What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-04-16 compared with 2025-01-23 · 500 added, 202 removed, 12 unchanged (98% of the section changed)

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

References to the “Company,” “Focus Impact Acquisition Corp.,” “our,” “us” or “we” refer to Focus Impact Acquisition Corp.

The following discussion and analysis of the Company’s financial condition and results of

operations should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this report.

Certain information contained in the discussion and analysis set forth below includes

forward-looking statements that involve risks and uncertainties.

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

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.

have based these forward-looking statements on our current expectations and projections about future events.

These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual

results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can identify

forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions.

Factors that might cause or

contribute to such a discrepancy include, but are not limited to, those described in our other SEC filings.

We were a blank check company incorporated on February 23, 2021 as a Delaware corporation and formed for the purpose of effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or

similar business combination with one or more businesses (the “Initial Business Combination”).

Our sponsor was Focus Impact Sponsor, LLC, a Delaware limited liability company (the “Sponsor”).

The registration statement for our initial public offering was declared effective on October 27, 2021.

On November 1,

2021, we consummated our initial public offering (the “Initial Public Offering”) of 23,000,000 Units, including the full exercise of the underwriters’ over-allotment option to purchase 3,000,000 units, at a purchase price of $10.00 per Unit.

Simultaneously with the closing of Initial Public Offering, we completed the private sale of 11,200,000 warrants (the “Private Placement Warrants”) at a purchase price of $1.00 per Private Placement Warrant to the

Sponsor, generating gross proceeds to us of $11,200,000.

Upon the closing of the Initial Public Offering, $10.20 per Unit sold in the Initial Public Offering (including the full exercise of the underwriters’ over-allotment option) and the proceeds of the sale of the

Private Placement Warrants, were held in a trust account (“Trust Account”) and were invested only in U.S.

government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the

Investment Company Act which invest only in direct U.S.

government treasury obligations.

The trust account was intended as a holding place for funds pending the earliest to occur of:

(a) the completion of the Initial Business Combination, (b) the

redemption of any public shares properly tendered in connection with a stockholder vote to amend our Certificate of Incorporation (i) to modify the substance or timing of our obligation to provide holders of our Class A common stock the right to

have their shares redeemed in connection with the Initial Business Combination or to redeem 100% of our public shares if we do not complete the Initial Business Combination by the Termination Date or (ii) with respect to any other provisions

relating to the rights of holders of our Class A common stock, and (c) the redemption of our public shares if we have not consummated the Initial Business Combination by the Termination Date, subject to applicable law.

Our Certificate of Incorporation provided that we had until the Termination Date to complete the Initial Business Combination.

If we did not complete the Initial Business Combination by the Termination Date, we would

(i) cease all operations except for the purpose of winding up;

(ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share price, payable in cash, equal to the aggregate amount

then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by

the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law;

as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims

of creditors and the requirements of other applicable law.

The following discussion and analysis should be read in conjunction with DevvStream’s unaudited condensed consolidated interim financial statements and related

notes for the three and six months ended January 31, 2025 and 2024 (“interim financial statements”), which have been prepared in accordance with US GAAP and are included elsewhere in this report.

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 described in our other SEC filings, including those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding

Forward-Looking Statements” in our Current Report on Form 8-K/A filed with the SEC on March 7, 2025.

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 Corp., a company existing under the Laws of the Province of Alberta, Canada, 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.

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

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

Business Combination

On November 6, 2024, the Company consummated the previously announced proposed Business Combination with DevvStream.

For more information on the consummation of the Business Combination and the transactions that were

entered in connection therewith, please see Note 9 (Subsequent Events) in the financial statements accompanying this Form 10-Q.

Following the consummation of the Business Combination, the management of the Company has transitioned to the prior Devvstream management team and certain FIAC

management team members, namely Carl Stanton and Wray Thorn, have joined the board of directors of New PubCo.

Additionally, following the consummation of the Business Combination, New PubCo's management has continued to work with its advisers to

complete the required filings and expects to do so expeditiously.

Warrant Price Adjustment

On December 6, 2024, New PubCo effectuated an adjustment of the Warrant Price.

For more information, please see Note 9 (Subsequent Events) in the financial statements accompanying this Form 10-Q.

New Convertible Notes

In association with the approval of the Extension Amendment Proposal, on May 9, 2023, we issued the Promissory Note to the Sponsor and the Sponsor funded deposits into the Trust Account.

The Promissory Note did not

bear interest and matured upon closing of our Initial Business Combination.

In the event that no Initial Business Combination was consummated, the Promissory Note would be repaid only from amounts remaining outside of the Trust Account, if any.

to the total principal amount of the Promissory Note was convertible, in whole or in part, at the option of the Lender into warrants of the Company at a price of $1.00 per warrant, which warrants would be identical to the Private Placement Warrants

issued to the Sponsor at the time of the Initial Public Offering.

As of September 30, 2024, an aggregate of $1,500,000 had been drawn under the Promissory Note.

In connection with the extension of the Termination Date, on December 1, 2023, the Company issued the Second Promissory Note to the Sponsor and the Sponsor funded deposits into the Trust Account.

Promissory Note did not bear interest and matured upon closing of the Company’s Initial Business Combination.

In the event that the Company did not consummate an Initial Business Combination, the Second Promissory Note would be repaid only from

amounts remaining outside of the trust account, if any.

As of September 30, 2024, an aggregate of $1,475,000 had been drawn under the Second Promissory Note.

Each of the First Promissory Note and Second Promissory Note were issued to fund extensions of FIAC, prior to the consummation of the Business Combination.

As described in more details in Note 9 (Subsequent Events) in the financial statements accompanying this Form 10-Q, DevvStream agreed, in connection with the closing of the Business Combination, to issue New Convertible Notes in exchange for the cancellation and conversion of the Focus Partners Convertible Note, the Focus Sponsor Convertible Notes and the Unpaid Fees .

Conversion of Class B common stock to Class A common stock

On December 21, 2023, the Sponsor, converted 5,000,000 shares of the company’s Class B common stock, par value $0.0001 per share (the “Class B common stock”) to shares of Class A common stock.

Notwithstanding the

conversions, the Sponsor was not entitled to receive any monies held in the Trust Account as a result of its ownership of shares of Class A common stock issued upon conversion of the Class B common stock.

The converted shares of Class A common

stock held no interest in the Trust Account and were non-redeemable.

Following such conversion and taking into account the redemptions described above, we had an aggregate of 6,717,578 shares of Class A common stock issued and outstanding and an

aggregate of 750,000 shares of Class B common stock issued and outstanding.

As described in more in Note 9 (Subsequent Events) in the financial statements accompanying this Form 10-Q, DevvStream converted additional Class B common stock to Class A

common stock on October 29, 2024 and November 6, 2024.

Financial and Capital Market Advisors

On September 12, 2023, the Company engaged CCM, to act as its (i) its financial advisor and capital markets advisor in connection with the Business Combination and

(ii) its placement agent in connection with a private placement of debt, equity, equity-linked or convertible securities or other capital or debt raising transaction in connection with the Business Combination.

Pursuant to the Cohen EL, the Company agreed to pay CCM the sum of (i) an advisory fee in an amount equal to $2,500,000 simultaneously with the closing of the

Business Combination plus (ii) a transaction fee in connection with the Offering of an amount equal to 4.0% of the sum of (A) the gross proceeds raised from investors and received by Company or DevvStream simultaneously with or before the closing

of the Offering and (B) the proceeds released from the Trust Account in connection with the Business Combination with respect to any stockholder of the Company that (x) entered into a non-redemption or other similar agreement or (y) did not

redeem the Company’s common stock, in each instance to the extent such stockholder was identified to the Company by CCM;

provided, however, CCM shall receive no fee for any gross proceeds received from, or non-redemptions obtained from any

investors holding capital stock of DevvStream (other than any investor who acquired their capital stock of DevvStream in open market activities).

The Transaction Fee shall be payable to CCM simultaneously with the closing of the Transaction.

addition, the Company may, in its sole discretion, pay to CCM a discretionary fee in an amount up to $500,000, simultaneously with the closing of the Business Combination, if the Company determines in its discretion and reasonable judgment that

the performance of CCM in connection with its leadership role in connection with the Transaction warrants such additional fee, taking into account, without limitation, (a) timing of the Transaction, (b) quality and delivery of services and advice

hereunder, and (c) overall valuation attributable to the Transaction.

No Advisory Fee, Offering Fee or Discretionary Fee shall be due to CCM if the Company does not complete the Business Combination.

On October 28, 2024, the Cohen EL was amended to state that the Company and the Sponsor shall pay to CCM a transaction fee in connection with the Transactions in an

amount equal to 1,031,779 (or otherwise a number that will lead to CCM owning 1,000,000 New PubCo Common Shares after the closing of the Business Combination) Class A common stock of the Company immediately upon the execution of the Amended Cohen

Additional Share Issuances

On December 27, 2024, New PubCo issued 412,478 New PubCo Common Shares to certain service providers pursuant to subscription agreements, dated December 27, 2024,

as consideration for services rendered to New PubCo.

Liquidity, Capital Resources and Going Concern

In connection with our assessment of going concern considerations in accordance with Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going

Concern,” management believes that the funds which we have available following the completion of the Initial Public Offering may not enable us to sustain operations for a period of at least one-year from the issuance date of this financial

In connection with the Company’s assessment of going concern considerations in accordance with FASB’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue

as a Going Concern,” management has determined that the mandatory liquidation and subsequent dissolution of FIAC prior to the closing of the Business Combination, raised substantial doubt about our ability to continue as a going concern.

until May 1, 2025 to consummate a business combination.

It was uncertain that we would be able to consummate an Initial Business Combination by this time.

If an Initial Business Combination was not consummated by this date, there would be a

mandatory liquidation and subsequent dissolution.

No adjustments have been made to the carrying amounts of assets or liabilities should the Company be required to liquidate after May 1, 2025.

On November 6, 2024, the Company consummated the

previously announced proposed Business Combination.

Following the closing of the Business Combination, management believes that the Company may not have sufficient working capital to meet its needs during the year following this filing.

Risks and Uncertainties

Our results of operations and ability to complete an Initial Business Combination were adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of

which are beyond our control.

Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines

in consumer confidence and spending and geopolitical instability, such as the military conflict in the Ukraine.

We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to

which they may negatively impact our business.

Change in Functional Currency

Effective August 1, 2024, the Company reassessed its functional currency and the functional currency of its subsidiaries due to changes in underlying transactions, events, and conditions.

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 its subsidiary, Devv Stream Inc.

functional currency for DevvESG Streaming Finco Ltd.

(“Finco”), another subsidiary of ours, remained CAD$.

This change aligns with the business’s future focus and the effective date of the Focus Impact Acquisition Corp.’s Form S-4 Registration

Statement with the SEC, a crucial part of the De-SPAC transaction closing.

The change in functional currency was accounted for prospectively from August 1, 2024, with no impact on prior year comparative information.

Upon the change in functional

currency on August 1, 2024, 1,220,668 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities.

Determining the functional currency involved significant judgments to assess the primary

economic environment in which the Company operates, including factors such as the currency of underlying transactions, the location of key operations, and the currency of expected cash flows.

Upon the completion of the De-SPAC Transaction on

November 6, 2024, 627,786 of the Company’s stock options which had strike prices denominated in CAD$ were reclassified as stock option liabilities, as exemptions from classification from derivative liability classification under ASC 718-10-25-14

that were previously applicable upon change in functional currency no longer apply upon the commencement of trading of the Company’s common shares on the NASDAQ.

Results of Operations — Three Months Ended January 31, 2025 Comparison Against the Three Months Ended January 31, 2024

For the Three

January 31, 2025

For the Three

January 31, 2024

Sales and marketing

General and administrative

Professional fees

Salaries and wages

Share-based compensation

Total operating expenses

Accretion and interest expense

Loss on investment in associate

Change in fair value of derivative liabilities

Change in the fair value of warrant liabilities

Foreign exchange gain (loss)

Gain on settlement of debt

Impairment of carbon credits

Stop-loss provision

During the three months ended January 31, 2025, we incurred a net loss of $4,557,626 compared to net loss of $1,738,500 for the three months ended January 31, 2024.

An analysis of

the increase in net loss of $2,819,126, including the major components thereof, is set forth below.

Share-based compensation

During the three months ended January 31, 2025, we incurred share-based compensation of $(91,779) compared to share-based compensation of $373,125 for the three months ended January 31, 2024.

Share-based payments relating to the vesting of RSUs decreased by $52,806.

Share-based payments relating to the vesting of Options decreased by $412,118.

Due to the listing of the Company on the NASDAQ on November 7, 2024 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 was $330,090.

Changes in fair value due to period end fair value remeasurements are reflected in compensation expense.

Please refer to Note 12 of the interim financial statements.

Professional fees

During the three months ended January 31, 2025, we incurred $4,596,025 in professional fees, as compared to $1,024,030 during the three months ended January 31, 2024.

fees for both periods mainly related to the Business Combination.

Salaries and wages

During the three months ended January 31, 2025 and 2024, we incurred salaries and wages of $262,885 and $207,476, respectively, the majority of which were to officers of the

Sales and marketing

Sales and marketing expenses for the three months ended January 31, 2025 and 2024 amounted to $404,797 and $129,729, respectively.

These costs primarily related to publications,

industry events and investor relations subsequent to our successful closing of the Business Combination.

General and administrative

General and administrative expenses for the three months ended January 31, 2025 and 2024 amounted to $334,070 and $77,672, respectively, and primarily comprised of insurance

costs, filing fees and rent.

The increase is primarily due to an increase in filing fees as a result of listing on the NASDAQ.

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 2,000,000 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 3 months ended January 31,

2025, the Company’s share of MSP’s loss was $106,850.

Change in fair value of derivative liabilities

During the three months ended January 31, 2025, we recognized a loss on derivative liabilities of $2,067,350 related to the convertible debt financings completed in January 2024

and April 2024.

Please refer to Note 9 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.

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.

Finco’s functional currency remained CAD$.

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, 1,220,668 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities with an initial

value of $454,571.

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 0.9692 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 three months ended January 31, 2025, we recognized a gain of $497,355 due to period end fair value remeasurement.

Please refer to Note 11 of the interim financial

Foreign exchange loss

During the three months ended January 31, 2025, we recognized a foreign exchange gain of $4,220.

During the three months ended January 31, 2024, we recognized a foreign exchange

gain of $77,740.

The foreign exchange gains 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.

Gain on settlement of debt

In December 2024, the Company issued 412,478 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.

Impairment of carbon credits and stop-loss provision

On November 6, 2024, concurrent with the completion of the business combination, the Company issued 3,249,876 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,

2025 is $1,024,713.

The Company is currently in dispute with one of the vendors for which 1,200,000 shares with a fair value of $658,800 was issued.

At the date of these financial statements, the

vendor has not delivered the carbon credits which are due under the contract and the Company has issued a demand letter to the vendor.

Management has assessed that it is improbable that these carbon credits will be received and has recorded an

impairment charge of $658,800 during the three months ended January 31, 2025.

One of the carbon credit purchase agreements provides for the vendor to return the consideration shares received for cancellation in return for the carbon credits if a

registration statement does not become effective within 45 days of the closing of the purchase agreement.

As this deadline was not met, the vendor has triggered this clause under the agreement and is currently in negotiations with the Company to

return 1,500,000 shares with a fair value of $549,000 issued under the contract in exchange for the carbon credits that were transferred to the Company.

Management has assessed that it is probable that the carbon credits will be returned to the

vendor and has recorded an impairment charge of $549,900 during the three months ended January 31, 2025.

Results of Operations — Six Months Ended January 31, 2025 Comparison Against the Six Months Ended January 31, 2024

Sales and marketing

General and administrative

Professional fees

Salaries and wages

Share-based compensation

Total operating expenses

Accretion and interest expense

Loss on investment in associate

Change in fair value of derivative liabilities

Change in fair value of mandatory convertible debentures

Change in the fair value of warrant liabilities

Foreign exchange gain (loss)

Gain on settlement of debt

Impairment of carbon credits

Stop-loss provision

During the six months ended January 31, 2025, we incurred a net loss of $8,614,060 compared to net loss of $5,110,574 for the six months ended January 31, 2024.

An analysis of the

increase in net loss of $3,503,486, 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 2,000,000 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,

2025, the Company’s share of MSP’s loss was $106,850.

Share-based compensation

During the six months ended January 31, 2025, we incurred share-based compensation of $115,437 compared to share-based compensation of $786,317 for the six months ended January

Share-based payments relating to the vesting of options decreased by $365,608 during the six months ended January 31, 2025 compared to the six months ended January 31, 2024.

Share-based payments relating to the vesting of RSU’s

decreased by $305,572.

Due to the listing of the Company on the NASDAQ on November 7, 2024 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 was $330,090.

Changes in fair value due to period end fair value remeasurements are reflected in compensation expense.

Please refer to Note 12 of the interim financial statements.

Professional fees

During the six months ended January 31, 2025, we incurred $6,005,398 in professional fees, the majority of which relate to legal, audit and accounting fees incurred relating to

the Business Combination.

During the six months ended January 31, 2024, we incurred $3,321,212 in professional fees, the majority of which relate to legal fees incurred relating to the Business Combination.

Salaries and wages

During the six months ended January 31, 2025 and 2024, we incurred salaries and wages of $543,907 and $415,830 respectively, the majority of which were to officers of the

Sales and marketing

Sales and marketing expenses for the six months ended January 31, 2025 and 2024 amounted to $676,692 and $326,650, 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, 2025 and 2024 amounted to $391,405 and $290,002, respectively, and primarily comprised of insurance

costs, filing fees.

The increase is a result of increased filing fees relating to the Business Combination, offset by a decrease in rent costs as the Company no longer leases office space in FY 2025.

Foreign exchange gain

During the six months ended January 31, 2025 and 2024, we recognized a foreign exchange gain of $6,672 and $34,105, 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.

Change in fair value of derivative liabilities and mandatory convertible debenture

During the six months ended January 31, 2025, we recognized a loss on derivative liabilities of $719,000 and a gain on mandatory convertible debentures of $70,500, respectively,

related to the convertible debt financings completed in January 2024 and April 2024.

Please refer to Note 9 of the interim financial statements.

Loss on settlement of debt

On September 5, 2024, the Company issued 15,963 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 December 2024, the Company issued 412,478 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.

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

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.

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, 1,220,668 of the Company’s warrants which had strike prices denominated in CAD$ were reclassified as warrant liabilities

with an initial value of $454,571.

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, 2025, we recognized a gain of $9,223 due to period end fair value remeasurement.

Please refer to Note 11 of the

interim financial statements.

Impairment of carbon credits and stop-loss provision

On November 6, 2024, concurrent with the completion of the business combination, the Company issued 3,249,876 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,

2025 is $1,024,713.

The Company is currently in dispute with one of the vendors for which 1,200,000 shares with a fair value of $658,800 was issued.

At the date of these financial statements, the

vendor has not delivered the carbon credits which are due under the contract and the Company has issued a demand letter to the vendor.

Management has assessed that it is improbable that these carbon credits will be received and has recorded an

impairment charge of $658,800 during the six months ended January 31, 2025.

One of the carbon credit purchase agreements provides for the vendor to return the consideration shares received for cancellation in return for the carbon credits if a

registration statement does not become effective within 45 days of the closing of the purchase agreement.

As this deadline was not met, the vendor has triggered this clause under the agreement and is currently in negotiations with the Company to

return 1,500,000 shares with a fair value of $549,000 issued under the contract in exchange for the carbon credits that were transferred to the Company.

Management has assessed that it is probable that the carbon credits will be returned to the

vendor and has recorded an impairment charge of $549,900 during the six months ended January 31, 2025.

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, 2025, we had a working capital deficit of $20,936,427 (current assets of $1,068,622, less current liabilities of $22,005,049) and as of July 31, 2024, we had a working capital deficit of $8,362,363

(current assets of $141,905, less current liabilities of $8,504,268).

Our continuing operations are dependent upon our ability to obtain debt or equity financing, of which there are no assurances, until such time that we achieve profitable

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 a equity line of credit purchase agreement (the “ELOC Agreement”) with Helena Global Investment Opportunities I Ltd.

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

many 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.

Since our inception, we have incurred operating losses and have experienced negative cash flows from operations.

We do not anticipate that cash on hand will be adequate to satisfy

our obligations in the ordinary course of business over the next 12 months.

Based on this assessment, we have material uncertainties about our business that may cast substantial doubt about our ability to continue as a going concern.

our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures and to meet our obligations.

See further discussion related to our ability to continue as a going concern

within “ — Critical Accounting Policies and Estimates.

As of January 31, 2025 and July 31, 2024, we had $16,665 and $21,106 in cash, respectively.

We are actively managing current cash flows until such time that we are profitable.

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

Six Months Ended

January 31, 2025

Six Months Ended

January 31, 2024

Net cash provided by (used in):

Operating activities

Financing activities

Investing activities

Effect of exchange rate changes on cash

(Decrease)/Increase in cash

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, 2025 was $4,051,780 compared to $1,067,670 for the six months ended January 31, 2024.

The loss for the six months ended January 31, 2025 of $8,614,060 was offset by $3,558,950 in changes

in working capital items and $1,003,330 in non-cash items consisting mainly of the gain on derivative liability, and offset by the impairment loss and stop-loss provision on carbon credits.

This compares to a loss of $5,110,574 for the prior

period, that was offset by $3,200,815 in changes in working capital items and $842,089 in non-cash items consisting mainly of share-based compensation.

Cash Provided by Investing Activities

Net cash provided by investing activities for the six months ended January 31, 2025 was $1,661,645, consisting of the cash assumed upon the completion of the Business

Net cash provided by investing activities for the six months ended January 31, 2024 was $nil.

Cash Provided by Financing Activities

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

from loans from related parties.

Net cash provided by financing activities for the six months ended January 31, 2025 was $2,383,887 compared to $606,847 for the six months ended January 31, 2024.

The following

financing activities occurred during the six months ended January 31, 2025:

Exercise of share purchase warrants:

On October 29, 2024, the Company issued 91,760 shares for the exercise of 91,760 share purchase warrants, at an exercise price of CAD$1.31 per share for gross proceeds of $86,237.

Non-brokered private placement of unsecured convertible notes:

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 amended terms of the Focus

Impact Partners convertible debenture.

Refer to Note 9 of our interim financial statements.

In October 2024, the mandatory convertible debentures were converted to 146,786 shares of the Company.

Refer to Note 10 of the interim financial statements.

PIPE financing:

On November 6, 2024, the Company issued 1,694,808 shares to various investors for gross proceeds of $2,250,000, of which $20,000 remain receivable as of January 31, 2025.

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, 2025, the Company had amounts owing and accrued liabilities of $525,398 (July 31, 2024 - $478,072) payable to directors and officers of the Company for salaries, expense

reimbursements and professional fees.

These amounts are non-interest bearing and have no terms of repayment.

During the six months ended January 31, 2025, the Company accrued wages and management fees of $380,000 and $100,000 (2024 - $323,770 and $84,920), respectively, to officers of the Company.

During the six months ended January 31, 2025, the Company accrued interest of $76,601 (2024 - $1,104) on convertible debentures payable to related parties (Note 9).

During the six months ended January 31, 2025, the Company amended the terms of convertible debentures payable to Focus Impact Partners and Focus Impact Sponsor, LLC, with face values of $637,150 and $3,345,000,

respectively.

The convertible debentures have an amended maturity date of November 13, 2026, and the principal and interest 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 $0.867 per share.

Focus Impact Partners is owned by two of the Company’s directors:

Carl Stanton and Wray Thorn.

During the six months ended January 31, 2025, the Company issued 557,290 common shares to Focus Impact Partners in consideration for services provided to the Company pursuant to the strategic consulting agreement

between the Company and Focus Impact Partners dated November 13, 2024.

See, Contractual Obligations below.

During the year ended July 31, 2024, the Company issued convertible debentures to Devvio Inc.

(‘Devio”) and Envviron SAS (“Envviron”), who are related parties to the Company.

The Devvio convertible debt had a

principal amount of $100,000, while the Envviron convertible debt had a principal amount of $250,000.

Devvio owns in excess of 10% of the outstanding shares of the Company.

Envviron is controlled by Ray Quintana, a former director of the

Company who stepped down on November 7, 2024 upon completion of the Business Combination.

On November 12, 2024, the maturity for the convertible debentures issued to Devvio and Envviron are extended to May 30, 2025.

During the year ended July 31, 2024, the Company signed an amended strategic partnership agreement with Devvio dated November 28, 2021.

Contractual Obligations

Prepaid Royalties Agreement with Devvio

In September 2023, we agreed to pay prepaid royalty payments to Devvio, a related party, equal to a minimum of $2,270,000, to be paid by August 1, 2025 and $1,270,000 to be paid

by August 1, 2026.

On July 8, 2024, we further amended the agreement such that the minimum advances extended by one year and are now due as follows:

$1,000,000 by August 1, 2025, followed by $1,270,000 by August 1, 2026 and August 1, 2027.

On February 16, 2024, we entered into a licensing agreement with Greenlines Technology Inc.

for the use of certain technologies.

We agreed to pay $42,000 within 15 days of the

closing of the BCA.

Commencing January 1, 2025, we must pay an annual fee of $12,000 of the first day of each calendar year for the use of the technology.

Equity line of credit (“ELOC”) fee commitment with Helena Global Investment Opportunities I Ltd (“Helena I”)

On October 29, 2024, we entered into the ELOC Agreement with Helena I.

Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming effective, we issued to

Helena I common shares equal to $125,000 divided by the greater of (i) the lowest one-day VWAP during the five trading days immediately preceding the effectiveness date of such Registration Statement and (ii) $0.75.

The Helena I Registration

Statement became effective on March 17, 2025.

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,

Fees due under the Strategic Consulting Agreement 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.

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.

Quantitative and Qualitative Disclosures about Market Risk

Our board of directors have overall responsibility for the establishment and oversight of our risk management policies on an annual basis.

Management identifies and evaluates our

financial risks and is charged with the responsibility of establishing controls and procedures to ensure financial risks are mitigated in accordance with the approved policies.

Our financial instruments consist of cash, GST receivable, accounts payable and accrued liabilities, convertible debt.

mandatory convertible debentures, warrant

liabilities and derivative liabilities.

The carrying value of the Company’s cash, GST receivable and accounts payable and accrued liabilities approximate their fair value due to their short terms to

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

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations.

Our credit risk is primarily

attributable to our liquid financial assets including cash.

Our financial assets are cash, GST receivable, corporate taxes receivable, subscription receivable, and deposit on carbon credits purchase.

Our maximum exposure to credit risk, as at

period end, is the carrying value of our financial assets, being $992,488 and $106,764 as of January 31, 2025 and July 31, 2024, respectively.

We hold cash with major financial institutions and with a publicly traded payment processing company

therefore minimizing our credit risk.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet financial obligations as they fall due.

We manage liquidity by maintaining adequate cash balances and by raising equity

and debt financings.

We have no assurance that such financings will be available on favorable terms in the future.

In general, we attempt to avoid exposure to liquidity risk by obtaining corporate financing through the issuance of shares.

As of January 31, 2025, we had cash of $16,665 to settle current liabilities of $9,975,493 which fall due for payment within twelve months of the statement of financial position.

As of July 31, 2024, we had cash of $21,106 to settle current liabilities of $7,595,974 which fall due for payment within twelve months of the statement of financial position.

All of our contractual obligations are current and due within one

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, 2025, the Company has minimal exposure to these risks.

Inflation Risk

We do not believe that inflation had a significant impact on our results of operations for any periods presented in our interim financial statements.

Nonetheless, if our costs

were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs, and our inability or failure to do so could harm our business, financial condition and results of operations.

Capital Management

Capital is comprised of our shareholders’ (deficiency) and any debt that we may issue.

Our objectives when managing capital are to maintain financial strength and to protect our

ability to meet ongoing liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for our shareholders over the long term, of which there can be no assurances.

Protecting the ability to pay current and

future liabilities includes maintaining capital above minimum regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels.

We manage capital structure to

maximize financial flexibility by making adjustments in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities.

We do not presently utilize any quantitative measures to monitor

our capital, but rather we rely on our management’s expertise to sustain the future development of the business.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given our size, is

There were no changes to our approach to capital management during the period.

We are not subject to externally imposed capital requirements.

Inflation Reduction Act of 2022 (the “IR Act”)

1 unchanged sentence

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 (i.e., U.S.) corporations.

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.

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.

excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations.

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 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.

The Treasury has been given authority to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the excise tax.

The IR Act applies only to repurchases that occur after December

applies only to repurchases that occur after December 31, 2022.

During the second quarter of 2024, the IRS issued final regulations with respect to the timing and payment of the 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.

For certain taxpayers affected by Hurricane Beryl, the deadline to file such returns and remit such payment has been extended to

February 2025.

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.

For certain taxpayers affected by Hurricane Beryl, the deadline to file such returns and

remit such payment has been extended to February 2025.

The Company is currently evaluating its options with respect to payment of this obligation.

If the Company is unable to pay its obligation in full, it will 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.

Results of Operations

As of September 30, 2024, we had not commenced any operations.

All activity for the period from February 23, 2021 (inception) through September 30, 2024 related to our formation and the Initial Public Offering, and

since the closing of the Initial Public Offering and until the closing of the Business Combination, the search for a prospective and consummation of an Initial Business Combination.

We have neither engaged in any operations nor generated any

revenues to date.

We did not generate any operating revenues prior to the closing of the Business Combination.

We did generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the

Initial Public Offering.

For the three months ended September 30, 2024, we had net loss of $1,011,733 resulting from operating costs of $1,372,525 and provision for income taxes of $40,918, partially offset by interest income from operating

account of $116, the change in fair value of warrants of $227,000, and trust earnings of $174,594.

For the three months ended September 30, 2023, we had net loss of $1,770,907 resulting from $2,485,780 in operating costs, $227,000 in change in fair value of warrants and $154,799 in provision for income taxes,

partially offset by a recovery of offering costs allocated to warrants of $309,534, interest income from operating account of $2,434 and $784,704 in trust earnings.

For the nine months ended September 30, 2024, we had net loss of $3,863,631 resulting from operating costs of $4,065,418, the change in fair value of warrants of $227,000, and provision for income taxes of $217,448,

partially offset by interest income from operating account of $1,479 and trust earnings of $644,756.

For the nine months ended September 30, 2023, we had net loss of $719,242 resulting from $4,027,550 in operating costs, $681,000 in change in fair value of warrants and $938,294 in provision for income taxes

partially offset by a recovery of offering costs allocated to warrants of $309,534, interest income from operating account of $13,363 and $4,604,705 in trust earnings.

Contractual Obligations

As of September 30, 2024, we did not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

Administrative Services Agreement

We agreed to pay the Sponsor a total of $10,000 per month for office space, utilities and secretarial and administrative support provided to us.

Upon completion of the Business Combination, we ceased paying these

monthly fees.

For more information, also see "Recent Developments" regarding the New Convertible Notes that were issued in exchange for the cancellation of the Unpaid Fees.

Restricted Cash

At September 30, 2024 and December 31, 2023, the Company had $25,843 and $75,773, respectively, of restricted cash related to funds withdrawn from the Trust Account reserved to the payment of taxes.

2024, the Company transferred $75,773 to the Trust Account related to excess funds withdrawn and the timing of the payment of taxes and no longer had restricted cash related to December 31, 2023.

As of the filing of this Form 10-Q, the $25,843 of

excess funds withdrawn from the Trust Account has not been returned to the Trust Account.

Registration and Stockholder Rights

The holders of the founder shares, Private Placement Warrants and warrants that may be issued upon conversion of working capital loans (and any shares of Class A common stock issuable upon the exercise of the Private

Placement Warrants and warrants that may be issued upon conversion of working capital loans and upon conversion of the founder shares) were entitled to registration rights pursuant to a registration rights and stockholder agreement, requiring us to

register such securities for resale (in the case of the founder shares, only after conversion to the Class A common stock).

The holders of the majority of these securities are entitled to make up to three demands, excluding short form demands, that

we register 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 us to register

for resale such securities pursuant to Rule 415 under the Securities Act.

For more information on the amendment of the Registration and Stockholder Rights Agreements in connection with the closing of the Business Combination, please see Note 9

(Subsequent Events) in the financial statements accompanying this Form 10-Q.

Underwriter Agreement

The underwriters were entitled to a deferred underwriting fee of approximately $0.376 per unit sold in the Initial Public Offering, or $8,650,000 in the aggregate (including the commission related to the

underwriters’ exercise of the over-allotment option) upon the completion of the Company’s Initial Business Combination.

In the third quarter 2023, the underwriters waived any right to receive the deferred underwriting fee and will therefore receive

no additional underwriting fee in connection with the Closing of the Business Combination.

As a result, the Company recognized $309,534 of income and $8,340,466 was recorded to accumulated deficit in relation to the reduction of the deferred

underwriting fee.

As of September 30, 2024 and December 31, 2023, the deferred underwriting fee is $0.

To account for the waiver of the deferred underwriting fee, the Company analogized to the SEC staff’s guidance on accounting for reducing a liability for “trailing fees”.

Upon the waiver of the deferred underwriter

fee, the Company reduced the deferred underwriting fee liability to $0 and reversed the previously recorded cost of issuing the instruments in the Initial Public Offering, which included recognizing a contra-expense of $309,534, which is the amount

previously allocated to liability classified warrants and expensed upon the Initial Public Offering, and reduced the accumulated deficit and increased income available to Class B common stock by $8,650,000, which was previously allocated to the

Class A common stock subject to redemption and accretion recognized at the Initial Public Offering date.

Critical Accounting Estimates

We account for the warrants issued in connection with the Initial Public Offering and Private Placement in accordance with the guidance contained in FASB ASC 815 “Derivatives and Hedging” whereby under that provision

the warrants do not meet the criteria for equity treatment and must be recorded as a liability.

Accordingly, we classified the warrant instrument as a liability at fair value and will adjust the instrument to fair value at each reporting period.

This liability will be re-measured at each balance sheet date until the warrants are exercised or expire, and any change in fair value will be recognized in our statement of operations.

The fair value of warrants was estimated using an internal

valuation model.

Our valuation model utilized inputs such as assumed share prices, volatility, discount factors and other assumptions and may not be reflective of the price at which they can be settled.

Such warrant classification is also subject

to re-evaluation at each reporting period.

If the Company is unable to pay its obligation in full, it will 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.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and it may take advantage of certain exemptions from various reporting requirements that are

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 stockholder

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 accounting 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.

We have 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 or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or

revised standard.

This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or

impossible because of the potential differences in accounting standards used.

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the JOBS Act, and we will take advantage of certain exemptions from various

reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley

Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder 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 accounting

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.

We have 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 or private companies, we, as an emerging growth company, can adopt the new or revised

standard at the time private companies adopt the new or revised standard.

Smaller Reporting Company

Additionally, we are a “smaller reporting company,” as defined in Item 10(f)(1) of Regulation S-K.

Smaller reporting companies may take advantage of certain reduced disclosure

obligations, including, among other things, providing only two years of audited financial statements.

We will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of our common stock held by

non-affiliates exceeds $250 million as of the last business day of our second fiscal quarter, or (ii) our annual revenue exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates

exceeds $700 million as of the last business day of our second fiscal quarter.

If we continue to be a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from these certain

reduced disclosure requirements that are available to smaller reporting companies.

Subsequent Events

NASDAQ Listing

On February 12, 2025, DevvStream Corp.

received a notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC (“Nasdaq”) that, because the closing bid price for the Company’s common stock had fallen

below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of

the Company’s common stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share.

The Company has 180 calendar days, or by August 13, 2025, to regain compliance with the minimum bid price

requirement but could be eligible for an additional 180-day compliance period.

Issuance of shares

On March 17, 2025, the Company issued 166,667 shares in accordance with the ELOC Agreement with Helena I in satisfaction of the $125,000 commitment (Note 17) upon the effectiveness of Helena I Registration

In March 2025, the Company issued 1,606,000 shares in accordance with the ELOC Agreement with Helena I for gross proceeds of $481,530.

Related Party Convertible Debt

On March 19, 2025, the Company received an additional advance of $218,000 into the Focus Impact Partners Convertible Debt.

Executive Officer Equity Awards

On March 26, 2025, the Board approved an award to (i) the Company’s Chief Executive Officer, Mr.

Sunny Trinh, of 305,867 restricted stock units;

(ii) 350,000 stock options to the Company’s Chief Operating Officer,

Chris Merkel;

and (iii) 50,000 options to the Company’s Chief Financial Officer, Mr.

David Goertz.

Quantitative and Qualitative Disclosures About Market Risk.

1 unchanged sentence

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What changed 10-Q

Item 2. Management’s Discussion and Analysis