What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-06-23 compared with 2025-04-16 · 323 added, 320 removed, 192 unchanged (77% of the section changed)

2 unchanged sentences

Cautionary Note Regarding Forward-Looking Statements

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.

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 nine months ended April 30, 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.

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

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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.

(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.

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.

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.

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to DevvStream Corp.

and continue the business of Devv Holdings following

the amalgamation.

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”).

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

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.

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.

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(“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.

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

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 April 30, 2025 Comparison Against the Three Months Ended April 30, 2024

For the Three

January 31, 2025

April 30, 2025

For the Three

January 31, 2024

April 30, 2024

Cost of sales

Sales and marketing

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Change in fair value of derivative liabilities

Change in fair value of convertible debt-FVTPL

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.

Net income (loss)

During the three months ended April 30, 2025, we incurred a net income of $3,522,625 compared to net loss of $1,717,619 for the three months ended April 30, 2024.

analysis of the increase in net income of $5,240,244, 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.

During the three months ended April 30, 2025, we incurred share-based compensation of $74,699 compared to share-based compensation of $ 262,433 for the three months ended April 30, 2024.

Share-based payments relating to the vesting of RSUs increased by $61,020.

Share-based payments relating to the vesting of Options decreased by $248,754.

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.

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.

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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.

During the three months ended April 30, 2025, we incurred $841,536 in professional fees, as compared to $942,688 during the three months ended April 30, 2024.

The legal 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

During the three months ended April 30, 2025 and 2024, we incurred salaries and wages of $279,109 and $201,570, 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.

Sales and marketing expenses for the three months ended April 30, 2025 and 2024 amounted to $155,496 and $38,756, 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

General and administrative expenses for the three months ended April 30, 2025 and 2024 amounted to $235,972 and $103,229, respectively, and primarily comprised of insurance

costs, filing fees and rent.

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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.

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.

During the 3 months ended

April 30, 2025, the Company’s share of MSP’s loss was $298,804.

Change in fair value of warrant liabilities

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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.

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.

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 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

The fair value of the

warrants was $7,196,286 upon issuance.

During the three months ended April 30, 2025, we recognized a gain of $5,641,785 due to period end fair value remeasurement.

Please refer to Note 11 of the interim financial statements.

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.

During the three months ended April 30, 2025, we recognized a foreign exchange loss of $31,100.

During the three months ended April 30, 2024, we recognized a foreign

exchange loss of $85,860.

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

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

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

April 30, 2025 is $1,101,248.

Results of Operations — Nine Months Ended April 30, 2025 Comparison Against the Nine Months Ended April 30, 2024

April 30, 2025

April 30, 2024

Cost of sales

Sales and marketing

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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.

During the nine months ended April 30, 2025, we incurred a net loss of $5,091,435 compared to net loss of $6,828,193 for the nine months ended April 30, 2024.

An analysis of

the decrease in net loss of $1,736,758, 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.

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.

During the nine months

ended April 30, 2025, the Company’s share of MSP’s loss was $405,654.

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.

During the nine months ended April 30, 2025, we incurred share-based compensation of $190,136 compared to share-based compensation of $1,048,750 for the nine months ended

April 30, 2024.

Share-based payments relating to the vesting of options decreased by $813,627 during the nine months ended April 30, 2025 compared to the nine months ended April 30, 2024.

Share-based payments relating to the vesting of

RSU’s decreased by $44,987.

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.

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.

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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.

During the nine months ended April 30, 2025, we incurred $6,846,934 in professional fees, the majority of which relate to legal, audit and accounting fees incurred

relating to the Business Combination.

During the nine months ended April 30, 2024, we incurred $4,263,900 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

During the nine months ended April 30, 2025 and 2024, we incurred salaries and wages of $823,016 and $617,400 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.

Sales and marketing expenses for the nine months ended April 30, 2025 and 2024 amounted to $832,188 and $365,406, 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

General and administrative expenses for the nine months ended April 30, 2025 and 2024 amounted to $627,377 and $393,231, 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.

Foreign exchange gain(loss)

During the nine months ended April 30, 2025 and 2024, we recognized a foreign exchange loss of $24,428 and a loss of $51,756, 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.

During the nine months ended April 30, 2025, we recognized a gain 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.

2 unchanged sentences

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.

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

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.

Finco’s functional currency

remained CAD$.

Finco’s functional

currency remained CAD$.

The change in

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

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.

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 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.

value of the warrants was $7,196,286 upon issuance.

As a result of above, during the nine months ended April 30, 2025, we recognized a gain of $5,651,008 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.

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

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

April 30, 2025 is $1,101,248.

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.

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 nine months ended April 30, 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.

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 $548,982 during the nine months ended April 30, 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).

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 April 30, 2025, we had a working capital deficit of $16,424,876 (current assets of $1,143,608, less current liabilities of $17,568,484) 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

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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.

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 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.

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 do not anticipate that cash on hand will be adequate to

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

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

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

See further discussion related to our ability to continue as

a going concern within “ — Critical Accounting Policies and Estimates.

As of April 30, 2025 and July 31, 2024, we had $4,002 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

Nine Months Ended

April 30, 2025

April 30, 2024

Net cash provided by (used in):

Operating activities

Financing activities

Investing activities

Financing activities

Effect of exchange rate changes on cash

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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.

Net cash used

in operating activities for the nine months ended April 30, 2025 was $4,763,601 compared to $1,421,362 for the nine months ended April 30, 2024.

The loss for the nine months ended April 30, 2025 of $5,091,435 was offset by $4,384,826 in

changes in working capital items and increased by $4,056,992 in non-cash items consisting mainly of the gain on warrant liability and gain on derivative liability, and offset by the impairment loss and stop-loss provision on carbon

This compares to a loss of $6,828,193 for the prior period, that was offset by $4,225,710 in changes in working capital items and $1,181,121 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.

Net cash provided by investing activities for the nine months ended April 30, 2025 was $1,661,645, consisting of the cash assumed upon the completion of the Business Combination.

provided by investing activities for the nine months ended April 30, 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:

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 nine months ended April 30, 2025 was $3,083,417 compared to $1,039,629 for the nine months ended April 30, 2024.

following financing activities occurred during the nine months ended April 30, 2025:

Exercise of share purchase warrants:

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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.

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.

On March 19, 2025, the Company received proceeds of $218,000 under a new convertible debenture issued to Focus Impact Partners.

Refer to Note 9 of our interim financial statements.

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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.

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 April 30, 2025.

ELOC drawdown:

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

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.

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

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.

At April 30, 2025, the Company had amounts owing and accrued liabilities of $484,911 (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,

During the nine months ended April 30, 2025, the Company accrued wages and management fees of $603,417 and $159,000 (2024 - $473,923 and $118,074), respectively, to officers of the Company.

During the nine months ended April 30, 2025, the Company accrued interest of $149,905 (2024 - $7,224) on convertible debentures payable to related parties.

Refer to Note 9 of our interim financial statements.

During the nine months ended April 30, 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.

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.

During the nine months ended April 30, 2025, the Company issued a new convertible debenture payable to Focus Impact Partners with face value of $218,000.

The convertible debenture has a maturity date of March

19, 2027, 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.

During the nine months ended April 30, 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.

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(‘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.

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

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

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

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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.

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:

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for the use of certain technologies.

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

closing of the BCA.

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 of the first day of each calendar year for the use of the technology.

The amounts due on January 1, 2025 are yet to be paid as of April 30, 2025.

The Company has accrued $4,000 in connection with the annual fee payable as of April 30, 2025.

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.

Following the closing of the De-SPAC Transaction and the Helena I Registration Statement becoming

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

The Company issued 166,667 shares in satisfaction of this commitment on March 17, 2025.

Strategic Consulting Agreement with Focus Impact Partners, LLC (“Focus Impact Partners”)

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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

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.

we have 2 or more consecutive quarters of positive cash flow from operations.

As of April 30, 2025, neither conditions have 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:

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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.

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

mandatory convertible debentures,

warrant liabilities and derivative liabilities.

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

terms to maturity.

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

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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.

Our financial assets are cash, trade receivable, 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 $975,650 and $106,764 as of April 30, 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 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.

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

As of April 30, 2025, we had cash of $4,002 to settle current liabilities of $10,877,745 which fall due for payment within twelve months of the statement of financial

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.

All of our contractual obligations are current and due

within one year.

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 April 30, 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.

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

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.

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

We do not presently utilize any

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

Management reviews its capital management approach on an ongoing basis and believes that this

approach, given our size, is reasonable.

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

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The IR Act provides for, among other measures, a new U.S.

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.

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.

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.

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

The IR Act 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.

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 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.

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

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.

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.

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.

Evaluation of Disclosure of Controls and Procedures

Based on an evaluation as of April 30, 2025, 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 nine months ended April 30, 2025.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a

material misstatement of our annual or interim financial statements will not be prevented or detected in a timely manner.

We did not design or maintain an effective control environment commensurate with financial reporting requirements.

Specifically, we did not consistently have documented

evidence of review procedures and, due to resource limitations, did not always maintain segregation of duties between preparing and reviewing analyses, and reconciliations.

The above material weakness did not result in a material misstatement of our unaudited condensed consolidated financial statements or our consolidated financial statements,

however, it could result in a misstatement of our account balances or disclosures that would result in a material misstatement that would not be prevented or detected.

Remediation Activities

We are working to remediate the material weakness and are taking steps to strengthen our internal control over financial reporting through the continued hiring of additional

appropriately skilled finance and accounting personnel with the requisite technical knowledge and skills.

With the additional skilled personnel, we are taking appropriate and reasonable steps to remediate this material weakness through the

implementation of appropriate segregation of duties, formalization of accounting policies and controls and retention of appropriate expertise for complex accounting transactions.

We will not be able to fully remediate these control

deficiencies until these steps have been completed and have been operating effectively for a sufficient period of time.

Management will continue to review and make necessary changes to the overall design of our internal control environment,

as well as policies and procedures to improve the overall effectiveness of internal control over financial reporting.

The material weakness will not be considered remediated, however, until the applicable controls operate for a sufficient

period of time and management has concluded that these controls are operating effectively.

Subsequent Events

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.

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.

In May 2025, the Company issued 3,346,000 shares in accordance with the ELOC Agreement with Helena I for gross proceeds of $1,051,857.

Return of carbon credits and cancellation of shares

On May 6, 2025, the Company entered into an agreement with a vendor of carbon credits for the return of the 1,500,000 consideration shares received for cancellation in return for the carbon credits.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis