30,587 options granted on October 14, 2022. 10% of the options vested on January 17, 2023 and 15% of the options vest every six months thereafter. In connection with the closing of the Business Combination, each outstanding option to purchase subordinate voting shares of DevvStream was converted into an option to purchase New PubCo Common Shares based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report.
(5)
Consists of 76,467 stock options granted on January 17, 2022. 10% of the options vested on January 17, 2023 and 15% of the options vest every six months thereafter. In connection with the closing of the Business Combination, each outstanding option to purchase subordinate voting shares of DevvStream was converted into an option to purchase New PubCo Common Shares based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report. Ray Quintana resigned from the Board on November 7, 2024. For more information, also see Item 5.02 of this Current Report.
(6)
Consists of 45,880 restricted stock units granted on March 14, 2022. 10% of the restricted stock units vested on January 17, 2023 and 15% of the restricted stock units vest every six months thereafter. Also consists of 26,106 restricted stock units granted on June 6, 2024. 10% of the restricted stock units vest on the six month anniversary of the grant date and 15% of the restricted stock units vest every six months thereafter for a period of 36 months. In connection with the closing of the Business Combination, each outstanding restricted stock unit of DevvStream was converted into restricted stock units of new PubCo. based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report. Each restricted stock unit represents the right to receive, at settlement, one New PubCo Common Shares.
(7)
Consists of 45,880 restricted stock units granted on January 17, 2022. 10% of the restricted stock units vested on January 17, 2023 and 15% of the restricted stock units vest every six months thereafter. Also consists of 23,206 restricted stock units granted on June 6, 2024. 10% of the restricted stock units vest on the six month anniversary of the grant date and 15% of the restricted stock units vest every six months thereafter for a period of 36 months. In connection with the closing of the Business Combination, each outstanding restricted stock unit of DevvStream was converted into restricted stock units of the New PubCo based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report. Each restricted stock unit represents the right to receive, at settlement, one New PubCo Common Shares.
(8)
Consists of 30,587 restricted stock units granted on January 17, 2022. 10% of the restricted stock units vested on January 17, 2023 and 15% of the restricted stock units vest every six months thereafter. Also consists of 27,769 restricted stock units granted on June 6, 2024. 10% of the restricted stock units vest on the six month anniversary of the grant date and 15% of the restricted stock units vest every six months thereafter for a period of 36 months. These restricted stock units were granted to DJG Enterprises Inc. ("DJG") Mr. Goertz is the sole director of DJG and as a result, may be deemed to indirectly beneficially own the common shares issuable upon exercise of the restricted stock units that are directly beneficially owned by DJG. Mr. Goertz disclaims beneficial ownership other than to the extent of any pecuniary interest he may have therein. The business address of DJG is 1500 - 1140 West Pender Street, BC V6E 4G1.
(9)
Consists of 45,880 stock options granted on May 15, 2023. 10% of the options vested on January 17, 2023 and 15% of the options vest every six months thereafter. In connection with the closing of the Business Combination, each outstanding option to purchase subordinate voting shares of DevvStream was converted into an option to purchase New PubCo Common Shares based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report.
(10)
Consists of 45,880 stock options granted on October 14, 2022. 10% of the options vested on January 17, 2023 and 15% of the options vest every six months thereafter. In connection with the closing of the Business Combination, each outstanding option to purchase subordinate voting shares of DevvStream was converted into an option to purchase New PubCo Common Shares based on an exchange ratio calculated at Closing, as described in Item 2.01 of this Current Report.
(11)
In connection with the consummation of the Business Combination on November 6, 2024, (i) the reporting person forfeited 575,000 Class B ordinary shares, par value $0.0001 per share, of the issuer ("Class B Shares"), (ii) 15,558 Class B Shares were converted into 15,079 New PubCo Common Shares"), and (iii) 5,000,531 New PubCo Common Shares were issued to the reporting person in exchange for the Class A ordinary shares, par value $0.0001 per share, of the issuer and the Class B Shares that the reporting person transferred on October 29, 2024. Does not include any New PubCo Common Shares upon exercise of any of the Converted Private Placement Warrant held by the reporting person. The reporting person is controlled by a four-member board of managers composed of Carl Stanton, Ernest Lyles, Howard Sanders and Wray Thorn. Each manager has one vote, and the approval of a majority of the managers is required to approve an action of the reporting person. Under the so-called "rule of three," if voting and dispositive decisions regarding an entity's securities are made by three or more individuals, and a voting or dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity's securities. This is the situation with regard to the reporting person. Based upon the foregoing analysis, no individual manager of the reporting person exercises voting or dispositive control over any of the securities held by the reporting, even those in which such manager holds a pecuniary interest. Accordingly, none of them will be deemed to have or share beneficial ownership of such securities. 11,200,000 private placement warrants of the issuer held by the reporting person at the time of the closing of the Business Combination will be assumed by New PubCo and converted into 11,200,000 Converted Private Placement Warrants of New PubCo, with each Converted Private Placement Warrant being exercisable for 0.9692 New PubCo Common Shares on a cashless basis or for cash at $11.86 (subject to additional adjustments pursuant to the terms of the Converted Private Placement Warrant). The issuance of 10,855,040 New PubCo Common Shares with respect to the Converted Private Placement Warrants held by the Sponsor assumes that each of the Converted Private Placement Warrant is exercised for cash. Pursuant to the terms of the Converted Private Placement Warrants, the exercise price of the Converted Private Placement Warrants is adjustable if certain capital raising transactions meet certain requirements in connection with a business combination and shall be adjusted to an exercise price that is equal to 115% of the higher of the Market Value and the New Issued Price. "Market Value" as used in the foregoing shall mean the volume-weighted average trading price of the New PubCo Common Shares during the twenty (20) trading day period starting on the trading day prior to the day on which the issuer consummated the Business Combination. "Newly Issued Price" as used in the foregoing shall mean the issue price or effective issue price (as determined in good faith by the board of directors of the issuer), at which the issuer issued additional shares or securities convertible into or exercisable or exchangeable for shares for capital raising purposes in connection with the closing of the Business Combination. Does not reflect the additional New PubCo Common Shares issuable to the Sponsor pursuant to the terms of the Strategic Consulting Agreement or the New PubCo Common Shares issuable upon conversion of the New Convertible Notes, which each were executed after the Closing.
(12)
Consists of 5,015,610 New PubCo Common Shares and 10,855,040 New PubCo Common Share issuable upon exercise of 11,200,000 Converted Private Placement Warrants held by the Sponsor (assumes the exercise of the Converted Private Placement Warrants for cash). None of the Converted Private Placement Warrants have been exercised on the date this Current Report is filed.

Directors and Executive Officers

The following sets forth certain information concerning the directors and executive officers of New PubCo immediately following consummation of the Transactions:

Name
  
Age
  
Position(s)
Executive Officers:
        
Sunny Trinh
    
53
  
Chief Executive Officer
David Goertz
    
44
  
Chief Financial Officer
Chris Merkel
    
57
  
Chief Operating Officer
Bryan Went
    
45
  
Chief Revenue Officer
Directors(1):
          
Wray Thorn
    
52
  
Director
Carl Stanton
    
56
  
Director
Michael Max Bühler
    
50
  
Director
Stephen Kukucha
    
56
  
Director
Jamila Piracci
    
51
  
Director

(1)
Thomas G. Anderson and Ray Quintana were appointed to the Board in connection with the consummation of the Transactions and resigned from the Board on November 7, 2024. For more information, also see Item 5.02 of this Current Report.

Information regarding the executive officers, key employees, and directors following the Business Combination is set forth below:

Executive Officers

Mr. Sunny Trinh serves as Chief Executive Officer of New PubCo following completion of the Business Combination. Mr. Trinh has served as Chief Executive Officer of DevvStream for the past two years and brings over 25 years of experience in the technology sector and directly in developing new verticals in ESG and carbon markets. Mr. Trinh also served as the Chief Digital Alchemist for Devvio, where he utilized their blockchain technology to develop solutions and new business models in the ESG and carbon markets. Mr. Trinh continues to advise Devvio in an informal capacity, and also advises Envviron SAS in an informal capacity regarding ESG matters. Prior to DevvStream, Mr. Trinh led innovation as the vice president of Strategic Partnerships and Ecosystem at Avnet Inc. (AVT: NASDAQ). He was also the chief operating officer for Jooster and vice president of sales for Arrow Electronics (ARW: NYSE) where he led the design team for a Corvette driven by a quadriplegic. Mr. Trinh also co-founded and served as Chief Executive Officer for 9:Fish Surfboards and was an adjunct professor for California Lutheran University’s master’s in business administration program, where he started the school’s technology tract. He also holds a patent on electronic accessories for cell phones. Mr. Trinh received his bachelor’s degree and master’s degree in engineering from Harvey Mudd College and his master’s in business administration from California Lutheran University.

Mr. David Goertz serves as the Chief Financial Officer of New PubCo following the completion of the Business Combination. Mr. Goertz has served as the Chief Financial Officer of DevvStream since November 2022. Mr. Goertz is a partner with Dale Matheson Carr-Hilton Labonte, LLP Chartered Professional Accountants, where he has worked since 2005 and became a partner in 2011. Mr. Goertz provides accounting, assurance, taxation and business advisory services to private and public companies, not-for-profit organizations and incorporate professionals. Mr. Goertz has an extensive background in public company operations, restructurings, acquisitions and initial public offerings. Mr. Goertz also has a specialized knowledge of the manufacturing, mining, real estate and technology industries. Mr. Goertz received his bachelor’s degree from the University of Victoria and has been a Chartered Professional Accountant since 2004.

Mr. Chris Merkel serves as the Chief Operating Officer of New PubCo following the completion of the Business Combination. Mr. Merkel has served as the Chief Operating Officer of DevvStream since December 2021. Prior to joining DevvStream, Mr. Merkel spent 24 years managing strategic customers, growing technical services verticals and held sales leadership roles at Avnet (AVT: NASDAQ) and Arrow Electronics (ARW:NYSE). He has engaged with companies at every stage, from pre-funded startups to global enterprises in markets such as the internet-of-things, consumer, industrial and medical. Mr. Merkel spent five years with Sierra Pacific Industries in a general sales and operations management role. Mr. Merkel has over 30 years of sales, operations and general management experience successfully managing diverse teams and projects.

Mr. Bryan Went serves as the Chief Revenue Officer of New PubCo following the completion of the Business Combination. Mr. Went has served as the Chief Revenue Officer of DevvStream since February 2022, and oversees corporate partnerships and the global project pipeline expansion. Mr. Went is the co-founder and co-chief executive officer of Matter Labs, a corporate innovation lab that focuses on solving problems in the technology industry at a local level. He also serves on the board of directors at FATHOMWERX, a public-private consortium and technical innovation lab located in Ventura County, California. Mr. Went has approximately 15 years of experience as a founder, executive and investor in sustainability and blockchain technologies.

Non-Employee Directors

Mr. Wray Thorn serves as a director of New PubCo following the completion of the Business Combination. Mr. Thorn is a Partner and Co-Founder of Focus Impact Partners, LLC and currently serves as the Chief Investment Officer of Focus Impact Acquisition Corp. He also serves as the Chief Investment Officer and a director of Focus Impact BH3 Acquisition Company, a special purpose acquisition corporation (Nasdaq: BHAC). Mr. Thorn is also the Founder and Chief Executive of Clear Heights Capital and a Board Member of Skipper Pets, Inc. Previously, Mr. Thorn was Managing Director and Chief Investment Officer - Private Investments at Two Sigma Investments, where he architected and led the firm’s private equity (Sightway Capital), venture capital (Two Sigma Ventures) and impact (Two Sigma Impact) investment businesses and was a leader in the creation of Hamilton Insurance Group and the incubation of Two Sigma’s insurance technology activities. With approximately three decades of experience as a chief investment officer, investment leader and lead director, Mr. Thorn has firsthand knowledge of investment firm leadership, private investing company value creation, asset allocation strategy and practice and risk management frameworks. Mr. Thorn has built and led businesses to source, structure, finance and make private investments, to allocate and risk manage capital across private investment strategies and to help companies, organizations and executives realize their growth and development objectives. Mr. Thorn has also been at the forefront of proactive impact investing and applying data and technology to innovate private investing. Mr. Thorn also serves as Co-Chair of the Board of Youth, INC, as Vice Chair of the Board and Chair of the Investment Committee for Futures and Options, as a grant monitor and event committee chair for Hour Children, and as an Associate of the Harvard College Fund.

Mr. Carl Stanton serves as a director of New PubCo following the completion of the Business Combination. Mr. Stanton is a Partner and Co-Founder of Focus Impact Partners, LLC and currently serves as the Chief Executive Officer. He also serves as the Chief Executive Officer and a director of Focus Impact BH3 Acquisition Company, a special purpose acquisition corporation (Nasdaq: BHAC). Mr. Stanton brings nearly three decades of experience in leading companies across transformative Private Equity/Alternative Asset management with a proven track record in creating shareholder value. Mr. Stanton has unique knowledge and skills across all facets of Asset Management. He is a team builder and has managed and co-led two Alternative Asset Management firms totaling over $4.5 billion AUM, and has delivered best-in-class investment performance results along with colleagues over multiple funds. He has advised CEOs, CFOs, and boards of directors of multiple companies and spread managerial, financial, and strategic best practices with demonstrated expertise in value creation strategies including revenue growth strategies, industry transformation, cost control, supply chain management, and technology best practices. Mr. Stanton has also served as Board Member to more than 15 portfolio companies across Industrial Products & Services, Transportation & Logistics and Consumer industries; including his current role as a Board Member of Skipper Pets, Inc.

Mr. Michael Max Bühler serves as a director of New PubCo following the completion of the Business Combination. Mr. Bühler is a member of various international committees, including the T20/G20 Task Force on Infrastructure Investment and the OECD Blue Dot Network. Mr. Bühler is actively involved in the formation of a data cooperative for the construction industry and sits on the board of the International Resilience and Sustainability (inRES) Partnership, supporting Botswana’s digital transformation. Currently, Mr. Bühler is a Professor of Construction Business Management at the University of Applied Sciences in Constance, Germany, with research interests in infrastructure planning and global challenges. Previously, he led initiatives at the World Economic Forum and worked with Deloitte in Vancouver. He also held roles at Bilfinger Berger in North America. He has over 25 years of experience in construction and real estate. Mr. Bühler has a PhD in civil engineering and an MBA with finance and accounting specialization.

Mr. Stephen Kukucha serves as a director of New PubCo following the completion of the Business Combination. Mr. Kukucha is a partner at PacBridge Partners with over twenty years of experience in clean technology, renewable power, investing and their intersection with public policy. At PacBridge Capital Partners, he specializes in providing early stage and growth capital to companies seeking to take disruptive technologies and build scalable businesses. PacBridge is based in Hong Kong and Vancouver and invests in opportunities globally, with a particular focus in Asia and North America. As well, Stephen also serves as a Senior Advisor to Fort Capital Partners, focusing on origination of M&A, capital raising and advisory transactions. Prior to his current roles, Mr. Kukucha practiced law and was in a leadership position at Ballard Power Systems - leading their global External Affairs group (including emerging market business development in Asia). Following Ballard, Mr. Kukucha founded both a renewable power company and a strategic advisory firm. Mr. Kukucha also served as Chief Executive Officer and a director of CERO Technologies from April 2023 to June 2024, and as a director of Sustainable Development Technology Canada (SDTC) from March 2021 to May 2024. Mr. Kukucha has a Bachelor of Arts from the University of British Columbia and a Bachelor of Laws from the University of New Brunswick and graduated from the ICD-Rotman, Directors Education Program and became a member of the Institute of Corporate Directors, ICD.D.

Ms. Jamila Piracci serves as a director of New PubCo following the completion of the Business Combination. Ms. Piracci is the Founder of Roos Innovations, a financial services and commodities consultancy firm. She also serves on the boards of the Futures Industry Association and Fiùtur Information Exchange Inc., and is a member of the advisory board of Itegriti Corporation. Prior to becoming a consultant, Ms. Piracci led the National Futures Association’s regulatory program from 2011 to 2019, overseeing swap dealers under the Dodd-Frank Act, including creating NFA’s program. Ms. Piracci previously worked at the Federal Reserve Bank of New York, where she was an attorney with a primary focus on orderly liquidation authority and resolution planning under the Dodd-Frank Act, as well as on market and other developments pertaining to OTC derivatives. Ms. Piracci also spent nearly a decade advising a range of OTC derivatives market participants, including dealer banks, investment managers, and energy firms. In addition, she was an Assistant General Counsel at the International Swaps and Derivatives Association, where she chaired working groups developing market documentation and best practices primarily in the credit derivatives area. Ms. Piracci received her J.D. from Cornell Law School and MBA from the S.C. Johnson Graduate School of Management at Cornell University. Ms. Piracci earned her B.A. from Harvard-Radcliffe College at Harvard University.

Independence of Board of Directors

Nasdaq listing standards require that a majority of our Board be independent. An “independent director” is defined generally as a person that, in the opinion of the FIAC Board, has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with FIAC). Our Board has determined that Michael Max Bühler, Stephen Kukucha and Jamila Piracci are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

Committees of the Board of Directors

The Board will have the authority to appoint committees to perform certain management and administration functions. Upon the Closing, the Board is expected to have a standing audit committee, compensation committee, and nominating and corporate governance committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by the Board. The charters for each of these committees re available on New PubCo’s website.

Audit Committee

The audit committee of the Board consists of Michael Max Bühler, Stephen Kukucha and Jamila Piracci. The Board has determined that each proposed member is independent under the Nasdaq listing standards and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (“Exchange Act”). The chairperson of the audit committee is Michael Max Bühler. Michael Max Bühler qualifies as an “audit committee financial expert” as such term is defined in Item 407(d)(5) of Regulation S-K and each member of the audit committee possess financial sophistication, as defined under the rules of Nasdaq.

The primary purpose of the audit committee is to discharge the responsibilities of the Board with respect to our accounting, financial, and other reporting and internal control practices and to oversee our independent registered accounting firm. Specific responsibilities of our audit committee include:


 •
selecting a qualified firm to serve as the independent registered public accounting firm to audit New PubCo’s financial statements;


•
helping to ensure the independence and performance of the independent registered public accounting firm;


•
discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;


•
developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;


•
reviewing policies on risk assessment and risk management;


•
reviewing related party transactions;


•
obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes New PubCo’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and


•
approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm.

Compensation Committee

The compensation committee of the Board consist of Jamila Piracci, Stephen Kukucha and Michael Max Bühler. The Board has determined each proposed member is a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. The chairperson of the compensation committee is expected to be Jamila Piracci. The primary purpose of the compensation committee is to discharge the responsibilities of the board of directors to oversee its compensation policies, plans and programs and to review and determine the compensation to be paid to its executive officers, directors and other senior management, as appropriate.

Specific responsibilities of the compensation committee include:


 •
reviewing and approving on an annual basis the corporate goals and objectives relevant to New PubCo’s Chief Executive Officer’s compensation, evaluating New PubCo’s Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of New PubCo’s Chief Executive Officer based on such evaluation;


•
reviewing and approving the compensation of New PubCo’s other executive officers;


•
reviewing and recommending to the Board the compensation of New PubCo’s directors;


•
reviewing New PubCo’s executive compensation policies and plans;


•
reviewing and approving, or recommending that the Board approve, incentive compensation and equity plans, severance agreements, change-of-control protections and any other compensatory arrangements for New PubCo’s executive officers and other senior management, as appropriate;


•
administering New PubCo’s incentive compensation equity-based incentive plans;


•
selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors;


•
assisting management in complying with New PubCo’s proxy statement and annual report disclosure requirements;


•
if required, producing a report on executive compensation to be included in New PubCo’s annual proxy statement;


•
reviewing and establishing general policies relating to compensation and benefits of New PubCo’s employees; and


•
reviewing New PubCo’s overall compensation philosophy.

Nominating and Corporate Governance Committee

The nominating and corporate governance committee of the Board consists of Stephen Kukucha, Jamila Piracci and Michael Max Bühler. The Board has determined each proposed member is independent under Nasdaq listing standards. The chairperson of the nominating and corporate governance committee is expected to be Stephen Kukucha.

Specific responsibilities of the nominating and corporate governance committee include:


 •
identifying, evaluating and selecting, or recommending that the Board approves, nominees for election to the Board;


•
evaluating the performance of the Board and of individual directors;


•
reviewing developments in corporate governance practices;


•
evaluating the adequacy of New PubCo’s corporate governance practices and reporting;


•
reviewing management succession plans; and


•
developing and making recommendations to the Board regarding corporate governance guidelines and matters.

Code of Business Conduct and Ethics

New PubCo adopted a Code of Business Conduct and Ethics that applies to all of its employees, officers and directors, including those officers responsible for financial reporting. New PubCo intends to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements. The full text of the Code of Business Conduct and Ethics is included as Exhibit 14.1 to this Current Report on Form 8-K and incorporated herein by reference.

Compensation Committee Interlocks and Insider Participation

None of New PubCo’s expected executive officers serve, or have served during the last year, as a member of the board of directors, compensation committee, or other board committee performing equivalent functions of any other entity that has one or more executive officers serving as one of our directors or on either company’s compensation committee.

Executive Compensation

Pre-Closing Compensation of Executive Officers

A description of the compensation of the named executive officers of DevvStream and the compensation of the executive officers of FIAC before the consummation of the Transactions is set forth in the Proxy Statement/Prospectus in the sections titled “Executive and Director Compensation of DevvStream” beginning on page 276 of the Proxy Statement/Prospectus and the subsection titled “Officer and Director Compensation” in the section titled “FIAC’s Management,” beginning on page 203 of the Proxy Statement/Prospectus, respectively, and that information is incorporated herein by reference.

Pre-Closing Compensation of Executive Officers

At the Business Combination Approval Meeting, the FIAC stockholders approved the DevvStream Corp. 2024 Equity Incentive Plan as may be amended, restated or modified from time to time, (the “Equity Incentive Plan”). The summary of the Equity Incentive Plan set forth in the Proxy Statement/Prospectus in the section titled “The Incentive Plan Proposal” beginning on page 192 of the Proxy Statement/Prospectus is incorporated herein by reference. A copy of the full text of the Equity Incentive Plan is attached hereto as Exhibit 10.4 and is incorporated herein by reference. New PubCo intends to develop an executive compensation program that is designed to align compensation with New PubCo’s business objectives and the creation of shareholder value, while enabling New PubCo to attract, motivate and retain individuals who contribute to the long-term success of New PubCo. Decisions on the executive compensation program will be made by the compensation committee of the Board.

Employment Agreements

On November 6, 2024, in connection with the consummation of the Business Combination, New PubCo entered into employment agreements with Bryan Went, Chris Merkel, and Sunny Trinh (collectively, the “Executives”). We refer to the employment agreements herein collectively as the “Employment Agreements.”

The Employment Agreements provide for a three-year initial term with automatic renewals for additional one-year periods unless either the applicable Executive or New PubCo gives written notice of non-renewal at least 90 days prior to the expiration of the then-current initial term or renewal term.

The Employment Agreements provide for initial annualized base salary of $250,000 for Mr. Trinh and $180,000 for each of Messrs. Went and Merkel, which will be reviewed by the Board annually, based on personal and corporate achievements and the overall financial performance of New PubCo. While employed under the Employment Agreements, the Executives are eligible for certain additional benefits, including reimbursement of reasonable travel and other business-related expenses and participation in the Company’s benefit plans or programs.

The Employment Agreements provide that upon a resignation by the applicable Executive for Good Reason or upon a termination by New PubCo without Cause (each as defined in the Employment Agreement), the Executive shall be entitled to receive 12 months of continued base salary payments (the “Severance Amount”), subject to the Executives execution and non-revocation of a release of claims.

Further, the Employment Agreements provide that upon a resignation by the applicable Executive for Good Reason (as defined in the Employment Agreement) or upon a termination by New PubCo without Cause, in either case, within 12 months following a Corporate Transaction (as defined in the Equity Incentive Plan), the Executive shall be entitled to receive the following payments or benefits: (i) the Severance Amount (as defined in the Employment Agreement), (ii) immediate vesting of any of New PubCo equity awards that vest solely based on continued service that are held by the Executive and (iii) immediate vesting of any New PubCo equity awards that were subject to performance-based vesting and held by the Executive based on the greater of (x) target level of performance and (y) New PubCo’s actual performance, measured as of the date of termination as determined by the Committee (as defined in the Equity Incentive Plan), subject to the Executives execution and non-revocation of a release of claims.

The Employment Agreements also contain certain restrictive covenants, including provisions that require the Executive to assign their rights to intellectual property to New PubCo and create restrictions, with certain limitations, on the Executives competing with New PubCo, soliciting any employees or individual service providers of, or soliciting or inducing any customers, clients, suppliers or licensees of New PubCo. These restrictions are generally intended to apply during the term and any renewal term and, subject to applicable state laws, for the twelve-month period following the Executive’s termination of employment.

The description of the Employment Agreements herein is qualified in its entirety by reference to the full text of the Employment Agreements, which are attached hereto as Exhibits 10.17, 10.18, and 10.19 incorporated by reference herein.

Director Compensation

The Board, or a committee thereof, will determine the annual compensation to be paid to the members of the Board. A description of the compensation of the named executive officers of DevvStream and the compensation of the executive officers of FIAC before the consummation of the Transactions is set forth in the Proxy Statement/Prospectus in the sections titled “Executive and Director Compensation of DevvStream” beginning on page 276 of the Proxy Statement/Prospectus and the subsection titled “Officer and Director Compensation” in the section titled “FIAC’s Management,” beginning on page 203 of the Proxy Statement/Prospectus, respectively, and that information is incorporated herein by reference.

Certain Relationships and Related Person Transactions

Certain relationships and related person transactions are described in the Proxy Statement/Prospectus in the section titled “Certain Relationships and Related Person Transactions,” beginning on page 278 of the Proxy Statement/Prospectus and that information is incorporated herein by reference. Reference is made to the disclosure regarding director independence under “Independence of our Board of Directors” above in this Item 2.01 of this Current Report. The information related to the Registration Rights Agreement, the Strategic Consulting Agreement and the New Convertible Notes in Item 1.01 of this Current Report is also incorporated herein by reference.

New PubCo adopted a formal written policy effective upon the consummation of the Business Combination providing that persons meeting the definition of “Related Person” under Item 404(a) of Regulation S-K such as New PubCo’s executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any class of New PubCo’s capital stock and any member of the immediate family of any of the foregoing persons are not permitted to enter into a related party transaction with New PubCo without the approval of New PubCo’s audit committee, subject to the exceptions described below.

A related party transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which New PubCo was or is to be a participant in which the amount involves exceeds $120,000 in the aggregate, and in which a related party had or will have a direct or indirect material interest. Transactions involving compensation for services provided to New PubCo as an employee or director and certain other transactions are not covered by this policy.

Under the policy, the audit committee will review information that it deems reasonably necessary to enable New PubCo to identify any existing or potential related person transactions and to effectuate the terms of the policy. In addition, under the Code of Conduct, employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest.

Legal Proceedings

Reference is made to the disclosure regarding legal proceedings in the subsections of the Proxy Statement/Prospectus titled “Legal Proceedings” in the sections titled “Information about FIAC” and “Information about DevvStream,” on page 202 and page 223 of the Proxy Statement/Prospectus, respectively, and that information is incorporated herein by reference.

Market Price of and Dividends on Common Equity and Related Stockholder Matters

The New PubCo Common Shares began trading on the Nasdaq under the symbol “DEVS” on November 7, 2024. As of immediately after the Closing Date, there were approximately 28 registered holders of New PubCo Common Shares.

New PubCo has not paid any cash dividends on its capital stock. Any decision of New PubCo to declare and pay dividends in the future will be made at the sole discretion of the Board and will depend on, among other things, applicable law, New PubCo’s results of operations, cash requirements, financial condition, contractual restrictions and other factors that the Board may deem relevant.

Recent Sales of Unregistered Securities.

Reference is made to the disclosure set forth below under Item 3.02 of this Current Report concerning the issuance and sale of certain unregistered securities, which is incorporated herein by reference.

Description of New PubCo’s Securities

The description of New PubCo’s securities is contained in the Proxy Statement/Prospectus in the section titled “Description of Securities of new PubCo” beginning on page 251 of the Proxy Statement/Prospectus and that information is incorporated herein by reference.

Indemnification of Officers and Directors

New PubCo has entered into indemnification agreements with each of its directors and executive officers, in each case effective as of the Closing Date. Each indemnification agreement provides for indemnification and advancements by New PubCo of certain expenses and costs relating to claims, suits or proceedings arising from his or her service to New PubCo or, at our request, service to other entities, as officers or directors to the maximum extent permitted by applicable law. Information about indemnification of the Company’s directors and officers is also set forth in the Proxy Statement/Prospectus in the section titled “Information about FIAC—Limitation on Liability and Indemnification of Officers and Directors” beginning on page 203 thereof, the subsection “Survival and Indemnification” and “Comparison of DGCL and ABCA” in the Proxy Statement/Prospectus in the section titled “The Business Combination Proposal” beginning on page 119 thereof, and the subsection “Comparison of DGCL and ABCA” in the Proxy Statement/Prospectus in the section titled “The SPAC Continuance Proposal” beginning on page 168 thereof, each of which are incorporated herein by reference. The disclosure set forth in Item 1.01 of this Current Report under the section titled “Indemnification Agreements” is also incorporated herein by reference.

The foregoing description of the indemnification agreements does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, a form of which is filed as Exhibit 10.5 to this Current Report on Form 8-K and is incorporated herein by reference.

Financial Statements and Exhibits

The information set forth above under the section entitled “Financial Information” in this Item 2.01 of this Current Report and the information under Item 9.01 of this Current Report is incorporated herein by reference.

Item 2.02
Results of Operations and Financial Condition.

The information set forth above under the section entitled “Financial Information” in this Item 2.01 of this Current Report and the information under Item 9.01 of this Current Report, including the financial statements of DevvStream and the disclosure contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations is incorporated herein by reference.

Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement or a Registrant.

The information in Item 1.01 of this Current Report regarding the New Convertible Note and the extension of the maturity of the Devvio and Envviron Convertible Notes is incorporated herein by reference.

Item 3.02.
Unregistered Sales of Equity Securities

The information described in the Introductory Note, Item 1.01 and Item 2.01 of this Current Report regarding the issuance of the New Convertible Notes and the issuance of New PubCo Common Shares pursuant to the PIPE Agreements, the Monroe Agreement and to the Sponsor pursuant to the Letter Agreement and the Strategic Consulting Agreement is incorporated herein by reference. The issuances of New PubCo Common Shares or shares of Class A common stock of FIAC pursuant to the PIPE Agreements, the New Convertible Notes, the Monroe Agreement and to the Sponsor pursuant to the Letter Agreement, as applicable, have not been registered under the Securities Act of 1933, as amended (the “Securities Act”) and have been issued or are expected to be issued, as applicable, in reliance upon the exemption provided in Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D under the Securities Act.

Item 3.03.
Material Modifications to Rights of Security Holders.

On December 6, 2024, New PubCo issued a notice (the “Warrant Adjustment Notice”) to Continental Stock Transfer & Trust Company, as warrant agent (“CST”), and the holders of Warrants that were issued pursuant to the warrant agreement (the “Warrant Agreement”), dated November 1, 2021, by and between the Company and CST, notifying CST and holders of the following adjustments to the Warrants (the “Warrant Adjustments”):

• the adjustment to the warrant price of the Warrants from $11.86 per share to $1.52 per common share of the Company (“Common Share”) (representing 115% of the Newly Issued Price (as defined below) which is greater than the Market Value (as defined below));

• the adjustment of the $18.00 per share redemption trigger price described in Section 6.1 and Section 6.2 of the Warrant Agreement to $2.39 per Common Share (representing 180% of the Newly Issued Price which is greater than the Market Value);

• the adjustment of the $10.00 per share redemption trigger price described in Section 6.2 of the Warrant Agreement to $1.32 (representing the Newly Issued Price which is greater than the Market Value); and

• pursuant to Section 4.2 of the Warrant Agreement, as a result of the consummation of the Business Combination, each Warrant will be exercisable for 0.9692 Common Shares.

The Warrant Adjustments were required pursuant to Section 4.2 and Section 4.4 of the Warrant Agreement as a result of (i) the Company issuing Common Shares at an effective issue price of $1.32 per share (the “Newly Issued Price”) for capital raising purposes in connection with the closing of the Business Combination, (ii) the aggregate gross proceeds from such issuances representing more than 60% of the total equity proceeds, and interest thereon, available for the funding of the Business Combination on the date of the completion of the Business Combination (net of redemptions), (iii) the volume-weighted average trading price of the Common Shares during the twenty (20) trading day period starting on the trading day prior to the day on which the Company consummated the Business Combination (such price, the “Market Value”) being below $9.20 per share, and (iv) the consummation of the Business Combination resulting in a decrease of the number of issued and outstanding shares by way of a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similar event. The Market Value was determined to be approximately $0.94 per share, which is the volume-weighted average trading price of the Common Shares during the twenty (20) trading day period starting on the trading day prior to the day on which the Company consummated the Business Combination.

The foregoing description of the Warrant Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the indemnification agreements, which are incorporated herein by reference.

Additionally, the disclosure set forth under Item 5.03 of this Current Report is incorporated herein by reference.

Item 4.01
Change in Registrant’s Certifying Accountant.

In connection with the Business Combination, the audit committee of the Board approved the dismissal of Marcum LLP (“Marcum”) as New PubCo’s independent registered public accounting firm and the appointment of Davidson & Company LLP (“Davidson”). Accordingly, on March 7, 2025, Marcum was informed that it would be dismissed as New PubCo’s independent registered public accounting firm, effective March 7, 2025.

The report of Marcum on FIAC’ balance sheet as of December 31, 2023 and December 31, 2022 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2023 did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles, except for an explanatory paragraph in such report regarding the substantial doubt about FIAC’ ability to continue as a going concern.

During the period from February 23, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “disagreements” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) between FIAC and Marcum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum, would have caused it to make reference to the subject matter of the disagreements in its reports on FIAC’ financial statements for such periods.

During the period from February 23, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act), except that in connection with DevvStream’s audit of its July 31, 2023 consolidated financial statements, management identified control deficiencies in the design and operation of our internal control over financial reporting that constituted a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected in a timely manner. Specifically, DevvStream did not consistently have documented evidence of review procedures and, due to resource limitations, did not always maintain segregation of duties between preparing and reviewing analyses, and reconciliations. Reference is made to the disclosure in the Proxy Statement/Prospectus in the section entitled “Risk Factors—Risks Related to DevvStream’s Business and Industry— We have identified a material weakness in our internal control over financial reporting. If we are unable to remediate this material weakness, or if we identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and the market price of our common shares” on pages 69-70 thereof, which is incorporated by reference herein.

During the period from February 23, 2021 (inception) through December 31, 2023 and the subsequent interim period through the date of Marcum’s dismissal, neither FIAC nor DevvStream did consulted with Davidson regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the financial statements of New PubCo, and no written report or oral advice was provided that Davidson concluded was an important factor considered by us in reaching a decision as to the accounting, auditing, or financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K under the Exchange Act) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act)

New PubCo has provided Marcum with a copy of the foregoing disclosures and has requested that Marcum furnish New PubCo with a letter addressed to the SEC stating whether it agrees with the statements made by New PubCo set forth above. A copy of Marcum’s letter, dated March 7, 2025, is filed as Exhibit 16.1 to this Current Report on Form 8-K.

Item 5.01.
Changes in Control of Registrant.

The disclosure set forth under the Introductory Note and in the section titled “Security Ownership of Certain Beneficial Owners and Management” in Item 2.01 of this Current Report is incorporated herein by reference. Reference is also made to the disclosure in the Proxy Statement/Prospectus in the subsection titled “The Business Combination Agreement” in the section titled “The Business Combination Proposal,” beginning on page 119 of the Proxy Statement/Prospectus, which is incorporated herein by reference. Further reference is made to the information contained in the Introductory Note and Item 2.01 to this Current Report on Form 8-K, which is incorporated herein by reference.

Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Upon the consummation of the Transactions, and in accordance with the terms of the Business Combination Agreement, each director of FIAC, other than Wray Thorn and Carl Stanton, and each officer of FIAC ceased serving in such capacities and five new directors were appointed to the Board, including Michael Max Bühler, Stephen Kukucha, Jamila Piracci, Ray Quintana and Thomas G. Anderson.

On November 7, 2024, Mr. Quintana and Mr. Anderson resigned from the Board as chairman and director and as director, respectively, and Wray Thorn was appointed chairman of the Board. Mr. Quintana’s and Mr. Anderson’s resignations were not the result of any disagreement with New PubCo on any matter relating to New PubCo’s operations, policies or practices.

The information on the composition of the Board and the new officers of New PubCo, director independence, committees of the Board, compensation of directors and officers, compensation committee interlocks and insider participation, indemnification of directors and certain related party transaction in the sections entitled “Directors and Executive Officers,” “Independence of Board of Director,” “Committees of the Board of Directors,” “Compensation Committee Interlocks and Insider Participation,” “Director Compensation,” “Executive Compensation,” “Indemnification of Officers and Directors” and “Certain Relationships and Related Person Transactions” in Item 2.01 of this Current Report are incorporated herein by reference.

Item 5.03.
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

Pursuant to the Business Combination Agreement, on the Closing Date, (a) FIAC changed its jurisdiction from the State of Delaware under the Delaware General Corporation Law to the Province of Alberta, Canada, and thereby become a company existing under the Business Corporations Act (Alberta) and changed its name to DevvStream Corp., and (b) DevvStream and Amalco Sub amalgamated to form one corporate entity.

The material terms of each of the Articles of Continuance and New PubCo Bylaws and the general effect upon the rights of holders of New PubCo’s capital stock are discussed in the Proxy Statement/Prospectus in the sections titled “The SPAC Continuance Proposal (Proposal 2) — Comparison of DGCL and ABCA” and “Description of Securities of New PubCo” beginning on pages 168 and 251 thereof, respectively, which are incorporated herein by reference.

Copies of the Articles of Continuance and New PubCo Bylaws are included as Exhibit 3.1 and Exhibit 3.2 to this Current Report, respectively, and are incorporated herein by reference.

Further, in connection with the consummation of the Business Combination, New PubCo changed its fiscal year end to July 31st.

Item 5.05.
Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.

In connection with the Transactions, on November 6, 2024, the Board approved and adopted a new Code of Business Conduct applicable to all employees, officers and directors of New PubCo. New PubCo intends to disclose future amendments to such code, or any waivers of its requirements, applicable to any principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions or its directors on its website identified above or in a current report on Form 8-K. The full text of the Code of Business Conduct and Ethics is included as Exhibit 14.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 5.06.
Change in Shell Company Status.

As a result of the Transaction, the Company ceased to be a shell company. Reference is made to the disclosure in the Proxy Statement/Prospectus in the section entitled “Proposal No. 1 — The Business Combination Proposal” beginning on page 119 thereof, which is incorporated by reference herein. Further reference is made to the information contained in Item 2.01 of this Current Report on Form 8-K.
 
Item 7.01.
Regulation FD Disclosure.

On November 6, 2024, New PubCo issued a press release announcing the consummation of the Business Combination. A copy of such press release is furnished as Exhibit 99.1 of this Current Report and incorporated herein by reference.

Item 8.01.
Other Events.

In order to illustrate the pro forma impact of certain transactions that were entered into on October 29, 2024, including the PIPE Agreements, the Monroe Agreement and Equitization, FIAC filed with the SEC on October 29, 2024 an unaudited pro forma condensed combined balance sheet as of June 30, 2024 and an unaudited pro forma combined income statement for the first six fiscal months of 2024 of DevvStream and FIAC (the “Illustrative Pro Forma Income Statement”). In connection with the closing of the Business Combination, New PubCo is furnishing as Exhibit 99.2 of this Current Report an amended version of the Illustrative Pro Forma Income Statement that corrects the pro forma number of New PubCo Common Shares and the resulting loss per Share (the “Amended Pro Formas”).

The Amended Pro Formas are presented for illustrative purposes only and are based on certain assumptions and New PubCo’s management’s current best estimates. Therefore, the Amended Pro Formas included in this Current Report are not necessarily indicative of the financial position or results that have been achieved by New PubCo upon closing of the Business Combination. The financial position and results of New PubCo after the consummation of the Business Combination may differ significantly from those indicated in the Amended Pro Formas furnished with this Current Report. You should not rely on the Amended Pro Formas as being indicative of (i) the historical financial position or results that have been achieved in connection with the consummation of the Business Combination, (ii) the financial position or results that would have been achieved had the Business Combination closed as of June 30, 2024, or (iii) the future financial position or results that New PubCo will achieve. FIAC’s, DevvStream’s or New PubCo’s auditors have not audited, reviewed, compiled or performed any procedures with respect to any of the data included in the Amended Pro Formas furnished with this Current Report and FIAC’s, DevvStream’s or New PubCo’s auditors do not express an opinion or any form of assurance with respect to the Amended Pro Formas furnished with this Current Report.

Item 9.01.
Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

The audited consolidated financial statements of DevvStream as of July 31, 2024 and 2023 and for the years ended July 31, 2024 and 2023 and the related notes are included as Exhibits 99.3 to this Current Report and are incorporated herein by reference.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream for the year ended July 31, 2024 are included as Exhibit 99.4 to this Current Report and is incorporated herein by reference.

The unaudited condensed consolidated financial statements of DevvStream as of October 31, 2024 and for the three month period ended October 31, 2024 and 2023 are included as Exhibit 99.5 to this Current Report and is incorporated herein by reference.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream for the three month period ended October 31, 2024 are included as Exhibit 99.6 to this Current Report and is incorporated herein by reference.

Additionally, the information set forth in Item 2.01 of this Current Report under the section entitled “Financial Information” is incorporated herein by reference.

(b) Pro forma financial information.

The unaudited pro forma condensed combined financial information of the Company as of October 31, 2024, for the three month period ended October 31, 2024, and for the year ended July 31, 2024, is attached as Exhibit 99.7 and is incorporated herein by reference.

Additionally, the information set forth in Item 2.01 of this Current Report under the section entitled “Financial Information” is incorporated herein by reference.

 
(d)
Exhibits

Exhibit
Number
Description
   
Business Combination Agreement, dated as of September 12, 2023, by and among FIAC, Focus Impact Amalco Sub Ltd., and DevvStream Holdings Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed by FIAC on September 13, 2023).
First Amendment to the Business Combination Agreement, dated as of May 1, 2024, by and among FIAC, Focus Impact Amalco Sub Ltd., and DevvStream Holdings Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed by FIAC on May 2, 2024).
Amendment No. 2 to Business Combination Agreement, dated as of August 10, 2024, by and among FIAC, Amalco Sub and DevvStream (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed by FIAC on August 12, 2024).
Waiver to Certain Business Combination Conditions Precedent, dated October 29, 2024, by and between FIAC, Amalco Sub and DevvStream (incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Certificate of Continuance of the Company.
By-Laws of the Company.
Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1, filed by FIAC on June 3, 2021).
Warrant Agreement, dated November 1, 2021, by and between FIAC and Continental Stock Transfer & Trust Company, as warrant agent (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by FIAC on November 1, 2021).
Specimen Common Stock Certificate of DevvStream Corp.
Strategic Partnership Agreement, dated November 28, 2021, between Devvio, Inc. and DevvESG Streaming, Inc. (incorporated by reference to Exhibit 10.6 to the Registration Statement on Form S-4, filed by FIAC on December 4, 2023).
Amendment No. 1 to the Strategic Partnership Agreement, dated November 30, 2021, between Devvio, Inc. and DevvESG Streaming, Inc. (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form S-4, filed by FIAC on December 4, 2023).
Amendment No. 2 to the Strategic Partnership Agreement, dated September 12, 2023, between Devvio, Inc. and DevvStream, Inc. (f/k/a DevvESG Streaming, Inc.) (incorporated by reference to Exhibit 10.8 to the Registration Statement on Form S-4, filed by FIAC on December 4, 2023).
DevvStream Corp. 2024 Equity Incentive Plan (incorporated by reference to Annex F to the Proxy Statement/Prospectus on Form 424B3, filed by FIAC on August 9, 2024).
Form of DevvStream Corp. Indemnification Agreement (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-4, filed by FIAC on July 10, 2024).

Amendment No. 3 to the Strategic Partnership Agreement, dated July 8, 2024, between Devvio, Inc. and DevvStream, Inc. (f/k/a DevvESG Streaming, Inc.) (incorporated by reference to Exhibit 10.17 to the Registration Statement on Form S-4, filed by FIAC on July 10, 2024).
Sponsor Side Letter, dated as of September 12, 2023, by and among FIAC and Focus Impact Sponsor, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by FIAC on September 13, 2023).
Amendment No. 1 to the Sponsor Side Letter, dated as of May 1, 2024, by and among FIAC and Focus Impact Sponsor, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by FIAC on May 2, 2024)
Amendment No. 2 to Sponsor Letter Agreement, dated October 29, 2024, by and between FIAC and the Sponsor (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Contribution and Exchange Agreement, dated October 29, 2024, by and among FIAC, DevvStream and Crestmont (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Form of PIPE Agreement (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Form of Carbon Subscription Agreement (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Amended and Restated Registration Rights Agreement, dated November 6, 2024, by and among FIAC, the Sponsor and certain other legacy DevvStream holders.
Registration Rights Agreement, dated October 29, 2024, by and between FIAC and Karbon-X Corp (incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Form of Company Support & Lock-Up Agreement, by and between FIAC, the Sponsor and certain other legacy DevvStream holders (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed by FIAC on September 13, 2023).
Purchase Agreement, dated October 29, 2024, by and between FIAC, Helena Global Investment Opportunities I Ltd. and the Sponsor (incorporated by reference to Exhibit 10.6 to the Current Report on Form 8-K, filed by FIAC on October 29, 2024).
Employment Agreement, dated November 6, 2024, between DevvStream Corp. and Sunny Trinh.
Employment Agreement, dated November 6, 2024, between DevvStream Corp. and Chris Merkel.
Employment Agreement, dated November 6, 2024, between DevvStream Corp. and Bryan Went.
Strategic Consulting Agreement, dated November 13, 2024, by and between DevvStream Corp. and Focus Impact Partners, LLC.
Form of New Convertible Note.
Security Agreement, dated December 18, 2024, by and among DevvStream Corp., Focus Impact Sponsor, LLC and Focus Impact Partners, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by FIAC on December 19, 2024).
Company’s Code of Business Conduct and Ethics.
Letter from Marcum to the U.S. Securities and Exchange Commission dated March 7, 2025.
List of Subsidiaries of the Company.
Press release, dated November 6, 2024, announcing the closing of the Business Combination.
Amended unaudited pro forma income statement of DevvStream Corp.
Audited consolidated financial statements of DevvStream Holdings Inc. as of July 31, 2024 and 2023 and for the years ended July 31, 2024 and 2023
Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream Holdings Inc. for the year ended July 31, 2024
Unaudited condensed consolidated interim financial statements of DevvStream Holdings Inc. as of October 31, 2024 and for the three month period ended October 31, 2024 and 2023
Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream Holdings Inc. for the three month period ended October 31, 2024
Unaudited pro forma condensed combined financial information of the DevvStream Corp. as of October 31, 2024, for the three month period ended October 31, 2024, and for the year ended July 31, 2024

* Previously filed.
+ Indicates management contract or compensatory plan.
† Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

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.

Dated: March 7, 2025
  
 
DEVVSTREAM CORP.
   
 
By:
/s/ David Goertz
 
Name:
David Goertz
 
Title:
Chief Financial Officer


Exhibit 16.1
 
March 7, 2025

Securities and Exchange Commission
100 F Street, N.E.
Washington, DC  20549

Commissioners:

We have read the statements made by DevvStream Corp. (formerly known as Focus Impact Acquisition Corp.) under Item 4.01 of its Form 8-K dated March 7, 2025.  We agree with the statements concerning our Firm in such Form 8-K; we are not in a position to agree or disagree with other statements of DevvStream Corp. contained therein.

Very truly yours,
  
   
/s/ Marcum LLP
  
   
Marcum LLP
  


Exhibit 99.3
DevvStream Holdings Inc.
Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 1930)
2
Consolidated Balance Sheets as of July 31, 2024 and 2023
3
Consolidated Statements of Operations and Comprehensive Loss for the years ended July 31, 2024  and 2023
4
Consolidated Statements of Changes in Shareholders’ Equity (Deficiency) for the years ended July 31, 2024 and 2023
 5
Consolidated Statements of Cash Flows for the years ended July 31, 2024 and 2023
6
Notes to the Consolidated Financial Statements
7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of DevvStream Corp.:
 
Opinion on the Consolidated Financial Statements
 
We have audited the accompanying consolidated balance sheets of DevvStream Holdings Inc. (the “Company”) as of July 31, 2024 and 2023 and the related consolidated statements of operations and comprehensive loss, changes in shareholders’ equity (deficiency), and cash flows for each of the years in the two-year period ended July 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
 
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of July 31, 2024 and 2023, and the results of its consolidated operations and its consolidated cash flows for each of the years in the two-year period ended July 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
 
Material Uncertainty Related to Going Concern
 
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has a working capital deficit, negative cash flows and losses since inception and requires additional capital to fund its operations, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion
 
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
 
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
 
/s/ MNP LLP
   
Toronto, Canada
Chartered Professional Accountants
March 6, 2025
Licensed Public Accountants
   
We have served as the Company’s auditor since 2022
   
MNP LLP
  
1 Adelaide Street East, Suite 1900, Toronto ON, M5C 2V9
1.877.251.2922 T: 416.596.1711 F: 416.596.7894
 
DevvStream Holdings Inc.
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)

             
As at
  
July 31,
2024
    
July 31,
2023
  
             
ASSETS
            
Current assets
            
Cash
  
$
21,106
    
$
489,971
  
GST receivable
    
85,658
      
49,408
  
Prepaid expenses
    
35,141
      
311,690
  
Total current assets
    
141,905
      
851,069
  
                 
Equipment
    
953
      
2,821
  
Total assets
  
$
142,858
    
$
853,890
  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIENCY)
                
Current liabilities
                
Accounts payable and accrued liabilities
  
$
6,575,974
    
$
908,652
  
Mandatory convertible debentures
    
127,500
      
-
  
Convertible debentures
    
881,544
      
-
  
Derivative liabilities
    
919,250
      
-
  
Total current liabilities
    
8,504,268
      
908,652
  
Shareholders’ equity (deficiency)
                
Common shares (No par value, unlimited common shares authorized; 29,603,123 SVS and 4,650,000 MVS issued and outstanding) (2023 – 28,419,790 SVS and 4,650,000 MVS)
    
-
      
-
  
Additional paid in capital
    
13,321,266
      
11,883,289
  
Accumulated other comprehensive loss
    
43,553
      
(83,570
)
Deficit
    
(21,726,229
)
    
(11,854,481
)
Total shareholders’ equity (deficiency)
    
(8,361,410
)
    
(54,762
)
Total liabilities and shareholders’ equity (deficiency)
  
$
142,858
    
$
853,890
  
                 
Going concern (Note 2)
                
Commitments and contingencies (Note 13)
                
Subsequent events (Note 14)
                

See accompanying notes to these consolidated financial statements.

3
DevvStream Holding Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in United States dollars)

For the year ended July 31,
  
2024
    
2023
  
             
Operating expenses
            
Sales and marketing
  
$
481,104
    
$
914,409
  
Depreciation
    
1,771
      
1,849
  
General and administrative
    
461,167
      
443,549
  
Professional fees
    
5,656,352
      
1,994,826
  
Salaries and wages
    
2,136,124
      
2,615,923
  
Total operating expenses
    
(8,736,518
)
    
(5,970,556
)
                 
Other income/expenses
                
Other income
     -       10,139  
Foreign exchange gain (loss)
    
(107,634
)
    
55,764
  
Interest
    
(29,296
)
    
-
  
Accretion expense
    
(52,554
)
    
-
  
Unrealized loss on derivative liabilities
    
(845,700
)
    
-
  
Unrealized loss on mandatory convertible debentures
    
(27,500
)
    
-
  
Net loss before income taxes
    
(9,799,202
)
    
(5,904,653
)
                 
Current income tax expense
    
(72,546
)
    
-
  
Net loss
  
$
(9,871,748
)
  
$
(5,904,653
)
                 
Other comprehensive loss
                
Foreign currency translation
    
127,123
      
878
  
Net loss and comprehensive loss
    
(9,744,625
)
    
(5,903,775
)
                 
Weighted average number of shares – Basic and diluted
    
34,195,108
      
30,398,859
  
                 
Loss per share – Basic and diluted
  
$
(0.29
)
  
$
(0.19
)

See accompanying notes to the consolidated financial statements.

4
Devvstream Holdings Inc.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)
(Expressed in United States dollars)

   
   
Number of Subordinate Voting Stock
    
Number of Multiple Voting Stock
    
Additional Paid-in Capital
    
Accumulated Deficit
    
Accumulated other comprehensive income (loss)
    
Total
shareholders’ equity (deficiency)
  
Balance, July 31, 2022
    
20,543,751
      
4,650,000
    
$
6,818,147
    
$
(5,949,828
)
  
$
(84,448
)
  
$
783,871
  
Share based compensation – RSUs
    
-
      
-
      
1,036,325
      
-
      
-
      
1,036,325
  
Share based compensation – Options
    
-
      
-
      
778,742
      
-
      
-
      
778,742
  
Shares issued for warrant exercises
    
1,170,000
      
-
      
301,984
      
-
      
-
      
301,984
  
Shares and warrants issued on RTO
    
6,706,039
      
-
      
3,721,852
      
-
      
-
      
3,721,852
  
Recapitalization on RTO
                    
(797,505
)
                    
(797,505
)
Warrant fair value modification
    
-
      
-
      
23,744
      
-
      
-
      
23,744
  
Foreign currency translation
    
-
      
-
      
-
      
-
      
878
      
878
  
Net loss
    
-
      
-
      
-
      
(5,904,653
)
    
-
      
(5,904,653
)
Balance, July 31, 2023
    
28,419,790
      
4,650,000
    
$
11,883,289
    
$
(11,854,481
)
  
$
(83,570
)
  
$
(54,762
)
Share based compensation – RSUs
    
-
      
-
      
597,587
      
-
      
-
      
597,587
  
Share based compensation – Options
    
-
      
-
      
692,740
      
-
      
-
      
692,740
  
Shares issued for warrant exercises
    
1,183,333
      
-
      
147,650
      
-
      
-
      
147,650
  
Foreign currency translation
    
-
      
-
      
-
      
-
      
127,123
      
127,123
  
Net loss
    
-
      
-
      
-
      
(9,871,748
)
    
-
      
(9,871,748
)
Balance, July 31, 2024
    
29,603,123
      
4,650,000
      
13,321,266
      
(21,726,229
)
  
$
43,553
    
$
(8,361,410
)

See accompanying notes to the consolidated financial statements.

5
DevvStream Holdings Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars)

For the year ended July 31,
  
2024
    
2023
  
 
Operating activities
            
Net loss for the period
  
$
(9,871,748
)
  
$
(5,904,653
)
Items not affecting cash:
                
   Depreciation
    
1,771
      
1,849
  
   Share based compensation
    
1,290,327
      
1,838,811
  
   Unrealized loss on derivative liabilities
     845,700       -  
   Unrealized loss on mandatory convertible debentures
    
27,500
          
   Non-cash general and administrative
    
50,000
      
-
  
   Accrued interest
    
19,024
      
-
  
   Accretion expense
    
52,554
      
-
  
   Gain on forgiveness of accounts payable
    
-
      
(6,542
)
                 
Changes in non-cash working capital items:
                
Other receivables
    
(39,121
)
    
(44,147
)
Prepaid expenses
    
267,294
      
115,817
  
Accounts payable and accrued liabilities
    
5,807,752
      
590,721
  
Net cash used in operating activities
    
(1,548,947
)
    
(3,408,144
)
                 
Investing activities
                
Cash assumed on RTO
    
-
      
10
  
Net cash provided by (used in) financing activities
    
-
      
10
  
                 
Financing activities
                
Proceeds from convertible debentures
    
883,516
      
-
  
Proceeds from warrant exercise
    
176,113
      
301,984
  
Proceeds from issuance of mandatory convertible debentures
    
50,000
      
-
  
Net cash provided by financing activities
    
1,109,629
      
301,984
  
                 
Effect of exchange rate changes on cash
    
(29,547
)
    
(159,534
)
                 
Net increase (decrease) in cash
    
(468,865
)
    
(3,265,684
)
Cash, Beginning
    
489,971
      
3,755,655
  
Cash, Ending
  
$
21,106
    
$
489,971
  
                 
Supplemental information:
                
Taxes paid
  
$
-
    
$
-
  
Interest paid
  
$
-
    
$
-
  
Fair value of securities issued for the acquisition of DevvStream Inc. (Note 4)
  
$
-
    
$
3,721,852
  

See accompanying notes to the consolidated financial statements.

6
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
1.
Nature of operations


DevvStream Holdings Inc. (the “Company” or “Devv Holdings”) was incorporated under the British Columbia Business Corporations Act on August 13, 2021. The head office is located at 2133 – 1177 West Hastings Street, Vancouver, BC V6E 2K3 and records and registered office is located at 1500 – 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7.
 
On November 4, 2022, the Company completed a reverse takeover (“RTO”) with DevvStream Inc. (“DESG”) and DevvESG Streaming Finco Ltd. (“Finco”), (the “Transaction”). DESG is an Environmental Social and Governance (“ESG”) principled, high-tech, impact investing company focused on high quality and high return carbon credit generating projects. DESG was determined to be the acquirer for accounting purposes, and therefore its assets, liabilities and operations are included in the consolidated financial statements at their historical carrying value. The Company’s operations are considered to be a continuance of the business and operations of DESG from its date of incorporation on August 27, 2021, with the Company and Finco’s operations being included from November 4, 2022, the closing date of the Transaction, onwards.
 
On September 12, 2023 (and as amended on May 1, 2024 , August 10, 2024 and October 29, 2024), the Company entered into a business combination agreement (“BCA”) with Focus Impact Acquisition Corp. (“Focus Impact”). Focus Impact was a special purpose acquisition corporation focused on amplifying social impact through the pursuit of a merger or business combination with socially forward companies. The transaction was structured as an amalgamation of the Company into a wholly owned subsidiary of Focus Impact, following Focus Impact’s redomiciling as an Alberta company. Focus Impact will be renamed “DevvStream Corp.” (the “Combined Company”) and continue the business of the Company following the amalgamation. It was a condition of the transaction that the securities of the Combined Company will be listed on the Nasdaq Stock Exchange (“NASDAQ”).  This transaction is also referred to as the “De-SPAC”. The De-SPAC transaction closed on November 6, 2024 (Note 14).
 
The Company was listed on the Cboe Exchange under the symbol “DESG” until November 6, 2024, when the Company delisted from the Cboe Exchange.

7
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
2.
Basis of preparation

(a) Statement of compliance
 
These consolidated financial statements reflect the accounts of the Company and have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for financial information.  These consolidated financial statements have been prepared on a going concern basis, under the historical cost convention.

(b) Going concern

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. As at July 31, 2024, the Company has a working capital deficit, incurred negative cash flows and losses since inception and has generated no revenue to date. The Company’s ability to continue its operations, realize its assets at their carrying values and discharge its liabilities is dependent upon its ability to raise adequate financing from external sources and generate profits and positive cash flows from operations.
 
The Company will require additional capital to fund its operations, to evaluate strategic opportunities, and for working capital purposes. However, there is no assurance that the Company will be able to secure such financing on favourable terms.  These matters raise substantial doubt regarding the Company’s ability to continue as a going concern.  These consolidated financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern. Such adjustments could be material.


(c) Basis of consolidation
 
These consolidated financial statements include the accounts of the Company and entities controlled by the Company.  Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All intercompany balances and transactions, income and expenses have been eliminated upon consolidation.
 
As of July 31, 2024, the Company’s subsidiaries were:
 
Name of subsidiary
Place of incorporation
  
Ownership
  
DESG
Delaware, USA
    
100
%
Finco
British Columbia, Canada
    
100
%
 
On November 10, 2022, the Company made an investment into Marmota Solutions Incorporated (“Marmota”). On the date of the initial investment, the Company owned 50% of Marmota and accounted for the investment as an equity investment. On October 16, 2023, the Company reduced its interest in Marmota to 10% by returning common shares to Marmota for cancellation in consideration of $19.

8
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
2.
Basis of preparation (continued)


(d) Variable interest entities (“VIE”)
 

A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to control the entity’s activities or do not substantially participate in the gains and losses of the entity. Upon inception of a contractual agreement, and thereafter, if a reconsideration event occurs, the Company performs an assessment to determine whether the arrangement contains a variable interest in an entity and whether that entity is a VIE. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Where the Company concludes that it is the primary beneficiary of a VIE, the Company consolidates the accounts of that VIE.
 

(e) Functional and presentation currencies

The consolidated financial statements of the Company are presented in United States dollars, while the functional currency of the Company and its subsidiaries is the Canadian dollar.

(f) Use of estimates and judgments

The preparation of consolidated financial statements in conformity with US GAAP requires the Company’s management to make judgments, estimates and assumptions about future events that the amounts reported in the consolidated financial statements. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are made prospectively.

Key estimates made by management with respect to the areas noted have been disclosed in the notes to these consolidated financial statements.

Valuation of embedded derivatives and mandatorily convertible debt

The estimates and judgments made in relation to the fair value of derivative liabilities and mandatory convertible debentures are subject to measurement uncertainty.  The valuation techniques used to determine fair value requires inputs that involve assumptions and judgments such as the probability of the De-SPAC transaction closing (Note 6), volatility of the Company and Focus Impact’s share prices, expected life and foreign exchange rates. Such judgments and assumptions are inherently uncertain


Functional currency

The Company and its subsidiaries are required to determine their functional currencies based on the primary economic environment in which each entity operates. In order to do that, management has to analyze several factors, including which currency mainly influences the cost of undertaking the business activities, in which currency the entity has received financing, and in which currency it keeps its receipts from operating activities. Management uses its judgment to determine which factors are most important when the above indicators are mixed and the functional currency is not obvious.

9
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
2.
Basis of preparation (continued)

Fair value of consideration in RTO

The fair value of consideration to acquire the Company in the RTO comprised of common shares and replacement warrants.  The share price of DESG as at the date of issuance is a significant estimate. In determining the estimate, management considered recent financings. The replacement warrants were valued using the Black-Scholes option pricing model which utilizes subjective assumptions such as fair value of the underlying share, expected price volatility, expected life and estimated forfeitures.


Equity-settled share-based payments


Share-based payments are measured at fair value. Options and warrants are measured using the Black-Scholes option pricing model based on estimated fair values of all share-based awards at the date of grant. The Black-Scholes option pricing model utilizes subjective assumptions such as fair value of the underlying share, expected price volatility, expected life and estimated forfeitures. Non‑market vesting conditions are estimated initially and re-assessed every reporting period. Changes in these input assumptions can significantly affect the fair value estimate.


Going concern


The assessment of the Company’s ability to continue as a going concern and to raise sufficient funds to pay its ongoing operating expenditures and to meet its liabilities for the ensuing year, involves significant judgment based on historical experience and other factors, including expectation of future events that are believed to be reasonable under the circumstances.

(g) Emerging growth company

The Company will be an “Emerging Growth Company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial reporting standards.  The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

10
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
3.
Significant accounting policies
 
The accounting policies set out below have been applied in the preparation of these consolidated financial statements. These policies have been applied consistently in the period unless otherwise stated.

(a) Additional paid in capital

Additional paid in capital is presented at the value of the shares issued as the Company’s shares have no stated par value. Transaction costs directly attributable to the issuance of common shares are recognized as a deduction from equity. Transactions with shareholders are disclosed separately in equity.

The proceeds from the exercise of stock options or warrants together with amounts previously recorded in additional paid in capital over the vesting periods are recorded as additional paid in capital.


Share units

The Company uses the relative fair value method with respect to the measurement of shares and warrants issued as private placement units. Under the relative fair value method, the Company first determines the fair value of the common shares and warrants issued in a private placement, calculates the total fair value of the issued units, and then allocates the proceeds received between the common shares and warrants based on their respective percent of the total fair value.

Warrants modification

The modification of warrants is accounted for as a cancellation of the old warrants, and the issuance of post-modification warrants as the new warrants. The fair value incremental calculated on the modification would be considered an additional cost of issuing equity as part of the exchange of the old instrument for the new instrument. The impact of modifications to warrants previously issued for services is recognized as share-based compensation in the consolidated statements of operations and comprehensive loss.

11
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
3.
Significant accounting policies (continued)

(b) Share-based payments

The Company records stock-based compensation in accordance with ASC 718 (“Compensation – Stock Compensation”) using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

The Company uses the Black-Scholes option pricing model to calculate the fair value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price volatility over the term of the awards. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.

The Company records restricted stock units based on their fair value at grant date and recognizes compensation expense on a graded basis over the vesting period. In circumstances where the restricted stock units vest on the date of grant, the expense would be immediately recognized on grant.

The cumulative expense is recognized for equity-settled transactions at each reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. At the end of each reporting period, the Company re-assesses its estimates of the number of awards that are expected to vest and recognizes the impact of the revisions in the consolidated statements of loss and comprehensive loss. No expense is recognized for awards that do not ultimately vest.

Where the terms of an equity settled award are modified, the minimum expense recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense or its reduction is recognized for any modification which increases or decreases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee as measured at the date of modification. Where an award is cancelled by the Company or the counterparty, any remaining element of the fair value of the award is expensed immediately or reversed through profit or loss, depending on whether the award was cancelled or forfeited.

(c)  Equipment

Equipment is stated at cost and depreciated using the straight-line method over the estimated useful life of the asset using the following annual rates:

Computer equipment
3 years

12
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
3.
Significant accounting policies (continued)



(d)  Foreign currency translation

Foreign currency transactions and balances

Foreign currency transactions are translated into the functional currency of the Company, using the exchange rates prevailing at the dates of the transactions, with the resulting foreign exchange gains and losses recognized in the consolidated statements of loss and comprehensive loss. The foreign exchange gains and losses resulting from the remeasurement of monetary items denominated in foreign currency at year end exchange rates are recognized in the consolidated statements operations and comprehensive loss.

Non-monetary items are not retranslated at year end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

Translation to presentation currency

The Company has a functional currency of the Canadian dollar and a presentation currency of the US dollar. For presentation, assets and liabilities have been translated into US Dollar at the closing rate at the reporting date and income and expenses are translated at average exchange rates prevailing during the period. Foreign currency translation gains and losses are recognized in other comprehensive loss.

(e)  Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

Financial assets are classified and measured at fair value with subsequent changes in fair value recognized in either profit and loss as they arise unless restrictive criteria are met for classifying and measuring the asset at either amortized cost or FVOCI. Financial liabilities are measured at amortized costs unless they are elected to be or required to be measured at fair value through profit and loss.

Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred all risks and rewards of ownership. Financial liabilities are derecognized when the obligations specified in the contract are discharged, cancelled, or expire.

ASC 820, Fair Value Measurements and Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.

13
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
3.
Significant accounting policies (continued)

ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements,

ASC 820 establishes a three-tier fair value hierarchy that distinguishes between the following, based on the nature of the valuation inputs:


•
Level 1: quoted prices (unadjusted) for identical assets or liabilities in active markets;

•
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and,

•
Level 3: one or more significant inputs used in a valuation technique are unobservable in determining fair values of the asset or liability.

Determination of fair value and the resulting hierarchy requires the use of observable market data where available. The classification of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement.

To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. The Company determined that the derivative liabilities relating to the embedded conversion feature in the convertible notes and the mandatory convertible debentures are liabilities at Level 3.

(f)  Income taxes

The Company’s tax provision consists of taxes currently payable or receivable, plus any change during the period in deferred tax assets and liabilities. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settles. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that is it more likely than note that some portion of the deferred tax asset will not be realized.

During the ordinary course of business, there are many transactions and calculations for which the ultimate tax determination is uncertain. Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if available evidence indicates it is more likely than not that the tax position will be fully sustained upon review by taxing authorities, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized upon ultimate settlement. For tax positions that are 50 percent or less likely of being sustained upon audit, the Company does not recognize any portion of that benefit in the financial statements.

14
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
3.
Significant accounting policies (continued)



(g) Loss per share

Basic loss per share is calculated by dividing the net loss attributable to the common shareholders of the Company by the weighted average number of subordinate voting stock outstanding and reduced by any shares held in escrow during the reporting period. Diluted loss per share is calculated by dividing the net loss applicable to subordinate voting stock by the sum of the weighted average number of subordinate voting stock issued and outstanding, all additional subordinate voting stock that would have been outstanding if potentially dilutive instruments were converted and reduced by any shares held in escrow. If these computations prove to be anti-dilutive, diluted loss per share is the same as basic loss per share.

(h) Advertising

The Company expenses advertising costs when the advertising first takes place. Advertising expense was approximately $481,104 for the year ended July 31, 2024 (2023 – $914,409).

(i) Operating segments

Operating segments are components of the Company that engage in business activities which generate revenues and incur expenses. The operations of an operating segment are distinct, and the operating results are regularly reviewed by the CODM for the purposes of resource allocation decisions and assessing its performance.  The Company has assessed the above criteria and has determined that the entity as a whole is one operating segment comprising of a single operating segment.

(j) Convertible debentures

The Company accounts for convertible debentures in accordance with ASC 470, Debt.   Convertible debentures are recorded at face value less unamortized issuance costs, assuming the conversion feature does not meet the requirements for bifurcation.

If the conversion feature does not meet the requirements to be classified as equity, it is bifurcated and accounted for separately as a derivative liability under ASC 815, Derivatives and Hedging, and measured at fair value, with subsequent changes recognized in earnings.

If the conversion feature meets the equity classification criteria, no separate accounting for the conversion feature is required, and the entire instrument is classified as a liability.

Interest expense is recognized using the effective interest method, which includes the amortization of any debt issuance costs and discounts or premiums.

Debt Modifications and Extinguishments

The Company evaluates modifications to convertible debt instruments in accordance with ASC 470-50, Modifications and Extinguishments.

A modification is deemed to be substantial if:

•
The present value of the cash flows under the terms of the modified debt differs by at least 10% from the present value of the remaining cash flows under the original debt terms, using the original effective interest rate (the “10% Test”); or

•
The modification results in a change in the embedded conversion option that requires re-evaluation under ASC 815.

15
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
3.
Significant accounting policies (continued)

If the modification is determined to be substantial, the original debt is extinguished, and the modified instrument is accounted for as a new debt issuance.

The Company also assesses whether a modification constitutes a troubled debt restructuring under ASC 470-60. A restructuring is considered troubled if the Company is experiencing financial difficulty and the creditor has granted a concession.

For modifications that are not substantial, the Company accounts for the changes prospectively, adjusting the effective interest rate to reflect the revised cash flows.

In evaluating convertible debt where the conversion option is bifurcated as a derivative liability before and after the modification, the 10% cash flow test is applied to the host debt instrument (without the conversion feature). Any change in fair value of the bifurcated conversion option is recognized in earnings.


(k) Comparative Information

Certain comparative figures have been reclassified to conform with the current year’s presentation.

(l) Standards issued but not yet effective

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Income Taxes (Topic 740)

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU-740”). ASU-740 requires public entities to provide enhanced disclosure of specific categories of reconciling items included in the rate reconciliation; disclosure of the nature, effect and underlying causes of each reconciling item in the rate reconciliation and the judgment used in the categorization of such items; and enhanced disclosures for income taxes paid. The amendments in this ASU are effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU-740 on its consolidated financial statements and disclosures.

Segment Reporting (Topic 280)

In November 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 280”). ASU 280 requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and to disclose how reported measures of segment profit or loss are used in assessing segment performance and allocating resources. The amendments in ASU-280 are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU-280 on its consolidated financial statements and related disclosures and does not expect the adoption of ASU-280 to have a material impact on the Company’s consolidated financial statements.

16
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
4.
Reverse takeover

On December 17, 2021, (and as amended on March 30, 2022, May 18, 2022, August 11, 2022, and October 24, 2022), the Company, a wholly-owned Canadian subsidiary of the Company (“BC Subco”), a wholly-owned Delaware subsidiary of the company (“Delaware Subco”), DESG and Finco, a related party of the Company, entered into an amalgamation agreement (the “Amalgamation Agreement”).  Under the Amalgamation Agreement, the Company consolidated all of its issued and outstanding common shares on a 28.09:1 basis and amended its articles to redesignate the common shares as subordinate voting shares (“SVS”) and create a new class of multiple voting shares (“MVS”). Under the Amalgamation Agreement, Delaware Subco amalgamated with DESG and BC Subco amalgamated with Finco.

All the outstanding DESG Subordinate Voting Shares and Finco common shares were exchanged for SVS of the Company on a one for one basis. All the outstanding DESG MVS were exchanged for MVS of the Company on a one for one basis. In addition, all of the outstanding convertible securities of DESG and Finco were exchanged for securities of the Company on a one for one basis and on substantially the same economic terms and conditions. The Transaction was completed on November 4, 2022.

In consideration for the Transaction, the Company issued 20,543,751 SVS to former holders of subordinate voting shares of DESG, 5,456,250 SVS to former holders of common shares of Finco and 4,650,000 MVS the former holder of multiple voting shares of DESG. The former shareholders of the Company retained 1,249,789 Subordinate Voting Shares. The fair value per share was estimated to be CAD$0.60 ($0.44) based on DESG’s recent financings.
 
As at November 4, 2022, Finco had 2,997,975 warrants outstanding exercisable at CAD$1.50 expiring on November 4, 2024. The fair value of the warrants was estimated to be $760,932 based on the Black-Scholes Option Pricing Model using the following assumptions: share price – CAD $0.60, expected dividend yield - 0%, expected–volatility - 150%, risk-free interest rate – 4.08% and an expected remaining life – 2 years. Expected volatility was estimated by using the annualized historical volatility of publicly traded companies that the Company considers to be comparable. The expected warrant life represents the period of time that warrants granted are expected to be outstanding. The risk-free interest rate is based on Canadian government bonds with a remaining term equal to the expected life of the warrants.

Immediately after the completion of the Transaction, the former holders of DESG’s shares owned 91% of the shares of the combined entity.  As a result of the Transaction, the former shareholders of DESG acquired control of the Company, thereby constituting a reverse takeover (“RTO”) of the Company. The RTO was determined to be a purchase of the Company and Finco’s net assets by the shareholders of DESG.
 
The Transaction is accounted for as a capital transaction of DESG and equivalent to the issuance of shares by DESG for the net assets of the Company and Finco accompanied by a recapitalization as the Company did not qualify as a business according to the definition in ASC 805 “Business Combinations” and met the definition of a non-operating public shell. As a result, the transaction has been accounted for as an asset acquisition with DESG being identified as the acquirer and the Company and Finco being treated as the accounting acquiree with the transaction being measured at the fair value of the equity consideration issued to the Company and Finco shareholders.  DESG is the continuing entity from the date of its incorporation on August 27, 2021.
 
The excess of the fair value of the shares issued over the value of the net monetary assets acquired has been recognized as a reduction of equity.
 
17
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
4.
Reverse takeover (continued)


The purchase price is allocated as follows:

Fair value of shares retained by former shareholders of the Company (1,249,789 post 28.09:1 consolidation shares at CAD$0.60 ($0.44))
  
$
551,820
  
Fair value of shares issued to former shareholders of Finco
(5,456,250 shares at CAD$0.60 ($0.44))
    
2,409,100
  
Fair value of replacement Finco warrants
    
760,932
  
Amounts due to Finco
    
(3,014,157
)
Amounts due from the Company
    
14,425
  
Total consideration
    
722,120
  
         
Net Assets (Liabilities) Acquired of PubCo and Finco:
        
Cash
  
$
10
  
Accounts payable and accrued liabilities
    
(75,396
)
Total net assets (liabilities)
  
$
(75,386
)
         
Reduction to additional paid-in capital as a result of the recapitalization
  
$
797,506
  


Transaction costs of $114,930 were incurred as part of the Transaction and recorded within professional fees in the statements of operations and comprehensive loss.

5.
Accounts payable and accrued liabilities

   
July 31, 2024
    
July 31, 2023
  
Accounts payable
  
$
5,661,681
    
$
490,287
  
Accrued liabilities
    
813,284
      
418,365
  
Income taxes payable
    
101,009
       -  
   
$
6,575,974
    
$
908,652
  

6.
Convertible debentures

During the year ended July 31, 2024, the Company closed several tranches of convertible debenture offerings under the following terms:

Devvio Tranche (Related Party Convertible Debt)

On January 12, 2024, the Company closed an unsecured convertible notes offering in the principal amount of $100,000 with Devvio that will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted. The maturity is November 6, 2024. The Company has the right to prepay the whole or any portion of the principal amount, and together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment. Devvio is a related party to the Company through its ownership, as Devvio holds 100% of the Company’s MVS, and one of Devvio’s officers, directors and principal owners was a director of the Company during the year ended July 31, 2024.
 
18
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
6.
Convertible debentures (continued)

Devvio Tranche (Related Party Convertible Debt continued)

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
  •
At a conversion price equal to the greater of (a) $7.65 multiplied by the common conversion ratio as set forth in the BCA (the “Common Conversion Ratio”), and (b) CAD$1.03. The shares are thereafter exchanged for common shares of the Combined Company at the Common Conversion Ratio.
  •
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days  after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of October 8, 2024 (270 days from the issuance date of the notes) and the termination of the business combination agreement with Focus Impact (Note 1), the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:
  •
At a conversion price equal to the greater of (a) the 30-day volume weighted average trading price (“VWAP”) of the shares on Cboe Canada stock exchange and (b) CAD$1.03.
  •
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$1.03. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The Devvio Tranche convertible debentures were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation.  On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The fair value of the derivative liability at issuance was estimated to be $45,000 using the Monte Carlo model.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

Focus Impact Partners Convertible Debt

During the year, the Company closed an unsecured convertible notes offering with Focus Impact Partners, LLC (“Focus Impact Partners”). The convertible notes were initially closed on January 12, 2024 and additional advances were added under the same offering.  The total principal amount of $550,000 was received in five installments: $150,000 on November 6, 2023, $150,000 on January 9, 2024, $100,000 on March 28, 2024, $100,000 on April 19, 2024, and $50,000 on June 13, 2024. The debentures will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction (Note 1) and the debentures are not converted. The maturity date for all advances is November 6, 2024. The Company has the right to prepay the whole or any portion of the principal amount, together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
  •
At a conversion price equal to the greater of (a) a 25% discount to the 20-day VWAP of the shares on the Cboe Exchange multiplied by the Common Conversion Ratio, and (b) $2.00 (the De-SPAC Floor Price”).
  •
The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
 
19
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
6.
Convertible debentures (continued)

Focus Impact Partners Convertible Debt (continued)

  •
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of October 8, 2024 (270 days from the issuance date of the notes), or the termination of the BCA with Focus Impact, the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:
  •
At a conversion price equal to the greater of (a) a 25% discount to the 20-day VWAP of the shares on the Cboe Exchange calculated on the conversion date and b) the floor price defined as the current market price on the date of announcement of the offering which was CAD $0.475.
  •
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 20-day VWAP and (b) the floor price defined as the current market price on the date of announcement of the offering which was CAD $0.475.
  •
The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

On June 28, 2024, the Company and Focus Impact Partners agreed to amend the Focus Impact Partners Convertible Debt (“Focus Impact Partners Amendment”) such that the De-SPAC Floor Price would be amended from $2.00 to CA$0.475.

On June 28, 2024, the Company received additional proceeds of $20,000 under the amended terms.

The Focus Impact Partners Convertible Debt were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation. On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The total fair value of the derivative liabilities at the various issuance dates was estimated to be $25,800 as valued using the Monte Carlo model.

The Focus Impact Partners Amendment had no impact on the classification of the convertible debenture and therefore, the conversion feature was considered a derivative before and after the modification.  As there was no change to the host instrument cash flows as a result of this change, the 10% test was not met and therefore, there was no extinguishment of the host debt as a result of this change.

As the conversion option was bifurcated before and after the modification, the change in the fair value of the conversion feature was recognized as the loss on revaluation of the derivative liabilities through the consolidated statement of operations and comprehensive loss.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

Envviron Tranche (Related Party Convertible Debt)

On April 23, 2024, the Company closed an unsecured convertible note offering in the principal amount of $250,000 with Envviron SAS (a company controlled by a former director of the Company) that will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted (“Envviron Tranche”). The maturity is February 15, 2025. The Company has the right to prepay the whole or any portion of the principal amount, and together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment.  The terms of the Envviron Tranche are identical to the original Focus Impact Partners Convertible Debt.
 
20
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
6.
Convertible debentures (continued)

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
  •
At a conversion price equal to the greater of (a) the price that is a 25% discount to the 20-day VWAP of the shares on Cboe Canada stock exchange, and (b) $2.00. The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
  •
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of January 18, 2025 (270 days from the issuance date of the notes) and the termination of the BCA with Focus Impact (Note 1), the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:

  •
At a conversion price equal to the greater of (a) the price that is a 25% discount to the 20-day VWAP of the shares on Cboe Canada stock exchange and (b) CAD$0.475.
  •
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$0.475. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The Environn Tranche convertible debentures were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation. On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The fair value of the derivative liability at issuance was estimated to be $2,750 using the Monte Carlo model.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

A continuity of the Company’s convertible debentures is as follows:

Balance as at August 1, 2023
  
$
-
  
Issued
    
920,000
  
Fair value of embedded derivative
    
(73,550
)
Transaction costs
    
(36,484
)
Accretion
    
52,552
  
Interest
    
19,026
  
Balance as at July 31, 2024
  
$
881,544
  

Below is a continuity of the embedded derivative liabilities:

Balance as at August 1, 2023
  
$
-
  
Derivative liability component of certain issued convertible debentures
    
73,550
  
Unrealized loss on derivative liabilities
    
845,700
  
Balance as at July 31, 2024
  
$
919,250
  

In connection with the issuance of these convertible debentures, the Company incurred $40,227 in directly attributable transaction costs. $36,484 was allocated to the host financial liability, $3,743 was allocated to the embedded derivative and recorded immediately in the consolidated statement of profit and loss as general and administrative expenses.
 
21
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
6.
Convertible debentures (continued)

The key inputs used in the Monte Carlo model for the derivative liabilities were as follows:

   
At initial
measurement
    
As at
July 31, 2024
  
Probability of De-SPAC Transaction closing
    
90
%
    
90
%
Risk-free interest rate
    
4.60% - 4.87
%
    
4.27% - 4.38
%
Expected term (years)
    
0.35 – 0.82
      
0.26 - 0.54
  
Expected annual volatility for the Company
    
90% - 145
%
    
85% - 112
%
Expected annual volatility for Focus Impact
    
2.5% - 5
%
    
2.5
%
Common conversion ratio
    
0.083 - 0.155
      
0.083
  
Foreign exchange rate
    
0.727 - 0.747
      
0.7242
  

7.
Mandatory convertible debentures

On January 12, 2024, the Company closed a tranche of unsecured convertible notes in the principal amount of $100,000 that bear interest at the rate of 15% per annum, payable only in Company securities on the Conversion Date, or payable in cash in connection with a Liquidating Event or Event of Default.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest automatically convert into SVS of the Company as follows:
  •
At a conversion price equal to the greater of (a) $7.65 multiplied by the Common Conversion Ratio, and (b) CAD$1.03.
  •
The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.

In the event the Company does not complete a De-SPAC transaction by October 8, 2024 (270 days from the issuance date of the notes), the principal and accrued interest are automatically convertible into units consisting of one SVS and half of a share purchase warrant, as follows:
  •
At a conversion price equal to the greater of (a) the 30-day VWAP of the shares on Cboe Canada stock exchange and (b) CAD$1.03.
  •
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$1.03. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The mandatory convertible debentures are liability classified and initially recorded at fair value with subsequent changes in fair value being recorded in profit and loss (“FVTPL”). The initial fair value was estimated to be $100,000. As at July 31, 2024, the Company revalued the mandatory convertible debentures using a Monte Carlo Simulation and recorded a change in fair value of $27,500 as an unrealized loss on mandatory convertible debentures.

22
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
7.
Mandatory convertible debt (continued)

In connection with the issuance of these mandatory convertible debentures, the Company incurred $7,545 in directly attributable transaction costs which were recorded immediately in the consolidated statement of profit and loss as general and administrative expenses.

A continuity of the Company’s mandatory convertible debentures is as follows:

Balance as at August 1, 2023
  
$
-
  
Issued
    
100,000
  
Unrealized loss on mandatory convertible debentures
    
27,500
  
Balance as at July 31, 2024
  
$
127,500
  

The key inputs used in the Monte Carlo model for the revaluation of the mandatory convertible debentures as at July 31, 2024 were as follows:

   
As at
July 31, 2024
  
Probability of De-SPAC Transaction closing by maturity date
    
85
%
Risk-free interest rate
    
4.42
%
Expected term (years)
    
0.19
  
Expected annual volatility for the Company
    
92.5
%
Expected annual volatility for Focus Impact
    
2.5
%
Common conversion ratio
    
0.083
  
Foreign exchange rate
    
0.7242
  

8.
Share capital

(a) Authorized
 
The Company is authorized to issue an unlimited number of SVS without par value and an unlimited number of MVS without par value. Each MVS can be converted into SVS at a rate of one MVS to 10 SVS and carries 10 voting rights per MVS.

(b) Shares issued
 
Shares issued during the year ended July 31, 2024
 
On August 4, 2023 the Company issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share.
 
On August 22, 2023 the Company issued 416,667 shares for the exercise of 416,667 share purchase warrants, at an exercise price of CAD$0.20 per share.
 
On September 22, 2023 the Company issued 166,666 shares for the exercise of 166,666 share purchase warrants, at an exercise price of CAD$0.20 per share.
 
Shares issued during year ended July 31, 2023
 
On November 4, 2022, the Company closed the Transaction and issued 6,706,039 SVS to former shareholders of Devv Holdings and Finco for consideration of $2,960,920 (Note 4).
 
On May 10, 2023 the Company issued 1,170,000 shares for the exercise of 1,170,000 share purchase warrants, 1,000,000 of which were exercised at CAD$0.20 per share, and 170,000 of which were exercised at CAD$1.20, for total cash proceeds of CAD$404,000 ($301,984).

23
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
8.
Share capital (continued)


(c)  Share purchase warrants
 
The continuity of share purchase warrants is as follows:

   
Number of warrants
  
Weighted
Average
Exercise price
  
Remaining life (Years)
  
Balance, July 31, 2022
    
7,959,376
  
CAD$0.70
    
1.80
  
Replacement Finco Warrants (Note 4)
    
2,997,975
  
CAD$1.20
    
1.27
  
Issued
    
85,000
  
CAD$2.00
    
1.92
  
Exercised
    
(1,170,000
)
CAD$0.35
    
-
  
Balance, July 31, 2023
    
9,872,351
  
CAD$0.90
    
1.85
  
Exercised
    
(1,183,333
)
CAD$0.20
    
-
  
Balance, July 31, 2024
    
8,689,018
  
CAD$1.00
    
0.67
  
 
As at July 31, 2024, the following share purchase warrants were outstanding:

Number of warrants outstanding
Exercise price
Expiry date
6,787,351
CAD$1.20
November 4, 2024
85,000
CAD$2.00
June 30, 2025
1,816,667
CAD$0.20
September 29, 2026
8,689,018
     
 

On May 1, 2023, the Company announced the implementation of a Warrant Exercise Incentive Program (the “Incentive Program”), to reduce the exercise price of warrants priced at CAD$1.50 per share to CAD$1.20 per share, (the “Eligible Warrants”).
 

Under the Incentive Program, the Company offered holders of Eligible Warrants the right to receive one new share purchase warrant (a “New Warrant”) for each two Eligible Warrants exercised between May 1, 2023 and June 30, 2023, and subsequently extended to August 30, 2023. Each New Warrant will entitle the holder to acquire one additional share of the Company at an exercise price of CAD$2.00 per share until June 30, 2025.
 

On May 10, 2023, 170,000 Eligible Warrants were exercised, and 85,000 New Warrants were subsequently issued. As part of the issuances, $37,379 was assigned to the value of the New Warrants using the relative fair value method.
 

The modification of warrants resulting from the Incentive Program resulted in $23,744 being recorded to share-based compensation from the modification of previously granted finder’s warrants.

(d) Options
 
The continuity of the Company’s stock options is as follows:

   
Number of
options
  
Weighted average
exercise price
Outstanding, July 31, 2022
    
1,980,000
  
CAD$0.80
Granted
    
2,125,000
  
CAD$0.89
Outstanding, July 31, 2024 and 2023
    
4,105,000
  
CAD$0.85
Exercisable, July 31, 2023
    
693,750
  
CAD$0.81
Exercisable, July 31, 2024
    
2,190,250
  
CAD$0.85
 
24
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
8.
Share capital (continued)

(d) Options (continued)
 
As at July 31, 2024, the weighted average remaining contractual life of outstanding options is 7.09 years (July 31, 2023 – 8.09 years).
 
As at July 31, 2024, the following stock options were outstanding and exercisable:

Number of options
outstanding
  
Exercise
price
Expiry date
  
Number of
options
exercisable
  
175,000
  
CAD$0.80
January 17, 2028
  
131,250
  
550,000
  
CAD$1.11
May 15, 2028
  
245,000
  
50,000
  
CAD$1.18
June 26, 2028
  
25,000
  
1,500,000
  
CAD$0.80
January 17, 2032
  
825,000
  
360,000
  
CAD$0.80
March 1, 2032
  
198,000
  
60,000
  
CAD$0.80
March 14, 2032
  
33,000
  
60,000
  
CAD$0.80
April 13, 2032
  
33,000
  
500,000
  
CAD$0.80
October 12, 2032
  
275,000
  
850,000
  
CAD$0.80
February 6, 2033
  
425,000
  
4,105,000
        
2,190,250
  
 
Stock options issued during the year ended July 31, 2024
 
No stock options were issued during the year ended July 31, 2024.
 
Stock options issued during the year ended July 31, 2023
 
On October 19, 2022, the Company granted 500,000 options with an exercise price of CAD$0.80 and a grant date fair value of $212,144. 10% of the options vest upon the Company’s listing on a recognized stock exchange which occurred on January 17, 2023 (the “Listing Date”), and 15% of the options vest every six months thereafter.
 
On January 17, 2023, the Company granted 175,000 options with an exercise price of CAD$0.80 and a grant date fair value of $79,180. 25% of the options vest every six months from their date of grant.
 
On February 6, 2023, the Company granted 850,000 options with an exercise price of CAD$0.80 and a grant date fair value of $393,786. 25% of the options vest every six months from their date of grant.
 
On May 15, 2023, the Company granted 300,000 options with an exercise price of CAD$1.11 and a grant date fair value of $203,989. 10% of the options vest one month from their date of grant, and 15% vest every six months thereafter.
 
On May 15, 2023, the Company granted 250,000 options with an exercise price of CAD$1.11 and a grant date fair value of $169,991. 25% of the options vest every six months from their date of grant.
 
On June 26, 2023, the Company granted 50,000 options with an exercise price of CAD$1.18 and a grant date fair value of $41,026. 25% of the options vest every six months from their date of grant.
 
The fair value of stock options granted were estimated using the Black-Scholes Option Pricing Model with the following assumptions:
25
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
8.
Share capital (continued)

(d) Options (continued)
Assumptions
    
Risk-free interest rate
2.93% - 3.70
%
Expected volatility
150
%
Fair value of underlying share
CAD$0.60 - CAD$1.18
  
Exercise price
CAD$0.80 – CAD$1.18
  
Dividend yield
0
%
Expected life (years)
5.00 - 10.00
  

Expected volatility was estimated by using the annualized historical volatility of publicly traded companies that the Company considers to be comparable. The expected option life represents the period of time that options granted are expected to be outstanding. The risk-free interest rate is based on Canadian government bonds with a remaining term equal to the expected life of the options.

Share-based compensation – Options
 
Share-based payments relating to the vesting of options for the year ended July 31, 2024 was $692,740 (2023 - $778,742) and is recorded as salaries and wages on the consolidated statement of operations.


(e)  Restricted stock units (“RSUs”)


The continuity of the Company’s RSU’s is as follows:

   
Number of RSU’s
  
Outstanding, July 31, 2022 and 2023
    
6,780,000
  
Granted
    
1,163,572
  
Outstanding, July 31, 2024
    
7,943,572
  

RSUs issued during the year ended July 31, 2024

On July 30, 2024, the Company granted 1,163,572 RSUs to directors, officers, employees and consultants of the Company. Each vested RSU can be exchanged for one SVS of the Company for no additional consideration. The RSUs will vest as follows:

•
10% vest upon the 6-month anniversary of the grant date

•
15% vest every 6 months thereafter for a period of 36 months

No RSUs were granted during the year ended July 31, 2023.

As at July 31, 2024, the Company had 7,943,572 (2023 – 6,780,000) restricted stock units (“RSUs”) outstanding, of which 3,736,000 (2023 – 1,700,000) had vested. All vested RSU’s are to be settled by December 31st of the calendar year in which the RSUs vest.

26
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
8.
Share capital (continued)

(e) RSU’s (continued)

As at July 31, 2024, the following RSUs were outstanding and vested:
 
Number of RSUs
outstanding
  
Grant date
 
  
Number of RSUs
Vested
  
 
60,000
  
November 30, 2021
    
40,000
  
 
2,500,000
  
December 24, 2021
    
1,375,000
  
 
120,000
  
March 1, 2022
    
66,000
  
 
4,100,000
  
March 14, 2022
    
2,255,000
  
 
1,163,572
  
July 30, 2024
    
-
  
 
7,943,572
        
3,736,000
  

As at July 31, 2023 the following RSUs were outstanding and vested:
 
Number of RSUs
outstanding
  
Grant date
 
  
Number of RSUs
vested
  
 
60,000
  
November 30, 2021
    
20,000
  
 
2,500,000
  
December 24, 2021
    
625,000
  
 
120,000
  
March 1, 2022
    
30,000
  
 
4,100,000
  
March 14, 2022
    
1,025,000
  
 
6,780,000
        
1,700,000
  

Stock-based compensation – RSU’s

Share-based payments relating to the vesting of RSUs for the year ended July 31, 2024 was $597,587 (2023 - $1,036,325) and is recorded as salaries and wages on the consolidated statement of operations.

9.
Related party transactions and balances
 
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties.
 
Related party balances as at July 31, 2024 and 2023

At July 31, 2024, the Company had amounts owing and accrued liabilities of $478,072 (2023 - $23,534) payable to directors and officers of the Company for salaries, expense reimbursements and professional fees. These amounts are non-interest bearing and have no terms of repayment.
 
Related party transactions during the year ended July 31, 2024
 
During the year ended July 31, 2024, the Company issued convertible debentures to Devvio and Envviron who are related parties to the Company (Note 6).
 
During the year ended July 31, 2024, the Company signed an amended strategic partnership agreement with Devvio, as described in Note 13.

27
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
9.
Related party transactions and balances (continued)
 
Related party transactions during the year ended July 31, 2023
 
During the year ended July 31, 2023, a related party of the Company was issued 180,000 shares from the exercise of 180,000 share purchase warrants, for proceeds of CAD$36,000 ($26,910).

10.
Financial instruments
 
As at July 31, 2024, the Company’s financial instruments consist of cash, GST receivable accounts payable and accrued liabilities, convertible debentures, mandatory convertible debentures and derivatives liabilities. The Company classifies cash and GST receivable as financial assets held at amortized cost.  The Company classifies accounts payable and accrued liabilities as financial liabilities which are held at amortized cost. The Company’s mandatory convertible debentures are carried at FVTPL. The Company’s convertible debentures are hybrid instruments where the debt host component is held at amortized cost and the embedded derivative is measured at FVTPL.
 
The Company’s mandatory convertible debentures and derivative liabilities are level 3 financial instruments.  In determining fair  value,  the  Company  utilizes  valuation  techniques  that  maximize  the  use  of  observable  inputs  and minimize  the  use  of  unobservable  inputs  to  the  extent  possible.  Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions based on the best information available.  The unobservable inputs used for valuation of the mandatory convertible debentures and derivative liabilities included volatility and probability of De-SPAC transaction.  Any significant changes in unobservable inputs could result in significantly lower or higher fair value measurements.

The risk exposure arising from these financial instruments is summarized as follows:
 
(a) Credit risk
 
The Company’s financial assets are cash and GST receivable. The Company’s maximum exposure to credit risk, as at period end, is the carrying value of its financial assets, being $106,764.  The Company holds its cash with a major financial institution and with a publicly traded payment processing company therefore minimizing the Company’s credit risk.
 
(b) Liquidity risk
 
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity by maintaining adequate cash balances and by raising equity financings. The Company has no assurance that such financings will be available on favorable terms. In general, the Company attempts to avoid exposure to liquidity risk by obtaining corporate financing through the issuance of shares.

As at July 31, 2024, the Company had cash of $21,106 to settle the contractual obligation of current liabilities of $7,595,974 which fall due for payment within twelve months of the statement of financial position. All of the Company’s contractual obligations are current and due within one year .

(c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or value of its holdings or financial instruments.  At July 31, 2024, the Company has cash of $20,466 denominated in US dollars that is exposed to foreign exchange risk. A 10% strengthening or weakening in the Canadian dollar against the US dollar with all other variables held constant would have an unfavorable or favorable impact of approximately $2,800.

28
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
11.
Income taxes

A reconciliation between the effective income tax rate and the federal statutory income tax rate is as follows:

 
July 31, 2024
  
July 31, 2023
  
         
Domestic
  
$
(7,403,278
)
  
$
(5,090,737
)
International
    
(2,395,924
)
    
(813,916
)
(Loss) before income taxes
    
(9,799,202
)
    
(5,904,653
)
                 
 
July 31, 2024
  
July 31, 2023
  
Expected recovery at statutory rate
    
(2,057,832
)
    
(1,239,977
)
Permanent book/tax differences
    
241,919
      
21,517
  
Change in valuation allowance
    
1,873,989
      
1,267,017
  
Current tax true up
    
28,463
      
-
  
Tax rate differential
     -      
(48,835
)
Impact of foreign currency translation
    
(13,993)
      
278
  
Total tax expense
  
$
72,546
    
$
-
  

The components of the provision for income taxes are as follows:

   
July 31, 2024
    
July 31, 2023
  
             
Current tax expense:
            
Federal
  
$
-
    
$
-
  
Foreign
    
72,546
      
-
  
Total current tax expense
    
72,546
      
-
  
                 
Deferred tax benefit:
                
Federal
    
-
      
-
  
Foreign
    
-
      
-
  
Total deferred tax benefit
    
-
      
-
  
Total income tax expense
  
$
72,546
    
$
-
  

The effective tax rate for 2024 is materially consistent with the prior year comparable period due to the continued full valuation allowance recorded against net deferred tax assets:

29
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
11.
Income taxes (continued)

Deferred Income Tax

The significant components of the deferred tax assets and liabilities consisted of the following:

   
July 31, 2024
    
July 31, 2023
  
Deferred tax assets
            
Net operating loss carryforwards
  
$
2,441,398
    
$
1,141,657
  
Unexercised share-based compensation
    
823,579
      
583,213
  
Capital start-up costs
    
620,911
      
707,758
  
Derivative liability
    
193,043
      
-
  
Accrued payroll reserves
    
49,866
      
-
  
Financing fees
    
6,005
      
-
  
Unrealized foreign exchange gain/loss
    
11,434
      
-
  
Total gross deferred tax assets
    
4,146,236
      
2,432,628
  
                 
Valuation allowance
    
(4,141,548
)
    
(2,429,492
)
                 
Total deferred tax assets, net of valuation allowance
    
4,688
      
3,136
  
                 
Deferred tax liability
                
Convertible debt
    
(4,410
)
     -  
Depreciation
    
(278
)
    
(592
)
Unrealized foreign exchange gain/loss
    
-
      
(2,544
)
Total gross deferred tax liabilities
    
(4,688
)
    
(3,136
)
                 
Net deferred tax asset
  
$
-
    
$
-
  

In assessing the realizability of deferred tax assets, management considers all positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Due to the uncertainty of the Company’s ability to realize the benefit of the deferred tax assets, primarily related to the history of cumulative operating losses, the net deferred tax assets are fully offset by a valuation allowance at July 31, 2024 and 2023. As of July 31, 2024, the Company recorded a valuation allowance of $4,141,548 compared to $2,429,492 as of July 31, 2023.

As of July 31, 2024, the Company had $Nil of unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. As of both July 31, 2024 and July 31, 2023 the Company had accrued $Nil for net interest and penalties.

As of July 31, 2024, the Company had Canadian federal net operating loss carryforwards (“NOLs”) of $1,464,527 which have a 20-year expiration period and will begin to expire in 2040, and U.S. federal NOLs of $10,043,004 which can be carried forward indefinitely.
DevvStream Holdings Inc. is subject to U.S. federal tax, as well as various foreign jurisdictions including Canadian federal and provincial tax that impose an income tax. The years that remain subject to examination are 2021 and onwards.

30
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
11.
Income taxes (continued)

U.S. Income Tax Status

U.S. federal tax legislation was enacted in 2004 to address perceived U.S. tax concerns in “corporate inversion” transactions. A “corporate inversion” generally occurs when a non-U.S. corporation acquires “substantially all” of the equity interests in, or the assets of, a U.S. corporation or partnership, if, after the acquisition, former equity holders of the U.S. corporation or partnership own a specified level of stock in the non-U.S. corporation. The tax consequences of these rules depend upon the percentage identity of stock ownership that results. Generally, in the “80-percent identity” transactions, i.e. former equity holders of the U.S. corporation owns 80% or more of the equity of the non-U.S. acquiring entity (excluding certain equity interests), the tax benefits of the inversion are limited by treating the non-U.S. acquiring entity as a domestic entity for U.S. tax purposes, DevvStream Holdings Inc. is subject to both Canadian and US tax. Note, the ownership percentage is computed under section 7874 which varies from legal ownership.

Management is of the view that a corporate inversion has resulted from the RTO transaction completed on November 4, 2022. Management has determined that DevvStream Holdings Inc. is subject to the “80 percent” identity with respect to the transactions undertaken. The tax implication resulting from this transaction would be annual filing of US corporate income tax return and additional withholding tax payment to IRS on future distribution to minority shareholders.

12.
Segmented information

The Company operates in one reportable operating segment – the development and monetization of environmental assets.  The Company has not generated revenue to date and as such has no reportable segment revenues.  The Company’s assets are located in Canada.

13.
Commitments and contingencies
 

•
On September 12, 2023, the Company amended their existing strategic partnership agreement with Devvio, a related party. The Company has committed to making specific payments to Devvio. They will provide a minimum advance of $1,000,000 by August 1, 2024, followed by $1,270,000 by August 1, 2025 and August 1, 2026. Additionally, starting from 2027, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement.  On July 8, 2024, the parties further amended the agreement such that the minimum advances extended by one year and are now due as follows: $1,000,000 by August 1, 2025, followed by $1,270,000 by August 1, 2026 and August 1, 2027. Additionally starting in calendar year 2028, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement.
 

•
On February 16, 2024, the Company entered into a licensing agreement with Greenlines Technology Inc. for the use of certain technologies. The Company has agreed to pay $42,000 within 15 days of the closing of the BCA. Commencing January 1, 2025, the Company has agreed to pay an annual fee of $12,000 of the first day of each calendar year for the use of the technology.
 

•
From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At July 31, 2024, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest.
31
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
14.
Subsequent events

Convertible Debt


Focus Impact Partners

On August 19, 2024, October 18, 2024, October 28, 2024, and November 1, 2024, the Company received additional proceeds of $41,500, $6,500, $7,650 and $12,000, from Focus Impact Partners, under the same terms as the Focus Impact Partners Convertible Debt (Note 6).

On November 13, 2024, Devvstream Corp issued (i) $3,000,000 of new 5.3% convertible notes to the Focus Impact Sponsor, and (ii) $982,150 of new 5.3% convertible notes to Focus Impact Partners  (together, the “New Convertible Notes”), in exchange for the cancellation and conversion of a $3,000,000 convertible note previously issued by Focus Impact, the Focus Impact Partners Convertible Debt which totaled $637,150 (Note 6 and subsequent advances) and unpaid fees in the amount of $345,000 which were owed by Focus Impact to Focus Impact Partners. The New Convertible Notes have a maturity date of November 13, 2026. The principal loan amount and any accrued and unpaid interest under the New Convertible Notes are convertible into DevvStream Corp. common shares at the option of the holder at a 25% discount to the 20-day volume weighted average price of the DevvStream Corp. shares, subject to a floor of $0.867 per share.

In connection with the New Convertible Notes, the Company agreed (i) to grant the Secured Parties a first ranking security interest in all of the carbon credits and similar environmental assets held by the Company, presently existing or hereafter created or acquired, and (ii) to execute and deliver to the Secured Parties a security agreement evidencing the Secured Parties’ security interest (the “Security Agreement”). On December 18, 2024, the Company executed and delivered to the Secured Parties the Security Agreement.

Devvio and Environ

On November 12, 2024, the Company amended the Devvio Tranche and the Environn Tranche convertible debentures by extending the maturity date to May 30, 2025 (Note 6).

Conversion of Mandatory Convertible Debentures

On October 28, 2024, the Company issued 146,786 shares upon the conversion of the mandatorily convertible debt (Note 7). The warrants have not yet been issued as of the date of these financial statements.

Warrant Exercises

On October 29, 2024 the Company issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share.
De-SPAC Transaction

On November 6, 2024, the Company completed a business combination with Focus Impact (referred to as the “De-SPAC” transaction). Upon the completion of the business combination, Focus Impact was renamed DevvStream Corp. In conjunction with the closing of the De-SPAC, each of the DevvStream Holdings Inc. outstanding securities was exchanged for DevvStream Corp. securities on a 1 to 0.152934 basis and each of Focus Impact’s outstanding securities were converted into DevvStream Corp. securities on a 1 to 0.9692 basis. The former shareholders of DevvStream Holding Inc. and Focus Impact received 11,768,884 and 5,159,200 shares of DevvStream Corp., respectively. As such, immediately following the share exchange, former shareholders of DevvStream Holdings Inc. held the majority of the outstanding shares of the Combined Company (DevvStream Corp.), thereby resulting in the De-SPAC transaction being accounted for as a reverse merger of Focus Impact by DevvStream Holdings Inc. In conjunction with the transaction, DevvStream Corp. also issued the following securities:

32
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
14.
Subsequent events (continued)


•

22,699,984 warrants to the former shareholders of Focus Impact. Each warrant was initially exercisable into 0.9692 shares of DevvStream Corp at $11.86 until November 6, 2029, may be redeemed at the option of the Company and can be exercised on a cashless basis. These warrants contain a clause such that upon a successful business combination, the exercise price will be adjusted based on a specified formula as outlined in the warrant agreement.  On December 6, 2024, DevvStream Corp. issued a notice under the warrant agreement notifying the warrant holders that the exercise price was adjusted to $1.52 per share of DevvStream Corp.;
 

•
199,064 warrants to the former shareholders of the DevvStream Holdings Inc. which are exercisable at CAD$1.31 until October 7, 2026;
 

•
586,497 options to the former shareholders of the DevvStream Holdings Inc. which have exercise prices between CAD$5.23 and CAD$7.26 and expiry dates ranging from January 17, 2028 to February 6, 2033; and
 

•
1,177,296 RSU’s to the former shareholders of the DevvStream Holdings Inc.

As of the issuance of these consolidated financial statements, the Company is in the process of gathering additional information to finalize the accounting for this acquisition, including the fair value of the assets acquired and liabilities assumed. The Company expects to provide a detailed acquisition note in its financial statements for the quarter ended January 31, 2025.
Shares Issued for Settlement of Payables
On September 5, 2024, the Company issued 104,379 shares to a consultant in settlement of accounts payable of $39,527 (CA$55,050).
During October 2024, the Company reached agreements with various vendors to settle approximately $5,900,000 of outstanding payables in exchange for shares of Devvstream Corp. as part of the closing of the business combination with Focus Impact.  Concurrent with the closing of the De-SPAC Transaction, 1,187,538 Devvstream Corp. shares were issued in relation to the settlement of accounts payable.

On December 27, 2024, DevvStream Corp. issued 412,478 common shares to certain service providers as consideration for services provided.
Shares Issued for Carbon Credit Purchases
Between October 17, 2024 and October 28, 2024, the Company entered into multiple agreements to acquire carbon credits in return for DevvStream Corp shares once the De-SPAC Transaction was completed. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued 3,249,876 common shares in consideration for these agreements. The agreements contain a mechanism whereby if the Company’s share price drops below 80%-90% of the respective purchase prices outlined in the agreements, in the next 12 to 18 months, the Company is obligated to issue additional shares to cover the shortfall.

33
DevvStream Holdings Inc.
Notes to Consolidated Financial Statements
(Expressed in United States dollars)
For the years ended July 31, 2024 and 2023
14.
Subsequent events

Acquisition of Monroe Sequestration Partners (“MSP”)

On October 28, 2024, the Company entered into an agreement to acquire a 50% stake in MSPPIP in exchange for 2,000,000 shares of DevvStream Corp., to be issued upon the completion of the De-SPAC transaction. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued the 2,000,000 common shares in consideration for 50% interest in MSP.

PIPE Financing
On October 29, 2024, Focus Impact entered into subscription agreements with various investors (“PIPE Shares”). The investors committed to purchase shares of Devvstream Corp. contingent upon the closing of the De-SPAC transaction. If the closing did not occur as expected, Focus Impact was required to return the subscription funds advanced. As part of this arrangement, the Focus Impact Sponsor transferred their Focus Impact Class A shares (“Sponsor Shares”) to the investors in advance of the De-SPAC transaction, representing a portion of the shares subscribed.  As compensation, the Focus Impact Sponsor received replacement shares upon the closing of the De-SPAC transaction for an equal amount. The investors subscribed for a total of $2,250,000 and received 1,547,000 Sponsor Shares prior to the De-SPAC closing. On November 6, upon the closing of the De-SPAC, DevvStream Corp. issued an additional 194,808 PIPE Shares to the investors, which were the remaining shares not previously advanced, and 1,500,000 replacement shares to the Focus Impact Sponsor.
Strategic Consulting Agreement
On November 13, 2024, DevvStream Corp. entered into a strategic consulting agreement with Focus Impact Partners, pursuant to which the Focus Impact Partners will provide DevvStream Corp. with certain consulting services ( “Strategic Consulting Agreement”) in consideration of an annual consulting fee of $500,000, which will be payable in quarterly installments of $125,000 starting with an initial payment for the period beginning December 31, 2023. Fees due under the Strategic Consulting Agreement shall accrue and not be payable until (a) DevvStream Corp. has successfully raised $5,000,000 in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) DevvStream Corp. has 2 or more consecutive quarters of positive cash flow from operations. DevvStream Corp. will pay the Focus Impact Partners additional consulting fees as to be mutually agreed consistent with market practice in connection with any acquisition, merger, consolidation, business combination, sale, divestiture, financing, refinancing, restructuring or other similar transaction.
In connection with signing of the Strategic Consulting Agreement, DevvStream Corp. issued 557,290 common shares. The Strategic Consulting Agreement has a term of three years unless terminated early with at least 120 days advance notice and will be automatically extended for successive one year periods at the end of each year unless either party provide a written notice of its desire not to automatically extend at least 120 days prior to the end of each year during the term of the Strategic Consulting Agreement.
Equity Line of Credit Purchase (“ELOC”) Agreement

On October 29, 2024, Focus Impact entered into the ELOC Agreement with Helena Global Investment Opportunities I Ltd (“Helena I”). Under the ELOC Agreement, DevvStream Corp. will have the right to issue and to sell to Helena I from time to time, up to $40,000,000 of DevvStream Corp. common shares following the closing of the De-SPAC Transaction and the effectiveness of the registration statement registering the DevvStream Corp. common shares being sold under the ELOC Agreement (the “Helena I Registration Statement”). As a commitment fee in connection with the execution of the ELOC Agreement, the Focus Impact Sponsor transferred 515,889 Sponsor Shares of Focus Impact to Helena I.  As compensation, the Focus Impact Sponsor received 500,000 replacement shares of DevvStream Corp. upon closing of the De-SPAC transaction. Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming effective, DevvStream Corp. will issue to Helena I common shares equal to $125,000 divided by the greater of (i) the lowest one-day VWAP during the five trading days immediately preceding the effectiveness date of such Registration Statement and (ii) $0.75.

NASDAQ Listing

On February 12, 2025, DevvStream Corp. received a notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share. The Company has 180 calendar days, or by August 13, 2025, to regain compliance with the minimum bid price requirement but could be eligible for an additional 180-day compliance period.
 
34

Exhibit 99.4

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DEVVSTREAM

The following discussion and analysis should be read in conjunction with the DevvStream Holdings Inc. (defined as “DevvStream” for this section) audited consolidated financial statements and related notes for the year ended July 31, 2024 and 2023 (“consolidated financial statements”), which have been prepared in accordance with US GAAP and are included elsewhere in this Form 8-K. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” which is incorporated by reference into this Form 8-K. All figures are in US dollars unless otherwise noted. Unless the context otherwise requires, for the purposes of this section, “DevvStream,” “we,” “us,” “our,” or the “Company” refer to DevvStream Holdings Inc. and its subsidiaries.

Company Overview

DevvStream is a technology-based sustainability company that advances the development and monetization of environmental assets, with an initial focus on carbon markets.  The Company's mission is to create alignment between sustainability and profitability, helping organizations achieve their climate initiatives while directly improving their financial health.

With a diverse approach to the International Renewable Energy Certificate (“I-REC”) and carbon market, DevvStream operates across three strategic domains: (1) an offset portfolio consisting of I-REC’s, nature-based, tech-based, and carbon sequestration credits for immediate sale to corporations and governments seeking to offset their most difficult-to-reduce emissions; (2) project investment, acquisitions, and industry consolidation to extend the Company's reach, allowing it to become a full end-to-end solutions provider; and (3) project development, where the Company serves as project manager for eligible activities such as EV charging in exchange for a percentage of generated credits.

Company Formation and Reverse Takeover Transaction

We were incorporated under the British Columbia Business Corporations Act on August 13, 2021. On December 17, 2021 (and as amended on March 30, 2022, May 18, 2022, August 11, 2022 and October 24, 2022), we entered into a business combination agreement (the “Transaction Agreement”) with DevvStream Inc. (“DESG”) and DevvESG Streaming Finco Ltd. (“Finco”). The transaction closed on November 4, 2022 and constituted a reverse takeover of DevvStream by DESG. We changed our name from 1319738 B.C. Ltd. to DevvStream Holdings Inc. upon the completion of the transaction.

Pursuant to the Transaction Agreement, we acquired all of the issued and outstanding Subordinate Voting Shares (“SVS”) and Multiple Voting Shares (“MVS”) of DESG by way of a three-cornered amalgamation among DevvStream, DESG and a Delaware subsidiary of DevvStream (the “Transaction”). Former SVS holders of DESG received one of our SVS for each SVS held and former MVS holders of DESG received one of our MVS for each MVS held.

Pursuant to the Transaction Agreement, we and Finco were required to complete private placements for aggregate gross proceeds of $10,000,000 (the “DESG Financing” and “Finco Financing”, respectively). The DESG Financing consisted of a unit private placement for our units at a price of CAD$0.80 per unit. Each unit under the DESG Financing consisted of one SVS and one SVS purchase warrant exercisable at a price of CAD$1.50 per share for a period of 24 months from the closing date of the Transaction. The Finco Financing consisted of a special warrant private placement at a price of CAD$0.80 per special warrant. Each special warrant converted into one unit of Finco consisting of one common share and one common share purchase warrant. Each Finco common share purchase warrant entitles the holder to purchase, upon exercise thereof, one Finco common share at a price of CAD$1.50 per share for a period of 24 months from the closing date of the Transaction.

In connection with the closing of the Transaction, we completed a consolidation of our shares on the basis of 28.09 pre-consolidation shares for each post-consolidation share.

DESG is deemed as the acquirer for accounting purposes, and therefore its assets, liabilities and operations are included in the consolidated financial statements at their historical carrying value. Our operations are considered to be a continuance of the business and operations of DESG from the date of its incorporation on August 27, 2021. Our results of operations are those of DESG, with our operations and Finco’s operations both being included from November 4, 2022, the closing date of the Transaction, onwards.

Recent Developments

Focus Impact Acquisition Corp. (“FIAC”) Business Combination

On September 12, 2023 (and as amended May 1, 2024, August 10, 2024, and October 29, 2024, the “Business Combination Agreement”), we entered into a Business Combination Agreement with FIAC (the ‘‘Business Combination’’ or the ‘‘De-SPAC Transaction’’). FIAC was a special purpose acquisition corporation focused on amplifying social impact through the pursuit of a merger or business combination with socially forward companies. The Business Combination was structured as an amalgamation of DevvStream into a wholly owned subsidiary of FIAC, following FIAC’s redomiciling as an Alberta company. FIAC would then be renamed DevvStream Corp. and continue the business of the Company following the amalgamation. It was a condition of the transaction that the securities of the Combined Company will be listed on NASDAQ.

On November 6, 2024, we completed the business combination with FIAC, pursuant to the BCA. In connection with the completion of the business combination, FIAC changed its jurisdiction from the State of Delaware under the Delaware General Corporation Law to the Province of Alberta, Canada, and thereby become a company existing under the Business Corporations Act (Alberta) and changed its name to DevvStream Corp., and (b) DevvStream and Amalco Sub amalgamated to form one corporate entity. DevvStream Corp’s common shares commenced trading on the NASDAQ under the new ticker symbol “DEVS” on November 7, 2024.   Refer below to ”Subsequent Events” for additional information related to the De-SPAC Transaction.

Amended Agreement with Devvio

On September 12, 2023, we amended our existing strategic partnership agreement with Devvio. As part of this amendment, we have committed to making specific payments to Devvio. We will provide a minimum advance payment of $2,270,000 by August 1, 2025, followed by $1,270,000 payment by August 1, 2026. Additionally, starting from 2027, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the agreement with us.  Devvio is a related party of the Company by virtue of holding 100% of the Company’s outstanding MVS.

On July 8, 2024, we further amended the agreement with Devvio, extending the minimum advances by one year. The revised due dates are as follows: $1,000,000 by August 1, 2025, followed by $1,270,000 by August 1, 2026, and August 1, 2027. Additionally, starting in calendar year 2028, if advance royalty payments fall below $1,000,000 in any year, Devvio reserves the right to terminate the Strategic Partnership Agreement.

Mutual Termination of Agreement

On June 26, 2024, we mutually agreed to terminate the Carbon Credit Streaming Agreement, originally executed on May 27, 2023 with BC Road Builders and Heavy Construction Association (“BC Roadbuilders”). The termination, which was effective immediately, was reached amicably and without any event of default. As part of the termination, both parties released each other from any future obligations, claims, or liabilities related to the Agreement. The termination allows DevvStream to reallocate resources to alternative initiatives that align with its strategic goals and operational priorities, thereby enhancing its ability to generate long-term shareholder value.

Results of Operations — Three Months Ended July 31, 2024 Comparison Against the Three Months Ended July 31, 2023

​
  
For the Three
Months Ended July
31, 2024
    
For the Three
Months Ended July
31, 2023
  
Sales and marketing
    
115,698
      
491,014
  
Depreciation
    
397
      
462
  
General and administrative
    
67,936
      
104,103
  
Professional fees
    
1,392,452
      
746,662
  
Salaries and wages
    
228,397
      
203,026
  
Share-based compensation
    
241,577
      
580,826
  
Total operating expenses
    
(2,046,457)
   
(2,126,093)

Other income
    
-
      
6,542
  
Accretion and interest expense
    
(46,174)

   
(2,134)

Unrealized loss on derivative liabilities
    
(795,000)

   
-
  
Unrealized loss on mandatory convertible debentures
    
(27,500)

   
-
  
Foreign exchange loss
    
(55,878)

   
(23,589)

Net loss before income tax
    
(2,971,009)

   
(2,145,274)

Current income tax expense
    
(72,546)

   
-
  
Net loss
    
(3,043,555)

   
(2,145,274)


During the three months ended July 31, 2024, we incurred a net loss of $3,043,555 compared to net loss of $2,145,274 for the three months ended July 31, 2023. An analysis of the increase in net loss of $898,281, including the major components our results for the periods, is below.

Share-based compensation

During the three months ended July 31, 2024, we incurred share-based compensation of $241,577 compared to share-based compensation of $580,826 for the three months ended July 31, 2023. Share-based payments relating to the vesting of RSUs decreased by $128,496. Share-based payments relating to the vesting of options decreased by $210,753.

Professional fees

During the three months ended July 31, 2024, we incurred $1,392,452 in professional fees, the majority of which relate to legal fees incurred relating to the De-SPAC Transaction. During the three months ended July 31, 2023, we incurred $746,662 in professional fees relating to legal fees incurred for the Transaction, general corporate matters and consulting fees related to advisory services.

Salaries and wages

During the three months ended July 31, 2024 and 2023, we incurred salaries and wages of $228,397 and $203,026, respectively, the majority of which were to officers of the Company.

Sales and marketing

Sales and marketing expenses for the three months ended July 31, 2024 and 2023 amounted to $115,698 and $491,014, respectively. These costs primarily related to publications, industry events and investor relations subsequent to our successful listing on the Cboe Exchange and the OTCQB.

General and administrative

General and administrative expenses for the three months ended July 31, 2024 and 2023 amounted to $67,936 and $104,103, respectively, and primarily comprised of insurance costs, filing fees and rent. The decrease is primarily a in rent as compared to the previously comparable period.

Foreign exchange loss

During the three months ended July 31, 2024 and 2023, we recognized a foreign exchange loss of $55,878 and $23,589, respectively. The foreign exchange loss is the result of fluctuations in the Canadian dollar against the US dollar, as we hold cash balances and have accounts payable denominated in both Canadian and US dollars.

Unrealized loss on derivative liability and convertible debt

During the three months ended July 31, 2024, we recognized a loss on derivative liabilities of $795,000 and a loss on mandatory convertible debentures measured at fair value through profit and loss of $27,500, respectively, related to the convertible debt financings completed during fiscal 2024. Please refer to Note 6 and Note 7 of the consolidated financial statements.

Results of Operations — Year Ended July 31, 2024 Comparison Against the Year Ended July 31, 2023

​
  
For the Year
Ended July 31,
2024
    
For the Year
Ended July 31,
2023
  
Sales and marketing
    
481,104
      
914,409
  
Depreciation
    
1,771
      
1,849
  
General and administrative
    
461,167
      
440,509
  
Professional fees
    
5,656,352
      
1,994,826
  
Salaries and wages
    
845,797
      
777,112
  
Share-based compensation
    
1,290,327
      
1,838,811
  
Total operating expenses
    
(8,736,518)

   
(5,967,516)

Other income
    
-
      
10,139
  
Accretion and interest expense
    
(81,850)

   
(3,040)

Unrealized loss on derivative liabilities
    
(845,700)

   
-
  
Unrealized loss on mandatory convertible debentures
    
(27,500)

   
-
  
Foreign exchange gain (loss)
    
(107,634)

   
55,764
  
Net loss before income taxes
    
(9,799,202)

   
(5,904,653)

Current income tax expense
    
(72,546)

   
-
  
Net loss
    
(9,871,748)

   
(5,904,653)


During the year ended July 31, 2024, we incurred a net loss of $9,871,748 compared to net loss of $5,904,653 for the year ended July 31, 2023. An analysis of the increase in net loss of $3,967,095 including the major components our results for the periods, is below.

Share-based compensation

During the year ended July 31, 2024, we incurred share-based compensation of $1,290,327 compared to share-based compensation of $1,838,811 for the year ended July 31, 2023. Share-based payments relating to the vesting of RSUs decreased by $438,738. Share-based payments relating to the vesting of options decreased by $86,002. We also recognized $Nil in warrant modifications during the year ended July 31, 2024, compared to $23,744 during the year ended July 31, 2023.

Professional fees

During the year ended July 31, 2024, we incurred $5,656,352 in professional fees, the majority of which relate to legal, audit and accounting fees incurred relating to the De-SPAC Transaction. During the year ended July 31, 2023, we incurred $1,994,826 in professional fees relating to legal fees incurred for the Transaction, general corporate matters and consulting fees related to advisory services. Legal and accounting costs of $114,930 were incurred as part of the Transaction and recorded within professional fees during the year ended July 31, 2023.

Salaries and wages

During the years ended July 31, 2024 and 2023, we incurred salaries and wages of $845,797 and $777,112 respectively, the majority of which were to officers of the Company.

Sales and marketing

Sales and marketing expenses for the years ended July 31, 2024 and 2023 amounted to $481,104 and $914,409, respectively. These costs primarily related to publications, industry events and investor relations subsequent to our successful listing on the Cboe Exchange and the OTCQB.

General and administrative

General and administrative expenses for the years ended July 31, 2024 and 2023 amounted to $461,167 and $440,509, respectively, and primarily comprised of insurance costs, filing fees and rent.

Foreign exchange gain (loss)

During the years ended July 31, 2024 and 2023, we recognized a foreign exchange loss of $107,634 and a gain of $55,764, respectively. The foreign exchange gain is the result of fluctuations in the Canadian dollar against the US dollar, as we hold cash balances and have accounts payable denominated in both Canadian and US dollars.

Unrealized loss on derivative liabilities and mandatory convertible debentures

During the year ended July 31, 2024, we recognized a loss on derivative liabilities of $845,700 and a loss on mandatory convertible debentures measured at fair value through profit and loss of $27,500 related to the convertible debt financings completed during fiscal 2024. Please refer to Note 6 and Note 7 of the consolidated financial statements.

Liquidity and Capital Resources

We continually monitor and manage cash flow to assess the liquidity necessary to fund operations and capital projects. We manage our capital resources and adjust them to take into account changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust our capital resources, we may, where necessary, control the amount of working capital, pursue financing or manage the timing of our capital expenditures. As of July 31, 2024, we had a working capital deficit of $8,362,363 (current assets of $141,905, less current liabilities of $8,504,268) and as of July 31, 2023, we had a working capital deficit of $57,583 (current assets of $851,069, less current liabilities of $908,652).

Our continuing operations are dependent upon our ability to obtain debt or equity financing until such time that we achieve profitable operations. There can be no assurance that we will gain adequate market acceptance for our products or be able to generate sufficient gross margins to reach profitability.

Since our inception, we have incurred operating losses, have experienced negative cash flows from operations and have not generated revenue. We do not anticipate that cash on hand will be adequate to satisfy our obligations in the ordinary course of business over the next 12 months. Based on this assessment, we have material uncertainties about our business that cast substantial doubt about our ability to continue as a going concern. Accordingly, our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures and to meet our obligations. See further discussion related to our ability to continue as a going concern within “— Critical Accounting Policies and Estimates.”

As of July 31, 2024 and July 31, 2023, we had $21,106 and $489,971 in cash, respectively. We are actively managing current cash flows until such time that we are profitable.

The chart below highlights our cash flows for the periods indicated:

​
  
For the
Fiscal Year Ended
July 31, 2024
$
    
For the
Fiscal Year Ended
July 31, 2023
$
  
Net cash provided by (used in):
            
Operating activities
    
(1,548,947)

   
(3,408,144)

Investing activities
    
-
      
10
  
Financing activities
    
1,109,629
      
301,984
  
Effect of exchange rate changes on cash
    
(29,547)

   
(159,534)

(Decrease)/Increase in cash
    
(468,865)

   
(3,265,684)


Cash Used in Operating Activities

Our net cash used in operating activities is primarily due to cash payments for operating expenses that we incur in the day-to-day operations of the business. Net cash used in operating activities for the year ended July 31, 2024 was $1,548,947 compared to $3,408,144 for the year ended July 31, 2023. The loss for the year ended July 31, 2024 of $9,871,748 was offset by $6,035,925 in changes in working capital items and $2,286,876 in non-cash items consisting mainly of share-based compensation. This compares to a loss of $5,904,653 for the prior year, that was offset by $662,391 in changes in working capital items and $1,834,118 in non-cash items consisting mainly of share-based compensation.

Cash Provided by Investing Activities

Net cash provided by investing activities for the year ended July 31, 2024 was $nil, compared to $10 in the year ended July 31, 2023. Net cash provided by investing activities for the year ended July 31, 2023 relates to the Transaction.

Cash Provided by Financing Activities

We have funded our business to date from the issuance of our common stock and convertible debentures through private placements, from proceeds from the exercises of warrants, and from loans with related parties.

Net cash provided by financing activities for the year ended July 31, 2024 was $1,109,629 compared to $301,984 for the year ended July 31, 2023. The following financing activities occurred during the year ended July 31, 2024:

(1)
Exercise of share purchase warrants:

On August 4, 2023, we issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share for gross proceeds of $89,826.

On August 22, 2023, we issued 416,667 shares for the exercise of 416,667 share purchase warrants, at an exercise price of CAD$0.20 per share for gross proceeds of $61,535.

On September 22, 2023, we issued 166,666 shares for the exercise of 166,666 share purchase warrants, at an exercise price of CAD$0.20 per share for gross proceeds of $24,752.

(2)
Non-brokered private placement of unsecured convertible notes:

During the year ended July 31 2024, the Company closed several tranches of convertible debenture offerings under the following terms:

Devvio Tranche (Related Party Convertible Debt)

On January 12, 2024, the Company closed an unsecured convertible notes offering in the principal amount of $100,000 with Devvio that will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted. The maturity is November 6, 2024. The Company has the right to prepay the whole or any portion of the principal amount, and together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment. Devvio is a related party to the Company through its ownership, as Devvio holds 100% of the Company’s MVS, and one of Devvio’s officers, directors and principal owners was a director of the Company during the year ended July 31, 2024.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:

•
At a conversion price equal to the greater of (a) $7.65 multiplied by the common conversion ratio stipulated by the business combination agreement (the “Common Conversion Ratio”), and (b) CAD$1.03. The shares are thereafter exchanged for common shares of Combined Company at the Common Conversion Ratio.

•
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the earliest of October 8, 2024 (270 days from the issuance date of the notes) and the termination of the business combination agreement with Focus Impact, the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:

•
At a conversion price equal to the greater of (a) the 30-day volume weighted average trading price (“VWAP”) of the shares on Cboe Canada stock exchange and (b) CAD$1.03.

•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$1.03. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The Devvio Tranche convertible debentures were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation.  On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The fair value of the derivative liability at issuance was estimated to be $45,000 using the Monte Carlo model.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

Focus Impact Partners Convertible Debt

During the year, the Company closed an unsecured convertible notes offering with Focus Impact Partners, LLC (“Focus Impact Partners”)  The convertible notes were initially closed on January 12, 2024 and additional advances were added under the same offering.  The total principal amount of $550,000 was received in five installments: $150,000 on November 6, 2023, $150,000 on January 9, 2024, $100,000 on March 28, 2024, $100,000 on April 19, 2024, and $50,000 on June 13, 2024. The debentures will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted. The maturity date for all advances is November 6, 2024. The Company has the right to prepay the whole or any portion of the principal amount, together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) a 25% discount to the 20-day VWAP of the shares on the Cboe Exchange multiplied by the Common Conversion Ratio, and (b) $2.00 (the De-SPAC Floor Price").
•
The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
•
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction of October 8, 2024 (270 days from the issuance date of the notes), or the termination of the business combination agreement with Focus Impact, the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) a 25% discount to the 20-day VWAP of the shares on the Cboe Exchange calculated on the conversion date and b) the floor price defined as the current market price on the date of announcement of the offering which was CAD$0.475.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 20-day VWAP and (b) the floor price defined as the current market price on the date of announcement of the offering which was CAD $0.475.
•
The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

On June 28, 2024, the Company and Focus Impact Partners agreed to amend the Focus Impact Partners Convertible Debt (“Focus Impact Partners Amendment”) such that the De-SPAC Floor Price would be amended from $2.00 to CA$0.475.

On June 28, 2024, the Company received additional proceeds of $20,000 under the amended terms.

The Focus Impact Partners Convertible Debt were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation. On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The total fair value of the derivative liabilities at the various issuance dates was estimated to be $25,800 as valued using the Monte Carlo model.

The amendment had no impact on the classification of the convertible debenture and therefore, the conversion feature was considered a derivative before and after the modification.  As there was no change to the host instrument cash flows as a result of this change, the 10% test was not met and therefore, there was no extinguishment of the host debt as a result of this change.

As the conversion option was bifurcated before and after the modification, the change in the fair value of the conversion feature was recognized as the loss on revaluation of the derivative liabilities through the consolidated statement of operations and comprehensive loss.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

Envviron Tranche (Related Party Convertible Debt)

On April 23, 2024, the Company closed an unsecured convertible note offering in the principal amount of $250,000 with Envviron SAS (a company controlled by a former director of the Company) that will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted (“Envviron Tranche”). The maturity is February 15, 2025. The Company has the right to prepay the whole or any portion of the principal amount, and together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment.  The terms of the Envviron Tranche are identical to the original Focus Impact Partners Convertible Debt.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) the price that is a 25% discount to the 20-day VWAP of the shares on Cboe Canada stock exchange, and (b) $2.00. The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
•
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of January 18, 2025 (270 days from the issuance date of the notes) and the termination of the BCA with Focus Impact (Note 1), the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) the price that is a 25% discount to the 20-day VWAP of the shares on Cboe Canada stock exchange and (b) CAD$0.475.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$0.475. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The Environn Tranche convertible debentures were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation. On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The fair value of the derivative liability at issuance was estimated to be $2,750 using the Monte Carlo model.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

A continuity of the Company’s convertible debentures is as follows:

Balance as at August 1, 2023
  
$
-
  
Issued
    
920,000
  
Fair value of embedded derivatives
    
(73,550
)
Transaction costs
    
(36,484
)
Accretion
    
52,552
  
Interest
    
19,026
  
Balance as at July 31, 2024
  
$
881,544
  

Below is a continuity of the embedded derivative liabilities:

Balance as at August 1, 2023
  
$
-
  
Derivative liability component of certain issued convertible debentures
    
73,550
  
Unrealized loss on derivative liabilities
    
845,700
  
Balance as at July 31, 2024
  
$
919,250
  

In connection with the issuance of these convertible debentures, the Company incurred $40,227 in directly attributable transaction costs. $36,484 was allocated to the host financial liability, $3,743 was allocated to the embedded derivative and recorded immediately in the consolidated statement of operations as general and administrative expenses.

The key inputs used in the Monte Carlo model for the derivative liabilities were as follows:

​
  
At initial
measurement
    
As at
July 31, 2024
  
Probability of De-SPAC Transaction closing
    
90%

   
90%

Risk-free interest rate
    
4.60% - 4.87%

   
4.27% - 4.38%

Expected term (years)
    
0.35 – 0.82
      
0.26 - 0.54
  
Expected annual volatility for the Company
    
90% - 145%

   
85% - 112%

Expected annual volatility for Focus Impact
    
2.5% - 5%

   
2.5%

Common conversion ratio
    
0.083 - 0.155
      
0.083
  
Foreign exchange rate
    
0.727 - 0.747
      
0.7242
  

(3)
Mandatory convertible debentures

On January 12, 2024, the Company closed a tranche of unsecured convertible notes in the principal amount of $100,000 that bear interest at the rate of 15% per annum, payable only in Company securities on the Conversion Date, or payable in cash in connection with a Liquidating Event or Event of Default.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest automatically convert into SVS of the Company as follows:
•
At a conversion price equal to the greater of (a) $7.65 multiplied by the Common Conversion Ratio, and (b) CAD$1.03. The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio
•
The shares are thereafter exchanged for common shares of Focus Impact at the common conversion ratio.

In the event the Company does not complete a De-SPAC transaction by October 8, 2024 (270 days from the issuance date of the notes), the principal and accrued interest are automatically convertible into units consisting of one SVS and half of a share purchase warrant, as follows:
•
At a conversion price equal to the greater of (a) the 30-day VWAP of the shares on Cboe Canada stock exchange and (b) CAD$1.03.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$1.03. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The mandatory convertible debentures are liability classified and initially recorded at fair value with subsequent changes in fair value being recorded in profit and loss (“FVTPL”). The initial fair value was estimated to be $100,000. As at July 31, 2024, the Company revalued the mandatory convertible debentures using a Monte Carlo Simulation and recorded a change in fair value of $27,500 in Other income as an unrealized loss on mandatory convertible debentures.

In connection with the issuance of these mandatory convertible debentures, the Company incurred $7,545 in directly attributable transaction costs which were recorded immediately in the consolidated statement of profit and loss as general and administrative expenses.

A continuity of the Company’s mandatory convertible debentures is as follows:

Balance as at August 1, 2023
  
$
-
  
Issued
    
100,000
  
Unrealized loss on mandatory convertible debentures
    
27,500
  
Balance as at July 31, 2024
  
$
127,500
  

The key inputs used in the Monte Carlo model for the revaluation of the mandatory convertible debentures as at July 31, 2024 were as follows:

​
  
As at
July 31, 2024
  
Probability of De-SPAC Transaction closing by maturity date
    
85%

Risk-free interest rate
    
4.42%
Expected term (years)
    
0.19
  
Expected annual volatility for the Company
    
92.5%

Expected annual volatility for Focus Impact
    
2.5%

Common conversion ratio
    
0.083
  
Foreign exchange rate
    
0.7242
  

Related party transactions and balances
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties.

Related party balances as at July 31, 2024 and 2023

At July 31, 2024, the Company had amounts owing and accrued liabilities of $478,072 (2023 - $23,534) payable to directors and officers of the Company for salaries, expense reimbursements and professional fees. These amounts are non-interest bearing and have no terms of repayment.

Related party transactions during the year ended July 31, 2024

During the year ended July 31, 2024, the Company issued convertible debentures to Devvio and Envviron who are related parties to the Company (Note 6).

During the year ended July 31, 2024, the Company signed an amended strategic partnership agreement with Devvio, as described in Note 13.

Related party transactions during the year ended July 31, 2023

During the year ended July 31, 2023, a related party of the Company was issued 180,000 shares from the exercise of 180,000 share purchase warrants, for proceeds of CAD$36,000 ($26,910).

Contractual Obligations

Prepaid Royalties Agreement with Devvio

On September 12, 2023, we amended our existing strategic partnership agreement with Devvio, a related party. We committed to making specific payments to Devvio and provide a minimum advance of $1,000,000 by August 1, 2024, followed by $1,270,000 by August 1, 2025 and August 1, 2026. Additionally, starting from 2027, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement.  On July 8, 2024, we further amended the agreement such that the minimum advances extended by one year and are now due as follows: $1,000,000 by August 1, 2025, followed by $1,270,000 by August 1, 2026 and August 1, 2027. Additionally starting in calendar year 2028, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement.

On February 16, 2024, we entered into a licensing agreement with Greenlines Technology Inc. for the use of certain technologies. We agreed to pay $42,000 within 15 days of the closing of the BCA. Commencing January 1, 2025, we must pay an annual fee of $12,000 of the first day of each calendar year for the use of the technology.

Quantitative and Qualitative Disclosures about Market Risk

Our board of directors have overall responsibility for the establishment and oversight of our risk management policies on an annual basis. Management identifies and evaluates our financial risks and is charged with the responsibility of establishing controls and procedures to ensure financial risks are mitigated in accordance with the approved policies.

Our financial instruments consist of cash, GST receivable, accounts payable and accrued liabilities, mandatory convertible debentures and derivative liabilities.  The carrying value of the Company’s cash, GST receivable and accounts payable and accrued liabilities and convertible debentures, convertible debentures approximate their fair value due to their short terms to maturity.

Our risk exposures and the impact on our financial instruments are summarized below:

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Our credit risk is primarily attributable to our liquid financial assets including cash. Our financial assets are cash and GST receivable. Our maximum exposure to credit risk, as at period end, is the carrying value of our financial assets, being $106,764 and $539,379 as of July 31, 2024 and July 31, 2023, respectively. We hold cash with major financial institutions and with a publicly traded payment processing company therefore minimizing our credit risk.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet financial obligations as they fall due. We manage liquidity by maintaining adequate cash balances and by raising equity and debt financings. We have no assurance that such financings will be available on favorable terms in the future. In general, we attempt to avoid exposure to liquidity risk by obtaining corporate financing through the issuance of shares.

As of July 31, 2024, we had cash of $21,106 to settle current contractual liabilities of $7,595,974 which are due for payment within twelve months of the statement of financial position. As of July 31, 2023, we had cash of $489,971 to settle current liabilities of $908,652 which were due for payment within twelve months of the statement of financial position. All of our contractual obligations are current and due within one year.

Refer to “— Liquidity and Capital Resources” above.

Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect our income or value of holdings or financial instruments. As of July 31, 2024 and July 31, 2023, we had cash denominated in US dollars that is exposed to foreign exchange risk of $20,466 and $395,336, respectively. As of July 31, 2024 and July 31, 2023, a 10% strengthening or weakening in the Canadian dollar against the US dollar with all other variables held constant would have an unfavorable or favorable impact of approximately $2,800 and $30,000, respectively.

Inflation Risk

We do not believe that inflation had a significant impact on our results of operations for any periods presented in our consolidated financial statements. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs, and our inability or failure to do so could harm our business, financial condition and results of operations.

Capital Management

Capital is comprised of our shareholders’ equity (deficiency) and any debt that we may issue. Our objectives when managing capital are to maintain financial strength and to protect our ability to meet ongoing liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for our shareholders over the long term. Protecting the ability to pay current and future liabilities includes maintaining capital above minimum regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels. We manage capital structure to maximize financial flexibility by making adjustments in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. We do not presently utilize any quantitative measures to monitor our capital, but rather we rely on our management’s expertise to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis and believes that this approach, given our size, is reasonable.

There were no changes to our approach to capital management during the period. We are not subject to externally imposed capital requirements.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our consolidated financial statements, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Valuation of derivative liabilities and mandatorily convertible debentures

The estimates and judgments made in relation to the fair value of derivative liabilities and mandatory convertible debentures are subject to measurement uncertainty.  The valuation techniques used to determine fair value requires inputs that involve assumptions and judgments such as the probability of the De-SPAC Transaction closing, volatility of the Company and Focus Impact’s share prices, expected life and foreign exchange rates. Such judgments and assumptions are inherently uncertain.

The Company accounts for convertible debentures in accordance with ASC 470, Debt.   Convertible debentures are recorded at face value less unamortized issuance costs, assuming the conversion feature does not meet the requirements for bifurcation.

If the conversion feature does not meet the requirements to be classified as equity, it is bifurcated and accounted for separately as a derivative liability under ASC 815, Derivatives and Hedging, and measured at fair value, with subsequent changes recognized in earnings.

If the conversion feature meets the equity classification criteria, no separate accounting for the conversion feature is required, and the entire instrument is classified as a liability.

Interest expense is recognized using the effective interest method, which includes the amortization of any debt issuance costs and discounts or premiums.

Going Concern

Since our inception, we have incurred operating losses,  have experienced negative cash flows from operations and have not generated revenue. Accordingly, our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures and to meet our obligations. Based on this assessment, we have material uncertainties about our business that cast substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not give effect to any adjustments that are required to realize our assets and discharge our liabilities in other than the normal course of business and at amounts different from those reflected in our financial statements. Such adjustments could be material.

Stock Compensation

We recognize stock compensation expense in accordance with ASC 718, Stock Compensation. In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment.

The fair value of the options and warrants granted to employees is estimated on the grant date using the Black-Scholes option pricing model. We use a third-party valuation firm to assist in calculating the fair value of our options and warrants. This valuation model requires us to make assumptions and judgments about the variables used in the calculation, including the volatility of our common stock and assumed risk-free interest rate, expected price volatility, and expected life.

Sales and Marketing

We expense costs relating to advertising and promotion either as costs are incurred or the first time the advertising takes place.

Salaries, Wages and Professional Fees

We record an expense for salaries, wages and professional fees as these expenses are incurred.

Off-Balance Sheet Arrangements

We have not entered into any material off-balance sheet arrangements such as guarantee contracts, contingent interests in assets transferred to unconsolidated entities, derivative financial obligations, or with respect to any obligations under a variable interest equity arrangement.

Emerging Growth Company Status

The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies, and our financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of this offering, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Further, even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

Evaluation of Disclosure of Controls and Procedures

Based on an evaluation as of July 31, 2024, our management, including the Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were not effective to provide reasonable assurance because of a material weakness in our internal control over financial reporting as described below. There have been no changes during the year ended July 31, 2024.

While we and our independent registered public accounting firm did not and were not required to perform an audit of our internal control over financial reporting, in connection with the audit of our 2024 consolidated financial statements, we identified control deficiencies in the design and operation of our internal control over financial reporting that constituted a material weakness.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected in a timely manner.

We did not design or maintain an effective control environment commensurate with financial reporting requirements. Specifically, we did not consistently have documented evidence of review procedures and, due to resource limitations, did not always maintain segregation of duties between preparing and reviewing analyses, and reconciliations.

The above material weakness did not result in a material misstatement of our consolidated financial statements, however, it could result in a misstatement of our account balances or disclosures that would result in a material misstatement that would not be prevented or detected.

Remediation Activities

We are working to remediate the material weakness and are taking steps to strengthen our internal control over financial reporting through the continued hiring of additional appropriately skilled finance and accounting personnel with the requisite technical knowledge and skills. With the additional skilled personnel, we are taking appropriate and reasonable steps to remediate this material weakness through the implementation of appropriate segregation of duties, formalization of accounting policies and controls and retention of appropriate expertise for complex accounting transactions. We will not be able to fully remediate these control deficiencies until these steps have been completed and have been operating effectively for a sufficient period of time. Management will continue to review and make necessary changes to the overall design of our internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting. The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded that these controls are operating effectively.

Subsequent Events

Convertible Debt

Focus Impact Partners

On August 19, 2024, October 18, 2024, October 28, 2024, and November 1, 2024, the Company received additional proceeds of $41,500, $6,500, $7,650 and $12,000, from Focus Impact Partners, under the same terms as the Focus Impact Partners Convertible Debt.

On November 13, 2024, Devvstream Corp issued (i) $3,000,000 of new 5.3% convertible notes to the Focus Impact Sponsor, and (ii) $982,150 of new 5.3% convertible notes to Focus Impact Partners  (together, the “New Convertible Notes”), in exchange for the cancellation and conversion of a $3,000,000 convertible note previously issued by Focus Impact, the Focus Impact Partners Convertible Debt which totaled $637,150 and unpaid fees in the amount of $345,000 which were owed by Focus Impact to Focus Impact Partners. The New Convertible Notes have a maturity date of November 13, 2026. The principal loan amount and any accrued and unpaid interest under the New Convertible Notes are convertible into DevvStream Corp. common shares at the option of the holder at a 25% discount to the 20-day volume weighted average price of the DevvStream Corp. shares, subject to a floor of $0.867 per share.
 
In connection with the New Convertible Notes, the Company agreed (i) to grant the Secured Parties a first ranking security interest in all of the carbon credits and similar environmental assets held by the Company, presently existing or hereafter created or acquired, and (ii) to execute and deliver to the Secured Parties a security agreement evidencing the Secured Parties’ security interest (the “Security Agreement”). On December 18, 2024, the Company executed and delivered to the Secured Parties the Security Agreement.

Devvio and Environ

On November 12, 2024, the Company amended the Devvio Tranche and the Environn Tranche convertible debentures by extending the maturity date to May 30, 2025.


Conversion of Mandatory Convertible Debentures
On October 28, 2024, the Company issued 146,786 shares upon the conversion of the mandatorily convertible debt. The warrants have not yet been issued as of the date of these financial statements.

Warrant Exercises

On October 29, 2024 the Company issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share.

De-SPAC Transaction

On November 6, 2024, the Company completed a business combination with Focus Impact (referred to as the “De-SPAC” transaction). Upon the completion of the business combination, Focus Impact was renamed DevvStream Corp. In conjunction with the closing of the De-SPAC, each of the DevvStream Holdings Inc. outstanding securities was exchanged for DevvStream Corp. securities on a 1 to 0.152934 basis and each of Focus Impact’s outstanding securities were converted into DevvStream Corp. securities on a 1 to 0.9692 basis. The former shareholders of DevvStream Holding Inc. and Focus Impact received 11,768,884 and 5,159,200 shares of DevvStream Corp., respectively. As such, immediately following the share exchange, former shareholders of DevvStream Holdings Inc. held the majority of the outstanding shares of the Combined Company (DevvStream Corp.), thereby resulting in the De-SPAC transaction being accounted for as a reverse merger of Focus Impact by DevvStream Holdings Inc. In conjunction with the transaction, DevvStream Corp. also issued the following securities:

•
22,699,984 warrants to the former shareholders of Focus Impact. Each warrant was initially exercisable into 0.9692 shares of DevvStream Corp at $11.86 until November 6, 2029, may be redeemed at the option of the Company and can be exercised on a cashless basis. These warrants contain a clause such that upon a successful business combination, the exercise price will be adjusted based on a specified formula as outlined in the warrant agreement.  On December 6, 2024, DevvStream Corp. issued a notice under the warrant agreement notifying the warrant holders that the exercise price was adjusted to $1.52 per share of DevvStream Corp.;

•
199,064 warrants to the former shareholders of the DevvStream Holdings Inc. which are exercisable at CA$1.31 until October 7, 2026;

•
586,497 options to the former shareholders of the DevvStream Holdings Inc. which have exercise prices between CA$5.23 and CA$7.26 and expiry dates ranging from January 17, 2028 to February 6, 2033; and

•
1,177,296 RSU’s to the former shareholders of the DevvStream Holdings Inc.

As of the date of this report, the Company is in the process of gathering additional information to finalize the accounting for this acquisition, including the fair value of the assets acquired and liabilities assumed. The Company expects to provide a detailed acquisition note in its financial statements for the quarter ended January 31, 2025.

Shares Issued for Settlement of Payables

On September 5, 2024, the Company issued 104,379 shares to a consultant in settlement of accounts payable of $39,527 (CA$55,050).
 
During October 2024, the Company reached agreements with various vendors to settle approximately $5,900,000 of outstanding payables in exchange for shares of DevvStream Corp. as part of the closing of the business combination with Focus Impact.  Concurrent with the closing of the De-SPAC Transaction, 1,187,538 DevvStream Corp. shares were issued in relation to the settlement of accounts payable.

On December 27, 2024, DevvStream Corp. issued 412,478 common shares to certain service providers as consideration for services provided.

Shares issued for Carbon Credit Purchases

Between October 17, 2024 and October 28, 2024, the Company entered into multiple agreements to acquire carbon credits in return for DevvStream Corp shares once the De-SPAC Transaction was completed. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued 3,249,876 common shares in consideration for these agreements. The agreements contain a mechanism whereby if the Company’s share price drops below 80%-90% of the respective purchase prices outlined in the agreements, in the next 12 to 18 months, the Company is obligated to issue additional shares to cover the shortfall.

Acquisition of Monroe Sequestration Partners (“MSP”)

On October 28, 2024, the Company entered into an agreement to acquire a 50% stake in MSPPIP in exchange for 2,000,000 shares of DevvStream Corp., to be issued upon the completion of the De-SPAC transaction. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued the 2,000,000 common shares in consideration for 50% interest in MSP.

PIPE Financing

On October 29, 2024, Focus Impact entered into subscription agreements with various investors (“PIPE Shares”). The investors committed to purchase shares of Devvstream Corp. contingent upon the closing of the De-SPAC transaction. If the closing did not occur as expected, Focus Impact was required to return the subscription funds advanced. As part of this arrangement, the Focus Impact Sponsor transferred their Focus Impact Class A shares (“Sponsor Shares”) to the investors in advance of the De-SPAC transaction, representing a portion of the shares subscribed.  As compensation, the Focus Impact Sponsor received replacement shares upon the closing of the De-SPAC transaction for an equal amount. The investors subscribed for a total of $2,250,000 and received 1,547,000 Sponsor Shares prior to the De-SPAC closing. On November 6, upon the closing of the De-SPAC, DevvStream Corp. issued an additional 194,808 PIPE Shares to the investors, which were the remaining shares not previously advanced, and 1,500,000 replacement shares to the Focus Impact Sponsor.

Strategic Consulting Agreement

On November 13, 2024, DevvStream Corp. entered into a strategic consulting agreement with Focus Impact Partners, pursuant to which the Focus Impact Partners will provide DevvStream Corp. with certain consulting services ( “Strategic Consulting Agreement”) in consideration of an annual consulting fee of $500,000, which will be payable in quarterly installments of $125,000 starting with an initial payment for the period beginning December 31, 2023. Fees due under the Strategic Consulting Agreement shall accrue and not be payable until (a) DevvStream Corp. has successfully raised $5,000,000 in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) DevvStream Corp. has 2 or more consecutive quarters of positive cash flow from operations. DevvStream Corp. will pay the Focus Impact Partners additional consulting fees as to be mutually agreed consistent with market practice in connection with any acquisition, merger, consolidation, business combination, sale, divestiture, financing, refinancing, restructuring or other similar transaction.

In connection with signing of the Strategic Consulting Agreement, DevvStream Corp. issued 557,290 common shares. The Strategic Consulting Agreement has a term of three years unless terminated early with at least 120 days advance notice and will be automatically extended for successive one year periods at the end of each year unless either party provide a written notice of its desire not to automatically extend at least 120 days prior to the end of each year during the term of the Strategic Consulting Agreement.

Equity Line of Credit Purchase (“ELOC”) Agreement

On October 29, 2024, Focus Impact entered into the ELOC Agreement with Helena Global Investment Opportunities I Ltd (“Helena I”). Under the ELOC Agreement, DevvStream Corp. will have the right to issue and to sell to Helena I from time to time, up to $40,000,000 of DevvStream Corp. common shares following the closing of the De-SPAC Transaction and the effectiveness of the registration statement registering the DevvStream Corp. common shares being sold under the ELOC Agreement (the “Helena I Registration Statement”). As a commitment fee in connection with the execution of the ELOC Agreement, the Focus Impact Sponsor transferred 515,889 Sponsor Shares of Focus Impact to Helena I.  As compensation, the Focus Impact Sponsor received 500,000 replacement shares of DevvStream Corp. upon closing of the De-SPAC transaction. Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming effective, DevvStream Corp. will issue to Helena I common shares equal to $125,000 divided by the greater of (i) the lowest one-day VWAP during the five trading days immediately preceding the effectiveness date of such Registration Statement and (ii) $0.75.

NASDAQ Listing
 
On February 12, 2025, DevvStream Corp. received a notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share. The Company has 180 calendar days, or by August 13, 2025, to regain compliance with the minimum bid price requirement but could be eligible for an additional 180-day compliance period.
 

Exhibit 99.5

DevvStream Holdings Inc.
Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023

INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 
Page
Condensed Consolidated Interim Balance Sheets as of October 31, 2024 and July 31, 2024
3
Condensed Consolidated Interim Statements of Operations and Comprehensive Loss for the three months ended October 31, 2024  and 2023
4
Condensed Consolidated Interim Statements of Changes in Shareholders’ Deficiency for the three months ended October 31, 2024 and 2023
5
Condensed Consolidated Interim Statements of Cash Flows for the three months ended October 31, 2024 and 2023
6
Notes to the Condensed Consolidated Interim Financial Statements
7

DevvStream Holdings Inc.
CONDENSED CONSOLIDATED INTERIM BALANCE SHEETS
(Unaudited Expressed in United States dollars)

As at
  
October 31,
2024
    
July 31,
2024
  
             
ASSETS
            
Current assets
            
Cash
  
$
13,385
    
$
21,106
  
GST receivable
    
95,556
      
85,658
  
Prepaid expenses
    
31,433
      
35,141
  
Total current assets
    
140,374
      
141,905
  
                 
Equipment
    
592
      
953
  
Total assets
  
$
140,966
    
$
142,858
  
                 
LIABILITIES AND SHAREHOLDERS’ (DEFICIENCY)
                
Current liabilities
                
Accounts payable and accrued liabilities
  
$
8,408,709
    
$
6,575,974
  
Mandatory convertible debentures
    
-
      
127,500
  
Convertible debentures
    
940,747
      
881,544
  
Derivative liabilities
    
2,321,350
      
919,250
  
Warrant liabilities
     646,711
       -
  
Total current liabilities
    
12,317,517
      
8,504,268
  
                 
Shareholders’ (deficiency)
                
Common shares (No par value, unlimited common shares authorized; 30,454,288 SVS and 4,650,000 MVS issued and outstanding) (2024 – 29,603,123 SVS and 4,650,000 MVS)
    
-
      
-
  
Additional paid in capital
    
13,561,064
      
13,321,266
  
Accumulated other comprehensive loss
    
45,048
      
43,553
  
Deficit
    
(25,782,663
)
    
(21,726,229
)
Total shareholders’ (deficiency)
    
(12,176,551
)
    
(8,361,410
)
Total liabilities and shareholders’ (deficiency)
  
$
140,966
    
$
142,858
  

Going concern (Note 2(b))
Commitments and contingencies (Note 12)
Subsequent events (Note 13)
See accompanying notes to the condensed consolidated interim financial statements.

3
DevvStream Holding Inc.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited Expressed in United States dollars)
For the three months ended October 31,
  
2024
    
2023
  
             
Operating expenses
            
Sales and marketing
  
$
271,895
    
$
196,921
  
Depreciation
    
361
      
460
  
General and administrative
    
57,335
      
212,330
  
Professional fees
    
1,409,373
      
2,297,182
  
Salaries and wages
    
488,258
      
621,546
  
Total operating expenses
    
(2,227,222
)
    
(3,328,439
)
                 
Other income/(expenses)
                
Foreign exchange gain (loss)
    
2,452
      
(43,635
)
Interest (expense)
    
(12,740
)
    
-
  
Accretion (expense)
    
(44,565
)
    
-
  
Change in fair value of derivative liabilities
    
(1,348,350
)
    
-
  
Change in fair value of warrant liabilities
     (488,132 )     -  
Change in fair value of mandatory convertible debentures
    
70,500
      
-
  
(Loss) on settlement of accounts payable
    
(8,377
)
     -  
Net loss
  
$
(4,056,434
)
  
$
(3,372,074
)
                 
Other comprehensive loss
                
Foreign currency translation
    
1,495
   
56,065
  
Net loss and comprehensive loss
    
(4,054,939
)
    
(3,316,009
)
                 
Weighted average number of shares – Basic and diluted
    
34,335,382
      
34,022,326
  
                 
Loss per share – Basic and diluted
  
$
(0.12
)
  
$
(0.10
)

See accompanying notes to the condensed consolidated interim financial statements.

4
DevvStream Holdings Inc.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIENCY)
(Unaudited Expressed in United States dollars)

   
Number of
Subordinate
Voting Stock
    
Number of
Multiple Voting
Stock
    
Additional
Paid-in
Capital
    
Accumulated
Deficit
    
Accumulated
other
comprehensive
income (loss)
    
Total
shareholders’
equity
(deficiency)
  
 
Balance, July 31, 2023
    
28,419,790
      
4,650,000
    
$
11,883,289
    
$
(11,854,481
)
  
$
(83,570
)
  
$
(54,762
)
Share based compensation – RSUs
    
-
      
-
      
179,544
      
-
      
-
      
179,544
  
Share based compensation – Options
    
-
      
-
      
233,648
      
-
      
-
      
233,648
  
Shares issued for warrant exercises
    
1,183,333
      
-
      
176,113
      
-
      
-
      
176,113
  
Foreign currency translation
     -      
-
       -      
-
      
56,065
      
56,065
  
Net loss
     -       -       -      
(3,372,074
)
     -      
(3,372,074
)
Balance, October 31, 2023
    
29,603,123
      
4,650,000
    
$
12,472,594
    
$
(15,226,555
)
  
$
(27,505
)
  
$
(2,781,466
)
                                                 
Balance, July 31, 2024
    
29,603,123
      
4,650,000
    
$
13,321,266
    
$
(21,726,229
)
  
$
43,553
    
$
(8,361,410
)
Share based compensation - RSUs
    
-
      
-
      
126,343
      
-
      
-
      
126,343
  
Share based compensation - Options
    
-
      
-
      
80,893
      
-
      
-
      
80,893
  
Warrants reclassified to liabilities on change in functional currency
     -       -       (454,571 )     -       -       (454,571 )
Shares issued for warrant exercises
    
600,000
      
-
      
389,729
       -       -      
389,729
  
Conversion of mandatory convertible debentures
    
146,786
      
-
      
49,500
       -       -      
49,500
  
Shares for settlement of debt
    
104,379
      
-
      
47,904
       -       -      
47,904
  
Foreign currency translation
    
-
      
-
      
-
      
-
      
1,495
   
1,495
Net loss
    
-
      
-
      
-
      
(4,056,434
)
    
-
      
(4,056,434
)
Balance, October 31, 2024
    
30,454,288
      
4,650,000
    
$
13,561,064
    
$
(25,782,663
)
  
$
45,048
    
$
(12,176,551
)

See accompanying notes to the condensed consolidated interim financial statements.

5
DevvStream Holdings Inc.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited Expressed in United States dollars)
For the period ended October 31,
  
2024
    
2023
  
Operating activities
            
Net loss for the period
  
$
(4,056,434
)
  
$
(3,372,074
)
Items not affecting cash:
                
Depreciation
    
361
      
460
  
Share based compensation
    
207,236
      
413,192
  
Change in fair value of derivative liabilities
    
1,348,350
      
-
  
Change in fair value of mandatory convertible debentures
    
(70,500
)
    
-
  
Change in fair value of warrant liabilities
     488,132       -  
Loss on settlement of accounts payable
    
8,377
       -  
Non-cash general and administrative
     -      
50,000
  
Accrued interest
    
12,740
      
-
  
Accretion expense
    
44,565
      
-
  
Changes in non-cash working capital items:
                
GST receivable
    
(9,898
)
    
(6,914
)
Prepaid expenses
    
3,708
      
152,913
  
Accounts payable and accrued liabilities
    
1,872,262
      
2,070,102
  
Net cash used in operating activities
    
(151,101
)
    
(692,321
)
                 
Financing activities
                
Proceeds from convertible debentures
    
55,650
      
-
  
Proceeds from warrant exercise
    
86,237
      
176,113
  
Proceeds from issuance of mandatory convertible debentures
     -      
50,000
  
Net cash provided by financing activities
    
141,887
      
226,113
  
                 
Effect of exchange rate changes on cash
    
1,493
      
(13,204
)
                 
Net (decrease) in cash
    
(7,721
)
    
(479,412
)
Cash, Beginning
    
21,106
      
489,971
  
Cash, Ending
  
$
13,385
    
$
10,559
  
                 
Supplemental information:
                
Taxes paid
  
$
-
    
$
-
  
Interest paid
  
$
-
    
$
-
  
Fair value of warrants exercised
   $
 303,492     $
 -  

See accompanying notes to the condensed consolidated interim financial statements.

6
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
1.
Nature of operations
 
DevvStream Holdings Inc. (the “Company” or “Devv Holdings”) was incorporated under the British Columbia Business Corporations Act on August 13, 2021. The head office is located at 2133 – 1177 West Hastings Street, Vancouver, BC V6E 2K3 and records and registered office is located at 1500 – 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7.
 
On September 12, 2023 (and as amended on May 1, 2024 , August 10, 2024 and October 29, 2024), the Company entered into a business combination agreement (“BCA”) with Focus Impact Acquisition Corp. (“Focus Impact”). Focus Impact was a special purpose acquisition corporation focused on amplifying social impact through the pursuit of a merger or business combination with socially forward companies. The transaction was structured as an amalgamation of the Company into a wholly owned subsidiary of Focus Impact, following Focus Impact’s redomiciling as an Alberta company. Focus Impact will be renamed “DevvStream Corp.” (the “Combined Company”) and continue the business of the Company following the amalgamation. It was a condition of the transaction that the securities of the Combined Company will be listed on the Nasdaq Stock Exchange (“NASDAQ”).  This transaction is also referred to as the “De-SPAC” transaction. The De-SPAC transaction closed on November 6, 2024 (Note 13).
 
The Company was listed on the Cboe Exchange under the symbol “DESG” until November 6, 2024, when the Company delisted from the Cboe Exchange.

2.
Basis of preparation
 
 
(a)
Statement of compliance
 
These unaudited condensed consolidated interim financial statements have been prepared on a going concern basis in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions in  Article 10 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission (the “SEC”), effective for the three months ended October 31, 2024.

Certain information or footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying condensed consolidated interim financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements for the year ended July 31, 2024. The interim period results do not necessary indicate the results that may be expected for any other interim period or for the full fiscal year.

These unaudited condensed consolidated interim financial statements have been prepared on a historical cost basis. In addition, these condensed consolidated interim financial statements have been prepared using the accrual basis of accounting, except for the cash flow information.

7
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
2.
Basis of preparation (continued)

 
(b)
Going concern
 
These unaudited condensed consolidated interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. As at October 31, 2024, the Company has a working capital deficit, incurred negative cash flows and losses since inception and has generated no revenue to date. The Company’s ability to continue its operations, realize its assets at their carrying values and discharge its liabilities is dependent upon its ability to raise adequate financing from external sources and generate profits and positive cash flows from operations.
 
The Company will require additional capital to fund its operations, to evaluate strategic opportunities, and for working capital purposes. However, there is no assurance that the Company will be able to secure such financing on favourable terms.  These matters raise substantial doubt regarding the Company’s ability to continue as a going concern.  These unaudited condensed consolidated interim financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should the Company not continue as a going concern. Such adjustments could be material.
 
 
(c)
Basis of consolidation
 
These unaudited condensed consolidated interim financial statements include the accounts of the Company and entities controlled by the Company.  Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. All intercompany balances and transactions, income and expenses have been eliminated upon consolidation.
 
As of October 31, 2024, the Company’s subsidiaries were:
 
Name of subsidiary
Place of incorporation
  
Ownership
  
Devvstream, Inc. (“DESG”)
Delaware, USA
    
100
%
DevvESG Streaming Finco Ltd (“Finco”)
British Columbia, Canada
    
100
%
 
On November 10, 2022, the Company made an investment into Marmota Solutions Incorporated (“Marmota”). On the date of the initial investment, the Company owned 50% of Marmota and accounted for the investment as an equity investment.  On October 16, 2023, the Company reduced its interest in Marmota to 10% by returning common shares to Marmota for cancellation in consideration of $19.

 
(d)
Variable interest entities (“VIE”)
 

A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to control the entity's activities or do not substantially participate in the gains and losses of the entity. Upon inception of a contractual agreement, and thereafter, if a reconsideration event occurs, the Company performs an assessment to determine whether the arrangement contains a variable interest in an entity and whether that entity is a VIE. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Where the Company concludes that it is the primary beneficiary of a VIE, the Company consolidates the accounts of that VIE.

8
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
2.
Basis of preparation (continued)
 
 
(e)
Functional and presentation currencies

Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions. As a result of this reassessment, the Company determined that its functional currency changed from the Canadian dollar (“CAD$”) to the United States dollar (“US$”) for DevvStream Holdings Inc. and DESG. Finco’s functional currency remained CAD$. This change aligns with the business's future focus and the effective date of the Focus Impact Acquisition Corp.'s Form S-4 Registration Statement with the SEC, a crucial part of the De-SPAC transaction closing.  The change in functional currency was accounted for prospectively from August 1, 2024, with no impact on prior year comparative information. Upon the change in functional currency on August 1, 2024, 7,981,668 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities (Note 7). Determining the functional currency involved significant judgments to assess the primary economic environment in which the Company operates, including factors such as the currency of underlying transactions, the location of key operations, and the currency of expected cash flows.

The Company’s presentation currency is and continues to be the United States dollar.


(f)
Use of estimates and judgments

In preparing these condensed consolidated interim financial statements, management has made judgements, estimates and assumptions that affect the applicability of the Company’s accounting policies.  In preparing these condensed consolidated interim financial statements, the significant estimates and critical judgments were the same as those applied to the audited consolidated financial statements as at and for the year ended July 31, 2024, other than the warrant liabilities.

Warrant Liabilities

Warrant liabilities are measured at fair value. Warrants are measured using the Black-Scholes option pricing model. The Black-Scholes option pricing model utilizes subjective assumptions such as fair value of the underlying share, expected price volatility, and expected life.  Changes in these input assumptions can significantly affect the fair value estimate.


(g)
Emerging growth company

The Company will be an “Emerging Growth Company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it has taken advantage of certain exemptions that are not applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b) (1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial reporting standards.  The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public and private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

9
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
3.
Significant accounting policies

The significant accounting policies applied in the preparation of these condensed consolidated interim financial statements, are consistent with the accounting policies disclosed in the Company’s audited consolidated financial statements for the year ended July 31, 2024 except for the addition below:

Warrant liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance ASC Topic 480, Distinguishing Liabilities from Equity (“Topic 480”) and ASC Topic 815, Derivatives and Hedging (“Topic 815”).  This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance or modification. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. This liability is subject to re-measurement at each balance sheet date until exercised or expired, and any change in fair value is recognized in the Company’s consolidated statement of operations.

The Company has concluded that certain warrants no longer meet the criteria for equity classification and must be recorded as a liability, upon the change in the Company’s functional currency. Accordingly, the Company re-classified warrants denominated in functional currencies other than the Company’s functional currency as a liability at fair value and will adjust the liability to fair value at each reporting period.
 
4.
Accounts payable and accrued liabilities

   
October 31, 2024
    
July 31, 2024
  
Accounts payable
  
$
6,297,712
    
$
5,661,681
  
Accrued liabilities
    
2,011,741
      
813,284
  
Income taxes payable
    
99,256
      
101,009
  
   
$
8,408,709
    
$
6,575,974
  

5.
Convertible debentures

During the year ended July 31, 2024, the Company closed several tranches of convertible debenture offerings under the terms outlined below.

During the three months ended October 31, 2024, the Company received additional funds under the Focus Impact Partners Convertible Debt totaling $55,650.

Devvio Tranche (Related Party Convertible Debt)

On January 12, 2024, the Company closed an unsecured convertible notes offering in the principal amount of $100,000 with Devvio that will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted. The maturity is November 6, 2024 (Note 13). The Company has the right to prepay the whole or any portion of the principal amount, and together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment. Devvio is a related party to the Company through its ownership, as Devvio holds 100% of the Company’s MVS, and one of Devvio’s officers, directors and principal owners was a director of the Company during the year ended July 31, 2024 and the quarter ended October 31, 2024.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) $7.65 multiplied by the common conversion ratio as set forth in the BCA (the “Common Conversion Ratio”), and (b) CAD$1.03. The shares are thereafter exchanged for common shares of the Combined Company at the Common Conversion Ratio.
•
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of October 8, 2024 (270 days from the issuance date of the notes) and the termination of the business combination agreement with Focus Impact (Note 1), the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) the 30-day volume weighted average trading price (“VWAP”) of the shares on Cboe Canada stock exchange and (b) CAD$1.03.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$1.03. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

10
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
5.
Convertible debentures (continued)

The Devvio Tranche convertible debentures were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation.  On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The fair value of the derivative liability at issuance was estimated to be $45,000 using the Monte Carlo model.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

Focus Impact Partners Convertible Debt

In the prior year, the Company closed an unsecured convertible notes offering with Focus Impact Partners, LLC (“Focus Impact Partners”). The convertible notes were initially closed on January 12, 2024 and additional advances were added under the same offering.  The total initial principal amounts of $550,000 under the original Focus Impact Partners Convertible Debt were received in five installments: $150,000 on November 6, 2023, $150,000 on January 9, 2024, $100,000 on March 28, 2024, $100,000 on April 19, 2024, and $50,000 on June 13, 2024. The debentures will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction (Note 1) and the debentures are not converted. The maturity date for all advances is November 6, 2024 (Note 13). The Company has the right to prepay the whole or any portion of the principal amount, together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) a 25% discount to the 20-day VWAP of the shares on the Cboe Exchange multiplied by the Common Conversion Ratio, and (b) $2.00 (the De-SPAC Floor Price”).
•
The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
•
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of October 8, 2024 (270 days from the issuance date of the notes), or the termination of the BCA with Focus Impact, the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) a 25% discount to the 20-day VWAP of the shares on the Cboe Exchange calculated on the conversion date and b) the floor price defined as the current market price on the date of announcement of the offering which was CAD $0.475.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 20-day VWAP and (b) the floor price defined as the current market price on the date of announcement of the offering which was CAD $0.475.
•
The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

On June 28, 2024, the Company and Focus Impact Partners agreed to amend the Focus Impact Partners Convertible Debt (“Focus Impact Partners Amendment”) such that the De-SPAC Floor Price would be amended from $2.00 to CA$0.475.

11
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
5.
Convertible debentures (continued)

On June 28, 2024, the Company received additional proceeds of $20,000 under the amended terms.

On August 19, 2024, October 18, 2024 and October 28, 2024, the Company received additional proceeds of $41,500, $6,500 and $7,650 under the amended terms.

The Focus Impact Partners Convertible Debt were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation. On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The total fair value of the derivative liabilities at the various issuance dates for the proceeds received during the year ended July 31, 2024 was estimated to be $25,800 as valued using the Monte Carlo model. The total fair value of the derivative liabilities at the various issuance dates for the proceeds received during the three months ended October 31, 2024 was estimated to be $53,750 as valued using the Monte Carlo model.

The amendment had no impact on the classification of the convertible debenture and therefore, the conversion feature was considered a derivative before and after the modification.  As there was no change to the host instrument cash flows as a result of this change, the 10% test was not met and therefore, there was no extinguishment of the host debt as a result of this change.

As the conversion option was bifurcated before and after the modification, the change in the fair value of the conversion feature was recognized as the loss on revaluation of the derivative liabilities through the consolidated statement of operations and comprehensive loss.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

Envviron Tranche (Related Party Convertible Debt)

On April 23, 2024, the Company closed an unsecured convertible note offering in the principal amount of $250,000 with Envviron SAS (a company controlled by a former director of the Company) that will bear interest at a rate of 5.3% per annum, payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted (“Envviron Tranche”). The maturity is February 15, 2025. The Company has the right to prepay the whole or any portion of the principal amount, and together with any accrued interest, at any time prior to the maturity date without notice or a penalty payment.  The terms of the Envviron Tranche are identical to the original Focus Impact Partners Convertible Debt.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest are convertible into SVS of the Company at the option of the lender, as follows:
•
At a conversion price equal to the greater of (a) the price that is a 25% discount to the 20-day VWAP of the shares on Cboe Canada stock exchange, and (b) $2.00. The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
•
If the Company completes the De-SPAC transaction, and the convertible notes are not converted into shares, the maturity date will accelerate and the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.

In the event the Company does not complete a De-SPAC transaction at the later of January 18, 2025 (270 days from the issuance date of the notes) and the termination of the BCA with Focus Impact (Note 1), the principal and accrued interest are convertible into units consisting of one SVS and half of a share purchase warrant, at the option of the lender, as follows:

•
At a conversion price equal to the greater of (a) the price that is a 25% discount to the 20-day VWAP of the shares on Cboe Canada stock exchange and (b) CAD$0.475.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$0.475. The warrants will expire 2 years after the conversion date.

12
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
5.
Convertible debentures (continued)

The conversion price is subject to certain anti-dilution provisions.

The Environn Tranche convertible debentures were determined to be a financial instrument comprising a host debt component and a conversion feature which is an embedded derivative that required bifurcation. On initial recognition, the embedded derivative was valued first, and the residual value was assigned to the host financial debt component. The fair value of the derivative liability at issuance was estimated to be $2,750 using the Monte Carlo model.

The prepayment option and the accelerated repayment condition were not separately accounted for as they were determined to be clearly and closely related to the host contract.

A continuity of the Company’s convertible debentures is as follows:

Balance as at August 1, 2023
  
$
-
  
Issued
    
920,000
  
Fair value of embedded derivative
    
(73,550
)
Transaction costs
    
(36,484
)
Accretion
    
52,552
  
Interest
    
19,026
  
Balance as at July 31, 2024
  
$
881,544
  
Issued (Focus Impact Partners Convertible Debt)
    
55,650
  
Fair value of embedded derivative
    
(53,750
)
Accretion
    
44,565
  
Interest
    
12,738
  
Balance as at October 31, 2024
  
$
940,747
  

The face value of the convertible debentures as of October 31, 2024 was $975,650.  Refer to Note 13 for Subsequent Event disclosure that impacts the convertible debentures.

Below is a continuity of the embedded derivative liabilities:

Balance as at August 1, 2023
  
$
-
  
Derivative liability component
   
73,550
  
Change in fair value of derivative liabilities
    
845,700
  
Balance as at July 31, 2024
  
$
919,250
  
Derivative liability component
    
53,750
  
Change in fair value of derivative liabilities
    
1,348,350
  
Balance as at October 31, 2024
  
$
2,321,350
  

In connection with the issuance of the convertible debentures during the year ended July 31, 2024, the Company incurred $40,227 in directly attributable transaction costs. $36,484 was allocated to the host financial liability, $3,743 was allocated to the embedded derivative and recorded immediately in the consolidated statement of operations as general and administrative expenses.

The key inputs used in the Monte Carlo model for the derivative liabilities were as follows:

   
At initial
measurement (for
the year ended July
31, 2024)
    
As at
July 31, 2024
    
At initial
measurement (for
the period ended
October 31, 2024)
    
As at
October 31, 2024
  
Probability of De-SPAC Transaction closing
    
90
%
    
90
%
    
90% - 99
%
    
99
%
Risk-free interest rate
    
4.60% - 4.87
%
    
4.27% - 4.38
%
    
1.10% - 4.25
%
    
3.25
%
Expected term (years)
    
0.35 – 0.82
      
0.26 - 0.54
      
0.02 – 0.21
      
0.02 – 0.29
  
Expected annual volatility for the Company
    
90% - 145
%
    
85% - 112
%
    
92.5
%
    
85% - 165
%
Expected annual volatility for Focus Impact
    
2.5% - 5
%
    
2.5
%
    
2.5% - 100
%
    
2.5%- 100
%
Common conversion ratio
    
0.083 - 0.155
      
0.083
     
0.063 – 0.1462
      
0.146
  
Foreign exchange rate
    
0.727 - 0.747
      
0.7242
     
0.720 – 0.734
      
0.719
  

13
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
6.
Mandatory convertible debentures

On January 12, 2024, the Company closed a tranche of unsecured convertible notes in the principal amount of $100,000 that bear interest at the rate of 15% per annum, payable only in Company securities on the Conversion Date, or payable in cash in connection with a Liquidating Event or Event of Default.

In the event the Company completes a De-SPAC transaction, the principal amount and accrued interest automatically convert into SVS of the Company as follows:
•
At a conversion price equal to the greater of (a) $7.65 multiplied by the Common Conversion Ratio, and (b) CAD$1.03.
•
The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.

In the event the Company does not complete a De-SPAC transaction by October 8, 2024 (270 days from the issuance date of the notes), the principal and accrued interest are automatically convertible into units consisting of one SVS and half of a share purchase warrant, as follows:
•
At a conversion price equal to the greater of (a) the 30-day VWAP of the shares on Cboe Canada stock exchange and (b) CAD$1.03.
•
Each warrant will carry the right to purchase a share with an exercise price equal to the greater of (a) a 20% premium on the 30-day VWAP and (b) the floor price of CAD$1.03. The warrants will expire 2 years after the conversion date.

The conversion price is subject to certain anti-dilution provisions.

The mandatory convertible debentures were liabilities classified and initially recorded at fair value with subsequent changes in fair value being recorded in profit and loss (“FVTPL”). The initial fair value was estimated to be $100,000. During the year ended July 31, 2024, the Company recognized a change in fair value of $27,500 using a Monte Carlo Simulation. In October 2024, the mandatory convertible debentures were revalued to $57,000 using a Monte Carlo Simulation and were converted to 146,786 shares of the Company. The debenture holders were also supposed to receive 73,393 warrants. As of the date of these financial statements, these warrants have not yet been issued. The Company recorded a gain on revaluation during the three months ended October 31, 2024 of $70,500.

In connection with the issuance of these mandatory convertible debentures, the Company incurred $7,545 in directly attributable transaction costs which were recorded immediately in the consolidated statement of operations as general and administrative expenses.

A continuity of the Company’s mandatory convertible debentures is as follows:

Balance as at August 1, 2023
  
$
-
  
Issued
    
100,000
  
Change in fair value of mandatory convertible debentures
    
27,500
  
Balance as at July 31, 2024
  
$
127,500
  
Change in fair value of mandatory convertible debentures
    
(70,500
)
Conversion of debentures
    
(57,000
)
Balance as at October 31, 2024
  
$
-
  

The key inputs used in the Monte Carlo model for the revaluation of the mandatory convertible debentures as at July 31, 2024 are set out in the table below. In October 2024, the mandatory convertible debentures were automatically converted into shares and warrants to be issued.  Immediately prior to conversion, the Company revalued the mandatory convertible debentures.  The fair value of the shares were valued using a share price of $0.34 and the warrants using the Black-Scholes option pricing model (Note 7).

   
As at July 31, 2024
  
Probability of De-SPAC Transaction closing by maturity date
     85 %
Risk-free interest rate
    
4.42
%
Expected term (years)
    
0.19
  
Expected annual volatility for the Company
    
92.5
%
Expected annual volatility for Focus Impact
    
2.5
%
Common conversion ratio
    
0.083
  
Foreign exchange rate
    
0.7242
  

14
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
7. Warrant liabilities

Impact of Change in Functional Currency on August 1, 2024

As at July 31, 2024, the Company had 8,689,018 warrants outstanding. The exercise price of these warrants is denominated in CAD. Due to the change in functional currency of the Company, a total of 7,981,668 warrants which were issued in connection with the Company’s reverse merger on November 4, 2022 and for private placements with an initial carrying value of $1,836,666 were reassessed to be derivative liabilities. The fair value of the warrants upon the change in classification on August 1, 2024 of $454,571, was remeasured using the Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0%, expected volatility - 105%, risk-free interest rate – 3.49% and an expected remaining life – 0.7 years.  The fair value of these warrants is classified as Level 2 in the fair value hierarchy.   The difference between the previous carrying value which was initially recorded as equity and the fair value of the warrant liabilities on August 1, 2024 was $1,382,096. Pursuant to ASC 815-40-35-9, the difference is recognized within equity.

707,350 of the warrants outstanding on August 1, 2024 were issued to brokers as compensation for finders fees (the “Broker Warrants”) and fall under the Scope of ASC 718, Stock-based Compensation. As the Company’s stock is primarily traded on the Cboe Exchange in Canadian dollars during the period ended October 31, 2024, the exemption under ASC 718-10-25-14A is met and the Broker Warrants remain equity classified.

Changes to warrant liability during the three months ended October 31, 2024

On October 8, 2024, the Company’s mandatory convertible debentures were automatically converted to shares of the Company. The debt holders were supposed to receive 73,393 warrants exercisable at CAD$1.03 for two years. The warrants to be issued are recorded as warrant liabilities as the exercise price is denominated in CAD. The fair value of the warrants to be issued at conversion date was estimated to be $7,500 using the Black-Scholes option pricing model, with the following assumptions: expected dividend yield - 0%, expected volatility – 92.5%, risk-free interest rate – 4.53% and an expected remaining life –2 years.

On October 29, 2024, 600,000 liability classified warrants were exercised at an exercise price of CAD$0.20 per share. The difference between the fair value of the warrants immediately preceding the exercise of $303,492 and the previously measured fair value of these warrants on August 1, 2024 of $141,096 was recognized as a change in fair value of the warrant liabilities of $162,396.

As at October 31, 2024, the fair value of the liability classified warrants were remeasured at $646,711 using Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0%, expected volatility - 110%, risk-free interest rate – 3.09% and an expected remaining life of 1.88 years. The Company recognized $325,736 as a change in fair value for the period ended October 31, 2024.

The following is a continuity of the Company’s derivative warrant liabilities:

Balance as at July 31, 2024
  
$
-
  
Warrant fair value upon change in functional currency (Note 2)
    
454,571
  
Warrants to be issued (mandatory convertible debentures)
    
7,500
  
Change in fair value of warrant liabilities (exercised warrants)
    
162,396
  
Fair value of warrants exercised
    
(303,492
)
Change in fair value of warrant liabilities
    
325,736
  
Balance as at October 31, 2024
  
$
646,711
  

A summary of the liability classified warrants outstanding and exercisable as of October 31, 2024, is as follows:

Number of warrants outstanding
Exercise price
Expiry date
6,080,001
CAD$1.20
November 4, 2024
85,000
CAD$2.00
June 30, 2025
1,216,667
CAD$0.20
September 29, 2026
7,381,668
    

8.
Share capital
 
(a)
Authorized
 
The Company is authorized to issue an unlimited number of SVS without par value and an unlimited number of MVS without par value. Each MVS can be converted into SVS at a rate of one MVS to 10 SVS and carries 10 voting rights per MVS.
 
(b)
Shares issued
 
Shares issued during the three months ended October 31, 2024
 
On September 5, 2024, the Company issued 104,379 shares with a fair value of $47,904 in settlement of accounts payable in the amount of $39,527 and recognized a loss on the settlement of $8,377.
 
In October 2024, the Company issued 146,786 shares with a fair value of $49,500 for the conversion of the mandatory convertible debentures (Note 7).
 
On October 29, 2024, the Company issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share for gross proceeds of $86,237. The fair value of the warrants was $303,492.
 
Shares issued during the three months ended October 31, 2023
 
On August 4, 2023, the Company issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share.
 
On August 22, 2023, the Company issued 416,667 shares for the exercise of 416,667 share purchase warrants, at an exercise price of CAD$0.20 per share.
 
On September 22, 2023, the Company issued 166,666 shares for the exercise of 166,666 share purchase warrants, at an exercise price of CAD$0.20 per share.

(c)
Share purchase warrants
 
The continuity of share purchase warrants is as follows:

   
Number of
warrants
  
Weighted
Average Exercise
price
  
Remaining
life (Years)
  
Balance, July 31, 2023
    
9,872,351
  
CAD$0.90
    
1.85
  
Exercised
    
(1,183,333
)
CAD$0.20
    
-
  
Balance, July 31, 2024
    
8,689,018
  
CAD$1.00
    
0.67
  
Exercised
    
(600,000
)
CAD$0.20
    
-
  
Balance, October 31, 2024
    
8,089,018
  
CAD$1.06
    
0.31
  
 
As at October 31, 2024, the following share purchase warrants were outstanding:

Number of warrants outstanding
  
Exercise price
  
Expiry date
  
6,787,351
  
CAD$1.20
  
November 4, 2024
  
85,000
  
CAD$2.00
  
June 30, 2025
  
1,216,667
  
CAD$0.20
  
September 29, 2026
  
8,089,018
           

7,381,668 of the warrants outstanding are liability classified (Note 7).

The Company has 73,393 warrants with an exercise price of CAD$1.03 to be issued as of October 31, 2024.

15
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
8.
Share capital (continued)


(d)
Options
 
The continuity of the Company’s stock options is as follows:

   
Number of
options
    
Weighted average
exercise price
  
Outstanding, October 31, 2024 and July 31, 2024
    
4,105,000
    
CAD$0.85
  
Exercisable, July 31, 2024
    
2,190,250
    
CAD$0.85
  
Exercisable, October 31, 2024
    
2,402,750
    
CAD$0.84
  
 
As at October 31, 2024, the weighted average remaining contractual life of outstanding options is 6.83 years (July 31, 2024 – 7.09 years).
 
As at October 31, 2024, the following stock options were outstanding and exercisable:

Number of options
outstanding
    
Exercise
price
    
Expiry date
    
Number of
options
exercisable
  
175,000
    
CAD$0.80
    
January 17, 2028
      
131,250
  
550,000
    
CAD$1.11
    
May 15, 2028
      
245,000
  
50,000
    
CAD$1.18
    
June 26, 2028
      
25,000
  
1,500,000
    
CAD$0.80
    
January 17, 2032
      
825,000
  
360,000
    
CAD$0.80
    
March 1, 2032
      
198,000
  
60,000
    
CAD$0.80
    
March 14, 2032
      
33,000
  
60,000
    
CAD$0.80
    
April 13, 2032
      
33,000
  
500,000
    
CAD$0.80
    
October 12, 2032
      
275,000
  
850,000
    
CAD$0.80
    
February 6, 2033
      
637,500
  
4,105,000
                  
2,402,750
  
 
No stock options were issued during the three months ended October 31, 2024 and 2023.
 
Share-based compensation – Options
 
Share-based payments relating to the vesting of options for the three months ended October 31, 2024 was $80,893 (2023 - $233,648) and is recorded as salaries and wages on the consolidated statement of operations.

 
(e)
Restricted stock units (“RSUs”)

The continuity of the Company’s RSU’s is as follows:

   
Number of RSU’s
  
Outstanding, July 31, 2023
    
6,780,000
  
Granted
    
1,163,572
  
Outstanding, July 31, 2024
    
7,943,572
  
Forfeited
    
(111,534
)
Outstanding, October 31, 2024
    
7,832,038
  

No RSUs were granted during the three months ended October 31, 2024 and 2023.

16
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
8.
Share capital (continued)

  (e)
RSU’s (continued)

As at October 31, 2024, the Company had 7,832,038 (July 31, 2024 – 7,943,572) restricted stock units (“RSUs”) outstanding, of which 3,736,000 (July 31, 2024 – 1,700,000) had vested. All vested RSU’s are to be settled by December 31st of the calendar year in which the RSUs vest.

As at October 31, 2024, the following RSUs were outstanding and vested:
 
Number of RSUs
outstanding
    
Grant date
  
Number of RSUs
Vested
  
 
60,000
    
November 30, 2021
    
40,000
  
 
2,500,000
    
December 24, 2021
    
1,375,000
  
 
66,000
    
March 1, 2022
    
66,000
  
 
4,100,000
    
March 14, 2022
    
2,255,000
  
 
1,106,038
    
July 30, 2024
    
-
  
 
7,832,038
          
3,736,000
  
 
Stock-based compensation – RSU’s
 
Share-based payments relating to the vesting of RSUs for the three months ended October 31, 2024 was $126,343 (2023 - $179,544) and is recorded as salaries and wages on the consolidated statement of operations.
 
9.
Related party transactions and balances
 
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties.

At October 31, 2024, the Company had amounts owing and accrued liabilities of $719,679 (July 31, 2024 - $478,072) payable to directors and officers of the Company for salaries, expense reimbursements and professional fees. These amounts are non-interest bearing and have no terms of repayment.

During the year ended July 31, 2024, the Company issued convertible debentures to Devvio and Envviron who are related parties to the Company (Note 5).  These loans were amended subsequent to October 31, 2024 (Note 13).

During the year ended July 31, 2024, the Company signed an amended strategic partnership agreement with Devvio (Note 12).

17
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
10.
Financial instruments
 
As at October 31, 2024, the Company’s financial instruments consist of cash, GST receivable, accounts payable and accrued liabilities, convertible debentures, mandatory convertible debentures, warrant liabilities and derivative liabilities. The Company classifies cash and GST receivable as financial assets held at amortized cost. The Company’s mandatory convertible debentures and warrant liabilities are carried at FVPTL. The Company classifies accounts payable and accrued liabilities as financial liabilities which are held at amortized cost. The Company’s convertible debentures are hybrid instruments where the debt host component is held at amortized cost and the embedded derivative is measured at FVTPL.

The Company’s derivative liabilities are level 3 financial instruments and its warrant liabilities are Level 2 instruments. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Observable or market inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s assumptions based on the best information available. The unobservable inputs used for valuation of the mandatory convertible debentures and derivative liabilities included volatility and probability of De-SPAC transaction. Any significant changes in unobservable inputs could result in significantly lower or higher fair value measurements.

The risk exposure arising from these financial instruments is summarized as follows:
 

(a)
Credit risk
 
The Company’s financial assets are cash and GST receivable. The Company’s maximum exposure to credit risk, as at period end, is the carrying value of its financial assets, being $108,941.  The Company holds its cash with a major financial institution and with a publicly traded payment processing company therefore minimizing the Company’s credit risk.
 

(b)
Liquidity risk
 
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity by maintaining adequate cash balances and by raising equity financings. The Company has no assurance that such financings will be available on favorable terms. In general, the Company attempts to avoid exposure to liquidity risk by obtaining corporate financing through the issuance of shares.

As at October 31, 2024, the Company had cash of $13,385 to settle the contractual obligation of current liabilities of $9,384,359 which fall due for payment within twelve months of the statement of financial position. All of the Company’s contractual obligations are current and due within one year.


(c)
Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or value of its holdings or financial instruments.  At October 31, 2024, the Company has minimal exposure to these risks.

18
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
11.
Segmented information

The Company operates in one reportable operating segment – the development and monetization of environmental assets.  The Company has not generated revenue to date and as such has no reportable segment revenues.  The Company’s assets are located in Canada.

12.
Commitments and contingencies
 

•
On September 12, 2023, the Company amended their existing strategic partnership agreement with Devvio, a related party. The Company has committed to making specific payments to Devvio. They will provide a minimum advance of $1,000,000 by August 1, 2024, followed by $1,270,000 by August 1, 2025 and August 1, 2026. Additionally, starting from 2027, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement.  On July 8, 2024, the parties further amended the agreement such that the minimum advances extended by one year and are now due as follows: $1,000,000 by August 1, 2025, followed by $1,270,000 by August 1, 2026 and August 1, 2027. Additionally starting in calendar year 2028, if advance royalty payments fall below $1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement.
 

•
On February 16, 2024, the Company entered into a licensing agreement with Greenlines Technology Inc. for the use of certain technologies. The Company has agreed to pay $42,000 within 15 days of the closing of the BCA. Commencing January 1, 2025, the Company has agreed to pay an annual fee of $12,000 of the first day of each calendar year for the use of the technology.
 

•
From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. At October 31, 2024, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s operations. There are also no proceedings in which any of the Company’s directors, officers or affiliates is an adverse party or has a material interest adverse to the Company’s interest.
 
21
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
13.
Subsequent events
 
Convertible Debt

Focus Impact Partners

On November 1, 2024, the Company received additional proceeds of $12,000, from Focus Impact Partners, under the same terms as the Focus Impact Partners Convertible Debt (Note 6).

On November 13, 2024, Devvstream Corp issued (i) $3,000,000 of new 5.3% convertible notes to the Focus Impact Sponsor, and (ii) $982,150 of new 5.3% convertible notes to Focus Impact Partners  (together, the “New Convertible Notes”), in exchange for the cancellation and conversion of a $3,000,000 convertible note previously issued by Focus Impact, the Focus Impact Partners Convertible Debt which totaled $637,150 (Note 6 and subsequent advance) and unpaid fees in the amount of $345,000 which were owed by Focus Impact to Focus Impact Partners. The New Convertible Notes have a maturity date of November 13, 2026. The principal loan amount and any accrued and unpaid interest under the New Convertible Notes are convertible into DevvStream Corp. common shares at the option of the holder at a 25% discount to the 20-day volume weighted average price of the DevvStream Corp. shares, subject to a floor of $0.867 per share.

In connection with the New Convertible Notes, the Company agreed (i) to grant the Secured Parties a first ranking security interest in all of the carbon credits and similar environmental assets held by the Company, presently existing or hereafter created or acquired, and (ii) to execute and deliver to the Secured Parties a security agreement evidencing the Secured Parties’ security interest (the “Security Agreement”). On December 18, 2024, the Company executed and delivered to the Secured Parties the Security Agreement.

Devvio and Environ

On November 12, 2024, the Company amended the Devvio Tranche and the Environn Tranche convertible debentures by extending the maturity date to May 30, 2025 (Note 6).

De-SPAC Transaction

On November 6, 2024, the Company completed a business combination with Focus Impact (referred to as the “De-SPAC” transaction). Upon the completion of the business combination, Focus Impact was renamed DevvStream Corp. In conjunction with the closing of the De-SPAC, each of the DevvStream Holdings Inc. outstanding securities was exchanged for DevvStream Corp. securities on a 1 to 0.152934 basis and each of Focus Impact’s outstanding securities were converted into DevvStream Corp. securities on a 1 to 0.9692 basis. The former shareholders of DevvStream Holding Inc. and Focus Impact received 11,768,884 and 5,159,200 shares of DevvStream Corp., respectively. As such, immediately following the share exchange, former shareholders of DevvStream Holdings Inc. held the majority of the outstanding shares of the Combined Company (DevvStream Corp.), thereby resulting in the De-SPAC transaction being accounted for as a reverse merger of Focus Impact by DevvStream Holdings Inc. In conjunction with the transaction, DevvStream Corp. also issued the following securities:

•
22,699,984 warrants to the former shareholders of Focus Impact. Each warrant was initially exercisable into 0.9692 shares of DevvStream Corp at $11.86 until November 6, 2029, may be redeemed at the option of the Company and can be exercised on a cashless basis. These warrants contain a clause such that upon a successful business combination, the exercise price will be adjusted based on a specified formula as outlined in the warrant agreement.  On December 6, 2024, DevvStream Corp. issued a notice under the warrant agreement notifying the warrant holders that the exercise price was adjusted to $1.52 per share of DevvStream Corp.;
•
199,064 warrants to the former shareholders of the DevvStream Holdings Inc. which are exercisable at CAD$1.31 until October 7, 2026;
•
586,497 options to the former shareholders of the DevvStream Holdings Inc. which have exercise prices between CAD$5.23 and CA$7.26 and expiry dates ranging from January 17, 2028 to February 6, 2033; and
•
1,177,296 RSU’s to the former shareholders of the DevvStream Holdings Inc.

As of the issuance of these condensed consolidated interim financial statements, the Company is in the process of gathering additional information to finalize the accounting for this acquisition, including the fair value of the assets acquired and liabilities assumed. The Company expects to provide a detailed acquisition note in its financial statements for the quarter ended January 31, 2025.

22
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
Shares Issued for Settlement of Payables

During October 2024, the Company reached agreements with various vendors to settle approximately $5,900,000 of outstanding payables in exchange for shares of Devvstream Corp. as part of the closing of the business combination with Focus Impact.  Concurrent with the closing of the De-SPAC Transaction, 1,187,538 Devvstream Corp. shares were issued in relation to the settlement of accounts payable.

On December 27, 2024, DevvStream Corp. issued 412,478 common shares to certain service providers as consideration for services provided.

Shares Issued for Carbon Credit Purchases

Between October 17, 2024 and October 28, 2024, the Company entered into multiple agreements to acquire carbon credits in return for DevvStream Corp shares once the De-SPAC Transaction was completed. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued 3,249,876 common shares in consideration for these agreements. The agreements contain a mechanism whereby if the Company’s share price drops below 80%-90% of the respective purchase prices outlined in the agreements, in the next 12 to 18 months, the Company is obligated to issue additional shares to cover the shortfall.

Acquisition of Monroe Sequestration Partners (“MSP”)

On October 28, 2024, the Company entered into an agreement to acquire a 50% stake in MSPPIP in exchange for 2,000,000 shares of DevvStream Corp., to be issued upon the completion of the De-SPAC transaction. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued the 2,000,000 common shares in consideration for 50% interest in MSP.

PIPE Financing

On October 29, 2024, Focus Impact entered into subscription agreements with various investors (“PIPE Shares”). The investors committed to purchase shares of Devvstream Corp. contingent upon the closing of the De-SPAC transaction. If the closing did not occur as expected, Focus Impact was required to return the subscription funds advanced. As part of this arrangement, the Focus Impact Sponsor transferred their Focus Impact Class A shares (“Sponsor Shares”) to the investors in advance of the De-SPAC transaction, representing a portion of the shares subscribed.  As compensation, the Focus Impact Sponsor received replacement shares upon the closing of the De-SPAC transaction for an equal amount. The investors subscribed for a total of $2,250,000 and received 1,547,000 Sponsor Shares prior to the De-SPAC closing. On November 6, upon the closing of the De-SPAC, DevvStream Corp. issued an additional 194,808 PIPE Shares to the investors, which were the remaining shares not previously advanced, and 1,500,000 replacement shares to the Focus Impact Sponsor.

23
DevvStream Holdings Inc.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three months ended October 31, 2024 and 2023
Strategic Consulting Agreement

On November 13, 2024, DevvStream Corp. entered into a strategic consulting agreement with Focus Impact Partners, pursuant to which the Focus Impact Partners will provide DevvStream Corp. with certain consulting services ( “Strategic Consulting Agreement”) in consideration of an annual consulting fee of $500,000, which will be payable in quarterly installments of $125,000 starting with an initial payment for the period beginning December 31, 2023. Fees due under the Strategic Consulting Agreement shall accrue and not be payable until (a) DevvStream Corp. has successfully raised $5,000,000 in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) DevvStream Corp. has 2 or more consecutive quarters of positive cash flow from operations. DevvStream Corp. will pay the Focus Impact Partners additional consulting fees as to be mutually agreed consistent with market practice in connection with any acquisition, merger, consolidation, business combination, sale, divestiture, financing, refinancing, restructuring or other similar transaction.

In connection with signing of the Strategic Consulting Agreement, DevvStream Corp. issued 557,290 common shares. The Strategic Consulting Agreement has a term of three years unless terminated early with at least 120 days advance notice and will be automatically extended for successive one year periods at the end of each year unless either party provide a written notice of its desire not to automatically extend at least 120 days prior to the end of each year during the term of the Strategic Consulting Agreement.

Equity Line of Credit Purchase (“ELOC”) Agreement

On October 29, 2024, Focus Impact entered into the ELOC Agreement with Helena Global Investment Opportunities I Ltd (“Helena I”). Under the ELOC Agreement, DevvStream Corp. will have the right to issue and to sell to Helena I from time to time, up to $40,000,000 of DevvStream Corp. common shares following the closing of the De-SPAC Transaction and the effectiveness of the registration statement registering the DevvStream Corp. common shares being sold under the ELOC Agreement (the “Helena I Registration Statement”). As a commitment fee in connection with the execution of the ELOC Agreement, the Focus Impact Sponsor transferred 515,889 Sponsor Shares of Focus Impact to Helena I.  As compensation, the Focus Impact Sponsor received 500,000 replacement shares of DevvStream Corp. upon closing of the De-SPAC transaction. Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming effective, DevvStream Corp. will issue to Helena I common shares equal to $125,000 divided by the greater of (i) the lowest one-day VWAP during the five trading days immediately preceding the effectiveness date of such Registration Statement and (ii) $0.75.

NASDAQ Listing

On February 12, 2025, DevvStream Corp. received a notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share. The Company has 180 calendar days, or by August 13, 2025, to regain compliance with the minimum bid price requirement but could be eligible for an additional 180-day compliance period.
 
 

24
Exhibit 99.6

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DEVVSTREAM

The following discussion and analysis should be read in conjunction with DevvStream’s unaudited condensed consolidated interim financial statements and related notes for the three months ended October 31, 2024 and 2023 (“interim financial statements”), which have been prepared in accordance with US GAAP and are included elsewhere in this Form 8-K/A. This discussion contains forward-looking statements reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors, including those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” appearing elsewhere in this Form 8-K. All figures are in US dollars unless otherwise noted. Unless the context otherwise requires, for the purposes of this section, “DevvStream,” “we,” “us,” “our,” or the “Company” refer to DevvStream Holdings Inc. and its subsidiaries.

Company Overview

DevvStream is a technology-based sustainability company that advances the development and monetization of environmental assets, with an initial focus on carbon markets.  The Company’s mission is to create alignment between sustainability and profitability, helping organizations achieve their climate initiatives while directly improving their financial health.

With a diverse approach to the International Renewable Energy Certificate (“I-REC”) and carbon market, DevvStream operates across three strategic domains: (1) an offset portfolio consisting of I-REC’s, nature-based, tech-based, and carbon sequestration credits for immediate sale to corporations and governments seeking to offset their most difficult-to-reduce emissions; (2) project investment, acquisitions, and industry consolidation to extend the Company’s reach, allowing it to become a full end-to-end solutions provider; and (3) project development, where the Company serves as project manager for eligible activities such as EV charging in exchange for a percentage of generated credits.

Company Formation and Reverse Takeover Transaction

We were incorporated under the British Columbia Business Corporations Act on August 13, 2021. On December 17, 2021 (and as amended on March 30, 2022, May 18, 2022, August 11, 2022 and October 24, 2022), we entered into a business combination agreement (the “Transaction Agreement”) with DevvStream Inc. (“DESG”) and DevvESG Streaming Finco Ltd. (“Finco”). The transaction closed on November 4, 2022 and constituted a reverse takeover of DevvStream by DESG. We changed our name from 1319738 B.C. Ltd. to DevvStream Holdings Inc. upon the completion of the transaction.

Pursuant to the Transaction Agreement, we acquired all of the issued and outstanding Subordinate Voting Shares (“SVS”) and Multiple Voting Shares (“MVS”) of DESG by way of a three-cornered amalgamation among DevvStream, DESG and a Delaware subsidiary of DevvStream (the “Transaction”). Former SVS holders of DESG received one of our SVS for each SVS held and former MVS holders of DESG received one of our MVS for each MVS held.

Pursuant to the Transaction Agreement, we and Finco were required to complete private placements for aggregate gross proceeds of $10,000,000 (the “DESG Financing” and “Finco Financing”, respectively). The DESG Financing consisted of a unit private placement for our units at a price of CAD$0.80 per unit. Each unit under the DESG Financing consisted of one SVS and one SVS purchase warrant exercisable at a price of CAD$1.50 per share for a period of 24 months from the closing date of the Transaction. The Finco Financing consisted of a special warrant private placement at a price of CAD$0.80 per special warrant. Each special warrant converted into one unit of Finco consisting of one common share and one common share purchase warrant. Each Finco common share purchase warrant entitles the holder to purchase, upon exercise thereof, one Finco common share at a price of CAD$1.50 per share for a period of 24 months from the closing date of the Transaction.

In connection with the closing of the Transaction, we completed a consolidation of our shares on the basis of 28.09 pre-consolidation shares for each post-consolidation share.

DESG is deemed as the acquirer for accounting purposes, and therefore its assets, liabilities and operations are included in the consolidated financial statements at their historical carrying value. Our operations are considered to be a continuance of the business and operations of DESG from the date of its incorporation on August 27, 2021. Our results of operations are those of DESG, with our operations and Finco’s operations both being included from November 4, 2022, the closing date of the Transaction, onwards.

Recent Developments

Focus Impact Acquisition Corp. (“FIAC”) Business Combination

On September 12, 2023 (and as amended May 1, 2024, August 10, 2024, and October 29, 2024, the “Business Combination Agreement”), we entered into a Business Combination Agreement with FIAC (the ‘‘Business Combination’’ or the ‘‘De-SPAC Transaction’’). FIAC was a special purpose acquisition corporation focused on amplifying social impact through the pursuit of a merger or business combination with socially forward companies. The Business Combination was structured as an amalgamation of DevvStream into a wholly owned subsidiary of FIAC, following FIAC’s redomiciling as an Alberta company. FIAC would then be renamed DevvStream Corp. and continue the business of the Company following the amalgamation. It was a condition of the transaction that the securities of the Combined Company will be listed on NASDAQ.

On November 6, 2024, we completed the business combination with FIAC, pursuant to the BCA. In connection with the completion of the business combination, FIAC changed its jurisdiction from the State of Delaware under the Delaware General Corporation Law to the Province of Alberta, Canada, and thereby become a company existing under the Business Corporations Act (Alberta) and changed its name to DevvStream Corp., and (b) DevvStream and Amalco Sub amalgamated to form one corporate entity. DevvStream Corp’s common shares commenced trading on the NASDAQ under the new ticker symbol “DEVS” on November 7, 2024.   Refer below to ”Subsequent Events” for additional information related to the De-SPAC Transaction.

Change in Functional Currency

Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions. As a result of this reassessment, the Company determined that its functional currency changed from the Canadian dollar (“CAD$”) to the United States dollar (“US$”) for DevvStream Holdings Inc. and DESG. Finco’s functional currency remained CAD$. This change aligns with the business’s future focus and the effective date of the Focus Impact Acquisition Corp.’s Form S-4 Registration Statement with the SEC, a crucial part of the De-SPAC transaction closing.  The change in functional currency was accounted for prospectively from August 1, 2024, with no impact on prior year comparative information. Upon the change in functional currency on August 1, 2024, 7,981,668 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities. Determining the functional currency involved significant judgments to assess the primary economic environment in which the Company operates, including factors such as the currency of underlying transactions, the location of key operations, and the currency of expected cash flows.

Results of Operations — Three Months Ended October 31, 2024 Comparison Against the Three Months Ended October 31, 2023

​
  
For the Three
Months Ended
October 31, 2024
    
For the Three
Months Ended
October 31, 2023
  
Sales and marketing
    
271,895
      
196,921
  
Depreciation
    
361
      
460
  
General and administrative
    
57,335
      
212,330
  
Professional fees
    
1,409,373
      
2,297,182
  
Salaries and wages
    
281,022
      
208,354
  
Share-based compensation
    
207,236
      
413,192
  
Total operating expenses
    
(2,227,222
)
    
(3,328,439
)
Other income
    
-
      
-
  
Accretion and interest expense
    
(57,305
)
    
-
  
Change in fair value of derivative liabilities
    
(1,348,350
)
    
-
  
Change in the fair value of mandatory convertible debentures
    
70,500
      
-
  
Change in the fair value of warrant liabilities
    
(488,132
)
        
Loss on settlement of accounts payable
     (8,377
 )
    
-
  
Foreign exchange gain (loss)
    
2,452
      
(43,635
)
Net loss
    
(4,056,434
)
    
(3,372,074
)

During the three months ended October 31, 2024, we incurred a net loss of $4,056,434 compared to net loss of $3,372,074 for the three months ended October 31, 2023. An analysis of the increase in net loss of $684,360, including the major components our results for the periods, is below.

Share-based compensation

During the three months ended October 31, 2024, we incurred share-based compensation of $207,236 compared to share-based compensation of $413,192 for the three months ended October 31, 2023. Share-based payments relating to the vesting of RSUs decreased by $53,209. Share-based payments relating to the vesting of Options decreased by $152,746.

Professional fees

During the three months ended October 31, 2024, we incurred $1,409,373 in professional fees, as compared to $2,297,182 during the three months ended October 31, 2023. The legal fees for both periods mainly related to the Business Combination.

Salaries and wages

During the three months ended October 31, 2024 and 2023, we incurred salaries and wages of $281,022 and $208,354, respectively, the majority of which were to officers of the Company.

Sales and marketing

Sales and marketing expenses for the three months ended October 31, 2024 and 2023 amounted to $271,895 and $196,921, respectively. These costs primarily related to publications, industry events and investor relations subsequent to our successful listing on the Cboe Exchange in 2023 and the NASDAQ in 2024.

General and administrative

General and administrative expenses for the three months ended October 31, 2024 and 2023 amounted to $57,335 and $212,330, respectively, and primarily comprised of insurance costs, filing fees and rent. The decrease is primarily due to a decrease in rent as compared to the previously comparable period as the Company no longer leases office space.

Foreign exchange loss

During the three months ended October 31, 2024, we recognized a foreign exchange gain of $2,452.  During the three months ended October 31, 2023, we recognized a foreign exchange loss of $43,635. The foreign exchange gain and loss result from fluctuations in the Canadian dollar against the US dollar, as we hold cash balances and have accounts payable denominated in both Canadian and US dollars.

Change in fair value of derivative liabilities and mandatory convertible debentures
 
During the three months ended October 31, 2024, we recognized a loss on derivative liabilities of $1,348,350 and a gain on mandatory convertible debentures of $70,500, respectively, related to the convertible debt financings completed in January 2024 and April 2024. Please refer to Note 6 of the interim financial statements.

Loss on settlement of accounts payable

On September 5, 2024, the Company issued 104,379 shares with a fair value of $47,904 in settlement of accounts payable in the amount of $39,527 and recognized a loss on the settlement of $8,377.
 
Change in fair value of warrant liabilities
 
Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions. As a result of this reassessment, the Company determined that its functional currency changed from the Canadian dollar (“CAD$”) to the United States dollar (“US$”) for DevvStream Holdings Inc. and DESG. Finco’s functional currency remained CAD$. This change aligns with the business’s future focus and the effective date of the Focus Impact Acquisition Corp.’s Form S-4 Registration Statement with the SEC, a crucial part of the De-SPAC transaction closing.  The change in functional currency was accounted for prospectively from August 1, 2024, with no impact on prior year comparative information. The Company’s presentation currency is and continues to be the United States dollar.
 
Upon the change in functional currency on August 1, 2024, 7,981,668 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities with an initial value of $454,571.
 
As a result of above during the three months ended October 31, 2024, we recognized a loss of $162,396 upon the exercise of 600,000 liability-classified warrants and a loss of $325,736 due to period end fair value remeasurement. The total change in fair value of warrant liability during the three months ended October 31, 2024 was $488,132 (2023 – nil). Please refer to Note 7 of the interim financial statements.

Liquidity and Capital Resources

We continually monitor and manage cash flow to assess the liquidity necessary to fund operations and capital projects. We manage our capital resources and adjust them to take into account changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust our capital resources, we may, where necessary, control the amount of working capital, pursue financing or manage the timing of our capital expenditures. As of October 31, 2024, we had a working capital deficit of $12,177,143 (current assets of $140,374, less current liabilities of $12,317,517) and as of July 31, 2024, we had a working capital deficit of $8,362,363 (current assets of $141,905, less current liabilities of $8,504,268).

Our continuing operations are dependent upon our ability to obtain debt or equity financing until such time that we achieve profitable operations. There can be no assurance that we will gain adequate market acceptance for our products or be able to generate sufficient gross margins to reach profitability.

Since our inception, we have incurred operating losses and have experienced negative cash flows from operations. We do not anticipate that cash on hand will be adequate to satisfy our obligations in the ordinary course of business over the next 12 months. Based on this assessment, we have material uncertainties about our business that may cast substantial doubt about our ability to continue as a going concern. Accordingly, our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures and to meet our obligations. See further discussion related to our ability to continue as a going concern within “— Critical Accounting Policies and Estimates.”

As of October 31, 2024 and July 31, 2024, we had $13,385 and $21,106 in cash, respectively. We are actively managing current cash flows until such time that we are profitable.

The chart below highlights our cash flows for the periods indicated:

​
  
For the
Three Months Ended
October 31, 2024
$
    
For the
Three Months
Ended
October 31, 2023
$
  
Net cash provided by (used in):
            
Operating activities
    
(151,101)

   
(692,321)
Financing activities
    
141,887
      
226,113
  
Effect of exchange rate changes on cash
    
1,493
      
(13,204)

(Decrease)/Increase in cash
    
(7,721)

   
(479,412)

Cash Used in Operating Activities

Our net cash used in operating activities is primarily due to cash payments for operating expenses that we incur in the day-to-day operations of the business. Net cash used in operating activities for the three months ended October 31, 2024 was $151,101 compared to $692,321 for the three months ended October 31, 2023. The loss for the three months ended October 31, 2024 of $4,056,434 was offset by $1,866,072 in changes in working capital items and $2,039,261 in non-cash items consisting mainly of loss on derivative liability. This compares to a loss of $3,372,074 for the prior period, that was offset by $2,216,101 in changes in working capital items and $463,652 in non-cash items consisting mainly of share-based compensation.

Cash Provided by Investing Activities

Net cash provided by investing activities for the three months ended October 31, 2024 and 2023 were $nil.

Cash Provided by Financing Activities

We have funded our business to date from the issuance of our common stock and convertible debentures through private placements, from proceeds from the exercises of warrants, and from loans from related parties.

Net cash provided by financing activities for the three months ended October 31, 2024 was $141,887 compared to $226,113 for the three months ended October 31, 2023. The following financing activities occurred during the three months ended October 31, 2024:

(1)
Exercise of share purchase warrants:

On October 29, 2024, the Company issued 600,000 shares for the exercise of 600,000 share purchase warrants, at an exercise price of CAD$0.20 per share for gross proceeds of $86,237.


 (2)
Non-brokered private placement of unsecured convertible notes:

On August 19, 2024, October 18, 2024 and October 28, 2024, the Company received additional proceeds of $41,500, $6,500 and $7,650 under the amended terms of the Focus Impact Partners convertible debenture.  Refer to Note 5 of our interim financial statements.

In October 2024, the mandatory convertible debentures were converted to 146,786 shares of the Company. Refer to Note 6 of the interim financial statements.

Related party transactions and balances

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities. A transaction is a related party transaction when there is a transfer of resources or obligations between related parties.

At October 31, 2024, the Company had amounts owing and accrued liabilities of $719,679 (July 31, 2024 - $478,072) payable to directors and officers of the Company for salaries, expense reimbursements and professional fees. These amounts are non-interest bearing and have no terms of repayment.

During the year ended July 31, 2024, the Company issued convertible debentures to Devvio and Envviron who are related parties to the Company.  These loans were amended subsequent to October 31, 2024.

During the year ended July 31, 2024, the Company signed an amended strategic partnership agreement with Devvio.

Contractual Obligations

Prepaid Royalties Agreement with Devvio

In September 2023, we agreed to pay prepaid royalty payments to Devvio, a related party, equal to a minimum of $2,270,000, to be paid by August 1, 2025 and $1,270,000 to be paid by August 1, 2026. On July 8, 2024, we further amended the agreement such that the minimum advances extended by one year and are now due as follows: $1,000,000 by August 1, 2025, followed by $1,270,000 by August 1, 2026 and August 1, 2027.

On February 16, 2024, we entered into a licensing agreement with Greenlines Technology Inc. for the use of certain technologies. We agreed to pay $42,000 within 15 days of the closing of the BCA. Commencing January 1, 2025, we must pay an annual fee of $12,000 of the first day of each calendar year for the use of the technology.

Quantitative and Qualitative Disclosures about Market Risk

Our board of directors have overall responsibility for the establishment and oversight of our risk management policies on an annual basis. Management identifies and evaluates our financial risks and is charged with the responsibility of establishing controls and procedures to ensure financial risks are mitigated in accordance with the approved policies.

Our financial instruments consist of cash, GST receivable, accounts payable and accrued liabilities, convertible debt. mandatory convertible debentures, warrant liabilities and derivative liabilities.  The carrying value of the Company’s cash, GST receivable and accounts payable and accrued liabilities approximate their fair value due to their short terms to maturity.

Our risk exposures and the impact on our financial instruments are summarized below:

Credit Risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. Our credit risk is primarily attributable to our liquid financial assets including cash. Our financial assets are cash and GST receivable. Our maximum exposure to credit risk, as at period end, is the carrying value of our financial assets, being $108,941 and $106,764 as of October 31, 2024 and July 31, 2024, respectively. We hold cash with major financial institutions and with a publicly traded payment processing company therefore minimizing our credit risk.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet financial obligations as they fall due. We manage liquidity by maintaining adequate cash balances and by raising equity and debt financings. We have no assurance that such financings will be available on favorable terms in the future. In general, we attempt to avoid exposure to liquidity risk by obtaining corporate financing through the issuance of shares.

As of October 31, 2024, we had cash of $13,385 to settle current contractual liabilities of $9,384,359 which fall due for payment within twelve months of the statement of financial position. As of July 31, 2024, we had cash of $21,106 to settle current contractual liabilities of $7,595,974 which fall due for payment within twelve months of the statement of financial position. All of our contractual obligations are current and due within one year.

Refer to “— Liquidity and Capital Resources” above.

Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect our income or value of holdings or financial instruments. As of October 31, 2024 and July 31, 2024, we had cash denominated in Canadian dollars that is exposed to foreign exchange risk of $18,230 and $20,466, respectively. As of October 31, 2024 and July 31, 2024, a 10% strengthening or weakening in the US dollar against the Canadian dollar with all other variables held constant would have an unfavorable or favorable impact of approximately $1,800 and $2,800, respectively.

Inflation Risk

We do not believe that inflation had a significant impact on our results of operations for any periods presented in our interim financial statements. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs, and our inability or failure to do so could harm our business, financial condition and results of operations.

Capital Management

Capital is comprised of our shareholders’ (deficiency) and any debt that we may issue. Our objectives when managing capital are to maintain financial strength and to protect our ability to meet ongoing liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for our shareholders over the long term. Protecting the ability to pay current and future liabilities includes maintaining capital above minimum regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels. We manage capital structure to maximize financial flexibility by making adjustments in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. We do not presently utilize any quantitative measures to monitor our capital, but rather we rely on our management’s expertise to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis and believes that this approach, given our size, is reasonable.

There were no changes to our approach to capital management during the period. We are not subject to externally imposed capital requirements.

Emerging Growth Company Status

The JOBS Act permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies, and our interim financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of this offering, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Further, even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our share price may be more volatile.

Evaluation of Disclosure of Controls and Procedures

Based on an evaluation as of October 31, 2024, our management, including the Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were not effective to provide reasonable assurance because of a material weakness in our internal control over financial reporting as described below. There have been no changes during the three months ended October 31, 2024.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected in a timely manner.

We did not design or maintain an effective control environment commensurate with financial reporting requirements. Specifically, we did not consistently have documented evidence of review procedures and, due to resource limitations, did not always maintain segregation of duties between preparing and reviewing analyses, and reconciliations.

The above material weakness did not result in a material misstatement of our unaudited condensed consolidated financial statements or our consolidated financial statements, however, it could result in a misstatement of our account balances or disclosures that would result in a material misstatement that would not be prevented or detected.

Remediation Activities

We are working to remediate the material weakness and are taking steps to strengthen our internal control over financial reporting through the continued hiring of additional appropriately skilled finance and accounting personnel with the requisite technical knowledge and skills. With the additional skilled personnel, we are taking appropriate and reasonable steps to remediate this material weakness through the implementation of appropriate segregation of duties, formalization of accounting policies and controls and retention of appropriate expertise for complex accounting transactions. We will not be able to fully remediate these control deficiencies until these steps have been completed and have been operating effectively for a sufficient period of time. Management will continue to review and make necessary changes to the overall design of our internal control environment, as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting. The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded that these controls are operating effectively.

Subsequent Events

Convertible Debt

Focus Impact Partners

On November 1, 2024, the Company received additional proceeds of $12,000, from Focus Impact Partners, under the same terms as the Focus Impact Partners Convertible Debt.

On November 13, 2024, Devvstream Corp issued (i) $3,000,000 of new 5.3% convertible notes to the Focus Impact Sponsor, and (ii) $982,150 of new 5.3% convertible notes to Focus Impact Partners  (together, the “New Convertible Notes”), in exchange for the cancellation and conversion of a $3,000,000 convertible note previously issued by Focus Impact, the Focus Impact Partners Convertible Debt (Note 6) and unpaid fees in the amount of $345,000 which were owed by Focus Impact to Focus Impact Partners. The New Convertible Notes have a maturity date of November 13, 2026. The principal loan amount and any accrued and unpaid interest under the New Convertible Notes are convertible into DevvStream Corp. common shares at the option of the holder at a 25% discount to the 20-day volume weighted average price of the DevvStream Corp. shares, subject to a floor of $0.867 per share.

In connection with the New Convertible Notes, the Company agreed (i) to grant the Secured Parties a first ranking security interest in all of the carbon credits and similar environmental assets held by the Company, presently existing or hereafter created or acquired, and (ii) to execute and deliver to the Secured Parties a security agreement evidencing the Secured Parties’ security interest (the “Security Agreement”). On December 18, 2024, the Company executed and delivered to the Secured Parties the Security Agreement.

Devvio and Environ

On November 12, 2024, the Company amended the Devvio Tranche and the Environn Tranche convertible debentures by extending the maturity date to May 30, 2025.

De-SPAC Transaction

On November 6, 2024, the Company completed a business combination with Focus Impact (referred to as the “De-SPAC” transaction). Upon the completion of the business combination, Focus Impact was renamed DevvStream Corp. In conjunction with the closing of the De-SPAC, each of the DevvStream Holdings Inc. outstanding securities was exchanged for DevvStream Corp. securities on a 1 to 0.152934 basis and each of Focus Impact’s outstanding securities were converted into DevvStream Corp. securities on a 1 to 0.9692 basis. The former shareholders of DevvStream Holding Inc. and Focus Impact received 11,768,884 and 5,159,200 shares of DevvStream Corp., respectively. As such, immediately following the share exchange, former shareholders of DevvStream Holdings Inc. held the majority of the outstanding shares of the Combined Company (DevvStream Corp.), thereby resulting in the De-SPAC transaction being accounted for as a reverse takeover (“RTO”) of Focus Impact by DevvStream Holdings Inc. In conjunction with the transaction, DevvStream Corp. also issued the following securities:

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22,699,984 warrants to the former shareholders of Focus Impact. Each warrant was initially exercisable into 0.9692 shares of DevvStream Corp at $11.86 until November 6, 2029, may be redeemed at the option of the Company and can be exercised on a cashless basis. These warrants contain a clause such that upon a successful business combination, the exercise price will be adjusted based on a specified formula as outlined in the warrant agreement.  On December 6, 2024, DevvStream Corp. issued a notice under the warrant agreement notifying the warrant holders that the exercise price was adjusted to $1.52 per share of DevvStream Corp.;
•
199,064 warrants to the former shareholders of the DevvStream Holdings Inc. which are exercisable at CAD $1.31 until October 7, 2026;
•
586,497 options to the former shareholders of the DevvStream Holdings Inc. which have exercise prices between CAD$5.23 and CAD$7.26 and expiry dates ranging from January 17, 2028 to February 6, 2033; and
•
1,177,296 RSU’s to the former shareholders of the DevvStream Holdings Inc.

As of the issuance of this report, the Company is in the process of gathering additional information to finalize the accounting for this acquisition, including the fair value of the assets acquired and liabilities assumed. The Company expects to provide a detailed acquisition note in its financial statements for the quarter ended January 31, 2025.

Shares Issued for Settlement of Payables

During October 2024, the Company reached agreements with various vendors to settle approximately $5,900,000 of outstanding payables in exchange for shares of Devvstream Corp. as part of the closing of the business combination with Focus Impact.  Concurrent with the closing of the De-SPAC Transaction, 1,187,538 Devvstream Corp. shares were issued in relation to the settlement of accounts payable.

On December 27, 2024, DevvStream Corp. issued 412,478 common shares to certain service providers as consideration for services provided.

Shares Issued for Carbon Credit Purchases

Between October 17, 2024 and October 28, 2024, the Company entered into multiple agreements to acquire carbon credits in return for DevvStream Corp shares once the De-SPAC Transaction was completed. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued 3,249,876 common shares in consideration for these agreements. The agreements contain a mechanism whereby if the Company’s share price drops below 80%-90% of the respective purchase prices outlined in the agreements, in the next 12 to 18 months, the Company is obligated to issue additional shares to cover the shortfall.

Acquisition of Monroe Sequestration Partners (“MSP”)

On October 28, 2024, the Company entered into an agreement to acquire a 50% stake in MSPPIP in exchange for 2,000,000 shares of DevvStream Corp., to be issued upon the completion of the De-SPAC transaction. On November 6, 2024, concurrent with the completion of the business combination, DevvStream Corp issued the 2,000,000 common shares in consideration for 50% interest in MSP.

PIPE Financing

On October 29, 2024, Focus Impact entered into subscription agreements with various investors (“PIPE Shares”). The investors committed to purchase shares of Devvstream Corp. contingent upon the closing of the De-SPAC transaction. If the closing did not occur as expected, Focus Impact was required to return the subscription funds advanced. As part of this arrangement, the Focus Impact Sponsor transferred their Focus Impact Class A shares (“Sponsor Shares”) to the investors in advance of the De-SPAC transaction, representing a portion of the shares subscribed.  As compensation, the Focus Impact Sponsor received replacement shares upon the closing of the De-SPAC transaction for an equal amount. The investors subscribed for a total of $2,250,000 and received 1,547,000 Sponsor Shares prior to the De-SPAC closing. On November 6, upon the closing of the De-SPAC, DevvStream Corp. issued an additional 194,808 PIPE Shares to the investors, which were the remaining shares not previously advanced, and 1,500,000 replacement shares to the Focus Impact Sponsor.

Strategic Consulting Agreement

On November 13, 2024, DevvStream Corp. entered into a strategic consulting agreement with Focus Impact Partners, pursuant to which the Focus Impact Partners will provide DevvStream Corp. with certain consulting services ( “Strategic Consulting Agreement”) in consideration of an annual consulting fee of $500,000, which will be payable in quarterly installments of $125,000 starting with an initial payment for the period beginning December 31, 2023. Fees due under the Strategic Consulting Agreement shall accrue and not be payable until (a) DevvStream Corp. has successfully raised $5,000,000 in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) DevvStream Corp. has 2 or more consecutive quarters of positive cash flow from operations. DevvStream Corp. will pay the Focus Impact Partners additional consulting fees as to be mutually agreed consistent with market practice in connection with any acquisition, merger, consolidation, business combination, sale, divestiture, financing, refinancing, restructuring or other similar transaction.

In connection with signing of the Strategic Consulting Agreement, DevvStream Corp. issued 557,290 common shares. The Strategic Consulting Agreement has a term of three years unless terminated early with at least 120 days advance notice and will be automatically extended for successive one year periods at the end of each year unless either party provide a written notice of its desire not to automatically extend at least 120 days prior to the end of each year during the term of the Strategic Consulting Agreement.

Equity Line of Credit Purchase (“ELOC”) Agreement

On October 29, 2024, Focus Impact entered into the ELOC Agreement with Helena Global Investment Opportunities I Ltd (“Helena I”). Under the ELOC Agreement, DevvStream Corp. will have the right to issue and to sell to Helena I from time to time, up to $40,000,000 of DevvStream Corp. common shares following the closing of the De-SPAC Transaction and the effectiveness of the registration statement registering the DevvStream Corp. common shares being sold under the ELOC Agreement (the “Helena I Registration Statement”). As a commitment fee in connection with the execution of the ELOC Agreement, the Focus Impact Sponsor transferred 515,889 Sponsor Shares of Focus Impact to Helena I.  As compensation, the Focus Impact Sponsor received 500,000 replacement shares of DevvStream Corp. upon closing of the De-SPAC transaction. Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming effective, DevvStream Corp. will issue to Helena I common shares equal to $125,000 divided by the greater of (i) the lowest one-day VWAP during the five trading days immediately preceding the effectiveness date of such Registration Statement and (ii) $0.75.

NASDAQ Listing
 
On February 12, 2025, DevvStream Corp. received a notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company’s common stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share. The Company has 180 calendar days, or by August 13, 2025, to regain compliance with the minimum bid price requirement but could be eligible for an additional 180-day compliance period.


Exhibit 99.7

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this Form 8-K/A.

Introduction

The unaudited pro forma combined financial information of New PubCo has been prepared in accordance with Article 11 of Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses,” and presents the combination of the historical financial information of FIAC and DevvStream as adjusted to give effect to the Business Combination and the other related events contemplated by the Business Combination Agreement. The unaudited pro forma combined financial information also gives effect to certain completed or probable transactions to be consummated by FIAC and DevvStream that are not yet reflected in the historical financial information of FIAC or DevvStream and are considered material to investors. These material transactions are described below in the section entitled “- Other Related Events in Connection with the Business Combination” below.

FIAC is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. FIAC was incorporated under the laws of the State of Delaware on February 23, 2021. The registration statement for FIAC’s IPO was declared effective on October 27, 2021. On November 1, 2021, FIAC consummated its IPO of 23,000,000 FIAC Units, which included the full exercise of the underwriters’ option to purchase an additional 3,000,000 FIAC Units at the IPO price to cover over-allotments. Each Unit consists of one share of Class A Common Stock and one-half of one FIAC Warrant, with each whole FIAC Warrant entitling the holder thereof to purchase one share of Class A Common Stock at an exercise price of $11.50 per share, subject to adjustment. The FIAC Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $230,000,000. Simultaneously with the closing of IPO, FIAC completed the private sale of 11,200,000 Private Placement Warrants at a purchase price of $1.00 per Private Placement Warrant to the Sponsor, generating gross proceeds to FIAC of $11,200,000.

Upon the closing of the IPO (including the full exercise of the underwriters’ over-allotment option) and the concurrent Private Placement, $234,600,000 was placed in the Trust Account, representing the aggregate redemption value of the Class A Common Stock sold in the IPO, at their redemption value of $10.20 per share.

On April 25, 2023, FIAC held a special meeting of stockholders (the “Extension Meeting”) to amend FIAC’s amended and restated certificate of incorporation to (i) extend the Termination Date by which FIAC has to consummate a Business Combination from May 1, 2023 (the “Original Termination Date”) to August 1, 2023 (the “Charter Extension Date”) and to allow FIAC, without another shareholder vote, to elect to extend the Termination Date to consummate a Business Combination on a monthly basis for up to nine times by an additional one month each time after the Charter Extension Date, by resolution of the FIAC Board if requested by the Sponsor, and upon five days’ advance notice prior to the applicable Termination Date, until May 1, 2024, or a total of up to twelve months after the Original Termination Date, unless the closing of FIAC’s initial Business Combination shall have occurred prior to such date (such amendment, the “Extension Amendment” and such proposal, the “Extension Amendment Proposal”) and (ii) remove the limitation that FIAC may not redeem shares of public stock to the extent that such redemption would result in FIAC having net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Securities Exchange Act of 1934, as amended), of less than $5,000,000 (such amendment, the “Redemption Limitation Amendment” and such proposal, the “Redemption Limitation Amendment Proposal”). The stockholders of FIAC approved the Extension Amendment Proposal and the Redemption Limitation Amendment at the Extension Meeting on April 26, 2023.

In connection with the First Extension Meeting, the holders of 17,297,209 shares of Class A Common Stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.40 per share, for an aggregate redemption amount of $179,860,588. In connection with the Second Extension Meeting, the holders of 3,985,213 shares of Class A Common Stock properly exercised their right to redeem their shares for cash at a redemption price of approximately $10.95 per share, for an aggregate redemption amount of $43,640,022.

In connection with the First Extension Meeting, on May 9, 2023, FIAC issued an unsecured promissory note in the total principal amount of up to $1,500,000 (the “Promissory Note”) to the Sponsor, and the Sponsor funded the initial principal amount of $487,500 and, as of December 31, 2023, $1,500,000 was outstanding. Such funds have been deposited into the Trust Account. The Promissory Note does not bear interest and matures upon closing of the FIAC’s initial Business Combination. In the event that FIAC does not consummate a Business Combination, the Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. Up to the total principal amount of the Promissory Note may be converted, in whole or in part, at the option of the Lender into warrants of the Company at a price of $1.00 per warrant, which warrants will be identical to the Private Placement Warrants issued to the Sponsor at the time of the IPO.

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In connection with the Second Extension Meeting, on December 1, 2023, the Company issued an unsecured promissory note in the total principal amount of up to $1,500,000 (the “Second Promissory Note”) to the Sponsor and the Sponsor funded deposits into the Trust Account. The Second Promissory Note does not bear interest and matures upon closing of the Company’s initial Business Combination. In the event that the Company does not consummate a Business Combination, the Second Promissory Note will be repaid only from amounts remaining outside of the Trust Account, if any. As of September 30, 2024, an aggregate of $1,475,000 has been drawn under the Second Promissory Note.

Proceeds from promissory notes of $2,975,000 (and related uses) through September 30, 2024 are reflected in FIAC’s historical financial statements presented in the unaudited pro forma condensed combined financial information. Proceeds received and related uses after September 30, 2024 are not reflected in the unaudited condensed consolidated pro forma financial information.

DevvStream is a capex-light carbon credit generation company focused on high-quality and high-return technology-based projects. DevvStream offers investors exposure to carbon credits, a key instrument used to offset emissions of carbon dioxide from industrial activities to reduce the effects of global warming.

FIAC and DevvStream have different fiscal year ends. DevvStream’s fiscal year end is the last day in July, or July 31st, and FIAC’s fiscal year end is December 31st. As the fiscal years differ by more than 93 days, pursuant to Rule 11- 02(c)(3) of Regulation S-X for the purposes of presenting the unaudited pro forma condensed combined financial information, the fiscal year end of DevvStream has been conformed to the fiscal year end of FIAC. Following the consummation of the Business Combination, New PubCo will have a July 31st fiscal year end.

The unaudited pro forma combined balance sheet as of October 31, 2024 combines the historical unaudited balance sheet of FIAC as of September 30, 2024, with the historical unaudited consolidated balance sheet of DevvStream as of October 31, 2024, on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on October 31, 2024.

The unaudited pro forma combined statement of operations for the twelve months ended July 31, 2024 combines the historical unaudited statement of operations of FIAC for the twelve months ended September 30, 2024 with the historical audited statement of operations of DevvStream for the 12 months ended July 31, 2024 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on August 1, 2023, the beginning of the earliest period presented.

The 12-month period of FIAC’s historical statement of operations ending on September 30, 2024 is calculated by taking the unaudited statement of operations results of FIAC for the nine months ended September 30, 2024 and adding the consolidated statements of operations and comprehensive loss of FIAC for the year ended December 31, 2023 and subtracting the unaudited statement of operations results of FIAC for the nine months ended September 30, 2023.

The unaudited pro forma combined statement of operations for the three months ended October 31, 2024 combines the historical unaudited statement of operations of FIAC for the three months ended September 30, 2024 with the historical unaudited statement of operations of DevvStream for the three months ended October 31, 2024 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on August 1, 2024, the beginning of the earliest period presented.

The unaudited pro forma combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in this proxy statement/prospectus:

•
the historical audited financial statements of FIAC for the fiscal year ended December 31, 2023;

•
the historical unaudited financial statements of FIAC as of and for the nine months ended September 30, 2024;

•
the historical audited financial statements of Devvstream for the fiscal year ended July 31, 2024;

•
the historical unaudited interim condensed consolidated financial statements of DevvStream as of October 31, 2024; and

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•
other information relating to FIAC and DevvStream included in this Form 8-K/A, including the Business Combination Agreement and the description of certain terms thereof set forth under the section entitled “The Business Combination Proposal (Proposal 1).”

The unaudited pro forma combined financial information should also be read together with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FIAC,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream,” and other financial information included elsewhere in this proxy statement/prospectus.

Description of the Business Combination

On September 12, 2023, FIAC entered into the Initial Business Combination Agreement, which was subsequently amended on May 1, 2024, August 10, 2024 and October 29, 2024 by and among FIAC, Amalco Sub and DevvStream. Pursuant to the Business Combination Agreement, among other things:

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Prior to the Effective Time, FIAC will affect the SPAC Continuance and change its name to New PubCo. following the SPAC Continuance, and in accordance with the applicable provisions of the Plan of Arrangement and the BCBCA.

•
The exchange of all 76,954,288 DevvStream Company Shares issued and outstanding immediately prior to the Effective Time for 11,747,809 ,  11,747,809, and 11,747,809 of New PubCo Common Shares in the no redemptions, 50% redemptions, and maximum redemption scenarios, respectively, as adjusted by the Common Conversion Ratio.

•
The cancellation and conversion of 4,105,000 Company Options and 7,832,038 Company RSUs issued and outstanding immediately prior to the Effective Time into  626,668, 626,668, and 626,668 Converted Options and  1,195,636, 1,195,636, 1,195,636 Converted RSUs in the no redemptions, 50% redemptions, and maximum redemption scenarios, respectively. Unvested Company Options and Company RSUs will accelerate and vest immediately upon the consummation of the Business Combination.

•
The exchange of 8,089,018 Company Warrants issued and outstanding immediately prior to the Effective Time for  1,234,866,  1,234,866, and  1,234,866 of Converted Warrants in the no redemptions, 50% redemptions, and maximum redemption scenarios, respectively. The Converted Warrants shall become exercisable into New PubCo Common Shares in an amount equal to the Company Shares underlying such Company Warrant multiplied by the Common Conversion Ratio (and at an adjusted exercise price equal to the exercise price for such Company Warrant prior to the Effective Time divided by the Common Conversion Ratio).

Other Related Events in Connection with the Business Combination

Other related events that are contemplated to occur in connection with the Business Combination are summarized below:

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The DevvStream management team is still in the process of negotiating a PIPE financing up to gross proceeds of $2.5 million to support the combined company at closing (the “PIPE Financing”). Since an agreement has not been completed, any proposed PIPE Financing is excluded from these pro forma financial statements. However, if suitable terms for a PIPE Financing cannot be reached, there is a probability there will be insufficient cash in the maximum redemption scenario. This would necessitate the settlement of the Sponsor Working Capital Loan in Private Placement Warrants, along with the recording of accrued expenses in the accompanying pro forma condensed combined balance sheet.

•
DevvStream is in the process of issuing Convertible Bridge Notes, of which $1.0 million has been issued as of October 31, 2024, in accordance with Section 2.12(f) of the Initial Business Combination Agreement and the Convertible Bridge Notes Subscription Agreements. The principal loan amount and all accrued interest for the Convertible Bridge Notes is payable in cash, or may be converted, at each holder’s sole option, into Subordinated Voting Company Shares effective immediately upon Closing. For more information regarding the Convertible Bridge Notes, see the section of this proxy statement/prospectus titled “Certain Relationships and Related Person Transactions - DevvStream - Convertible Bridge Financing.” We have assumed for purposes of this disclosure that these Convertible Bridge Notes will be fully settled and paid in cash upon the consummation of the Business Combination. The Convertible Bridge Notes are referred to as the “Financing Transactions.”

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•
In connection with the Business Combination, DevvStream and FIAC are expected to pay $13.4 million of transaction costs and an additional $2.9 million for the repayment of the Sponsor Working Capital Loans and $0.3 million for the settlement of Sponsor accrued administrative fees. In the maximum redemption scenario, there will not be sufficient cash to pay these fees at closing, no transaction expenses are paid at closing, and $13.4 million is recorded as accrued fees in the accompanying pro forma condensed balance sheet. Furthermore, within the context of the maximum redemption scenario, the First Sponsor Working Capital Loan is settled through the exchange for 1,500,000 Private Placement Warrants.

Expected Accounting Treatment of the Business Combination

We expect the Business Combination to be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, FIAC is expected to be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of New PubCo will represent a continuation of the financial statements of DevvStream with the Business Combination treated as the equivalent of DevvStream issuing shares for the net assets of FIAC, accompanied by a recapitalization whereby no goodwill or other intangible assets are recorded. Operations prior to the Closing will be those of DevvStream in future reports of New PubCo. DevvStream has been determined to be the accounting acquirer based on evaluation of the following facts and circumstances under each of the no redemptions, 50% redemptions and maximum redemptions scenarios:

•
DevvStream Shareholders will have the largest portion of the voting power of New PubCo;

•
DevvStream Shareholders will have the ability to nominate a majority of the members of the New PubCo Board;

•
DevvStream senior management will comprise the senior management roles of New PubCo and be responsible for the day-to-day operations;

•
New PubCo will assume the DevvStream name as DevvStream Corp.; and

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The intended strategy and operations of New PubCo will continue DevvStream’s current strategy and operations in the post-combination company.

We currently expect the FIAC Warrants and Private Placement Warrants to remain liability classified instruments upon the Closing. New PubCo has preliminarily evaluated the accounting for the Company Warrants, which shall be converted into warrants to purchase shares of New PubCo in accordance with the requirements of ASC 480 and ASC 815-40-15. For purposes of the unaudited pro forma condensed combined financial information, the New PubCo Warrants are classified as permanent equity. However, the evaluation and finalization of accounting conclusions including, but not limited to, classification of the instrument, impact to earnings per share, analysis of any potential embedded derivatives and the impact to other preferred/equity units are ongoing and subject to change.

Basis of Pro Forma Presentation

The unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X. The adjustments in the unaudited pro forma combined financial information have been identified and presented to provide relevant information necessary for an illustrative understanding of New PubCo upon consummation of the Business Combination. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma combined financial information are described in the accompanying notes.

The unaudited pro forma combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Business Combination occurred on the dates indicated, nor does it reflect adjustments for any anticipated synergies, operating efficiencies, tax savings or cost savings. Any cash proceeds remaining after the consummation of the Business Combination and the other related events contemplated by the Business Combination Agreement are expected to be used for general corporate purposes. The unaudited pro forma combined financial information does not purport to project the future operating results or financial position of New PubCo following the consummation of the Business Combination. The unaudited pro forma adjustments represent management’s estimates based on information available as of the date of these unaudited pro forma combined financial statements and are subject to change as additional information becomes available and analyses are performed. FIAC and DevvStream have not had any historical operational relationship prior to the Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

54
The unaudited pro forma combined financial information contained herein assumes that the FIAC stockholders approve the Business Combination on the terms and conditions set forth in the Business Combination Agreement. Pursuant to the current certificate of incorporation, FIAC’s public stockholders may elect to redeem their Public Shares for cash even if they approve the Business Combination. FIAC cannot predict how many of its public stockholders will exercise their right to redeem their shares of Class A Common Stocks for cash. The unaudited pro forma combined financial information has been prepared assuming three redemption scenarios after giving effect to the Business Combination, as follows:

•
Assuming No Redemptions: Assuming that no holders of Class A Common Stock exercise redemption rights with respect to their shares for a pro rata share of the funds in the Trust Account.

•
Assuming 50% Redemptions: Assuming that FIAC stockholders holding 858,789 of the Public Shares subject to redemption (prior to the application of the Reverse Split Factor) will exercise their redemption rights for their pro rata share (approximately $11.24 per share) of the funds in the Trust Account. This scenario gives effect to Public Share redemptions for aggregate redemption payments of approximately $9.7 million using a per share redemption price of $11.24 per share.

•
Assuming Maximum Redemptions: Assuming that FIAC stockholders holding 1,717,578 of the Public Shares subject to redemption (prior to the application of the Reverse Split Factor) will exercise their redemption rights for their pro rata share (approximately $11.24 per share) of the funds in the Trust Account. This scenario gives effect to Public Share redemptions for aggregate redemption payments of approximately $19.3 million using a per share redemption price of $11.24 per share. Additionally, due to the cash constraints in the maximum redemption scenario, the First Sponsor Working Capital Loan is expected to be settled in exchange for 1,500,000 Private Placement Warrants.

The public stockholder redemptions are expected to be within the parameters described by the above three scenarios. However, there can be no assurance regarding which scenario will be closest to the actual results.

The following summarizes the pro forma New PubCo Common Shares issued and outstanding immediately after the Business Combination, presented under the three assumed redemption scenarios:
 
  
Share Ownership in DevvStream Holdings Inc.(1)
  
 
  
Pro Forma Combined
(Assuming No Redemptions)(2)
    
Pro Forma Combined
(Assuming 50% Redemptions)(3)
    
Pro Forma Combined
(Assuming Maximum Redemptions)(4)(5)
  
 
  
Number of Shares
    
% Ownership
    
Number of Shares
    
% Ownership
    
Number of Shares
    
% Ownership
  
Sponsor and initial FIAC shareholders(6)(7)
    
5,086,324
      
27.5
%
    
5,086,324
      
28.8
%
    
5,086,324
      
30.2
%
FIAC public shareholders(8)
    
1,688,150
      
9.1
%
    
844,075
      
4.8
%
    
-
      
0.0
%
Former DevvStream shareholders(9)
    
11,747,809
      
63.4
%
    
11,747,809
      
66.4
%
    
11,747,809
      
69.8
%
Former DevvStream Convertible Note Holders
    
-
      
0.0
%
    
-
      
0.0
%
    
-
      
0.0
%
Total
    
18,522,283
      
100.0
%
    
17,678,208
      
100.0
%
    
16,834,133
      
100.0
%

(1)
Assumes a Reverse Split Factor of 0.9829, based on the closing price of the Subordinated Voting Company Shares on the Cboe Canada, as of October 31, 2024, converted into United States dollars based on the Bank of Canada daily exchange rate as of October 31, 2024.
(2)
Assumes that no Class A Common Stock is redeemed.
(3)
Assumes 50% of the shares of Class A Common Stock are redeemed for aggregate redemption payments of approximately $9.7 million, assuming a $11.24 per share redemption price and based on shares subject to redemption (prior to the application of the Reverse Split Factor) and funds in the Trust Account as of September 30, 2024.
(4)
Assumes the maximum amount of shares of Class A Common Stock are redeemed for aggregate redemption payments of approximately $19.3 million, assuming a $11.24 per share redemption price and based on shares subject to redemption (prior to the application of the Reverse Split Factor) and funds in the Trust Account as of September 30, 2024.
(5)
Excludes the 1,075,204 Private Placement Warrants exchanged for the payment of the First Sponsor Working Capital Loan, given the expectation that these warrants will not be in the money at the time of closing.
(6)
Includes 1,725,328 Founder Shares held by FIAC’s Sponsor, 862,664 Founder Shares held by other investors that will convert into New PubCo Common Shares.
(7)
Excludes 5,601,064 Private Placement Warrants as the warrants are not expected to be in the money at Closing.
(8)
Excludes 5,751,092 FIAC Warrants as the warrants are not expected to be in the money at Closing.
(9)
Excludes shares underlying (i) Legacy Warrants, which will be exercisable for 1,234,866 shares at a weighted average exercise price of $9.29 per share, (ii) Converted Options, which will be exercisable for 626,668 shares at a weighted average exercise price of $7.87 per share and (iii) 1,195,636 Converted RSUs, as well as shares available for future issuance pursuant to the proposed Equity Incentive Plan.

All of the relative percentages above are for illustrative purposes only and are based upon certain assumptions. Should one or more of the assumptions prove incorrect, actual beneficial ownership percentages may vary materially from those described in this proxy statement/prospectus as anticipated, believed, estimated, expected or intended.

56
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
As of October 31, 2024
(in thousands)

 
                              
Assuming No
Redemptions
    
Assuming 50%
Redemptions
    
Assuming Maximum
Redemptions
  
 
  
Focus
Impact
Acquisition
Corp.
(Historical)
    
Devv
Stream
Holdings
Inc.
(Historical)
    
Devv
Stream
Shareholders'
Extension
Redemptions
    
Financing
Transaction
Adjustments
        
Transaction
Accounting
Adjustments
        
Pro
Forma
Combined
    
Transaction
Accounting
Adjustments
        
Pro
Forma
Combined
    
Transaction
Accounting
Adjustments
        
Pro
Forma
Combined
  
Assets
                                                                            
Current assets:
                                                                            
Cash
  
$
2
    
$
13
          
$
50
    
A
  
$
1,616
    
B
  
$
1,681
    
$
(541
)
  
B
  
$
(476
 )
  
$
(65
)
  
B
  
$
-
  
Restricted Cash
    
26
      
-
            
-
          
-
          
26
      
-
          
26
      
-
          
26
  
Income tax receivable
    
172
      
-
            
-
          
-
          
172
      
-
          
172
      
-
          
172
  
GST receivable
    
-
      
96
            
-
          
-
          
96
      
-
          
96
      
-
          
96
  
Prepaid expenses
    
8
      
31
            
-
          
-
          
39
      
-
          
39
      
-
          
39
  
Total current assets
    
208
      
140
    
-
      
50
          
1,616
          
2,014
      
(541
)
        
(143
)
    
(65
)
        
333
  
Equipment
    
-
      
1
    
       
-
        
$
-
        
$
1
      
-
          
1
      
-
          
1
  
Prepaid expenses, non-current
    
-
      
-
    
       
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Investment held in Trust Account
    
19,307
      
-
    
-
      
-
          
(19,307
)
  
C
    
-
      
(19,307
)
  
C
    
-
      
(19,307
)
  
C
    
-
  
Total assets
  
$
19,515
    
$
141
    
$
0
    
$
50
        
$
(17,691
)
      
$
2,015
    
$
(19,848
)
      
$
(142
)
  
$
(19,372
)
      
$
334
  
 
                  
                                                                           
Liabilities and Shareholders' Equity
                  
                                                                           
Current liabilities:
                  
                                                                           
Accounts payable and accrued liabilities
    
7,283
      
8,409
    
       
-
          
(15,691
)
  
D
  
$
1
      
(18,023
)
  
D
  
$
(2,331
)
    
(2,481
)
  
D
  
$
13,211
  
Convertible debenture
    
-
      
941
    
       
50
    
A
    
(991
)
  
E
    
-
      
(991
)
  
E
    
-
      
(50
)
  
E
    
941
  
Mandatory convertible debentures
    
-
      
-
    
       
-
          
-
    
E
    
-
      
-
    
E
    
-
      
-
          
-
  
Derivative liability
    
-
      
2,321
    
       
-
          
(2,321
)
  
E
    
-
      
(2.321
)
  
E
    
-
      
-
          
2,321
  
Due to related party
    
-
      
-
    
       
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Due to Sponsor
    
330
      
-
    
       
-
          
(330
)
  
D
    
-
      
(330
)
  
D
    
-
      
(15
)
  
D
    
315
  
Franchise taxes payable
    
30
      
-
    
       
-
          
-
          
30
      
-
          
30
      
-
          
30
  
Income taxes payable
    
-
      
-
    
       
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Excise tax payable
    
2,235
      
-
    
       
-
          
-
    
D
    
2,235
      
97
    
D
    
2,332
      
193
    
D
    
2,428
  
Warrant liability
    
-
      
647
    
-
      
-
          
-
          
647
      
-
          
647
      
-
          
647
  
Redemption payable
    
-
      
-
    
-
      
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Promissory note - related party
    
2,975
      
-
    
       
-
          
(2,975
)
  
D
    
-
      
(2,975
)
  
D
    
-
      
(1,500
)
  
D
    
1,475
  
Total current liabilities
    
12,853
      
12,318
    
-
      
50
          
(22,308
)
        
2,913
      
(24,543
)
        
678
      
(3,853
)
        
21,368
  
Warrant liability
    
681
      
-
    
       
-
          
-
          
681
      
-
          
681
      
60
          
741
  
Marketing agreement
    
150
      
-
    
       
-
          
(150
)
  
D
    
-
      
(150
)
  
D
    
-
      
-
    
D
    
150
  
Deferred underwriting commissions
    
-
      
-
    
       
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Note Payable
    
-
      
-
    
       
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Total liabilities
    
13,684
      
12,318
    
-
      
50
          
(22,458
)
        
3,594
      
(24,693
)
        
1,359
      
(3,793
)
        
22,259
  
Commitments and contingencies:
                  
                                                                           
Class A common stock subject to possible redemption
    
19,479
      
-
    
       
-
          
(19,479
)
  
F
    
-
      
(19,479
)
  
F
    
-
      
(19,479
)
  
F
    
-
  
 
                                                                                                
Equity:
                                                                                                
Preferred Equity
    
-
      
-
              
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Class A common Stock
    
1
      
-
              
-
          
1
    
G
    
2
      
1
    
G
    
2
      
1
    
G
    
2
  
Class B common stock
    
-
      
-
              
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Additional paid in capital
    
-
      
13,561
              
-
          
8,562
    
H
    
22,123
      
8,640
    
H
    
22,201
      
(10,938
)
  
H
    
2,623
  
Common Shares
    
-
      
-
              
-
          
-
          
-
      
-
          
-
      
-
          
-
  
Accumulated other comprehensive loss
    
-
      
45
              
-
          
-
          
45
      
-
          
45
      
-
          
45
  
Deficit
    
(13,649
)
    
(25,783
)
            
-
          
15,683
    
I
    
(23,749
)
    
15,683
    
I
    
(23,749
)
    
14,837
    
I
    
(24,595
)
Total shareholders' equity
    
(13,648
)
    
(12,177
)
    
-
      
-
          
24,246
          
(1,579
)
    
24,324
          
(1,501
)
    
3,900
          
(21,925
)
Total liabilities and shareholders' equity
  
$
19,515
    
$
141
      
-
    
$
50
        
$
(17,691
)
      
$
2,015
    
$
(19,848
)
      
$
(142
)
  
$
(19,372
)
      
$
334
  

57
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the 3 Months Ended October 31, 2024
(in thousands, except share data)

 
                
Assuming No
Redemption
    
Assuming 50%
Redemptions
    
Assuming Maximum
Redemptions
  
 
    
Focus
Impact Acquisition Corp.
(Historical)
    
Devv
Stream Holdings
Inc.
(Historical)
    
Transaction Accounting Adjustments
  
 
    
Pro
Forma Combined
    
Transaction Accounting Adjustments
  
 
    
Pro
Forma
Combined
    
Transaction Accounting Adjustments
  
 
    
Pro
Forma Combined
  
 
                    
 
              
 
              
 
        
Operating expenses:
                    
 
              
 
              
 
        
Operating costs
      
1,373
      
-
      
(1,373
)
 
J
    
-
      
(1,373
)
 
J
    
-
      
(1,373
)
 
J
    
-
  
Sales and marketing
      
-
      
272
      
-
  
 
      
272
      
-
  
 
      
272
      
-
  
 
      
272
  
Depreciation
      
-
      
-
      
-
  
 
      
-
      
-
  
 
      
-
      
-
  
 
      
-
  
General and administrative
      
-
      
57
      
1,373
  
 
J
    
1,430
      
1,373
  
 
J
    
1,430
      
1,373
  
 
J
    
1,430
  
License fee
      
-
      
-
      
-
  
 
      
-
      
-
  
 
      
-
      
-
  
 
      
-
  
Professional fees
      
-
      
1,409
      
-
  
 
      
1,409
      
-
  
 
      
1,409
      
-
  
 
      
1,409
  
Salaries and wages
      
-
      
488
      
-
  
 
      
488
      
-
  
 
      
488
      
-
  
 
      
488
  
Share-based compensation
      
-
      
-
      
-
  
 
      
-
      
-
  
 
      
-
      
-
  
 
      
-
  
Total operating expenses
      
1,373
      
2,226
      
-
  
 
      
3,599
      
-
  
 
      
3,599
      
-
  
 
      
3,599
  
Other income
                          
 
                  
 
                  
 
          
Other Income (expense)
      
-
      
-
      
-
  
 
      
-
      
-
  
 
      
-
      
-
  
 
      
-
  
Interest and accretion expense
      
-
      
(57
)
    
0
  
 
J
    
(57
)
    
0
  
 
J
    
(57
)
    
0
  
 
J
    
(57
)
Unrealized loss on derivative liability
      
-
      
(1,348
)
    
1,348
  
 
O
    
-
      
1,348
  
 
O
    
-
      
1,348
  
 
O
    
-
  
Foreign exchange gain (loss)
      
-
      
2
      
-
  
 
      
2
      
-
  
 
      
2
      
-
  
 
      
2
  
Unrealized gain on mandatory convertible debentures
      
-
      
71
      
-
  
 
      
71
      
-
  
 
      
71
      
-
  
 
      
71
  
Loss on impairment
      
-
      
-
      
-
  
 
      
-
      
-
  
 
      
-
      
-
  
 
      
-
  
Loss on settlement of accounts payable
      
-
      
(8
)
    
-
  
 
      
(8
)
    
-
  
 
      
(8
)
    
-
  
 
      
(8
)
Recovery of offering costs allocated to warrants
      
-
      
-
      
-
  
 
      
-
      
-
  
 
      
-
      
-
  
 
      
-
  
Change in fair value of warrant liabilities
      
227
       (488 )
    
-
  
 
N
    
(261
 )
    
-
  
 
N
     (261 )
    
(30
)
 
N
    
(291
 )
Operating account interest income
      
0
      
-
      
(0
)
 
J
    
-
      
(0
)
 
J
    
-
      
(0
)
 
J
    
-
  
Income from trust account
      
175
      
-
      
(175
)
 
K
    
-
      
(175
)
 
K
    
-
      
(175
)
 
K
    
-
  
Total other income
      
402
      
(1,828
)
    
1,173
  
 
      
(253
 )
    
1,173
  
 
       (253 )
    
1,144
  
 
       (283 )
Income before provision for income taxes
      
(971
)
    
(4,054
)
    
1,173
  
 
      
(3,851
)
    
1,173
  
 
      
(3,851
)
    
1,144
  
 
      
(3,881
)
Provision for income taxes
      
(41
)
    
-
      
-
  
 
L
    
(41
)
    
-
  
 
L
    
(41
)
    
-
  
 
L
    
(41
)
Net (loss) income
    
$
(1,012
)
  
$
(4,054
)
  
$
1,173
  
 
    
$
(3,892
)
  
$
1,173
  
 
    
$
(3,892
)
  
$
1,144
  
 
    
$
(3,922
)
 
                          
 
                  
 
                  
 
          
Pro Forma Earnings Per Share
                          
 
                  
 
                  
 
          
Basic
                          
 
    
$
(0.21
)
        
 
    
$
(0.22
)
        
 
    
$
(0.23
)
Diluted
                          
 
    
$
(0.21
)
        
 
    
$
(0.22
)
        
 
    
$
(0.23
)
Pro Forma Number of Shares Used in Computing EPS
                          
 
                  
 
                  
 
          
Basic (#)
                          
 
      
18,522,283
          
 
      
17,678,208
          
 
      
16,834,133
  
Diluted (#)
                          
 
      
18,522,283
          
 
      
17,678,208
          
 
      
16,834,133
  

58
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
For the Twelve Months Ended July 31, 2024
(in thousands, except share data)

 
                
Assuming No
Redemptions
    
Assuming 50%
Redemptions
    
Assuming Maximum
Redemptions
  
 
    
Focus
Impact
Acquisition
Corp.
(Historical)
    
Devv
Stream
Holdings
Inc.
(Historical)
    
Transaction Accounting Adjustments
        
Pro
Forma
Combined
    
Transaction Accounting Adjustments
        
Pro
Forma
Combined
    
Transaction Accounting Adjustments
        
Pro
Forma
Combined
  
 
                                                              
Operating expenses:
                                                              
Operating costs
      
5,258
      
-
      
(5,258
)
  
J
    
-
      
(5,258
)
  
J
    
-
      
(5,258
)
  
J
    
-
  
Sales and marketing
      
-
      
481
      
-
          
481
      
-
          
481
      
-
          
481
  
Depreciation
      
-
      
2
      
-
          
2
      
-
          
2
      
-
          
2
  
General and administrative
      
-
      
461
      
5,258
    
J
    
5,719
      
5,258
    
J
    
5,719
      
5,258
    
J
    
5,719
  
License fee
      
-
      
-
      
-
          
-
      
-
          
-
      
-
          
-
  
Professional fees
      
-
      
5,656
      
-
          
5,656
      
-
          
5,656
      
-
          
5,656
  
Salaries and wages
      
-
      
2,136
      
-
          
2,136
      
-
          
2,136
      
-
          
2,136
  
Share-based compensation
      
-
      
-
      
-
          
-
      
-
          
-
      
-
          
-
  
Total operating expenses
      
5,258
      
8,736
      
-
          
13,994
      
-
          
13,994
      
-
          
13,994
  
Other income
                                                                              
Other Income (expense)
      
-
      
-
      
(252
)
  
M
    
(252
)
    
(252
)
  
M
    
(252
)
    
(252
)
  
M
    
(252
)
Interest and accretion expense
      
-
      
(82
)
    
3
    
J
    
(79
)
    
3
    
J
    
(79
)
    
1,443
    
J
    
1,361
  
Unrealized loss on derivative liability
      
-
      
(846
)
    
3,132
    
O
    
2,286
      
3,132
    
O
    
2,286
      
3,132
          
2,286
  
Foreign exchange gain (loss)
      
-
      
(108
)
    
-
          
(108
)
    
-
          
(108
)
    
-
          
(108
)
Unrealized loss on mandatory convertible debentures
      
-
      
(28
)
    
-
          
(28
)
    
-
          
(28
)
    
-
          
(28
)
Loss on impairment
      
-
      
-
      
-
          
-
      
-
          
-
      
-
          
-
  
Gain on forgiveness of accounts payable
      
-
      
-
      
-
          
-
      
-
          
-
      
-
          
-
  
Recovery of offering costs allocated to warrants
      
-
      
-
      
-
          
-
      
-
          
-
      
-
          
-
  
Change in fair value of warrant liabilities
      
1,135
      
-
      
-
    
N
    
1,135
      
-
    
N
    
1,135
      
89
    
N
    
1,224
  
Operating account interest income
      
3
      
-
      
(3
)
  
J
    
-
      
(3
)
  
J
    
-
      
(3
)
  
J
    
-
  
Income from trust account
      
1,390
      
-
      
(1,390
)
  
K
    
-
      
(1,390
)
  
K
    
-
      
(1,390
)
  
K
    
-
  
Total other income
      
2,528
      
(1,064
)
    
1,489
          
2,954
      
1,489
          
2,954
      
3,019
          
4,483
  
Income before provision for income taxes
      
(2,730
)
    
(9,800
)
    
1,489
          
(11,040
)
    
1,489
          
(11,040
)
    
3,019
          
(9,511
)
Provision for income taxes
       (391 )
    
(73
 )
     -
 
L
    
(464
 )
    
-
    
L
    
(464
 )
    
-
    
L
    
(464
 )
Net (loss) income
    
$
(3,120
)
  
$
(9,873
)
  
$
1,489
        
$
(11,504
)
  
$
1,489
        
$
(11,504
)
  
$
3,019
        
$
(9,975
)
 
                                                                              
Pro Forma Earnings Per Share
                                                                              
Basic
                                
$
(0.62
)
              
$
(0.65
)
              
$
(0.59
)
Diluted
                                
$
(0.62
)
              
$
(0.65
)
              
$
(0.59
)
Pro Forma Number of Shares Used in Computing EPS
                                                                              
Basic (#)
                                  
18,522,283
                  
17,678,208
                  
16,834,133
  
Diluted (#)
                                  
18,522,283
                  
17,678,208
                  
16,834,133
  

59
NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

1. Basis of Presentation

The Business Combination will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, FIAC will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the financial statements of New PubCo will represent a continuation of the financial statements of DevvStream with the Business Combination treated as the equivalent of DevvStream issuing shares for the net assets of FIAC, accompanied by a recapitalization. The net assets of FIAC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of DevvStream in future reports of New PubCo.

FIAC and DevvStream have different fiscal year ends. DevvStream’s fiscal year end is the last day in July, or July 31st, and FIAC’s fiscal year end is December 31st. As the fiscal years differ by more than 93 days, pursuant to Rule 11- 02(c)(3) of Regulation S-X for the purposes of presenting the unaudited pro forma condensed combined financial information, the fiscal year end of DevvStream has been conformed to the fiscal year end of FIAC. Following the consummation of the Business Combination, New PubCo will have a July 31st fiscal year end.

The unaudited pro forma combined balance sheet as of October 31, 2024 combines the historical unaudited balance sheet of FIAC as of September 30, 2024, with the historical audited consolidated balance sheet of DevvStream as of October 31, 2024, on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on October 31, 2024.

The unaudited pro forma combined statement of operations for the twelve months ended July 31, 2024 combines the historical unaudited statement of operations of FIAC for the twelve months ended September 30, 2024 with the historical audited statement of operations of DevvStream for the 12 months ended July 31, 2024 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on August 1, 2023, the beginning of the earliest period presented.

The 12-month period of FIAC’s historical statement of operations ending on September 30, 2024 is calculated by taking the unaudited statement of operations results of FIAC for the nine months ended September 30, 2024 and adding the consolidated statements of operations and comprehensive loss of FIAC for the year ended December 31, 2023 and subtracting the unaudited statement of operations results of FIAC for the 9 months ended September 30, 2023.

The unaudited pro forma combined statement of operations for the three months ended October 31, 2024 combines the historical unaudited statement of operations of FIAC for the three months ended September 30, 2024 with the historical unaudited statement of operations of DevvStream for the three months ended October 31, 2024 on a pro forma basis as if the Business Combination and the other events, summarized below, had been consummated on August 1, 2024, the beginning of the earliest period presented.

The unaudited pro forma combined financial information was derived from, and should be read in conjunction with, the following historical financial statements and the accompanying notes, which are included elsewhere in this proxy statement/prospectus:

•
the historical audited financial statements of FIAC for the fiscal year ended December 31, 2023;

•
the historical unaudited financial statements of FIAC as of and for the nine months ended September 30, 2024;

•
the historical audited financial statements of Devvstream for the fiscal year ended July 31, 2024;

•
the historical unaudited interim condensed consolidated financial statements of DevvStream as of October 31, 2024 and for the three months ended October 31, 2024; and

•
other information relating to FIAC and DevvStream included in this proxy statement/prospectus, including the Business Combination Agreement and the description of certain terms thereof set forth under the section entitled “The Business Combination Proposal (Proposal 1).”

The unaudited pro forma combined financial information should also be read together with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of FIAC,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of DevvStream,” and other financial information included elsewhere in this proxy statement/prospectus.

Management has made significant estimates and assumptions in its determination of the pro forma adjustments based on information available as of the date of this proxy statement/prospectus. As the unaudited pro forma combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented as additional information becomes available. Management considers this basis of presentation to be reasonable under the circumstances.

60
One-time direct and incremental transaction costs anticipated to be incurred prior to, or concurrent with, the Closing are reflected in the unaudited pro forma combined balance sheet as a direct reduction to New PubCo’s additional paid in capital and are assumed to be cash settled. In the maximum redemption scenario, certain transaction costs are presented as accrued and unpaid as of the Closing. One-time direct and incremental transaction costs incurred in connection with the Business Combination allocated to the liability classified warrants are recorded as a charge to accumulated deficit.

Management has not identified any material differences in accounting policies that would require adjustments in the pro forma financial information. Certain reclassifications have been reflected to conform financial statement presentation as described in the notes the pro forma financial statements below.

2. Adjustments to Unaudited Pro Forma Combined Financial Information

The unaudited pro forma combined financial information takes into consideration the effects of adjustments under the no redemptions scenario, 50% redemptions scenario and the maximum redemptions scenario.

Adjustments to Unaudited Pro Forma Combined Balance Sheet

The adjustments included in the unaudited pro forma combined balance sheet as of October 31, 2024, are as follows:

  A.
The pro forma adjustments for subsequent DevvStream financing transactions represent significant transactions completed by DevvStream subsequent to Closing are as follows:

(in thousands)
  
No Redemption
    
50 % Redemption
    
Maximum Redemption
  
Recognize Note Payable
  
$
50
    
$
50
    
$
 501
Net adjustment
  
$
50
    
$
50
    
$
50
  

(1)
Reflects the $0.5 million of cash proceeds received from the note payable issuance, and an equal and offsetting increase to Convertible Debenture. The unaudited pro forma condensed combined statements of operations adjustments for the 12 months ended July 31, 2024 and the three months ended October 31, 2024, do not include the recognition of interest expense on the note payable, issued at a 5.30% annual interest rate and maturing within one year of issuance. The interest expense was deemed immaterial, and consequently, it has not been incorporated into these pro forma adjustments.

B. Represents pro forma adjustments to cash and cash equivalents to reflect the following:


(in thousands)
  
No Redemption
    
50 %
Redemption
    
Maximum
Redemption
    
Reclass of Cash and Securities Held in Trust Account
    
19,307
      
19,307
    
$
19,307
  
1 
Payment of Transaction Costs
    
(13,360
)
    
(5,864
)
  
$
(15
)
2 
Payment of Sponsor Capital Loan
    
(3,305
)
    
(3,305
)
  
$
-
  
3 
Cash Paid on Redeemed Shares
    
-
      
(9,653
)
  
$
(19,307
)
4 
Payment of Convertible Bridge Notes
    
(976
)
    
(976
)
  
$
-
  
5 
 
                          
Net adjustment6
    
1,666
      
(491
)
    
(15
)
  

(1)
Reflects the liquidation and reclassification of $19.3 million of investments held in the Trust Account to cash and cash equivalents that becomes available for general corporate use by New PubCo.
(2)
Reflects the cash disbursement for the preliminary estimated direct and incremental transaction costs of $13.4 million, including $5.9 million and $0.0 million to be paid by FIAC and DevvStream, respectively, in connection with the Business Combination prior to, or concurrent with the Closing.
(3)
Reflects the cash disbursement of 3.0 million for the repayment of the First Sponsor Working Capital Loan, Second Sponsor Working Capital Loan and the accrued administrative fees totaling $0.30 million. In the maximum redemption scenario, the First Sponsor Working Capital Loan is settled and exchanged for 1,500,000 Private Placement Warrants which is reflected in Note 2 (E).
(4)
Reflects the cash disbursement for the shares redeemed, 844,075 and 1,688,150 shares of Class A Common Stock subject to redemption (prior to the application of the Reverse Split Factor), in the 50% and maximum redemption scenarios, respectively, at a redemption share price of $11.24 per share.
(5)
Reflects the cash disbursement of $1.0 million for the repayment of the convertible bridge notes, in the max redemption scenario, due to an insufficient amount of cash, the convertible bridge notes will remain outstanding and subject to conversion into NewPubCo shares at the closing of the Business Combination or repayable within 10 days after the closing of the Business Combination.
(6)
This adjustment also has offsetting impacts to cash from a $0.5 million note payable issuance subsequent to the latest balance sheet date. While the principal loan amount and all accrued interest for the note payable may be converted, at each holder’s sole option, into Subordinated Voting Company Shares effective immediately upon closing, we have assumed for purposes of this disclosure that this note payable will be fully paid in cash upon the consummation of the Business Combination.

61
C. Reflects the release of $19.3 million of cash currently held in the Trust Account that becomes available to effectuate the Business Combination and for the general use of New PubCo upon consummation of the Business Combination.

D. Reflects the payment of the Sponsor Working Capital Loans, the accrued administrative fee and previously incurred, expected to be incurred, and accrued transaction costs paid upon consummation of the Business Combination. This adjustment also reflects the accrual of an excise tax calculated at 1% of the shares of Class A Common Stock redeemed in each of the minimum, 50% and maximum redemption scenarios.

Additionally, a portion of these transaction costs is accounted for as a $0.3 million increase in the accumulated deficit. The charge to accumulated deficit is associated with transaction costs allocated to the liability classified warrants, as further discussed in Note 2 (J) and Note 2 (N).

In both the 50% redemption scenario and the maximum redemption scenario, there will not be sufficient cash to pay the transaction expenses at closing. Accordingly, $2.3 million and $2.5 million of direct and incremental transaction expenses that have not yet been incurred are recorded as accrued expenses in the accompanying pro forma condensed combined balance sheet. The DevvStream and FIAC management teams are attempting to complete a PIPE and/or other financing arrangements to pay these fees at closing. There is no firm commitment for a PIPE or other financing arrangement as of the date of this filing.

E. Reflects the settlement of the $0.9 million principal amount and all accrued interest from associated with the Convertible Bridge Notes and the reversal of $2.3 million of bifurcated derivative liability associated with the convertible note bridge financing and a loss of $2.3 million recorded to accumulated deficit.

F. Reflects the reclassification of shares of Class A Common Stock subject to possible redemption (prior to the application of the Reverse Split Factor) into permanent equity assuming no redemptions and immediate conversion of 1,688,150 shares of Class A Common Stock into New PubCo Common Shares in connection with the Business Combination and 50% redemptions and immediate conversion of 844,075 shares of Class A Common Stock into New PubCo Common Shares in connection with the Business Combination.

G. Represents pro forma adjustments to par value of Class A Common Stock balance to reflect the following:

(in thousands)
  
Amount
  
Conversion of Class A Common Stock into New PubCo Common Shares as a result of the Business Combination
    
1
  
Net adjustment
  
$
1
  

H. Represents pro forma adjustments to additional paid in capital balance to reflect the following:

(in thousands)
  
No Redemption
    
50% Redemption
    
Maximum Redemption
  
Reduction in additional paid in capital for accrual of excise tax payable based on number of shares redeemed
    
-
      
(97
)
    
(193
)
Reduction in additional paid in capital for excess acquisition-related expenses over accrued amounts and recognition of unaccrued and unpaid acquisition-related expenses.
    
2,734
      
12,562
      
2,734
  
Reflection of the accrued deferred underwriting fees related to the Business Combination
    
-
      
-
      
-
  
Issuance of New Pubco Class A common Stock to holders of DevvStream ordinary units at the Closing
    
(1
)
    
(1
)
    
(1
)
Conversion of FIAC Class A ordinary shares into New Pubco Class A common stock as a result of the Business Combination
    
19,479
      
9,825
      
172
  
Elimination of FIAC 's historical accumulated deficit in connection with the reverse recapitalization at the Closing
    
(13,649
)
    
(13,649
)
    
(13,649
)
Conversion of the convertible debenture at the completion of the reverse recapitalization
    
-
      
-
      
-
  
Net adjustment
  
$
8,563
    
$
8,640
    
$
(10,937
)

62
I. Reflects the recognition of $0.3 million of direct and incremental transaction cost allocated to the liability classified warrants and the elimination of FIAC’s historical accumulated deficit with a corresponding adjustment to Additional paid in-capital for New PubCo in connection with the reverse recapitalization at the Closing, which is also reflected in Note 2 (M).

Adjustments to Unaudited Pro Forma Combined Statements of Operations

J. Represents reclassifications to conform FIAC’s financial information to financial statement line items and presentation of New PubCo based on DevvStream’s financial statement presentation.

K. Reflects the elimination of $0.2 million and $1.4 million of interest income for the three months and year ended September 30, 2024, related to historical income from the Trust Account, respectively.

L. The pro forma income statement adjustments do not reflect any income tax effect because DevvStream has a full valuation allowance offsetting any potential tax impact.

M. Reflects the recognition of $0.3 million of direct and incremental transaction costs allocated to the liability classified warrants.

In the maximum redemption scenario, this adjustment also reflects the recognition of a gain of $1.4 million attributable to the extinguishment of the $1.5 million First Sponsor Working Capital Loan in exchange for Private Placement Warrants with a fair value of $89 thousand.

N. Reflects the recognition of additional change in fair value of warrant liabilities, amounting to a loss of $30,000 for the three months ended September 30, 2024, and a gain of $89,000 for the year ended September 30, 2024, assuming that the 1,500,000 additional Private Placement Warrants used to settle the First Sponsor Working Capital Loan were outstanding as of October 1, 2023.

O. Reflects the elimination of the change in fair value of the embedded derivative liability and the recognition of a loss on extinguishment associated with the cash settlement of the convertible notes in the minimum and 50% redemption scenarios.

3. Earnings per Share

The pro forma earnings per share calculation represents the net income (loss) per share calculated using the pro forma basic and diluted weighted average shares outstanding of New PubCo Common Shares (assuming a Reverse Split Factor of 0.9829, based on the closing price of the Subordinated Voting Company Shares on the Cboe Canada, as of October 31, 2024, converted into United States dollars based on the Bank of Canada daily exchange rate as of October 31, 2024) as a result of the pro forma adjustments as if the Business Combination had occurred on January 1, 2023, the beginning of annual period. The calculation of weighted average shares outstanding for pro forma basic and diluted net income per share reflects (i) the historical DevvStream shares, as adjusted by the Common Conversion Ratio, outstanding as of the respective original issuance date and (ii) assumes that the new shares issuable relating to the Other Related Events, as adjusted by the Common Conversion Ratio (where applicable), and the Business Combination have been outstanding as of October 1, 2023, the beginning of the earliest period presented. For potentially dilutive securities related to DevvStream’s historical stock-based compensation and DevvStream’s Converted Warrants, the treasury stock method is applied along with the Conversion Ratio has been applied to determine the potentially dilutive impact. Under the 50% redemptions scenario, 50% of the shares of Class A Common Stock are assumed to be redeemed by FIAC public stockholders and are eliminated as of January 1, 2023, the beginning of the annual period. Under the maximum redemption scenario, 100% of the shares of Class A Common Stock assumed to be redeemed by FIAC public stockholders and are eliminated as of October 1, 2023, the beginning of the annual period.

63
The unaudited pro forma combined per share information has been presented under the three assumed redemption scenarios as follows:

 
  
Three Months Ended September 30, 2024
  
(in thousands, except share and per share data)
  
Assuming No Redemptions
    
Assuming
50%
Redemptions
    
Assuming Maximum Redemptions
  
Numerator:
                  
Net income (loss) attributable to common shareholders - basic and diluted
  
$
(3,892
)
  
$
(3,892
)
  
$
(3,922
)
Denominator:
                        
Sponsor and certain affiliates
    
5,086,324
      
5,086,324
      
5,086,324
  
Public Shareholders
    
1,688,150
      
844,075
      
-
  
Former DevvStream shareholders
    
11,747,809
      
11,747,809
      
11,747,809
  
Former DevvStream convertible note holders
    
-
      
-
      
-
  
PIPE Investors
    
-
      
-
      
-
  
Weighted average shares outstanding - basic
    
18,522,283
      
17,678,208
      
16,834,133
  
Diluted effect of DevvStream stock based compensation
    
-
      
-
      
-
  
Diluted effect of DevvStream Converted Warrants
    
-
      
-
      
-
  
Weighted average shares outstanding - diluted
    
18,522,283
      
17,678,208
      
16,834,133
  
 
                        
Net income (loss) per share attributable to common shareholders - basic
  
$
(0.21
)
  
$
(0.22
)
  
$
(0.23
)
Net income (loss) per share attributable to common shareholders - diluted
  
$
(0.21
)
  
$
(0.22
)
  
$
(0.23
)

Upon Closing, the following outstanding shares of Common Stock equivalents were excluded from the computation of pro forma diluted net income (loss) per share for the period and scenarios presented because including them would have had an anti-dilutive effect:

 
  
Three Months Ended September 30, 2024
  
 
  
Assuming No Redemptions
    
Assuming 50% Redemptions
    
Assuming Maximum Redemptions
  
Private placement warrants
    
11,008,084
      
11,008,084
      
12,482,381
  
Public warrants
    
11,302,943
      
11,302,943
      
11,302,943
  
New Pubco Warrants
    
1,234,866
      
1,234,866
      
1,234,866
  
New Pubco Stock Options
    
626,668
      
626,668
      
626,668
  
New Pubco RSUs
    
1,195,636
      
1,195,636
      
1,195,636
  

 
  
Twelve Months Ended September 30, 2024
  
(in thousands, except share and per share data)
  
Assuming No Redemptions
    
Assuming
50%
Redemptions
    
Assuming Maximum Redemptions
  
Numerator:
                  
Net income (loss) attributable to common shareholders - basic and diluted
  
$
(11,504
)
  
$
(11,504
)
  
$
(9,975
)
Denominator:
                        
Sponsor and certain affiliates
    
5,086,324
      
5,086,324
      
5,086,324
  
Public Shareholders
    
1,688,150
      
844,075
      
-
  
Former DevvStream shareholders
    
11,747,809
      
11,747,809
      
11,747,809
  
Former DevvStream convertible note holders
    
-
      
-
      
-
  
Weighted average shares outstanding - basic
    
18,522,283
      
17,678,208
      
16,834,133
  
Diluted effect of DevvStream stock based compensation
    
-
      
-
      
-
  
Diluted effect of DevvStream Converted Warrants
    
-
      
-
      
-
  
Weighted average shares outstanding - diluted
    
18,522,283
      
17,678,208
      
16,834,133
  
 
                        
Net income (loss) per share attributable to common shareholders - basic
  
$
(0.62
)
  
$
(0.65
)
  
$
(0.59
)
Net income (loss) per share attributable to common shareholders - diluted
  
$
(0.62
)
  
$
(0.65
)
  
$
(0.59
)

Following the Closing, the following outstanding shares of Common Stock equivalents were excluded from the computation of pro forma diluted net income (loss) per share for the period and scenarios presented because including them would have had an anti-dilutive effect:
 
 
  
Twelve Months Ended September 30, 2024
  
 
  
Assuming No Redemptions
    
Assuming 50% Redemptions
    
Assuming Maximum Redemptions
  
Private placement warrants
    
11,008,084
      
11,008,084
      
12,482,381
  
Public warrants
    
11,302,943
      
11,302,943
      
11,302,943
  
New Pubco Warrants
    
1,234,866
      
1,234,866
      
1,234,866
  
New Pubco Stock Options
    
626,668
      
626,668
      
626,668
  
New Pubco RSUs
    
1,195,636
      
1,195,636
      
1,195,636
  



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