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Item 1A. Risk Factors

2025-12-16 compared with 2025-06-23 · 100 added, 7 removed, 0 unchanged (100% of the section changed)

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 8-K/A filed with the SEC on

March 7, 2025 and with the risks described in the our prospectus included in the Registration Statement on Form S-1 we filed on March 3, 2025.

Any of these factors could result in a significant or material adverse effect on our results of

operations or financial condition.

Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

As of the date of this Quarterly Report, there have been no

material changes to the risk factors disclosed in our Annual Report.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K

filed with the SEC on November 6, 2025.

Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.

Additional risk factors not presently known to us or that we

currently deem immaterial may also impair our business or results of operations.

Except as set forth below, there have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in our Annual Report

on Form 10-K.

Risks related to the Merger

The Merger may be delayed or may not be completed, and the Merger Agreement may be terminated in

accordance with its terms.

The completion of the merger is subject to the satisfaction or waiver of a number of conditions as specified in the Merger Agreement, including,

receipt of clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976, as amended, approval for the post-merger Company’s initial listing application with Nasdaq, as well as other customary closing conditions.

can be given as to the timing of the satisfaction or waiver of these conditions or that these conditions will be satisfied or waived at all.

Accordingly, there can no assurance as to whether or when the Merger will be completed.

In addition, either the Company or Southern may terminate the Merger Agreement under certain circumstances, including if the Merger is not

completed by September 3, 2026 (which date may be extended by thirty or sixty days, under certain circumstances).

Litigation relating to the Merger, if any, could delay or prevent the completion of the Merger and result

in substantial costs to the Company.

Governmental authorities or other third parties with appropriate standing may file litigation challenging the Merger and seeking an order

enjoining or otherwise delaying or prohibiting the completion of the Merger.

If any such litigation is successful, then such order may prevent the Merger from being completed, or from being completed within the expected time frame.

can be no assurance that the Company or any other defendants would be successful in the outcome of any potential future lawsuits.

Even if a lawsuit is without merit, it could result in substantial costs to the Company and divert

management time and resources.

Failure to complete the Merger could negatively impact the Company.

If the Merger is not completed for any reason, the ongoing business and financial condition of the Company may be adversely affected, including

in the following ways:

the Company may experience negative reactions from the financial markets, including negative impacts on the market price of its common shares;

the Company may experience negative reactions from its suppliers, distributors, vendors, customers or other third parties with whom it does business;

the Company may experience negative reactions from employees;

the Company will have incurred, and may continue to incur, significant costs relating to the Merger, such as investment banking, legal, accounting and financial advisor fees and expenses, that it

may not be able to recover;

the Company will have expended significant time and resources that could otherwise have been spent on its existing business or the pursuant of other opportunities without realizing any of the

potential benefits associated with the Merger;

the Company may face litigation related to the failure to complete the Merger or an enforcement proceeding with respect to its obligations under the Merger Agreement.

In addition, if the Merger Agreement is terminated and the Company seeks an alternative transaction, there can be no guarantee that it will be

able to find or complete an alternative transaction on more attractive terms than the Merger or at all.

The Merger Agreement restricts the Company’s business activities prior to the completion of the Merger.

The Merger Agreement places certain restrictions on the operations of the Company and restricts the Company and taking certain other specified

actions without the consent of Southern until the completion of the Merger or the termination of the Merger Agreement.

These restrictions, which could be in place for an extended period of time if the completion of the Merger is delayed,

could prevent the Company from pursuing attractive business opportunities that may arise prior to completion of the Merger or from making appropriate changes to business or organizational structure.

This could in turn adversely impact the

Company’s results of operations, financial condition and cash flows.

The Merger, including uncertainty regarding the Merger, could disrupt the Company’s business

relationships and adversely affect the Company’s ability to effectively manage its business.

As discussed above, the completion of the Merger is subject to the satisfaction or waiver of several conditions.

Many of these conditions are

outside the Company’s control.

Furthermore, both the Company and Southern have certain rights to terminate the Merger Agreement.

Accordingly, there may be uncertainty regarding the completion of the Merger.

This uncertainty may cause

customers, suppliers, vendors, strategic partners or other parties that have business relationships with the Company to delay or defer entering into contracts with, or making other decisions concerning, the Company or to seek to change or

cancel existing business relationships with the Company, which could negatively affect the Company’s business regardless of whether the Merger is ultimately completed.

This could in turn adversely impact the Company’s results of

operations, financial condition and cash flows.

The Merger, regardless of whether it is completed, will continue to divert resources from ordinary

operations, which could adversely affect the Company’s business.

The Company has diverted the attention of management and other resources to the Merger.

Whether or not the Merger is completed, the pendency of

the Merger will continue to divert the attention of management and other resources from day-to-day operations to the completion of the Merger.

This diversion of management attention and other resources could adversely affect the Company’s

ongoing business regardless of whether the Merger is completed.

The Company has incurred and expects to continue to incur significant merger-related costs.

The Company has incurred and expects to continue to incur a number of non-recurring costs associated with negotiating and completing the Merger.

These costs and expenses have been, and will continue to be, significant.

These costs and expenses include fees paid or payable to financial, legal and accounting advisors, potential employment-related costs, filing fees, printing

expenses and other related charges.

Some of these costs are payable by the Company regardless of whether the Merger is completed.

While the Company has assumed that a certain level of expenses would be incurred in connection with the

Merger, there are many factors beyond its control that could affect the total amount or the timing of these expenses.

These costs and expenses could adversely impact the Company’s financial condition and liquidity.

Uncertainties associated with the Merger could negatively impact the Company’s ability to attract,

motivate and retain management personnel and other key employees.

Competition for qualified personnel can be intense.

Current and prospective employees of the Company may experience uncertainty about their

future role until strategies with regard to these employees are announced or executed, which may impair the Company’s ability to attract, retain and motivate key management, sales, marketing, and other personnel prior to completion of the

Employee retention may be particularly challenging as employees may experience uncertainty about their future roles with the combined company.

If the Company is unable to retain personnel, including key management personnel, it

could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how, and unanticipated additional recruitment and training costs.

Failure to meet Nasdaq’s continued listing requirements could result in the delisting of our common

shares, negatively impact the price of our common shares and negatively impact our ability to raise additional capital.

On November 18, 2025, DevvStream Corp.

(the “Company”) received a deficiency letter from the Listing Qualifications Department of The Nasdaq

Stock Market LLC (“Nasdaq”) notifying the Company that its net income from continuing operations had fallen below the minimum requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(3) (the

“Minimum Net Income Requirement”) and that the Company does not meet the alternatives of market value of listed securities or stockholders’ equity (collectively with the Minimum Net Income Requirement, the “Continued Listing Standards”).

In accordance with Nasdaq Listing Rule 5810(c)(2)(C), the Company has until January 2, 2026, which is 45 calendar days from the date the Notice was received, to provide Nasdaq with a plan to regain compliance with the Continued Listing

Standards (the “Compliance Plan”).

If Nasdaq accepts the Compliance Plan, Nasdaq may grant an extension of up to 180 calendar days from the date of the Notice for the Company to

evidence compliance.

If Nasdaq does not accept the Compliance Plan, then the Nasdaq staff will provide written notification to the Company that its common shares will be subject to delisting.

The Company may appeal Nasdaq’s rejection of

the Compliance Plan and any such determination to delist its securities, but there can be no assurance that any such appeal would be successful.

The Company intends to submit the Compliance Plan to Nasdaq within the required time period.

There can be no assurance that Nasdaq will accept the Compliance Plan, that the Company will be successful in achieving its Compliance Plan, or that the Company will be able to regain or maintain compliance with the Continued Listing

If our common shares are delisted, it could reduce the price of our common shares and the levels of liquidity available to our stockholders.

addition, the delisting of our common shares could materially adversely affect our access to the capital markets and any limitation on liquidity or reduction in the price of our common shares could materially adversely affect our ability

to raise capital.

Delisting from The Nasdaq Capital Market could also result in other negative consequences, including the potential loss of confidence by suppliers, customers and employees, the loss of institutional investor interest and

fewer business development opportunities.

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 1A. Risk Factors