DevvStream Corp 10-Q for FY2026 Q2
DevvStream Corp. (DEVSF)
10-Q
2026-03-13
For: 2026-01-31
View Original
Added on
April 12, 2026
About this 10-Q
DevvStream Corp filed this 10-Q on March 13, 2026, covering the quarter ended January 31, 2026 (FY2026 Q2).
Headline figures
Quarter ended January 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $7043
- compared with $0 a year earlier
- Net loss
- $3.41M
- compared with a net loss of $4.56M a year earlier
- Diluted EPS
- -$0.80
- compared with -$1.69 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended , 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
(Exact name of registrant as specified in its charter)
| | | | | |
| (State or other jurisdiction of incorporation or organization) | | (Commission File Number) | | (I.R.S. Employer Identification Number) |
| | | |
| (Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (818 )-683-2765
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| | | | | The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| | ☒ | Smaller reporting company | |
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of March 12, 2026, 5,335,682 common shares were issued and outstanding.
DEVVSTREAM CORP.
Quarterly Report on Form 10-Q
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Item 2.
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Item 3.
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| Item 4. | Evaluation of Controls and Procedures | 54 |
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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DevvStream Corp.
Condensed Consolidated Interim Financial Statements
(Expressed in United States dollars)
For the six months ended January 31, 2026 and 2025
(unaudited)
INDEX TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
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Page
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3
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4
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5
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7
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8
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On August 8, 2025, the Company effected a 1-for-10 reverse stock split of its outstanding common stock. All share and per share amounts in these consolidated financial statements and related footnotes have been retroactively adjusted to reflect the reverse stock split for all periods presented, unless otherwise indicated (the “Reverse Stock Split”).
DevvStream Corp.
(Unaudited - Expressed in United States dollars)
| As at | January 31,
2026 | July 31,
2025 | ||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Trade receivable | ||||||||
| GST receivable | ||||||||
| Corporate taxes receivable | ||||||||
| Deferred financing costs | ||||||||
| Prepaid expenses | ||||||||
| Deposit on carbon credits purchase | ||||||||
| Carbon credits | ||||||||
| Total current assets | ||||||||
| Restricted cash | ||||||||
| Cryptocurrencies – restricted | ||||||||
| Deferred financing costs, long-term | ||||||||
| Deposit on carbon credits purchase, long-term | ||||||||
| Investment in associate | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIENCY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | $ | ||||||
| Accounts payable and accrued liabilities – related parties | ||||||||
| Convertible debentures | ||||||||
| Convertible debentures – related parties | ||||||||
| Derivative liabilities | ||||||||
| Warrant liabilities | ||||||||
| Stock option liabilities | ||||||||
| Stop loss provision liabilities | ||||||||
| Total current liabilities | ||||||||
| Convertible debentures, long term | ||||||||
| Convertible debentures – related parties, long term | ||||||||
| Total liabilities | ||||||||
| Shareholders’ deficiency | ||||||||
| Common shares ( | ||||||||
| Additional paid in capital | ||||||||
| Subscription receivable | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income | ||||||||
| Deficit | ( | ) | ( | ) | ||||
| Total shareholders’ deficiency | ( | ) | ( | ) | ||||
| Total liabilities and shareholders’ deficiency | $ | $ | ||||||
| Going concern (Note 2(b)) | ||||||||
| Commitments and contingencies (Note 17) | ||||||||
| Subsequent events (Note 18) | ||||||||
See accompanying notes to the condensed consolidated interim financial statements
DevvStream Corp.
(Unaudited - Expressed in United States dollars)
|
Six months
ended
January 31, |
Six months
ended January 31, |
Three months ended January 31, |
Three months ended January 31, | |||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of sales | ( | ) | ( | ) | ||||||||||||
| Gross profit | ( | ) | ||||||||||||||
| Operating expenses | ||||||||||||||||
|
Sales and marketing
|
||||||||||||||||
|
Depreciation
|
||||||||||||||||
|
General and administrative
|
||||||||||||||||
|
Professional fees
|
||||||||||||||||
|
Salaries and wages
|
||||||||||||||||
| Total operating expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income (expenses) | ||||||||||||||||
|
Staking income
|
||||||||||||||||
|
Interest expense
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
|
Accretion expense
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
|
Change in fair value of derivative liabilities
|
( | ) | ||||||||||||||
|
Change in fair value of warrant liabilities
|
||||||||||||||||
|
Change in fair value of mandatory convertible debentures
|
||||||||||||||||
|
Stop-loss provision loss
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
|
Equity loss on investment in associate
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
|
Gain on share settlement
|
||||||||||||||||
|
Gain on settlement of debt
|
||||||||||||||||
|
Impairment of carbon credits
|
( | ) | ( | ) | ( | ) | ( | ) | ||||||||
|
Loss on revaluation of cryptocurrencies
|
( | ) | ( | ) | ||||||||||||
|
Foreign exchange gain (loss)
|
( | ) | ( | ) | ||||||||||||
| Net loss | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Other comprehensive gain (loss) | ||||||||||||||||
|
Foreign currency translation
|
( | ) | ( | ) | ||||||||||||
| Net loss and comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Weighted average number of common shares outstanding – Basic and diluted | ||||||||||||||||
| Loss per share – Basic and diluted | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
See accompanying notes to the condensed consolidated interim financial statements.
DevvStream Corp.
(Unaudited - Expressed in United States dollars)
| Number of Shares |
Additional
Paid-in Capital | Subscription receivable | Accumulated Deficit | Accumulated other comprehensive income (loss) | Total shareholders’ equity (deficiency) | |||||||||||||||||||
|
Balance, July 31, 2024
|
$ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
|
Share based compensation - RSUs
|
- | |||||||||||||||||||||||
|
Share based compensation - Options
|
- | |||||||||||||||||||||||
|
Warrants reclassified to liabilities on change in functional currency
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Stock options reclassified to liabilities on RTO
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Conversion option derivative transferred to equity
|
- | |||||||||||||||||||||||
|
Gain on modification of debt with related parties
|
- | |||||||||||||||||||||||
|
Recapitalization on RTO
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Shares issued for warrant exercises
|
||||||||||||||||||||||||
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Conversion of mandatory convertible debentures
|
||||||||||||||||||||||||
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Shares for settlement of debt
|
||||||||||||||||||||||||
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Shares issued in connection with RTO
|
||||||||||||||||||||||||
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Shares issued for acquisition of associate
|
||||||||||||||||||||||||
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Shares issued for PIPE financing
|
||||||||||||||||||||||||
|
Shares issued for carbon credit purchases
|
||||||||||||||||||||||||
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Shares issued for ELOC commitment
|
||||||||||||||||||||||||
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Shares issued for services
|
||||||||||||||||||||||||
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Foreign currency translation
|
- | |||||||||||||||||||||||
|
Net loss
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Balance, January 31, 2025
|
$ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
|
Balance, July 31, 2025
|
$ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
|
Cancellation of shares
|
( | ) | ||||||||||||||||||||||
|
Share based compensation - RSUs
|
- | |||||||||||||||||||||||
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Share based compensation - Options
|
- | |||||||||||||||||||||||
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Shares issued for PIPE financing
|
||||||||||||||||||||||||
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Shares issued for ELOC drawdown
|
||||||||||||||||||||||||
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Amortization of deferred financing costs
|
- | ( | ) | ( | ) | |||||||||||||||||||
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Foreign currency translation
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Net loss
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Balance, January 31, 2026
|
$ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
DevvStream Corp.
CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIENCY
(Unaudited - Expressed in United States dollars)
| Number of Shares |
Additional
Paid-in Capital | Subscription receivable | Accumulated Deficit | Accumulated other comprehensive income (loss) | Total shareholders’ equity (deficiency) | |||||||||||||||||||
|
Balance, October 31, 2024
|
$ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
|
Share based compensation - RSUs
|
- | |||||||||||||||||||||||
|
Share based compensation - Options
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Stock options reclassified to liabilities on RTO
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Conversion option derivative transferred to equity
|
- | |||||||||||||||||||||||
|
Gain on modification of debt with related parties
|
- | |||||||||||||||||||||||
|
Recapitalization on RTO
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Shares for settlement of debt
|
||||||||||||||||||||||||
|
Shares issued in connection with RTO
|
||||||||||||||||||||||||
|
Shares issued for acquisition of associate
|
||||||||||||||||||||||||
|
Shares issued for PIPE financing
|
||||||||||||||||||||||||
|
Shares issued for carbon credit purchases
|
||||||||||||||||||||||||
|
Shares issued for ELOC commitment
|
||||||||||||||||||||||||
|
Shares issued for services
|
||||||||||||||||||||||||
|
Foreign currency translation
|
- | |||||||||||||||||||||||
|
Net loss
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Balance, January 31, 2025
|
$ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
|
Balance, October 31, 2025
|
$ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
|
Share based compensation - RSUs
|
- | |||||||||||||||||||||||
|
Share based compensation - Options
|
- | |||||||||||||||||||||||
|
Shares issued for PIPE financing
|
||||||||||||||||||||||||
|
Shares issued for ELOC drawdown
|
||||||||||||||||||||||||
|
Amortization of deferred financing costs
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Foreign currency translation
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Net loss
|
- | ( | ) | ( | ) | |||||||||||||||||||
|
Balance, January 31, 2026
|
$ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | |||||||||||||
See accompanying notes to the condensed consolidated interim financial statements.
DevvStream Corp.
(Unaudited - Expressed in United States dollars)
|
For the six months ended January 31,
|
2026 | 2025 | ||||||
|
Operating activities
|
||||||||
|
Net loss for the period
|
$ | ( | ) | $ | ( | ) | ||
|
Items not affecting cash:
|
||||||||
|
Depreciation
|
||||||||
|
Share based compensation
|
||||||||
|
Change in fair value of derivative liabilities
|
( | ) | ||||||
|
Change in fair value of mandatory convertible debentures
|
( | ) | ||||||
|
Change in fair value of warrant liabilities
|
( | ) | ( | ) | ||||
|
Change in fair value of stock option liabilities
|
( | ) | ( | ) | ||||
|
Staking income
|
( | ) | ||||||
|
Loss on revaluation of cryptocurrencies
|
||||||||
|
Loss on investment in associate
|
||||||||
|
Gain on settlement of accounts payable
|
( | ) | ||||||
|
Gain on settlement of debt
|
( | ) | ||||||
|
Impairment of carbon credits
|
||||||||
|
Stop-loss provision loss
|
||||||||
|
Accrued interest
|
||||||||
|
Accretion expense
|
||||||||
|
Retirement of carbon credits
|
||||||||
|
Changes in non-cash working capital items:
|
||||||||
|
Trade receivable
|
( | ) | ||||||
|
GST receivable
|
( | ) | ( | ) | ||||
|
Other receivables
|
( | ) | ||||||
|
Carbon credits
|
( | ) | ( | ) | ||||
|
Prepaid expenses
|
( | ) | ( | ) | ||||
|
Accounts payable and accrued liabilities
|
( | ) | ||||||
|
Net cash used in operating activities
|
( | ) | ( | ) | ||||
|
Investing activities
|
||||||||
|
Cash assumed on RTO
|
||||||||
|
Purchase of cryptocurrencies
|
( | ) | ||||||
|
Net cash provided by (used in) investing activities
|
( | ) | ||||||
|
Financing activities
|
||||||||
|
Proceeds from convertible debentures
|
||||||||
|
Proceeds from warrant exercise
|
||||||||
|
Proceeds from PIPE financing
|
||||||||
|
Proceeds from ELOC drawdown
|
||||||||
|
Repayment of convertible debentures
|
( | ) | ||||||
|
Net cash provided by financing activities
|
||||||||
|
Effect of exchange rate changes on cash
|
( | ) | ||||||
|
Net decrease in cash
|
( | ) | ( | ) | ||||
|
Cash, Beginning
|
||||||||
|
Cash, Ending
|
$ | $ | ||||||
|
Presented as:
|
||||||||
|
Cash
|
$ | $ | ||||||
|
Restricted cash
|
||||||||
|
Cash, Ending
|
$ | $ | ||||||
|
Supplemental information:
|
||||||||
|
Taxes paid
|
$ | $ | ||||||
|
Interest paid
|
$ | $ | ||||||
|
Fair value of warrants exercised
|
$ | $ | ||||||
|
Fair value of securities issued for the RTO (Note 4)
|
$ | $ | ||||||
|
Fair value of securities issued for settlement of accounts payable
|
$ | $ | ||||||
|
Fair value of securities issued for services
|
$ | $ | ||||||
|
Fair value of securities issued for carbon credits
|
$ | $ | ||||||
|
Fair value of securities issued for the acquisition of interest in associate
|
$ | $ | ||||||
|
Fair value of securities issued for ELOC commitment
|
$ | $ | ||||||
|
Repayment of convertible debentures from ELOC drawdown proceeds
|
$ | $ | ||||||
See accompanying notes to the condensed consolidated interim financial statements
DevvStream Corp.
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
1.
Nature of operations
DevvStream Corp. (formerly Focus Impact Acquisition Corp.) (the “Company” or “Devv Corp.”) is a company existing under the Business Corporations Act of Alberta, Canada. The head office is located at 2133 – 1177 West Hastings Street, Vancouver, BC V6E 2K3 and its records and registered office is located at #1700, 421 – 7th Avenue S.W., Calgary, Alberta, T2P 4K9.
The Company was a special purpose acquisition corporation incorporated in Delaware, the United States, on February 23, 2021, formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more business (“Initial Business Combination”). On November 6, 2024, the Company completed a reverse takeover (“RTO”) with DevvStream Holdings Inc. (“Devv Holdings”) (Note 4) pursuant to a business combination agreement (“BCA”) entered into on September 12, 2023 (and as amended on May 1, 2024, August 10, 2024 and October 29, 2024). The transaction is also referred to as the “De-SPAC” transaction. The Company was redomiciled as an Alberta company as part of the De-SPAC transaction. Devv Holdings is an Environmental Social and Governance (“ESG”) principled, high-tech, impact investing company focused on high quality and high return carbon credit generating projects. Devv Holdings 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 values. The Company’s operations are considered to be a continuance of the business and operations of Devv Holdings, with the Company’s operations being included from November 6, 2024, the closing date of the De-SPAC transaction, onwards.
The Company is a public company which is listed on the Nasdaq Stock Exchange (“NASDAQ”) under the symbol “DEVS”.
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 generally accepted accounting principles 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 six months ended January 31, 2026.
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, 2025. The interim period results do not necessarily 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.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
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 January 31, 2026, the Company has a working capital deficit, has incurred negative cash flows and losses since inception, and has generated limited revenues 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 January 31, 2026, the Company’s subsidiaries were:
|
Name of subsidiary
|
Place of incorporation
|
Ownership | |||
|
Devv Holdings
|
% | ||||
|
Devvstream, Inc. (“DESG”)
|
% | ||||
|
DevvESG Streaming Finco Ltd (“Finco”)
|
% | ||||
|
Sierra Merger Sub, Inc.
|
% |
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 $19 .
On November 6, 2024, the Company made an investment into Freedom Carbon Solutions LLC (formerly Monroe Sequestration Partners, LLC) (“FCS”). The Company owns 50 % of FCS and accounted for the investment as an equity investment.
(d) Variable interest entities (“VIE”)
A VIE is an entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to control the entity's activities or do not substantially participate in the gains and losses of the entity. Upon inception of a contractual agreement, and thereafter, if a reconsideration event occurs, the Company performs an assessment to determine whether the arrangement contains a variable interest in an entity and whether that entity is a VIE. The primary beneficiary of a VIE is the party that has both the power to direct the activities that most significantly impact the VIE's economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. Where the Company concludes that it is the primary beneficiary of a VIE, the Company consolidates the accounts of that VIE.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
2.
Basis of preparation (continued)
(e) Functional and presentation currencies
Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions. As a result of this reassessment, the Company determined that its functional currency changed from the Canadian dollar (“CAD$”) to the United States dollar (“US$”) for Devv Holdings and DESG. Finco’s functional currency remained CAD$. This change aligns with the business's future focus and the effective date of the Devv 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, 121,995 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities (Note 11). 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, 2025.
(g)
Emerging growth company
The Company is 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.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
2.
Basis of preparation (continued)
(g)
Emerging growth company (continued)
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.
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, 2025.
The following accounting policies have been updated or included to reflect transactions occurring during the current interim period:
(a)
Cryptocurrencies
The Company accounts for cryptocurrencies as indefinite-lived intangible assets in accordance with ASC 350-60. Cryptocurrencies are initially recorded at cost and subsequently measured at fair value at each reporting date based on quoted prices in active markets, with changes in fair value recognized in earnings in accordance with ASC 350-60-35 and ASC 820. Cryptocurrencies are not amortized.
Cryptocurrency holdings are classified as non-current assets when they are restricted as collateral for long-term obligations or when the Company does not expect to liquidate the assets within twelve months, consistent with ASC 210-10-45. The Company may delegate certain cryptocurrency holdings to blockchain validators to earn staking rewards; such delegation does not result in derecognition of the underlying tokens because the Company retains control of the assets. Staking rewards are recognized in earnings when earned and measured at fair value on the date earned.
4.
Reverse takeover
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 Devv Holdings.
Pursuant to the BCA, on November 6, 2024, the Company changed its jurisdiction from the State of Delaware under the Delaware General Corporation Law to the Province of Alberta, Canada, and thereby became a company existing under the Business Corporations Act of Alberta, and changed its name to Devvstream Corp., and Devv Holdings was amalgamated with a wholly owned subsidiary of the Company to form one corporate entity.
Under the BCA, the Company consolidated all of its issued and outstanding common stock on a 1:0.9692 basis. All the outstanding Devv Holdings subordinate voting shares (“SVS”) were exchanged for common stock of the Company on a common conversion ratio of 0.152934 (the “Common Conversion Ratio”). All the outstanding Devv Holdings multiple voting shares (“MVS”), being the equivalent of 10 SVS, were exchanged for common stock of the Company on the basis of the Common Conversion Ratio. In addition, all of the outstanding convertible securities of Devv Holdings were exchanged for securities of the Company on the basis of the Common Conversion Ratio, with corresponding adjustments to exercise prices, and otherwise on substantially the same economic terms and conditions. The De-SPAC transaction was completed on November 6, 2024.
Historical presentation of number of shares, warrants, options, and RSUs outstanding, weighted average number of shares outstanding, and exercise price of equity instruments, that are presented elsewhere in the condensed consolidated financial statements, including the condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, condensed consolidated statements of changes in shareholders’ deficiency, and Note 10 and 13, are retrospectively adjusted to reflect the application of the Common Conversion Ratio, with exercise price of warrants and options, and conversion price of convertible debentures adjusted by the inverse of the Common Conversion Ratio. This is further adjusted by a reverse stock split that took place on August 8, 2025.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
4.
Reverse takeover (continued)
In consideration for the De-SPAC transaction, the Company issued 465,747 common shares to the former holders of SVS of Devv Holdings and 711,140 common shares to the former holders of MVS of Devv Holdings. The former shareholders of the Company retained 515,920 shares. The fair value per share was estimated to be $6.10 (CAD$8.50 ) based on the last trading price of Devv Holdings on the Cboe Exchange.
As at November 6, 2024, the Company had 22,699,987 warrants outstanding, each exercisable at $1.52 for 0.09692 common shares, expiring on November 6, 2029. The fair value of the warrants was estimated to be $7,196,286 based on the Black-Scholes Option Pricing Model using the following assumptions: share price – $0.61 , expected dividend yield – 0 %, expected volatility – 87 %, risk-free interest rate – 3.12 % and an expected remaining life – 5 years. Expected volatility was estimated by using the average of historical volatility of Devv Holdings and of public 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 De-SPAC transaction, the former holders of Devv Holdings’ shares owned 70 % of the shares of the combined entity. As a result of the De-SPAC transaction, the former shareholders of Devv Holdings acquired control of the Company, thereby constituting an RTO of the Company. The RTO was determined to be a purchase of the Company’s net assets by the shareholders of Devv Holdings.
The De-SPAC transaction was accounted for as a capital transaction of Devv Holdings and equivalent to the issuance of shares by Devv Holdings for the net assets of the Company accompanied by a recapitalization as the Company did not qualify as a business according to the definition of ASC Topic 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 Devv Holdings being identified as the acquirer and the Company being treated as the accounting acquiree with the transaction being measured at the fair value of the equity consideration issued to the Company’s shareholders. Devv Holdings is the continuing entity.
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 in equity.
The purchase price is allocated as follows:
| Fair value of shares retained by former shareholders of the Company ( |
$ | |||
|
Fair value of replacement warrants of the Company
|
||||
|
Total consideration
|
$ | |||
|
Net assets (liabilities) acquired of the Company:
|
||||
|
Cash and cash equivalents
|
$ | |||
|
Accounts payable and accrued liabilities
|
( | ) | ||
|
Promissory note payable (Note 10)
|
( | ) | ||
|
Total net assets (liabilities)
|
$ | ( | ) | |
|
Reduction to additional paid in capital as a result of the recapitalization
|
$ |
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
4.
Reverse takeover (continued)
Sponsor side letter
In connection with the De-SPAC transaction, Focus Impact Sponsor entered into a sponsor side letter, and agreed to certain transfer and lock-up restrictions of the Company’s common stock, which would terminate upon the earlier of: (i) 360 days after November 6, 2024; (ii) a liquidation, merger, capital stock exchange, reorganization, or other similar transaction that results in all of the Company’s stockholders having the right to exchange their equity for cash, securities or other property; or, (iii) if the Company’s common stock has a closing price of at least $120 per share for any 20 trading days in a 30 -day trading period starting from April 5, 2025. Focus Impact Sponsor also agreed to vote its shares in favor of the RTO.
Registration rights agreement
In connection with the De-SPAC transaction, on November 6, 2024, the Company, Focus Impact Sponsor, and certain historical holders of Devv Holdings securities entered into an Amended and Restated Registration Rights Agreement, pursuant to which, among other things, the historical holders of Devv Holdings securities and Focus Impact Sponsor were granted customary registration rights with respect to the securities of the Company that they hold.
Indemnification agreements
In connection with the De-SPAC transaction, on November 6, 2024, the Company entered into indemnification agreements with each of its directors and executive officers. Each indemnification agreement provides for indemnification and advancements by the Company of certain expenses, including attorney’s 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 the Company’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 the Company’s request.
5.
Carbon credits
Between October 17, 2024 and October 28, 2024, Devv Holdings entered into multiple agreements to acquire carbon credits in return for shares of the Company once the De-SPAC Transaction was completed. On November 6, 2024, concurrent with the completion of the business combination, the Company issued 324,987 common shares in consideration for these agreements. The fair value of the shares issued was $1,982,424 .
Stop-loss provision
All of the agreements contain adjustment clauses whereby if the Company’s share price falls below the respective purchase prices outlined in the agreements, in the 12 to 18 months following the agreements, the Company is obligated to issue additional shares to cover the shortfall. The Company has assessed that the potential liability associated with the stop-loss provision for carbon credits received as of January 31, 2026 is $1,114,575 , based on the closing market price of the Company’s shares on that date.
Deposit on carbon credits
Consideration paid of $371,403 related to the future delivery of carbon credits is recorded as a deposit on carbon credits, of which $271,403 relate to a contract containing a stop-loss provision. The stop-loss provision related to these contracts has not been recognized. As there is not yet certainty to the delivery of the credits, the obligation to issue additional shares is not probable as at January 31, 2026.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
5.
Carbon credits (continued)
Retirement of carbon credits
On June 20, 2025, the Company entered into an agreement to purchase 16,500 carbon credits from a vendor at a unit price of $6.06 , for a total purchase consideration of $100,000 . Under the terms of the agreement, the vendor is required to retire 50 % of the credits on behalf of the Company within five (5 ) days of payment confirmation, and transfer the remainder to the Company. As of January 31, 2026, full consideration of $100,000 has been paid. On August 14, 2025, the vendor retired 50 % of the purchased credits (8,250 credits) on behalf of the Company to offset the Company’s carbon footprints. Accordingly, an environmental expense of $50,000 has been recorded during the six months ended January 31, 2026. The remaining 8,250 carbon credits have been fully delivered to the Company on January 21, 2026.
Impairment of carbon credits
During the six months ended January 31, 2026, the Company identified indicators that the NRV of certain carbon credits had declined below their carrying values due to changes in market pricing. As a result, the Company wrote down the affected carbon credits to their NRV. The impairment recognized during the six months ended January 31, 2026 amounted to $12,968 .
The impairment was recognized as impairment of carbon credits in the consolidated statements of operations and comprehensive loss. The write-down establishes a new cost basis for the impaired carbon credits, which will not be subsequently reversed in future periods, even if market prices recover, in accordance with US GAAP.
6.
Cryptocurrencies
The Company holds cryptocurrency assets and related cash balances with Bitgo Trust Company, Inc., a cryptocurrency exchange which is a South Dakota chartered trust company. These holdings are subject to collateral requirements associated with the Company’s convertible debentures issued to Helena, the proceeds of which were used to fund the Bitgo account (Note 10).
Under the terms of this financing arrangement, all cryptocurrency and cash maintained with Bitgo are restricted to secure the Helena convertible debt until the fair value of the Company’s cryptocurrency holdings exceeds $20 million (the “Threshold Amount”). Helena also maintains a first preference claim on the Company’s assets until the Threshold Amount is met. Once the Threshold Amount is achieved, only cryptocurrency holdings up to $20 million in a segregated account remain pledged as security; however, as of January 31, 2026, the Threshold Amount had not been met, and all cryptocurrency and cash balances remained fully restricted.
Cryptocurrencies are accounted for as indefinite-lived intangible assets in accordance with ASC 350-60 and are subsequently measured at fair value, with changes in fair value recognized in earnings in accordance with ASC 350-60-35 and ASC 820. Fair value is determined using quoted prices in active markets.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
6.
Cryptocurrencies (continued)
Activity in cryptocurrency holdings during the six months ended January 31, 2026 was as follows:
| Bitcoin | Solana | USDC | Total | |||||||||||||
|
Balance, August 1, 2025
|
$ | $ | $ | $ | ||||||||||||
|
Purchases
|
||||||||||||||||
|
Staking income earned
|
||||||||||||||||
|
Fair value loss
|
( | ) | ( | ) | ( | ) | ||||||||||
|
Balance, January 31, 2026
|
$ | $ | $ | $ | ||||||||||||
As at January 31, 2026, the Company held 22.229041 BTC, 12,371.78 SOL and 99.959976 USDC, with fair values of $78,621.12 per BTC, $1 per USDC and $105.44 per SOL. The Company also held $1,279,900 in cash in the Bitgo account (Note 10). All cryptocurrency and cash balances are presented as non-current assets, as management does not expect to liquidate these assets within the next twelve months and the balances are pledged as collateral for long-term debt, in accordance with ASC 210-10-45.
The Company participates in staking activities for Solana. Staked Solana remains recognized as an asset of the Company because delegation to validators does not transfer control of the underlying tokens, and the criteria for derecognition under ASC 350-10-40 are not met. Staking rewards are recognized in earnings when earned and measured at fair value on the date earned. During the period, the Company earned 260.80 SOL, with a total fair value of $40,245 .
7.
Investment in associate
On November 6, 2024, the Company received 2,000,000 shares in FCS, in connection with an agreement to acquire a stake in FCS in exchange for 200,000 shares of the Company that was entered into on October 28, 2024. At the time of acquisition, the 2,000,000 shares of FCS received by the Company represented 50 % of shares outstanding, and the initial balance of investment was determined to be $1,220,000 being the fair value of the shares issued by the Company in consideration for the exchange. As at January 31, 2026, the Company’s share of ownership remained at 50 %. Management assessed that the Company has significant influence over FCS based on its share of ownership, and that the investment should be accounted for using the equity method of accounting.
Summarized financial information of FCS and a reconciliation of the carrying amount of the investment set forth in the consolidated balance sheets are set out below:
Summarized balance sheet
|
January 31, 2026
| ||||
|
ASSETS
|
||||
|
Cash
|
$ | |||
|
Due from related parties
|
||||
|
Start-up costs, net
|
||||
|
Total assets
|
$ | |||
|
LIABILITIES
|
||||
|
Accounts payable and accrued liabilities
|
$ | |||
|
Convertible notes
|
||||
|
Loan to shareholder
|
||||
|
Total liabilities
|
$ | |||
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
7.
Investment in associate (continued)
Summarized statement of loss
|
For the six
months ended January 31, 2026 |
For the three months ended January 31, 2026 | |||||||
|
Operating expenses
|
||||||||
|
General and administrative expenses
|
$ | $ | ||||||
|
Guaranteed payments
|
||||||||
|
Legal and professional fees
|
||||||||
|
Travel
|
||||||||
|
Amortization
|
||||||||
|
Total operating expenses
|
( | ) | ( | ) | ||||
|
Interest expenses
|
( | ) | ( | ) | ||||
|
Net loss
|
$ | ( | ) | $ | ( | ) | ||
|
Company’s ownership
|
% | % | ||||||
|
Company’s share of loss
|
$ | ( | ) | $ | ( | ) | ||
A continuity of the Company’s investment in associate is as follows:
|
Balance as at July 31, 2024
|
$ | |||
|
Investment by the Company
|
||||
|
Company’s share of loss
|
( | ) | ||
|
Balance as at July 31, 2025
|
$ | |||
|
Company’s share of loss
|
( | ) | ||
|
Balance as at January 31, 2026
|
$ |
8.
Equity Line of Credit (“ELOC”)
On October 29, 2024, the Company entered into the ELOC Agreement with Helena Global Investment Opportunities I Ltd (“Helena I”). Under the ELOC Agreement, the Company will have the right to issue and to sell to Helena I from time to time, up to $40,000,000 of the Company’s common shares following the closing of the De-SPAC Transaction and the effectiveness of the registration statement registering the Company’s 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, 50,000 shares of the Company was issued upon closing of the De-SPAC transaction. Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming effective, the Company issued to Helena I common shares equal to $125,000 divided by the greater of (i) the lowest one-day VWAP during the trading days immediately preceding the effectiveness date of such Registration Statement and (ii) $7.50 . On March 17, 2025, the Company issued 16,666 shares in satisfaction of this obligation.
The Company may require that Helena purchase the Company’s common shares by delivering one or more advance notices to Helena setting forth, in each advance notice, the amount of advance it is requesting, which amount may not exceed an amount equal to the lesser of (i) 100 % of the average of the daily value traded of the common shares over the 10 trading days immediately preceding such advance notice, and (ii) $8,000,000 . However, in no event may the number of common shares issuable to Helena pursuant to an advance cause the aggregate number of shares beneficially owned (as calculated pursuant to Section 13 (d) of the Exchange Act) by Helena and its affiliates as a result of previous issuances and sales of common shares to Helena under the ELOC Agreement to exceed 9.99 % of the then outstanding common shares.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
8.
Equity Line of Credit (“ELOC”) (continued)
On March 18, 2025, the Company and Helena I entered into a first amendment to ELOC Agreement, which allows Helena to permit Secondary Advances, as defined in the amendment, as well as to update references to “Common Stock” in the ELOC Agreement to “Common Shares”. On August 4, 2025, the Company and Helena entered into a second amendment to ELOC Agreement, which increased the commitment amount from $40,000,000 to $300,000,000 .
On
December 3, 2025, the Company entered a side letter with Helena I, amending the
terms of the Company’s existing convertible note and ELOC Agreement. The
amendment places temporary limits on Helena’s sales of conversion shares,
subject to trading-volume conditions, and requires the Company to submit
advance notices sufficient to receive at least $7,500,000 in net proceeds under
the ELOC prior to February 28, 2026. The Company has not submitted advance
notices to receive sufficient net proceeds as of February 28, 2026, as the
Company subsequently entered into a binding term sheet for a merger (Note 17),
which placed restrictions on further drawdowns of the ELOC by the Company.
As at January 31, 2026, $5,536,019 have been drawn against the ELOC through the issuance of 2,056,700 shares. During the six months ended January 31, 2026, $2,207,938 has been drawn against the ELOC through the issuance of 1,211,000 shares (Note 13).
9.
Accounts payable and accrued liabilities
| January 31, 2026 | July 31, 2025 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Excise taxes payable | ||||||||
| Income taxes payable | ||||||||
| Accounts payable, related parties | ||||||||
| Accrued liabilities, related parties | ||||||||
| $ | $ | |||||||
10.
Convertible debentures
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, is payable at maturity, subject to acceleration if the Company completes the De-SPAC transaction and the debentures are not converted. The maturity was 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 of the Company’s shares, and one of Devvio’s officers, directors and principal owners was a director of the Company during the year ended July 31, 2024 and until November 7, 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) $76.50 multiplied by the common conversion ratio as set forth in the BCA (the “Common Conversion Ratio”), and (b) CAD$10.30 . 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.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (continued)
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 for the De-SPAC transaction, the principal and accrued interest are convertible into units consisting of one SVS and 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$10.30 .
●
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$10.30 . The warrants will expire 2 years after the conversion date.
The conversion price is subject to certain anti-dilution provisions.
At issuance, 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.
On November 6, 2024, the Company completed the De-SPAC transaction (Note 4), and accordingly, the conversion terms of the principal amount and accrued interest crystalized such that they are convertible, at the option of the lender, at a conversion price of $11.70 (being $76.50 multiplied by the Common Conversion Ratio). If the convertible notes are not converted into shares, the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.
Upon the crystallization of the conversion price, the conversion option met the definition of equity under Topic 815 and bifurcation is no longer required. The fair value of the conversion option was remeasured on November 6, 2024 to be $176,000 and was transferred into equity. The fair value was estimated using the Black-Scholes Option Pricing model using the following assumptions: expected dividend yield - 0 %, expected volatility - 275 %, risk-free interest rate - 3.10 % and an expected remaining life - 0.6 years.
On November 12, 2024, the maturity of the Devvio Tranche was extended to May 30, 2025. As there was no change to the cash flows as a result of this change, the 10% test was not met and therefore, there was no extinguishment of the debt as a result of this change. The Devvio Tranche is outstanding as of January 31, 2026, and the Company is in the process of negotiating a further extension.
Focus Impact Partners Convertible Debt (Related Party Convertible Debt)
In the prior year, the Company closed an unsecured convertible notes offering with Focus Impact Partners, LLC (“Focus Impact Partners”). Subsequent to the closing of the De-SPAC transaction, Focus Impact Partners became a related party of the Company as one of the directors of the Company is an officer of 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 4) and the debentures are not converted. The maturity date for all advances was 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.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
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) a 25 % discount to the 20 -day VWAP of the shares on the Cboe Exchange multiplied by the Common Conversion Ratio, and (b) $20.00 (the De-SPAC Floor Price”).
●
The shares are thereafter exchanged for common shares of the 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), or the termination of the BCA with Focus Impact, the principal and accrued interest are convertible into units consisting of one SVS and 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 $4.75 .
●
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 $4.75 .
●
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 (“the June 2024 Amendment”) such that the De-SPAC Floor Price would be amended from $20.00 to CA$4.75 .
On June 28, 2024, the Company received additional proceeds of $20,000 under the June 2024 Amendment.
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 under the June 2024 Amendment.
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 year ended July 31, 2025 was estimated to be $65,750 as valued using the Monte Carlo model.
The June 2024 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.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (continued)
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.
On November 13, 2024, the Company issued a new $637,150 convertible note bearing interest of 5.3 % per annum, with a maturity date of November 13, 2026 (“New Focus Impact Partners Convertible Debt”), in exchange for the cancellation of the Focus Impact Partners Convertible Debt as described above (the “November 2024 Amendment”). The principal loan amount and any accrued interest under the New Focus Impact Partners Convertible Debt are convertible into common stock of the Company at the option of the holder at a 25 % discount to the 20 -day volume weighted average price of the Company’s shares, subject to a floor of $8.67 per share. The Company retains 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.
Accrued interest on the previously existing Focus Impact Partners Convertible Debt, amounting to $21,129 , were not converted into the New Focus Impact Partners Convertible Debt, and were transferred to accrued liabilities of the Company.
As a result of the November 2024 amendment, the conversion option met the definition of equity under Topic 815 and bifurcation is no longer required. As the conversion option was bifurcated before the amendment but not bifurcated after the amendment, a change in the fair value of the conversion option of over 10 % of the of the carrying amount of the original debt without the bifurcation at inception constitutes a substantial change. Immediately prior to the November 2024 Amendment, the value of the conversion feature associated with the Focus Impact Partners Grid Note was $2,250,000 . The fair value of the conversion feature was $59,000 after the November 2024 Amendment as estimated using the Monte Carlo model. With the 10 % test being met, extinguishment accounting was applied. The carrying value of the old debt of $637,650 was derecognized and the fair value of the new debt of $544,441 (based on a 14 % market yield) was recognized. The fair value of the conversion feature of $59,000 was transferred to equity. As Focus Impact Partners is a related party, the gain on the extinguishment of $93,209 was recognized in equity as a capital transaction pursuant to ASC 470-50-40-2.
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 date was 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) $20.00 . The shares are thereafter exchanged for common shares of Focus Impact at the Common Conversion Ratio.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (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 January 18, 2025 (270 days from the issuance date of the notes) and the termination of the BCA for the De-SPAC transaction, the principal and accrued interest are convertible into units consisting of one SVS and 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$4.75 .
●
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$4.75 . The warrants will expire 2 years after the conversion date.
The conversion price is subject to certain anti-dilution provisions.
The Envviron 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.
On November 6, 2024, the Company completed the De-SPAC transaction (Note 4), and accordingly, the conversion terms of the principal amount and accrued interest crystalized such that they are convertible, at the option of the lender, 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 the NASDAQ, and (b) $20.00 . If the convertible notes are not converted into shares, the principal plus interest will become repayable within 10 days after the closing of the De-SPAC transaction.
Upon the crystallization of the conversion price, the conversion option met the definition of equity under Topic 815 and bifurcation is no longer required. The fair value of the conversion option was remeasured on November 6, 2024 to be $31,000 and was transferred into equity. The fair value was estimated using the Monte Carlo model.
On November 12, 2024, the maturity of the Envviron Tranche are extended to May 30, 2025. As there was no change to the cash flows as a result of this change, the 10% test was not met and therefore, there was no extinguishment of the debt as a result of this change. The Envviron Tranche is outstanding as of January 31, 2026, and the Company is in the process of negotiating a further extension.
Debt Assumed on RTO
Upon the completion of the De-SPAC transaction (Note 4), the Company assumed two unsecured promissory notes amounting to $3,000,000 issued to Focus Impact Sponsor, LLC (the “Focus Impact Sponsor”), a significant shareholder of the Company. The promissory notes were interest-free and had a maturity date on the completion of the De-SPAC transaction (Note 4). Upon the completion of the De-SPAC transaction, $1,500,000 of the promissory notes was convertible into warrants of the Company at a price of $1.00 per warrant. The Company also assumed $345,000 of accrued administrative fees owing to Focus Impact Partners.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (continued)
On November 13, 2024, the Company issued new convertible notes totaling $3,345,000 , bearing interest of 5.3 % per annum, with a maturity date of November 13, 2026 (“New Convertible Debt”), in exchange for the cancellation of the assumed debt described above.
The principal loan amount and any accrued interest under the New Convertible Debt are convertible into common stock of the Company at the option of the holder at a 25 % discount to the 20 -day volume weighted average price of the Company’s shares, subject to a floor of $8.67 per share. 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.
As the conversion feature was not bifurcated before and after the amendment, a difference in the present value of cash flows under the terms of the new debt instrument of at least 10 % from the present value of the remaining cash flows under the terms of the original debt instrument constitutes a substantial change. The change was assessed to be in excess of 10 %. With the 10 % test being met, extinguishment accounting was applied. The carrying value of the old debt of $3,345,000 was derecognized and the fair value of the new debt of $2,856,042 (based on a 14 % market yield) was recognized. As Focus Impact Partners and the Focus Impact Sponsor are related parties, the gain on the extinguishment of $488,957 was recognized in equity as a capital transaction pursuant to ASC 470-50-40-2.
In connection with the New Focus Impact Partners Convertible Debt and the New Convertible Debt, 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.
Additional Focus Impact Partners Convertible Debt (Related Party Convertible Debt)
On March 19, 2025, the Company closed a convertible note offering in the principal amount of $218,000 with Focus Impact Partners that will bear interest at a rate of 5.3 % per annum, with a maturity date of March 19, 2027 (“Additional Convertible Debt”).
The principal loan amount and any accrued interest under the Additional Convertible Debt are convertible into common stock of the Company at the option of the holder at a 25 % discount to the 20 -day volume weighted average price of the Company’s shares. The Company has a 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.
Due to the absence of a floor conversion price, the Additional Convertible Debt was 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 liabilities at issuance was estimated to be $72,500 as valued using the Monte Carlo model. The fair value of the derivative liabilities as at January 31, 2026 was estimated to be $74,000 as valued using the Monte Carlo model.
Crypto Strategy Convertible Debt
On July 17, 2025, the Company entered into a securities purchase agreement with Helena for the issuance of up to fifty-nine tranches of convertible notes (“Crypto Strategy Convertible Debt”) for a total principal amount of $300,000,000 , with closings of each tranche subject to fulfillment of conditions. Each tranche will have an issuance discount of 8 %, and bear interest at a rate of 8 % per annum, with a maturity date of 18 months from the date of funding. Interest shall be payable by the Company on the first day of each month. At the option of the Company, the interest is payable in cash, through the issuance of additional notes, or under certain situations, through the issuance of common shares. The Crypto Strategy Convertible Debt ranks senior to all outstanding and future indebtedness of the Company. The securities purchase agreement will terminate automatically on July 17, 2027.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (continued)
The principal loan amount and any accrued interest under the Crypto Strategy Convertible Debt in issuance are convertible into common stock of the Company at the option of the holder at 95 % of the lowest daily volume weighted average price of the Company’s shares during the 5 preceding trading days, subject to a floor price of $0.7722 , and a cap price of $7.722 .
If the Company issues any debt or equity, the lenders have the option to cause the Company to direct 25 % of aggregate proceeds of such issuances to repay the Crypto Strategy Convertible Debt. The Company has a 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. A 10 % prepayment penalty is applied on any repayments prior to the maturity date.
During the period ending on the later of (i) 12 months after the closing date of the initial tranche of the Crypto Strategy Convertible Debt, and (ii) the termination of the securities purchase agreement for the Crypto Strategy Convertible Debt, if the Company offers new securities for sale, the lenders have first refusal to up to 25 % of the new securities being offered.
The proceeds of the Crypto Strategy Convertible Debt are subject to restrictions of use, with 70 % of the net proceeds of the initial tranche, and 75 % of the net proceeds of the subsequent tranches are required to be used to purchase cryptocurrencies. Until such time as the Company’s aggregate acquisition of cryptocurrencies equal or exceeds $20,000,000 (the “Digital Asset Threshold Amount”), the Crypto Strategy Convertible Debt will be secured by a first preference perfected security interest in all of the existing and future assets of the Company and its direct and indirect subsidiaries, including all of the capital stock of each of the subsidiaries and cryptocurrencies purchased with the proceeds of the Crypto Strategy Convertible Debt, as evidenced by a security agreement. Subject to certain exceptions contained in the purchase agreement for the Crypto Strategy Convertible Debt, upon the Company’s achievement of the Digital Asset Threshold Amount, the parties have agreed to amend the terms of the security agreement such that the Company’s obligations shall thereafter be secured exclusively by the cryptocurrencies held in the designated collateral control account.
As of January 31, 2026, the Crypto Strategy Convertible Debt is secured by up to $20,000,000 of proceeds from the Crypto Strategy Convertible Debt, held in a segregated account for trading in cryptocurrencies. The segregated account is subject to a crypto control account agreement, which requires lenders’ approval for actions taken in the segregated account.
On July 17, 2025, the Company closed the initial tranche of the Crypto Strategy Convertible Debt in the principal amount of $10,000,000 , for gross proceeds of $9,200,000 , with a maturity date of January 17, 2027 . The Company also incurred $85,000 in transaction costs in connection with the issuance. $6,405,000 of net proceeds are intended for the purchase of cryptocurrencies. As of January 31, 2026, $1,279,900 are held as cash in a segregated account, and are thus presented as restricted cash in the consolidated balance sheet and $5,125,100 has been used for purchase of cryptocurrencies (Note 6).
In connection with entering into the Crypto Strategy Convertible Debt, the Company entered into a registration rights agreement (the “RRA”), pursuant to which, the Company agreed to register for resale the common shares that are issuable upon conversion of the Crypto Strategy Convertible Debt. If the registration statement covering the resale of the common shares is not filed or declared effective by certain dates set forth in the RRA, the Company will be required to pay Helena I certain amounts as liquidated damages.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (continued)
On December 3, 2025, the Company received a consent and waiver letter from Helena in relation to a Merger Agreement (Note 13) entered into between the Company and Southern Energy Renewables Inc. (“Southern”), under which Helena agreed to (i) consent to the Company entering into the Merger Agreement; (ii) waive its right to terminate the securities purchase agreement for the Crypto Strategy Convertible Debt in relation to a potential change of control triggered by the execution of the Merger Agreement; (iii) waive its right to cause the Company to utilize 25 % of the aggregate proceeds of any issuances in connection with the Merger Agreement with Southern to repay the Crypto Strategy Convertible Debt.; (iv) waive its right to participate in any stock issuances contemplated by the Merger Agreement; (v) waive the Company’s obligation to deliver any notice of change of control triggered by the execution of the Merger Agreement, and other limited waivers.
A continuity of the Company’s convertible debentures is as follows:
|
Balance as at July 31, 2024
|
$ | |||
|
Issued
|
||||
|
Fair value of embedded derivative
|
( | ) | ||
|
Issuance discount
|
( | ) | ||
|
Transaction costs
|
( | ) | ||
|
Repayment
|
( | ) | ||
|
Accretion
|
||||
|
Interest
|
||||
|
Accrued interest transferred to accrued liabilities
|
( | ) | ||
|
Extinguishment
|
( | ) | ||
|
Assumed on RTO
|
||||
|
Balance as at July 31, 2025
|
$ | |||
|
Repayment
|
( | ) | ||
|
Accretion
|
||||
|
Interest
|
||||
|
Balance as at January 31, 2026
|
$ |
Breakdown of the Company’s convertible debentures is as follows:
|
January 31, 2026
|
July 31, 2025
| |||||||
|
Convertible debentures, short-term, related party
|
$ | $ | ||||||
|
Convertible debentures, long-term, related party
|
||||||||
|
Convertible debentures, short-term
|
||||||||
|
Convertible debentures, long-term
|
||||||||
| $ | $ |
The face value of the convertible debentures as of January 31, 2026 was $14,020,121 .
Below is a continuity of the embedded derivative liabilities:
|
Balance as at July 31, 2024
|
$ | |||
|
Derivative liability component
|
||||
|
Change in fair value of derivative liabilities
|
( | ) | ||
|
Transferred to equity
|
( | ) | ||
|
Balance as at July 31, 2025
|
$ | |||
|
Change in fair value of derivative liabilities
|
||||
|
Balance as at January 31, 2026
|
$ |
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
10.
Convertible debentures (continued)
In connection with the issuance of the convertible debentures during the year ended July 31, 2025, the Company incurred $85,000 in directly attributable transaction costs, which are allocated to the convertible debenture.
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, 2025) |
As at July 31, 2025 | As at January 31, 2026 | |||||||
|
Probability of De-SPAC Transaction closing
|
|
N/A | N/A | ||||||
|
Risk-free interest rate
|
|
% | % | ||||||
|
Expected term (years)
|
|
||||||||
|
Expected annual volatility for the Company
|
|
% | % | ||||||
|
Expected annual volatility for Focus Impact
|
|
N/A | N/A | ||||||
|
Common conversion ratio
|
|
N/A | N/A | ||||||
|
Foreign exchange rate
|
|
N/A | N/A |
As at January 31, 2026, the conversion options attached to the Devvio Tranche, the Focus Impact Partners Convertible Debt, the Envviron Tranche, and the New Convertible Debt meet the definition of equity under Topic 815 and are accordingly no longer presented as derivative liabilities. Only the conversion option attached to the Additional Convertible Debt is presented as derivative liabilities.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
11.
Warrant liabilities
Impact of Change in Functional Currency on August 1, 2024
As at July 31, 2024, the Company had 132,811 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 121,995 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.
Changes to warrant liability during the six months ended January 31, 2026
As at January 31, 2026, the fair value of the liability classified warrants were remeasured at $1,868,874 using the Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0 %, expected volatility - 150 %, risk-free interest rate – 2.93 % and an expected remaining life of 3.74 years. The Company recognized ($3,757,599 ) as a change in fair value for the six months ended January 31, 2026.
The following is a continuity of the Company’s derivative warrant liabilities:
|
Balance as at July 31, 2024
|
$ | |||
|
Warrants fair value upon change in functional currency (Note 2)
|
||||
|
Warrants issued upon De-SPAC transaction (Note 4)
|
||||
|
Warrants to be issued (mandatory convertible debentures)
|
||||
|
Change in fair value of warrant liabilities (exercised warrants)
|
||||
|
Change in fair value of warrant liabilities (expired warrants)
|
( | ) | ||
|
Fair value of warrants exercised
|
( | ) | ||
|
Change in fair value of warrant liabilities
|
( | ) | ||
|
Balance as at July 31, 2025
|
$ | |||
|
Change in fair value of warrant liabilities
|
( | ) | ||
|
Balance as at January 31, 2026
|
$ |
12.
Stock option liabilities
Impact of listing on the NASDAQ on November 6, 2024
As at November 6, 2024, the Company had 62,772 stock options outstanding. The exercise price of these stock options is denominated in CAD. Due to the listing of the Company on the NASDAQ (Note 4) and commencement of trading of shares in the United States dollars, exemptions available under ASC 718-10-25-14 to classify stock options with strike prices in foreign currencies as equity were no longer met and all stock options outstanding were reassessed to be derivative liabilities. The fair value of the stock options upon the change in classification on November 6, 2024 of $330,090 , was
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
12.
Stock option liabilities (continued)
remeasured using the Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0 %, expected volatility - 97 %, risk-free interest rate – 3.12 % and an expected remaining life – 5.96 years. The fair value of these options 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 option liabilities on August 1, 2024 was $1,381,715 . Pursuant to ASC 815-40-35-9, the difference is recognized within equity.
Changes to stock option liability during the six months ended January 31, 2026
As at January 31, 2026, the fair value of the liability classified stock options were remeasured at $32,042 using Black-Scholes option pricing model, with the following assumptions (weighted average): expected dividend yield - 0 %, expected volatility - 150 %, risk-free interest rate – 3.06 % and an expected remaining life of 4.73 years. The Company recognized ($101,423 ) as a change in fair value for the six months ended January 31, 2026, which is presented within salaries and wages.
The following is a continuity of the Company’s derivative stock option liabilities:
|
Balance as at July 31, 2024
|
$ | |||
|
Stock options fair value upon change De-SPAC transaction (Note 4)
|
||||
|
Change in fair value of stock option liabilities
|
( | ) | ||
|
Balance as at July 31, 2025
|
$ | |||
|
Change in fair value of stock option liabilities
|
( | ) | ||
|
Balance as at January 31, 2026
|
$ |
13.
Share capital
(a)
Authorized
The Company is authorized to issue an number of common stock without par value.
The Company is authorized to issue an number of preferred stock, issuable in series in accordance with the Business Corporations Act of Alberta, Canada.
(b)
Shares issued
Shares issued during the six months ended January 31, 2026
In August 2025, the Company issued 300,000 shares in accordance with the ELOC Agreement with Helena I (Note 8) for gross proceeds of $756,600 .
In December 2025, the Company issued 411,000 shares in accordance with the ELOC Agreement with Helena I (Note 8) for gross proceeds of $821,238 .
On December 3, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Southern and Sierra Merger Sub, Inc., a Delaware corporation and a newly-formed wholly owned subsidiary of the Company. The transaction contemplates (i) a domestication of the Company into a Delaware corporation, (ii) a merger in which Southern will become a wholly owned subsidiary of the Company, and (iii) the issuance of Company common shares to Southern’s existing shareholders such that, upon completion of the merger, the Southern shareholders (inclusive of the concurrent PIPE described below) will hold approximately 70 % of the Company’s common shares on a fully diluted basis, resulting in a reverse takeover of the Company by Southern. The Merger Agreement is subject to termination, pursuant to a binding term sheet for a three-party merger among the Company, Southern, and XCF Global Inc. (“XCF”) (Note 17), whereupon the execution of a definitive agreement for such three-party merger, the Merger Agreement between the Company, Southern and Sierra Merger Sub Inc. shall be terminated. Any definitive agreement for such three-party merger shall be subject to the parties thereto mutually agreeing to acceptable terms prior to execution thereof.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
13.
Share capital (continued)
(b)
Shares issued (continued)
Concurrent with signing the Merger Agreement with Southern, the Company entered into a Securities Purchase Agreement with EEME Energy SPV I LLC pursuant to which the Company issued 128,370 shares of its common stock for aggregate gross proceeds of $2,000,004 in a private placement transaction at a price of $15.58 per share. The Company also agreed to register the resale of the PIPE shares and the shares issuable to Southern shareholders following the closing of the merger.
In January 2026, the Company issued 500,000 shares in accordance with the ELOC Agreement with Helena I (Note 8) for gross proceeds of $630,100 .
Shares issued during the six months ended January 31, 2025
On September 5, 2024, the Company issued 1,596 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 28, 2024, the Company issued 2,244 shares with a fair value of $49,500 for the conversion of the mandatory convertible debentures.
On October 29, 2024, the Company issued 9,176 shares for the exercise of 9,176 share purchase warrants, at an exercise price of CAD$13.08 per share for gross proceeds of $86,237 . The fair value of the warrants was $303,492 .
On November 6, 2024, the Company completed the De-SPAC transaction (Note 4), with each of former Devv Holdings shares converted to securities of the Company on a 1 to 0.152934 basis. All disclosures in these financial statements on number of shares have been accordingly converted on the same basis. 515,920 shares with a fair value of $3,147,118 were retained by former shareholders of the Company as consideration for the De-SPAC transaction.
On November 6, 2024, upon completion of the De-SPAC transaction (Note 4), the Company also issued:
●
●
●
●
●
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
13.
Share capital (continued)
(b)
Shares issued (continued)
On November 13, 2024, the Company issued 55,729 shares with a fair value of $585,155 in consideration to Focus Impact Partners, for entering into a strategic consulting agreement (Note 17).
On December 27, 2024, the Company issued 41,247 shares with a fair value of $317,608 in settlement of accounts payable and accrued liabilities with various vendors of the Company, in the amount of $1,225,000 , and recognized a gain on settlement of $907,392 .
(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, 2024
|
$ | |||||||||||
|
Issued on RTO (Note 4)
|
$ | - | ||||||||||
|
Exercised
|
( | ) | $ | - | ||||||||
|
Expired
|
( | ) | $ | - | ||||||||
|
Balance, July 31, 2025
|
$ | |||||||||||
|
Balance, January 31, 2026
|
$ |
As at January 31, 2026, the following share purchase warrants were outstanding:
| Number of warrants outstanding | Exercise price | Expiry date | ||||||
| | ||||||||
| * | $ | | ||||||
* Each warrant exercisable for 0.09692 common stock.
All of the warrants outstanding are liability classified (Note 11).
The Company has 1,122 warrants with an exercise price of CAD$67.30 to be issued as of January 31, 2026.
Of the 22,699,987 warrants issued on the RTO, 11,200,000 were to replace former SPAC public warrants (“Public Warrants”), and 11,499,987 were to replace former SPAC private warrants (“Private Warrants”, together with Public Warrants, “SPAC Warrants”). Each SPAC Warrant is exercisable at $1.52 for 0.09692 shares of common stock.
In connection with the Initial Business Combination, the Company assumed the agreements for the SPAC Warrants between the Company’s predecessor, Focus Impact Acquisition Corp., and Continental Stock Transfer & Trust Company, as warrant agent, and entered into such amendments thereto as were necessary to give effect to the provisions of the BCA, and each SPAC Warrant then outstanding and unexercised automatically without any action on the part of its holder was converted into a warrant of the Company.
Each replacement warrant is subject to the same terms and conditions, including exercisability terms, as were applicable to the corresponding SPAC Warrants immediately prior to the Initial Business Combination, except to the extent of such terms or conditions that are rendered inoperative by the Initial Business Combination. Accordingly, following the Initial Business Combination:
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
13.
Share capital (continued)
(c)
Share purchase warrants (continued)
●
each replacement warrant will be exercisable solely for the Company’s common shares;
●
the number of the Company’s common shares subject to each replacement warrant will be equal to the number of Class A common shares subject to the applicable SPAC Warrant (subject to amendments as set forth in the agreement to the SPAC Warrants)
●
the per share exercise price for the Company’s common shares issuable upon exercise of such replacement warrant will be equal to the per share exercise price for the Class A Common Shares subject to the applicable SPAC Warrant, as in effective prior to the Initial Business Combination (subject to amendments as set forth in the agreement to the SPAC Warrants)
Public Warrants
The Company had agreed that as soon as practicable, but in no event later than business days after the closing of the Initial Business Combination, the Company would use commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of common stock issuable upon exercise of the warrants, and the Company would use commercially reasonable efforts to cause the same to become effective within 60
If a registration statement covering the shares of common stock issuable upon exercise of the warrants is not effective by the 60th day after the closing of the Initial Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company would have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption, but use commercially reasonable efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the lessor of (A) the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the excess of the “fair market value” (defined below) less the exercise price of the warrants by (y) the fair market value and (B) the product of 0.361 and the number of whole warrants being exercised by such holder. The “fair market value” as used in this paragraph shall mean the volume weighted average price of the common stock for the 10 trading days ending on the trading day prior to the date on which the notice of exercise is received by the warrant agent.
Private Warrants
The Private Warrants are not redeemable by the Company so long as they are held by Focus Impact Sponsor or its permitted transferees. Focus Impact Sponsor or its permitted transferees have the option to exercise the Private Warrants on a cashless basis.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
13.
Share capital (continued)
(c)
Share purchase warrants (continued)
Company’s right to redemption of warrants
The Company may redeem the outstanding Public Warrants under the following conditions, while a registration statement covering the common stock issuable upon exercise of the warrants is effective, upon a minimum of 30
(1)
Redemption at a price of $0.01 per warrant
If common stock is trading at a price in excess of $23.90 (“Upper Redemption Trigger”) for any 20 trading days within a 30 -day period ending trading days before the Company sends a notice of redemption to the warrant holders.
(2)
Redemption at a price of $0.10 per warrant
If the common stock is trading in excess of $13.20 (“Lower Redemption Trigger”) for any 20 trading days within a 30 -day period ending trading days before the Company sends a notice of redemption to the warrant holders.
Concurrently, if the common stock is trading at a price of less than the Upper Redemption Trigger for any 20 trading days within a 30 -day period ending trading days before the Company sends a notice of redemption to the warrant holders, the Private Warrants must also be concurrently called for redemption on the same terms as the Public Warrants.
Adjustments to exercise price of SPAC Warrants
The terms of the SPAC Warrants provided for an adjustment of the exercise price if the Initial Business Combination issued shares at a price (“Newly Issued Price”) below $92.00 per share, the aggregate gross proceeds from such issuances represent more than 60 % of total equity proceeds, and the 20 -day VWAP of the Company’s shares upon Initial Business Combination (“Market Value”) is below $92.00 .
In such event, the exercise price will be adjusted to be 115 % of the higher of the Market Value and the Newly Issued Price (“Reference Price”); the Upper Redemption Trigger will be adjusted to be 180 % of the Reference Price ; and the Lower Redemption Trigger will be adjusted to the Reference Price.
On December 6, 2024, the Company determined the Newly Issued Price was $13.20 ; and the Market Value was $9.40 . Accordingly the Reference Price was set at $13.20 . The Company accordingly issued a notice of warrant adjustment to holders of SPAC Warrants, effecting the following adjustments in accordance with the terms of the SPAC Warrants:
●
Adjustment to the exercise price of the SPAC Warrants to $1.52 per 0.09692 share of the common stock of the Company, being 115 % of Reference Price;
●
Adjustment of the Upper Redemption Trigger to $23.90 per share of the common stock of the Company, being 180 % of Reference Price;
●
Adjustment of the Lower Redemption Trigger to $13.20 per share of the common stock of the Company, being the Reference Price
The number of SPAC Warrants outstanding is not impacted by the consolidation arising from the RTO (Note 4) nor the reverse stock split of the Company. Correspondingly, the exercise price is also not adjusted. Instead, the number of shares each SPAC Warrant is exercisable into is adjusted to account for such adjustments. Upon the RTO, the number of shares each SPAC Warrant is exercisable into (“Exercise Ratio”) is reduced from 1 to 0.9692 . Upon reverse stock-split in August 2025, the Exercise Ratio is further reduced to 0.09692 .
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
13.
Share capital (continued)
(c)
Share purchase warrants (continued)
As set forth in the warrant agreement for the SPAC Warrants, the SPAC Warrants are not exercisable for any fractional shares. If, by reason of any adjustment made pursuant to the terms of the SPAC Warrants, the holder would be entitled to a fractional interest in a shares upon exercise of such SPAC Warrant, the Company shall round down to the nearest whole number of common shares to be issued to such holder upon exercise.
(d)
Stock options
The continuity of the Company’s stock options is as follows:
|
Number of stock options |
Weighted average exercise price | |||||||
|
Outstanding, October 31, 2024 and July 31, 2024
|
$ | |||||||
|
Forfeited
|
( | ) | $ | |||||
|
Granted
|
$ | |||||||
|
Cancelled
|
( | ) | $ | |||||
|
Outstanding, July 31, 2025
|
$ | |||||||
|
Outstanding, January 31, 2026
|
$ | |||||||
|
Exercisable, July 31, 2025
|
$ | |||||||
|
Exercisable, January 31, 2026
|
$ |
As at January 31, 2026, the weighted average remaining contractual life of outstanding options is 4.41 years (July 31, 2025 – 4.90 years).
As at January 31, 2026, the following stock options were outstanding and exercisable:
| Number of options
outstanding | Exercise price | Expiry date | Number of options exercisable | ||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
| $ | | ||||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
| CAD$ | | ||||||||||
No stock options were issued during the six months ended January 31, 2026 and 2025.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
13.
Share capital (continued)
(d)
Stock options (continued)
Share-based compensation – Stock options
Share-based payments relating to the vesting of stock options for the six months ended January 31, 2026 was $36,874 (2025 - $47,191 ) and is recorded as salaries and wages on the consolidated statement of operations.
As of November 6, 2024, upon the listing of the Company’s shares on the NASDAQ, 58,644 stock options outstanding are liability classified (Note 12).
As of January 31, 2026, the total intrinsic value of stock options outstanding and exercisable was $Nil and $Nil , respectively. The intrinsic value of outstanding stock options is based on the Company’s closing stock price on January 31, 2026.
(e)
Restricted stock units (“RSUs”)
The continuity of the Company’s RSU’s is as follows:
| Number of RSUs | ||||
|
Outstanding, July 31, 2024
|
||||
|
Granted
|
||||
|
Forfeited
|
( | ) | ||
|
Outstanding, July 31, 2025 and January 31, 2026
|
As at January 31, 2026, the following RSUs were outstanding and vested:
|
Number of RSUs
outstanding
|
Grant date
|
Number of RSUs
Vested
| |||||||||
|
November 30, 2021
| |||||||||||
|
December 24, 2021
| |||||||||||
|
March 1, 2022
| |||||||||||
|
March 14, 2022
| |||||||||||
|
July 30, 2024
| |||||||||||
|
March 26, 2025
| |||||||||||
Share-based compensation – RSU’s
Share-based payments relating to the vesting of RSUs for the six months ended January 31, 2026 was $79,764 (2025 - $245,705 ) and is recorded as salaries and wages on the consolidated statement of operations.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
14.
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 January 31, 2026, the Company had amounts owing and accrued liabilities of $90,318 (July 31, 2025 - $794,990 ) 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 six months ended January 31, 2026, the Company incurred wages and management fees of $230,435 and $97,000 , respectively, to officers of the Company. Share based compensation incurred to officers and directors of the Company amounted to $75,081 .
During the six months ended January 31, 2026, the Company accrued interest of $125,242 on convertible debentures payable to related parties (Note 10).
15.
Financial instruments
As at January 31, 2026, the Company’s financial instruments consist of cash, restricted cash, trade receivable, GST receivable, corporate taxes receivable, deposit on carbon credits purchase, accounts payable and accrued liabilities, convertible debentures, warrant liabilities, stock option liabilities, stop loss provision liabilities and derivative liabilities. The Company classifies cash, GST receivable, corporate taxes receivable, and deposit on carbon credits purchase 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 warrant liabilities, stock option liabilities, and stop loss provision liabilities 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 was measured at FVTPL, until upon their amendments (Note 10), or the completion of the De-SPAC transaction (Note 4) of the Company, when they met the criteria for equity classification and were transferred to equity.
The Company’s derivative liabilities are level 3 financial instruments and its warrant liabilities and stock option 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.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
15.
Financial instruments (Continued)
The risk exposure arising from these financial instruments is summarized as follows:
(a)
Credit risk
The Company’s financial assets are cash, restricted cash, trade receivable, GST receivable, corporate taxes receivable, and deposit on carbon credits purchase. The Company’s maximum exposure to credit risk, as at period end, is the carrying value of its financial assets, being $2,804,470 . 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 January 31, 2026, the Company had cash of $815,707 to settle the cash
settled obligation of current liabilities of $23,334,157 which fall due for
payment within twelve months of the balance sheet. All of the Company’s cash
settled 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 January 31, 2026, the Company has minimal exposure to these risks.
16.
Segmented information
The Company operates in one no reportable segment revenues. The Company’s assets are located in Canada.
17.
Commitments and contingencies
●
On September 12, 2023, the Company amended its 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 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 1,000,000 in any year, Devvio has the right to terminate the Strategic Partnership Agreement. The agreement is amended on October 28, 2025 to eliminate the aforementioned payment obligations.
●
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. Such amount was paid on November 26, 2024. 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. The amounts due on January 1, 2025 were paid on January 9, 2026. The Company has accrued $1,000 in connection with the annual fee payable as of January 31, 2026.
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
17.
Commitments and contingencies (Continued)
●
On November 13, 2024, the Company entered into a strategic consulting agreement with Focus Impact Partners, pursuant to which the Focus Impact Partners will provide the Company 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) the Company has successfully raised $5,000,000 in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) the Company has 2 or more consecutive quarters of positive cash flow from operations. As of January 31, 2026, neither condition has been met. 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. 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.
●
Holders of the Company’s common stock, including Focus Impact Sponsor and historical holders of Devv Holdings, as well as holders of SPAC Warrants are entitled to registration rights pursuant to registration rights agreements signed prior to the RTO, requiring the Company to register such securities for resale. The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that the Company registers such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of the Initial Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act.
●
On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other measures, a new U.S. federal 1% excise tax on certain repurchases, including redemptions, of stock by publicly traded domestic corporations in the U.S. The excise tax is imposed on the repurchasing corporation and the amount of the excise tax is generally 1% of the fair market value of the stock repurchased. However, for the purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. During 2024, the IRS issued final regulations with respect to the timing and payment of excise tax. Pursuant to those regulations, the Company would need to file a return and remit payment for any liability incurred during the period from January 1, 2023 to December 31, 2023 on or before October 31, 2024. The Company is currently evaluating its obligations with respect to this provision of the IR Act. As the Company was formerly a special purposes acquisition corporation, redemption of shares by shareholders took place prior to the Initial Business Combination. The Company accrued $2,410,973 in excise taxes payable (Note 9), however has not made a payment as of January 31, 2026. If the Company is unable to pay its obligations in full, it may be subject to additional interest and penalties which are currently estimated at 10 % interest per annum and a 5 % underpayment penalty per month or portion of a month up to 25 % of the total liability for any amount that is unpaid from November 1, 2024 until paid in full.
- On October 28, 2025, in accordance with an amendment to the strategic partnership agreement with Devvio, a related party, the Company agreed to purchase DevvE tokens annually in the amount of $
DevvStream Corp.
Notes to Condensed Consolidated Interim Financial Statements
(Unaudited - Expressed in United States dollars)
For the three and six months ended January 31, 2026 and 2025
17.
Commitments and contingencies (Continued)
●
On January 15, 2026, the Company executed a binding term sheet with Fayafi to establish a jointly governed special purpose vehicle expected to be formed within 90 days. The platform is intended to scale to approximately $100 million in capital commitments by the end of 2027 and will focus on investments in decarbonization and environmental infrastructure. Profits are expected to be distributed 80 % to Fayafi and 20 % to the Company, and the Company expects to receive a one-time setup fee and ongoing consulting fees once capital deployment begins. As of the date of issuance of these financial statements, the SPV has not yet been formed, and no capital has been committed or deployed.
●
On January 26, 2026, the Company entered into a binding term sheet with XCF Global, Inc. and Southern to pursue a proposed three-party merger. The contemplated transaction would combine the parties into an integrated platform focused on sustainable aviation fuel (“SAF”), environmental attribute monetization, and related low-carbon fuel initiatives. The term sheet establishes a framework for negotiating definitive agreements, which remain subject to further negotiation and approval by the respective boards of directors. As of January 31, 2026, no definitive merger agreement has been executed, and no transaction has been consummated. Accordingly, no amounts have been recognized in the accompanying condensed consolidated financial statements related to this proposed transaction.
Any definitive agreement for such three-party merger shall be subject to the parties thereto mutually agreeing to acceptable to terms prior to execution thereof.
●
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 January 31, 2026, 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.
18.
Subsequent events
Debt conversion side letter with Helena I
On February 10, 2026, the Company and Helena I entered into a side letter in relation to the Crypto Strategy Convertible Debt (Note 10), wherein Helena I commits to convert at least $9,000,000 of the aggregate outstanding principal and/or accrued interest into common shares of the Company on or before May 10, 2026, subject to no events of default by the Company, and the Company being in material compliance with all covenants and obligations under the securities purchase agreement in relation to the Crypto Strategy Convertible Debt, the ELOC Agreement (Note 8) and all other transaction documents between the Company and Helena I. The Company shall issue a convertible promissory note for the amount of $250,000 in the same form as the Crypto Strategy Convertible Debt as consideration for entering into this agreement.
Nasdaq Continued Listing Requirements
On November 18, 2025, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that its net income from continuing operations had fallen below the minimum requirement for continued listing on the Nasdaq Capital Market (the “Minimum Net Income Requirement”) and that the Company does not meet the alternatives of market value of listed securities or stockholders’ equity (collectively with the Minimum Net Income Requirement, the “Continued Listing Standards”). On February 23, 2026, the Company received a letter from the Listing Qualifications Department of Nasdaq notifying the Company that the Nasdaq Staff had granted the Company an extension until May 18, 2026 to regain compliance with the Continued Listing Standards.
Issuance of shares
On March 12, 2026,
the Company issued 454,670 shares pursuant to a conversion of $330,000 of
principal of the Crypto Strategy Convertible Debt (Note 10) at a price of
$0.7258 per share for a conversion notice received on March 4, 2026 from Helena
I.
These transactions occurred after the balance sheet date and do not relate to conditions existing as of January 31, 2026. Accordingly, no adjustments have been made to the accompanying financial statements.
FORWARD LOOKING STATEMENTS AND CERTAIN CONSIDERATIONS
This report, along with other documents that are publicly disseminated by us, contains or might contain forward-looking statements within the meaning of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements included in this report and in any subsequent filings made by us with the Securities and Exchange Commission (the “SEC”) other than statements of historical fact, that address activities, events or developments that we or our management expect, believe or anticipate will or may occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially. We claim the protection of the safe harbor for forward-looking statements provided in the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act. Examples of forward-looking statements include: (i) projections of revenue, earnings, capital structure and other financial items, (ii) statements of our plans and objectives, (iii) statements of expected future economic performance, and (iv) assumptions underlying statements regarding us or our business. Forward-looking statements can be identified by, among other things, the use of forward-looking language, such as “believes,” “expects,” “estimates,” “may,” “will,” “should,” “could,” “seeks,” “plans,” “intends,” “anticipates” “outlook,” “continues,” “approximately,” “predicts,” “estimates,” “projects,” or “scheduled to” or the negatives of those terms, or other variations of those terms or comparable language, or by discussions of strategy or other intentions.
Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause the actual results to differ materially from those contemplated by the statements. The forward-looking information is based on various factors and was derived using numerous assumptions. Important factors that could cause our actual results to be materially different from the forward-looking statements include the following risks and other factors discussed under Item 1A “Risk Factors” in this report and under Item 1A “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on November 6, 2025. These factors include:
•
the Company’s ability to recognize the expected benefits of the Business Combination;
•
the number of stockholders that exercise dissenter’s rights in connection with the Merger;
•
the occurrence of any event, change or other circumstances that could give rise to the termination of negotiations and any subsequent definitive agreements with respect to the proposed merger transactions;
•
the outcome of any legal proceedings that may be instituted against the Company, Southern, the combined company or others;
•
the inability of the parties to successfully or timely consummate the Merger, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the Merger or that the approval of stockholders is not obtained;
•
changes to the proposed structure of the proposed merger transactions that may be required or appropriate as a result of applicable laws or regulations;
•
the ability to meet stock exchange listing standards following the consummation of the proposed merger transactions;
•
the risk that the proposed merger transactions disrupts current plans and operations of the Company or Southern as a result of the announcement and consummation of the proposed transactions;
•
the ability to recognize the anticipated benefits of the proposed merger transactions, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees;
•
costs related to the proposed merger transactions;
•
the Company’s Digital Asset Strategy and assets;
•
the Company’s ability to utilize its ELOC Agreement and to sell additional Convertible Notes to Helena (as such terms are defined below);
•
changes in the market price of Common Shares and the digital assets the Company owns;
•
the ability of the Company to maintain the listing of the Common Shares on Nasdaq;
•
future financial performance;
•
the impact from the outcome of any known and unknown litigation;
•
the ability of the Company to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses;
•
expectations regarding future expenditures of the Company;
•
the future mix of revenue and effect on gross margins of the Company;
•
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;
•
the ability of the Company to compete effectively in a competitive industry
•
the ability to protect and enhance the Company’s corporate reputation and brand;
•
future development activities, including, but not limited to, acquiring interests in carbon reduction projects and carbon credits and the development of software and technological applications to carbon credit projects and carbon credits;
•
expectations concerning the relationships and actions of the Company and its affiliates with third parties;
•
the impact from future regulatory, judicial and legislative changes in the Company’s industry;
•
the ability to locate and acquire complementary products or product candidates and integrate those into the Company’s business;
•
future arrangements with, or investments in, other entities or associations;
•
competitive pressures from other companies in the industries in which the Company operates;
•
the growth and value of the global carbon credit or I-REC market traded value;
•
the impact of regulatory uncertainty and changes related to digital assets, including potential classification of digital assets as securities;
•
risks relating to the custody of our tokens, including the loss or destruction of private keys required to access our tokens and cyberattacks or other data loss relating thereto, including smart contract related losses and vulnerabilities; and
•
the volatility of the market price and liquidity or trading of the securities of the Company.
While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims 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 the Company.
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 six months ended January 31, 2026 and 2025 (“interim financial statements”), which have been prepared in accordance with US GAAP and are included elsewhere in this Form 10-Q. 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 in this Form 10-Q. 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 are a company existing under the Business Corporations Act of Alberta, Canada. We were a special purpose acquisition corporation (“SPAC”) incorporated in Delaware, the United States on February 23, 2021.
On September 12, 2023 (and as amended May 1, 2024, August 10, 2024, and October 29, 2024, the “Business Combination Agreement”, or “BCA”), we entered into a Business Combination Agreement with DevvStream Holdings Inc. (the ‘‘Business Combination’’ or the ‘‘De-SPAC Transaction’’). The Business Combination was structured as an amalgamation of DevvStream Holdings Inc. (“Devv Holdings”) into a wholly owned subsidiary of the Company, following our redomiciling as an Alberta company. We were then renamed from Focus Impact Acquisition Corp. to DevvStream Corp. and continue the business of Devv Holdings 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 Devv Holdings, pursuant to the BCA. In connection with the completion of the business combination, we consolidated all of our issued and outstanding common stock on a 1:0.9692 basis. All the outstanding Devv Holdings subordinate voting shares (“SVS”) were exchanged for common stock of the Company on a common conversion ratio of 0.152934 (the “Common Conversion Ratio”). All the outstanding Devv Holdings multiple voting shares (“MVS”), being the equivalent of 10 SVS, were exchanged for common stock of the Company on the basis of the Common Conversion Ratio. In addition, all of the outstanding convertible securities of Devv Holdings were exchanged for securities of the Company on the basis of the Common Conversion Ratio, with corresponding adjustments to exercise prices, and otherwise on substantially the same economic terms and conditions. Our common shares commenced trading on the NASDAQ under the new ticker symbol “DEVS” on November 7, 2024.
Devv Holdings 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 Devv Holdings. Our results of operations are those of Devv Holdings, with our operations being included from November 6, 2024, the closing date of the De-SPAC Transaction, onwards.
Recent Developments
Cryptocurrency Treasury Strategy
On July 17, 2025, the Company entered into a securities purchase agreement with Helena for the issuance of up to fifty-nine tranches of convertible notes (“Crypto Strategy Convertible Debt”) for a total principal amount of $300,000,000, with closings of each tranche subject to fulfillment of conditions. Each tranche will have an issuance discount of 8%, and bear interest at a rate of 8% per annum, with a maturity date of 18 months from the date of funding. Interest shall be payable by the Company on the first day of each month. The securities purchase agreement will terminate automatically on July 17, 2027.
The principal loan amount and any accrued interest
under the Crypto Strategy Convertible Debt are convertible into common stock of
the Company at the option of the holder at 95% of the lowest daily volume
weighted average price of the Company’s shares during the 5 trading days
preceding the conversion, subject to a floor price of $0.7722, and a cap price
of $7.722.If the Company issues any debt or equity, the lenders
have the option to cause the Company to direct 25% of aggregate proceeds of
such issuances to repay the Crypto Strategy Convertible Debt.The
Company has a 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.
During the period ending on the later of (i) 12 months
after the closing date of the initial tranche of the Crypto Strategy
Convertible Debt, and (ii) the termination of the securities purchase agreement
for the Crypto Strategy Convertible Debt, if the Company offers new securities
for sale, the lenders have first refusal for up to 25% of the new securities
being offered.
The proceeds of the Crypto Strategy Convertible Debt
are subject to restrictions of use, with 70% of the net proceeds of the initial
tranche, and 75% of the net proceeds of the subsequent tranches required to be
used to purchase cryptocurrencies. The Crypto Strategy Convertible Debt is
secured by up to $20,000,000 of proceeds from the Crypto Strategy Convertible
Debt, held in a segregated account for trading in cryptocurrencies. The
segregated account is subject to a crypto control account agreement, which
requires lenders’ approval for actions taken in the segregated account.
On July 17, 2025, the Company closed the initial tranche of the Crypto Strategy Convertible Debt in the principal amount of $10,000,000, for gross proceeds of $9,200,000, with a maturity date of January 17, 2027. The Company also incurred $85,000 in transaction costs in connection with the issuance. $6,405,000 of net proceeds are intended for the purchase of cryptocurrencies. As of January 31, 2026, $1,279,900 are held as cash in a segregated account, and are thus presented as restricted cash in the consolidated balance sheet.
On August 1, 2025, the Company started deploying funds raised from its senior secured convertible notes facility with Helena Global Investment Opportunities I Ltd. (“Helena”) for purchases of Bitcoin and Solana, as part of the operational launch of the Company’s digital treasury strategy, supporting the Company’s long-term objectives in and the industry’s move towards sustainability-linked tokenization.
On February 10, 2026, the Company entered into a side letter agreement with Helena I in connection with the Crypto Strategy Convertible Debt. Under the agreement, Helena I committed to convert at least $9,000,000 of the aggregate outstanding principal and/or accrued interest of the Crypto Strategy Convertible Debt into common shares of the Company on or before May 10, 2026. The conversion commitment is subject to the Company not being in default and remaining in material compliance with all covenants and obligations under the related securities purchase agreement, the ELOC Agreement, and all other transaction documents between the Company and Helena I.
As consideration for entering into the side letter agreement, the Company agreed to issue Helena I a convertible promissory note in the principal amount of $250,000, in the same form as the Crypto Strategy Convertible Debt.
Proposed Merger with Southern Energy
On December 3, 2025, the Company entered into an Agreement and
Plan of Merger with Southern Energy Renewables Inc. (“Southern”) and Sierra
Merger Sub, Inc., a Delaware corporation and a newly-formed wholly owned
subsidiary of the Company. The transaction contemplates (i) a domestication of
the Company into a Delaware corporation, (ii) a merger in which Southern will
become a wholly owned subsidiary of the Company, and (iii) the issuance of
Company common shares to Southern’s existing shareholders such that, upon
completion of the merger, the Southern shareholders (inclusive of the
concurrent PIPE described below) will hold approximately 70% of the Company’s
common shares on a fully diluted basis. The Merger Agreement is subject to
termination, pursuant to a binding term sheet for a three-party merger among
the Company, Southern, and XCF Global Inc., whereupon the execution of a
definitive agreement, the Merger Agreement between the Company, Southern and
Sierra Merger Sub, Inc. shall be terminated.
Strategic Investment Platform with Fayafi
On January 15, 2026, the Company executed a binding term sheet with Fayafi to establish a jointly governed special purpose vehicle (“SPV”), which is expected to be formed within 90 days. The platform is intended to scale to approximately $100 million in capital commitments by the end of 2027 and will focus on investments in decarbonization and environmental infrastructure. Under the contemplated structure, profits are expected to be distributed 80% to Fayafi and 20% to the Company. The Company also expects to receive a one-time setup fee and ongoing consulting fees once capital deployment begins.
Proposed Three-Party Merger
On January 26, 2026, the Company entered a binding term sheet with XCF Global, Inc. and Southern to pursue a proposed three-party merger. The contemplated transaction would combine the parties into an integrated platform focused on sustainable aviation fuel (“SAF”), environmental attribute monetization, and related low-carbon fuel initiatives. The term sheet establishes a framework for negotiating definitive agreements, which remain subject to further negotiation and approval by the respective boards of directors.
Results of Operations — Three Months Ended January 31, 2026 Comparison Against the Three Months Ended January 31, 2025
|
For the Three
Months Ended January 31, 2026 |
For the Three Months Ended January 31, 2025 | |||||||
| Revenue | 7,043 | - | ||||||
|
Cost of sales
|
(6,773 | ) | - | |||||
|
Gross profit
|
270 | - | ||||||
|
Sales and marketing
|
147,423 | 404,797 | ||||||
|
Depreciation
|
- | 361 | ||||||
|
General and administrative
|
196,876 | 334,070 | ||||||
|
Professional fees
|
2,107,203 | 4,596,025 | ||||||
|
Salaries and wages
|
155,511 | 262,885 | ||||||
|
Share-based compensation
|
26,842 | (91,799 | ) | |||||
|
Total operating expenses
|
(2,633,855 | ) | (5,506,339 | ) | ||||
|
Staking income
|
25,911 | - | ||||||
|
Accretion and interest expense
|
(524,667 | ) | (188,241 | ) | ||||
|
Loss on investment in associate
|
(10,610 | ) | (106,850 | ) | ||||
|
Change in fair value of derivative liabilities
|
- | 2,067,350 | ||||||
|
Change in the fair value of warrant liabilities
|
1,474,301 | 497,355 | ||||||
|
Loss on revaluation of cryptocurrencies
|
(1,689,591 | ) | - | |||||
|
Gain on share settlement
|
- | 907,392 | ||||||
|
Stop-loss provision
|
(19,810 | ) | (1,024,713 | ) | ||||
|
Impairment of carbon credits
|
(12,968 | ) | (1,207,800 | ) | ||||
|
Foreign exchange gain (loss)
|
(23,544 | ) | 4,220 | |||||
|
Net loss
|
(3,414,563 | ) | (4,557,626 | ) |
During the three months ended January 31, 2026, we incurred a net loss of $3,414,563 compared to net loss of $4,557,626 for the three months ended January 31, 2025. An analysis of the decrease in net loss of $1,143,063, including the major components our results for the periods, is below.
Share-based compensation
During the three months ended January 31, 2026, we incurred share-based compensation of $26,842 compared to share-based compensation of $(91,799) for the three months ended January 31, 2025. Share-based payments relating to the vesting of Options increased by $52,139. Share-based payments relating to the vesting of RSUs decreased by $81,493.
During the three months ended January 31, 2026, we recognized an unrealized gain of $29,464 on stock options compared to the unrealized gain of $177,459 during the three months ended January 31, 2025. This decrease of $147,995 is due to period end fair value remeasurements, which are reflected in compensation expense. Please refer to Note 13 of the interim financial statements.
Professional fees
During the three months ended January 31, 2026, we incurred $2,107,203 in professional fees, as compared to $4,596,025 during the three months ended January 31, 2025. The reduction in professional fees reflects the fact that no Business Combination–related legal services were incurred in the current period, whereas such services were required in the comparative period.
Salaries and wages
During the three months ended January 31, 2026 and 2025, we incurred salaries and wages of $155,511 and $262,885, respectively, the majority of which were to officers of the Company.
Sales and marketing
Sales and marketing expenses for the three months ended January 31, 2026 and 2025 amounted to $147,423 and $404,797, respectively. The decrease is mainly attributable to expenditures in the comparative period associated with publications, industry events, and investor relations efforts undertaken following our successful closing of the Business Combination. The Company did not incur similar costs in the current period.
General and administrative
General and administrative expenses for the three months ended January 31, 2026 and 2025 amounted to $196,876 and $334,070, respectively, and primarily comprised of insurance costs and filing fees. The decrease reflects higher filing fees as a result of listing on the NASDAQ in the comparative period.
Loss on investment in associate
On November 6, 2024, the Company received 2,000,000 shares in Freedom Carbon Solutions LLC (formerly Monroe Sequestration Partners, LLC) (“FCS”), in connection with an agreement to acquire a stake in FCS in exchange for 200,000 shares of the Company that was entered into on October 28, 2024. At the time of acquisition, the 2,000,000 shares of FCS received by the Company represented 50% of FCS’s shares outstanding. During the three months ended January 31, 2026, the Company’s share of FCS’s loss was $10,610.
Foreign exchange gain (loss)
During the three months ended January 31, 2026 we recognized a foreign exchange loss of $23,544. During the three months ended January 31, 2025, we recognized a foreign exchange gain of $4,220. 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.
Loss on revaluation of cryptocurrencies
During the three months ended January 31, 2026, the Company recorded an unrealized loss of $1,689,591 on the remeasurement of its cryptocurrency holdings. This variance was driven by declines in the market prices of Bitcoin and Solana relative to their acquisition costs, resulting in losses of $687,656 and $1,001,935, respectively. Please refer to Note 6 of the interim financial statements.
Staking income
During the three months ended January 31, 2026, we recognized staking income of $25,911 from our Solana holdings. The income reflects rewards earned for delegating Solana tokens to validators on the Solana network. Staking rewards are measured at fair value using the market price on the date earned and are recorded as other income. No staking income was recognized in the comparative period as the Company had not yet initiated its staking program.
Change in fair value of derivative liabilities and mandatory convertible debenture
During the three months ended January 31, 2026, we recognized no gain or loss on derivative liabilities related to the convertible debt financing completed in March 2025 and recorded no gain or loss on mandatory convertible debentures. In comparison, during the three months ended January 31, 2025, we recognized a gain on derivative liabilities of $2,067,350 and a gain on mandatory convertible debentures of $497,355 related to the January 2024 and April 2024 convertible financings. Please refer to Note 10 of the interim financial statements.
Change in fair value of warrant liabilities
Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions. As a result of this reassessment, the Company determined that its functional currency changed from the Canadian dollar (“CAD$”) 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, 121,995 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities with an initial value of $454,571.
On November 6, 2024, 22,699,987 warrants were issued by the Company in connection with the De-SPAC transaction. The warrants were assessed to be derivative liabilities of the Company due to certain settlement provisions of the warrants that do not meet the criteria for equity classification under Topic 815. The warrants are each exercisable at $1.52 for 0.09692 common stock, expiring on November 6, 2029. The fair value of the warrants was $7,196,286 upon issuance.
During the three months January 31, 2026, we recognized a gain of $1,474,301 due to period end fair value remeasurement. Please refer to Note 11 of the financial statements.
Gain on share settlement
In December 2024, the Company issued 41,247 shares
with a fair value of $317,608 for the settlement of accounts payable in the
amount of $1,225,000 and recognized a gain on the settlement of $907,392. There
was no such settlement in the current period.
Stop-loss provision
On November 6, 2024, concurrent with the completion of the business combination, the Company issued 324,987 common shares in consideration for carbon credit purchase agreements.
All of the agreements contain adjustment clauses whereby if the Company’s share price falls below the respective purchase prices outlined in the agreements, in the 12 to 18 months following November 6, 2024, the Company is obligated to issue additional shares to cover the shortfall. The Company has assessed that the potential liability associated with the stop-loss provision for carbon credits received as of January 31, 2026 is $1,114,575.
Impairment of carbon credits
During the three months ended January 31, 2026, the Company recognized an impairment loss of $12,968 on certain carbon credits, compared to the impairment of $1,207,800 recognized in the comparative period. The impairment was recorded after the Company identified indicators that the net realizable value (“NRV”) of certain carbon credits had declined below their carrying values due to changes in market pricing.
Results of Operations — Six Months Ended January 31, 2026 Comparison Against the Six Months Ended January 31, 2025
|
For the Six Months Ended January 31, 2026 |
For the Six Months Ended January 31, 2025 | |||||||
| Revenue | 8,143 | - | ||||||
|
Cost of sales
|
(8,657 | ) | - | |||||
|
Gross profit
|
(514 | ) | - | |||||
|
Sales and marketing
|
196,461 | 676,692 | ||||||
|
Depreciation
|
- | 722 | ||||||
|
General and administrative
|
775,443 | 391,405 | ||||||
|
Professional fees
|
3,270,853 | 6,005,398 | ||||||
|
Salaries and wages
|
162,588 | 543,907 | ||||||
|
Share-based compensation
|
15,215 | 115,437 | ||||||
|
Total operating expenses
|
(4,420,560 | ) | (7,733,561 | ) | ||||
|
Staking income
|
40,245 | - | ||||||
|
Accretion and interest expense
|
(1,025,882 | ) | (245,546 | ) | ||||
|
Loss on investment in associate
|
(100,177 | ) | (106,850 | ) | ||||
|
Change in fair value of derivative liabilities
|
(1,500 | ) | 719,000 | |||||
|
Change in the fair value of warrant liabilities
|
3,757,599 | 9,223 | ||||||
|
Change in fair value of mandatory convertible debentures
|
- | 70,500 | ||||||
|
Loss on revaluation of cryptocurrencies
|
(2,113,072 | ) | - | |||||
|
Gain on settlement of accounts payable
|
- | 899,015 | ||||||
|
Gain on share settlement
|
17,007 | - | ||||||
|
Stop-loss provision
|
(49,340 | ) | (1,024,713 | ) | ||||
|
Impairment of carbon credits
|
(12,968 | ) | (1,207,800 | ) | ||||
|
Foreign exchange gain (loss)
|
(26,947 | ) | 6,672 | |||||
|
Net loss
|
(3,936,109 | ) | (8,614,060 | ) |
During the six months ended January 31, 2026, we incurred a net loss of $3,936,109 compared to net loss of $8,614,060 for the six months ended January 31, 2025. An analysis of the decrease in net loss of $ 4,677,951, including the major components thereof, is set forth below.
Loss on investment in associate
On November 6, 2024, the Company received 2,000,000 shares in Monroe Sequestration Partners, LLC (“MSP”), in connection with an agreement to acquire a stake in MSP in exchange for 200,000 shares of the Company that was entered into on October 28, 2024. At the time of acquisition, the 2,000,000 shares of MSP received by the Company represented 50% of MSP’s shares outstanding. During the six months ended January 31, 2026, the Company’s share of MSP’s loss was $100,177.
Share-based compensation
During the six months ended January 31, 2026, we incurred share-based compensation of $15,215 compared to share-based compensation of $115,437 for the six months ended January 31, 2025. Share-based payments relating to the vesting of options decreased by $10,317 during the six months ended January 31, 2026 compared to the six months ended January 31, 2025. Share-based payments relating to the vesting of RSU’s decreased by $165,941.
During the six months ended January 31, 2026, we recognized an unrealized gain of $101,423 on stock options compared to the unrealized gain of $177,459 during the six months ended January 31, 2025. This decrease of $76,036 is due to period end fair value remeasurements, which are reflected in compensation expense. Please refer to Note 13 of the interim financial statements.
Professional fees
During the six months ended January 31, 2026, we incurred $3,270,853 in professional fees, as compared to $6,005,398 during the six months ended January 31, 2025. The reduction in professional fees reflects the fact that no Business Combination–related legal services were incurred in the current period, whereas such services were required in the comparative period.
Salaries and wages
During the six months ended January 31, 2026 and 2025, we incurred salaries and wages of $162,588 and $543,907 respectively, the majority of which were to officers of the Company.
Sales and marketing
Sales and marketing expenses for the six months ended January 31, 2026 and 2025 amounted to $196,461 and $676,692, respectively. These costs primarily related to publications and industry events and investor relations subsequent to our successful closing of the Business Combination.
General and administrative
General and administrative expenses for the six months ended January 31, 2026 and 2025 amounted to $775,443 and $391,405, respectively, and primarily comprised of insurance costs and filing fees. The increase reflects elevated insurance expenses as well as the recognition of filing and printing fees incurred in relation to the Company’s various U.S. filings during the period.
Foreign exchange gain (loss)
During the six months ended January 31, 2026 and 2025, we recognized a foreign exchange loss of $26,947 and a gain of $6,672, 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.
Loss on revaluation of cryptocurrencies
During the six months ended January 31, 2026, the Company recorded an unrealized loss of $2,113,072 on the remeasurement of its cryptocurrency holdings. This variance was driven by declines in the market prices of Bitcoin and Solana relative to their acquisition costs, resulting in losses of $814,828 and $1,298,244, respectively. Please refer to Note 6 of the interim financial statements.
Staking income
During the six months ended January 31, 2026, we recognized staking income of $40,245 from our Solana holdings. The income reflects rewards earned for delegating Solana tokens to validators on the Solana network. Staking rewards are measured at fair value using the market price on the date earned and are recorded as other income. No staking income was recognized in the comparative period as the Company had not yet initiated its staking program.
Change in fair value of derivative liabilities and mandatory convertible debenture
During the six months ended January 31, 2026, we recognized a loss on derivative liabilities of $1,500 related to the convertible debt financing completed in March 2025 and recorded no gain or loss on mandatory convertible debentures. In comparison, during the six months ended January 31, 2025, we recognized a gain on derivative liabilities of $719,000 and a loss on mandatory convertible debentures of $70,500 related to the January 2024 and April 2024 convertible financings. Please refer to Note 10 of the interim financial statements.
Gain on settlement of debt
On September 18, 2025, the Company paid $31,613 in settlement of an accounts payable in the amount of $48,620 and recognized a gain on the settlement of $17,007.
Change in fair value of warrant liabilities
Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions. As a result of this reassessment, the Company determined that its functional currency changed from the Canadian dollar (“CAD$”) 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, 121,995 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities with an initial value of $454,571.
On November 6, 2024, 22,699,987 warrants were issued by the Company in connection with the De-SPAC transaction. The warrants were assessed to be derivative liabilities of the Company due to certain settlement provisions of the warrants do not meet the criteria for equity classification under Topic 815. The warrants are each exercisable at $1.52 for 0.9692 common stock, expiring on November 6, 2029. The fair value of the warrants was $7,196,286 upon issuance.
As a result of above, during the six months ended January 31, 2026, we recognized a gain of $3,757,599 due to period end fair value remeasurement. Please refer to Note 11 of the interim financial statements.
Stop-loss provision
On November 6, 2024, concurrent with the completion of the business combination, the Company issued 324,987 common shares in consideration for carbon credit purchase agreements.
All of the agreements contain adjustment clauses whereby if the Company’s share price falls below the respective purchase prices outlined in the agreements, in the 12 to 18 months following November 6, 2024, the Company is obligated to issue additional shares to cover the shortfall. The Company has assessed that the potential liability associated with the stop-loss provision for carbon credits received as of January 31, 2026 is $1,114,575.
Impairment of carbon credits
During the six months ended January 31, 2026, the Company recognized an impairment loss of $12,968 on certain carbon credits, compared to the impairment of $1,207,800 recognized in the comparative period. The impairment was recorded after the Company identified indicators that the net realizable value (“NRV”) of certain carbon credits had declined below their carrying values due to changes in market pricing.
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 January 31, 2026, we had a working capital deficit of $24,381,835 (current assets of $2,041,813, less current liabilities of $26,423,648) and as of July 31, 2025, we had a working capital deficit of $14,412,728 (current assets of $4,337,627, less current liabilities of $18,750,355).
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.
On October 29, 2024, we entered into an equity line of credit purchase agreement (the “ELOC Agreement”) with Helena. Pursuant to the ELOC Agreement, the Company has the right to issue and to sell to Helena from time to time, as provided in the ELOC Agreement, up to $40,000,000 of Company’s Common Shares, subject to the conditions set forth therein. Specifically, pursuant to the ELOC Agreement, the Company may require that Helena purchase Common Shares from the Company by delivering one or more advance notices to Helena setting forth, in each advance notice, the amount of the advance it is requesting, which amount may not exceed an amount equal to lesser of (i) one hundred percent (100%) of the average of the daily value traded of the Common Shares over the ten (10) trading days immediately preceding such advance notice, and (ii) eight million United States Dollars ($8,000,000). On March 18, 2025, the Company and Helena entered into a first amendment to ELOC Agreement, which provides the Company with greater flexibility by allowing Helena to permit Secondary Advances, as defined in the amendment, as well as to update references to “Common Stock” in the ELOC Agreement to “Common Shares”. However, in no event may the number of Common Shares issuable to Helena pursuant to an advance cause the aggregate number of shares beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act) by Helena and its affiliates as a result of previous issuances and sales of Common Shares to Helena under the ELOC Agreement to exceed 9.99% of the then outstanding Common Shares. Additionally, the Company may not affect any sales under the ELOC Agreement and Helena will have no obligation to purchase Common Shares under the ELOC Agreement to the extent (but only to the extent) that after giving effect to such purchase and sale the aggregate number of Common Shares issued under the ELOC Agreement would exceed 19.99% of the outstanding shares of Common Shares following the closing of the Business Combination Agreement (the “Exchange Cap”), provided that, the Exchange Cap will not apply if the Company’s stockholders have approved issuances in excess of the Exchange Cap in accordance with the rules of the Nasdaq. The purchase price for the Common Shares so purchased by Helena pursuant to an advance notice is the lowest intraday sale price for the Common Shares during the three (3) trading days commencing on the date of Helena’s receipt of the Common Shares relating to such advance. Because the per share purchase price that Helena will pay for Common Shares in connection with any advance notice we have elected to deliver to Helena pursuant to the ELOC Agreement will be determined by reference to the lowest intraday sale price for the Common Shares during the three (3) trading days commencing on the date of Helena’s receipt of the Common Shares relating to such advance, we cannot determine the actual purchase price per share that Helena will be required to pay for any Common Shares that we may elect to sell to Helena under the ELOC Agreement until after we deliver an advance notice and, therefore, we cannot be certain how many Common Shares, in the aggregate, we may issue and sell to Helena under the ELOC Agreement. Sales of Common Shares to Helena under the ELOC Agreement will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of the Common Share and determinations by us as to the appropriate sources of funding for our business and operations. We may not be able to raise sufficient funds under the ELOC Agreement to satisfy our obligations.
On August 4, 2025, the Company and Helena entered into a second amendment to ELOC Agreement, which increased the commitment amount from $40,000,000 to $300,000,000. On December 3, 2025, the Company entered into a side letter with Helena I amending the terms of the Company’s existing convertible note and equity line of credit arrangements. The amendments include, among other items, limitations on Helena’s sales of conversion shares, subject to trading-volume conditions, and a requirement that the Company draw a minimum of $7,500,000 in aggregate proceeds under the equity line of credit prior to February 28, 2026. These limitations may cease to apply if the Company defaults under the convertible note or is unable to submit compliant advance notices under the equity line of credit for more than five trading days. The Company has not submitted advance
notices to receive sufficient net proceeds as of February 28, 2026, as the
Company subsequently entered into a binding term sheet for a merger with XCF
and Southern, which placed restrictions on further drawdowns of the ELOC by the
Company.
On February 10, 2026, the Company entered into a side letter agreement with Helena I in connection with the Crypto Strategy Convertible Debt. Under the agreement, Helena I committed to convert at least $9,000,000 of the aggregate outstanding principal and/or accrued interest into common shares of the Company on or before May 10, 2026, subject to the Company not being in default and remaining in material compliance with the covenants and obligations under the related securities purchase agreement, the ELOC Agreement, and other transaction documents between the parties. The conversion, if completed, would reduce the Company’s outstanding debt obligations and strengthen its equity position. As consideration for entering into the agreement, the Company agreed to issue a $250,000 convertible promissory note to Helena I in the same form as the existing Crypto Strategy Convertible Debt.
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 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.
As of January 31, 2026 and July 31, 2025, we had $815,707 and $3,446,111 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 Six Months Ended January 31, 2026 $ |
For the Six Months Ended January 31, 2025 $ | |||||||
|
Net cash provided by (used in):
|
||||||||
|
Operating activities
|
(5,938,280 | ) | (4,051,780 | ) | ||||
|
Investing activities
|
(5,125,100 | ) | 1,661,645 | |||||
|
Financing activities
|
3,308,004 | 2,383,887 | ||||||
|
Effect of exchange rate changes on cash
|
(128 | ) | 1,807 | |||||
|
Decrease in cash
|
(7,755,504 | ) | (4,441 | ) |
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 six months ended January 31, 2026 was $5,938,280 compared to $4,051,780 for the six months ended January 31, 2025. The loss for the six months ended January 31, 2026 of $3,936,109 was further impacted by $1,555,104 of changes in working capital items and $447,067 in non-cash items, primarily driven by the gain on warrant derivative and loss on revaluation of cryptocurrencies. This compares to a loss of $8,614,060 for the prior period, that was offset by $3,558,950 in changes in working capital items and $1,003,330 in non-cash items consisting mainly of impairment of carbon credits and stop-loss provision loss.
Cash Provided by Investing Activities
Net cash used by investing activities for the six months ended January 31, 2026 was $5,125,100 for purchase of cryptocurrencies and net cash provided by investing activities for the six months ended January 31, 2025 was $1,661,645 assumed upon reverse takeover (“RTO”).
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 six months ended January 31, 2026 was $3,308,004 compared to $2,383,887 for the six months ended January 31, 2025. The following financing activities occurred during the six months ended January 31, 2026:
(1)
ELOC drawdown:
In August 2025, the Company issued 300,000 shares in accordance with the ELOC Agreement with Helena for gross proceeds of $756,600, of which $189,145 was used to repay the Helena CD, resulting in net proceeds of $567,455.
In December 2025, the Company issued 411,000 shares in accordance with the ELOC Agreement with Helena gross proceeds of $821,238, of which $205,316 was used to repay the Helena CD, resulting in net proceeds of $615,922.
In January 2026, the Company issued 500,000 shares in accordance with the ELOC Agreement with Helena for gross proceeds of $630,100 of which $157,525 was used to repay the Helena CD, resulting in net proceeds of $472,575.
(2)
Repayment of interest on convertible debt with Helena
In August 2025, the Company paid $156,764 for the repayment of interest on Helena’s convertible debt.
In December 2025 and January 2026, the Company paid $191,188 for the repayment of interest on Helena’s convertible debt.
(3)
PIPE financing
In December 2025, the Company entered into a Securities Purchase Agreement with EEME Energy SPV I LLC pursuant to which the Company issued 128,370 common shares in a private placement at a price of $15.58 per share, resulting in aggregate gross proceeds of $2,000,004.
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 January 31, 2026, the Company had amounts owing and accrued liabilities of $90,318 (July 31, 2025 - $794,990) 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 six months ended January 31, 2026, the Company incurred wages and management fees of $230,435 and $97,000, respectively, to officers of the Company. Share based compensation incurred to officers and directors of the Company amounted to $75,081.
During the six months ended January 31,
2026, the Company accrued interest of $125,242 on three convertible debentures notes, two
of which were issued on November 13, 2024, payable to Focus Impact Partners and
Focus Impact Sponsor, and one of which was issued on March 19, 2025, payable to
Focus Impact Partners.
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. The agreement is subsequently amended on October 28, 2025 to eliminate the aforementioned payment obligations.
Licensing agreement with Greenlines Technology Inc.
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. Such amount was paid on November 26, 2024. Commencing January 1, 2025, we must pay an annual fee of $12,000 on the first day of each calendar year for the use of the technology. The amounts due on January 1, 2025 were paid on January 9, 2026. The Company has accrued $1,000 in connection with the annual fee payable as of January 31, 2026.
Strategic Consulting Agreement with Focus Impact Partners, LLC (“Focus Impact Partners”)
On November 13, 2024, we entered into a strategic consulting agreement with Focus Impact Partners, pursuant to which the Focus Impact Partners will provide us 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) we have successfully raised $5,000,000 in outside debt and/or equity capital, cumulatively since the period beginning December 31, 2023 or (b) we have 2 or more consecutive quarters of positive cash flow from operations. As of January 31, 2026, neither condition has been met. We will pay 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. 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. Focus Impact Partners is owned by two of the Company’s directors: Carl Stanton and Wray Thorn.
Strategic Partnership Amendment with Devvio, Inc. (“Devvio”)
On October 28, 2025, the Company entered into Amendment No. 4 to the Strategic Partnership Agreement with Devvio, Inc. (“Devvio”), pursuant to which the parties agreed to terminate and fully settle all remaining rights and obligations under the prior strategic partnership agreement originally entered into in November 2021, as amended, with the exception of certain surviving confidentiality provisions. Concurrently, the parties entered into a new token-based collaboration to replace the prior arrangement, ensuring continuity of the commercial relationship without interruption.
Under the new Strategic Token Partnership, the Company has committed to purchase Devvio’s DevvE tokens in the amount of USD $1.0 million in 2025 and USD $1.27 million in each of 2026 and 2027. Each annual purchase will be priced based on the 10-day volume-weighted average price immediately preceding the applicable purchase date and is payable in U.S. dollars or, in certain circumstances, in tokens. In connection with each annual purchase, the Company will also receive warrants to acquire additional DevvE tokens equal to 25% of the primary purchase amount, exercisable at the same VWAP-based price for a period of three years. If the DevvE token ceases to exist or can no longer be lawfully issued or traded, the Company will have no further purchase obligations. The Company has yet to purchase the DevvE tokens as of January 31, 2026.
Subsequent Events
Debt conversion side letter with Helena I
On February 10, 2026, the Company and Helena I entered into a side letter in relation to the Crypto Strategy Convertible Debt, wherein Helena I commits to convert at least $9,000,000 of the aggregate outstanding principal and/or accrued interest into common shares of the Company on or before May 10, 2026, subject to no events of default by the Company, and the Company being in material compliance with all covenants and obligations under the securities purchase agreement in relation to the Crypto Strategy Convertible Debt, the ELOC Agreement and all other transaction documents between the Company and Helena I. The Company shall issue a convertible promissory note for the amount of $250,000 in the same form as the Crypto Strategy Convertible Debt as consideration for entering into this agreement.
Nasdaq Continued Listing Requirements
On November 18, 2025, the Company received a notification letter from the Listing Qualifications Department of Nasdaq notifying the Company that its net income from continuing operations had fallen below the minimum requirement for continued listing on the Nasdaq Capital Market (the “Minimum Net Income Requirement”) and that the Company does not meet the alternatives of market value of listed securities or stockholders’ equity (collectively with the Minimum Net Income Requirement, the “Continued Listing Standards”). On February 23, 2026, the Company received a letter from the Listing Qualifications Department of Nasdaq notifying the Company that the Nasdaq Staff had granted the Company an extension until May 18, 2026 to regain compliance with the Continued Listing Standards.
Issuance of shares
On March 12, 2026, the Company issued 454,670 shares
pursuant to a conversion of $330,000 of principal of the Crypto Strategy
Convertible Debt (Note 10) at a price of $0.7258 per share for a conversion
notice received on March 4, 2026 from Helena I.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Based on an evaluation as of January 31, 2026, 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 six months ended January 31, 2026.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended January 31, 2026 covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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.
To the knowledge of our management, there is no litigation currently pending or contemplated against us, any of our officers or directors in their capacity as such or against any of our property.
Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on November 6, 2025. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. Except as set forth below, there have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K.
Risks related to the Proposed Three-Party Merger
The Term Sheet for the proposed three-party merger between the Company, XCF Global, Inc. and Southern is subject to the finalization of a mutually agreeable merger structure and definitive transaction documents. If a merger structure is not agreed upon or definitive transaction documents are not executed, the three-party merger may be delayed or may not be completed and the applicable Term Sheet may be terminated in accordance with its terms.
On January 26, 2026, the Company entered into a binding term sheet with XCF Global, Inc. and Southern to pursue a proposed three-party merger. The contemplated transaction would combine the parties into an integrated platform focused on SAF, environmental attribute monetization, and related low-carbon fuel initiatives. The term sheet establishes a framework for negotiating definitive agreements, which remain subject to further negotiation and approval by respective boards of directors.
If a merger structure is not agreed upon or no definitive documentation for such three-party merger is entered into, the Term Shet may be terminated. No assurance can be given as to the timing of the execution of the definitive agreements or that any other conditions pursuant to the Term Sheet will be satisfied. Accordingly, there can be no assurance as to whether or when the three-party merger will be completed.
Risks related to the Southern Energy Renewables Inc. (Southern) Merger
The pending Merger with Southern and Sierra Merger Sub, Inc. may be delayed or may not be completed, and the applicable Merger Agreement may be terminated in accordance with its terms.
On December 3, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Southern and Sierra Merger Sub, Inc., a Delaware corporation and a newly-formed wholly owned subsidiary of the Company. The transaction contemplates (i) a domestication of the Company into a Delaware corporation, (ii) a merger in which Southern will become a wholly owned subsidiary of the Company, and (iii) the issuance of Company common shares to Southern’s existing shareholders such that, upon completion of the merger, the Southern shareholders (inclusive of the concurrent PIPE described below) will hold approximately 70% of the Company’s common shares on a fully diluted basis, resulting in a reverse takeover of the Company by Southern (the “Merger”). The Merger Agreement is subject to termination, pursuant to a binding term sheet for a three-party merger among the Company, Southern, and XCF, whereupon the execution of a definitive agreement for such three-party merger, the Merger Agreement shall be terminated. Any definitive agreement for such three-party merger shall be subject to the parties thereto mutually agreeing to acceptable terms prior to execution thereof.
If no definitive documentation for such three-party merger is entered into and the Merger Agreement is not terminated as a result, the completion of the Merger remains subject to the satisfaction or waiver of a number of conditions as specified in the Merger Agreement, including, receipt of clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, approval for the post-Merger Company’s initial listing application with Nasdaq, as well as other customary closing conditions. No assurance can be given as to the timing of the satisfaction or waiver of these conditions or that these conditions will be satisfied or waived at all. Accordingly, there can be no assurance as to whether or when the Merger will be completed.
In addition, either the Company or Southern may terminate the Merger Agreement under certain circumstances, including if the Merger is not completed by September 3, 2026 (which date may be extended by thirty or sixty days, under certain circumstances).
Litigation relating to the Merger, if any, could delay or prevent the completion of the Merger and result in substantial costs to the Company.
Governmental authorities or other third parties with appropriate standing may file litigation challenging the Merger and seeking an order enjoining or otherwise delaying or prohibiting the completion of the Merger. If any such litigation is successful, then such order may prevent the Merger from being completed, or from being completed within the expected time frame. There can be no assurance that the Company or any other defendants would be successful in the outcome of any potential future lawsuits. Even if a lawsuit is without merit, it could result in substantial costs to the Company and divert management time and resources.
Failure to complete the Merger could negatively impact the Company.
If the Merger is not completed for any reason, the ongoing business and financial condition of the Company may be adversely affected, including in the following ways:
•
the Company may experience negative reactions from the financial markets, including negative impacts on the market price of its common shares;
•
the Company may experience negative reactions from its suppliers, distributors, vendors, customers or other third parties with whom it does business;
•
the Company may experience negative reactions from employees;
•
the Company will have incurred, and may continue to incur, significant costs relating to the Merger, such as investment banking, legal, accounting and financial advisor fees and expenses, that it may not be able to recover;
•
the Company will have expended significant time and resources that could otherwise have been spent on its existing business or the pursuant of other opportunities without realizing any of the potential benefits associated with the Merger; and
•
the Company may face litigation related to the failure to complete the Merger or an enforcement proceeding with respect to its obligations under the Merger Agreement.
In addition, if the Merger Agreement is terminated and the Company seeks an alternative transaction, there can be no guarantee that it will be able to find or complete an alternative transaction on more attractive terms than the Merger or at all.
The Merger Agreement restricts the Company’s business activities prior to the completion of the Merger.
The Merger Agreement places certain restrictions on the operations of the Company and restricts the Company and taking certain other specified actions without the consent of Southern until the completion of the Merger or the termination of the Merger Agreement. These restrictions, which could be in place for an extended period of time if the completion of the Merger is delayed, could prevent the Company from pursuing attractive business opportunities that may arise prior to completion of the Merger or from making appropriate changes to business or organizational structure. This could in turn adversely impact the Company’s results of operations, financial condition and cash flows.
The Merger, including uncertainty regarding the Merger, could disrupt the Company’s business relationships and adversely affect the Company’s ability to effectively manage its business.
As discussed above, the completion of the Merger is subject to the satisfaction or waiver of several conditions. Many of these conditions are outside the Company’s control. Furthermore, both the Company and Southern have certain rights to terminate the Merger Agreement. Accordingly, there may be uncertainty regarding the completion of the Merger. This uncertainty may cause customers, suppliers, vendors, strategic partners or other parties that have business relationships with the Company to delay or defer entering into contracts with, or making other decisions concerning, the Company or to seek to change or cancel existing business relationships with the Company, which could negatively affect the Company’s business regardless of whether the Merger is ultimately completed. This could in turn adversely impact the Company’s results of operations, financial condition and cash flows.
The Merger, regardless of whether it is completed, will continue to divert resources from ordinary operations, which could adversely affect the Company’s business.
The Company has diverted the attention of management and other resources to the Merger. Whether or not the Merger is completed, the pendency of the Merger will continue to divert the attention of management and other resources from day-to-day operations to the completion of the Merger. This diversion of management attention and other resources could adversely affect the Company’s ongoing business regardless of whether the Merger is completed.
The Company has incurred and expects to continue to incur significant merger-related costs.
The Company has incurred and expects to continue to incur a number of non-recurring costs associated with negotiating and completing the Merger. These costs and expenses have been, and will continue to be, significant. These costs and expenses include fees paid or payable to financial, legal and accounting advisors, potential employment-related costs, filing fees, printing expenses and other related charges. Some of these costs are payable by the Company regardless of whether the Merger is completed. While the Company has assumed that a certain level of expenses would be incurred in connection with the Merger, there are many factors beyond its control that could affect the total amount or the timing of these expenses. These costs and expenses could adversely impact the Company’s financial condition and liquidity.
Uncertainties associated with the Merger could negatively impact the Company’s ability to attract, motivate and retain management personnel and other key employees.
Competition for qualified personnel can be intense. Current and prospective employees of the Company may experience uncertainty about their future role until strategies with regard to these employees are announced or executed, which may impair the Company’s ability to attract, retain and motivate key management, sales, marketing, and other personnel prior to completion of the Merger. Employee retention may be particularly challenging as employees may experience uncertainty about their future roles with the combined company. If the Company is unable to retain personnel, including key management personnel, it could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs.
Failure to meet Nasdaq’s continued listing requirements could result in the delisting of our common shares, negatively impact the price of our common shares and negatively impact our ability to raise additional capital.
On November 18, 2025, DevvStream Corp. (the “Company”) received a deficiency letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that its net income from continuing operations had fallen below the minimum requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(3) (the “Minimum Net Income Requirement”) and that the Company does not meet the alternatives of market value of listed securities or stockholders’ equity (collectively with the Minimum Net Income Requirement, the “Continued Listing Standards”). In accordance with Nasdaq Listing Rule 5810(c)(2)(C), the Company has until January 2, 2026, which is 45 calendar days from the date the Notice was received, to provide Nasdaq with a plan to regain compliance with the Continued Listing Standards (the “Compliance Plan”).
On February 23, 2026, the Company received a letter
from Nasdaq notifying the Company that based on the compliance plan and
materials the Company submitted to Nasdaq, the Nasdaq Staff had granted the
Company an extension until May 18, 2026 to regain compliance with the Continued
Listing Standards, which requires a minimum $2,500,000 stockholders’ equity, $35,000,000
market value of listed securities, or $500,000 net income from continuing
operations. There can be no assurance that the Company will be successful in
achieving its Compliance Plan, or that the Company will be able to regain or
maintain compliance with the Continued Listing Standards.
If our common shares are delisted, it could reduce the price of our common shares and the levels of liquidity available to our stockholders. In addition, the delisting of our common shares could materially adversely affect our access to the capital markets and any limitation on liquidity or reduction in the price of our common shares could materially adversely affect our ability to raise capital. Delisting from The Nasdaq Capital Market could also result in other negative consequences, including the potential loss of confidence by suppliers, customers and employees, the loss of institutional investor interest and fewer business development opportunities.
None.
None.
Not applicable.
During the quarter ended January 31, 2026, no director or officer adopted terminated
The following exhibits are filed as part of, or incorporated by reference into, this Report on Form 10-Q.
| Exhibit Number |
Description
|
| Merger Agreement, dated as of December 3, 2025, by and among the Company, Southern Energy Renewables, Inc. and Sierra Merger Sub, Inc. (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K, filed on December 3, 2025). | |
| Certificate of Continuance of the Company (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by DevvStream on November 13, 2024). | |
| Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by DevvStream on August 7, 2025). | |
| By-Laws of the Company (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed by New PubCo on November 13, 2024). |
|
Amendment No. 4 to the Strategic Partnership Agreement, dated
November 28, 2025, between Devvio, Inc. and DevvStream, Inc. (f/k/a DevvESG
Streaming, Inc.) (incorporated by reference to Exhibit 10.1 to the Current
Report on Form 8-K, filed by the Company on November 3, 2025).
|
|
|
Securities Purchase Agreement, dated as of December 3, 2025, by
and between the Company and EEME Energy SPV I LLC (incorporated by reference
to Exhibit 10.1 to the Current Report on Form 8-K, filed by the Company on
December 3, 2025).
|
|
|
Registration Rights Agreement, dated as of December 3, 2025, by
and between the Company and EEME Energy SPV I LLC (incorporated by reference
to Exhibit 10.2 to the Current Report on Form 8-K, filed by the Company on
December 3, 2025).
|
|
|
Form of Company Support & Lock-Up Agreement (incorporated by
reference to Exhibit 10.3 to the Current Report on Form 8-K, filed by the
Company on December 3, 2025).
|
|
|
Form of Southern Support & Lock-Up Agreement (incorporated
by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed by the
Company on December 3, 2025).
|
|
|
Transaction Term Sheet, dated as of January 26, 2026, by and
among XCF Global Inc., Southern Energy Renewables Inc., DevvStream Corp., and
EEME Energy SPV I LLC (incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K, filed by the Company on January 26, 2026).
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| List of Subsidiaries of DevvStream (incorporated by reference to Exhibit 21.1 to the Current Report on Form 8-K, filed by New PubCo on November 13, 2024). | |
| Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
| Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
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101.INS*
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
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101.SCH*
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Inline XBRL Taxonomy Extension Schema Document
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101.DEF*
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Inline XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB*
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Inline XBRL Taxonomy Extension Labels Linkbase Document
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101.PRE*
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Inline XBRL Taxonomy Extension Presentation Linkbase Document
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104*
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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Filed herewith.
** These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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 thereunto duly authorized on this 13th day of March, 2026.
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DEVVSTREAM CORP.
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/s/ David Goertz
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Name:
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David Goertz
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Title:
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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62
Exhibit 31.1
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sunny Trinh, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of DevvStream Corp.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 13, 2026
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By:
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/s/ Sunny Trinh
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Sunny Trinh
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Chief Executive Officer
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(Principal Executive Officer)
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Exhibit 31.2
CERTIFICATION
PURSUANT TO RULES 13a-14(a) AND 15d-14(a)
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, David Goertz, certify that:
1.
I have reviewed this Quarterly Report on Form 10-Q of DevvStream Corp.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 13, 2026
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By:
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/s/ David Goertz
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David Goertz
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Chief Financial Officer
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(Principal Financial Officer and Accounting Officer)
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Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of DevvStream Corp. (the “Company”) on Form 10-Q for the quarterly period ended January 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, Sunny Trinh, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
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Date: March 13, 2026
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By:
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/s/ Sunny Trinh
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Sunny Trinh
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Chief Executive Officer
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(Principal Executive Officer)
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Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of DevvStream Corp. (the “Company”) on Form 10-Q for the quarterly period ended January 31, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, David Goertz, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1.
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.
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Date: March 13, 2026
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By:
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/s/ David Goertz
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David Goertz
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Chief Financial Officer
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(Principal Financial Officer and Accounting Officer)
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