DevvStream Announces Amendments to Business Combination Agreement with Focus Impact Acquisition Corp.

Rhea-AI Summary

DevvStream Holdings Inc. announces amendments to the Business Combination Agreement with Focus Impact Acquisition Corp., involving a reverse split of stock and share consideration adjustments. The First Amendment outlines the conversion of securities, warrants, and shares, detailing the SPAC Continuance and the Amalgamation process. The agreement specifies terms for New PubCo Common Shares issuance and the Reverse Split Factor calculation, aiming to streamline the Business Combination.

Positive

• The amendments to the Business Combination Agreement aim to enhance the efficiency and clarity of the transaction process between DevvStream and Focus Impact Acquisition Corp.

Negative

• The complexities of the amended agreement may pose challenges in understanding the intricacies of the conversion processes and the impact on shareholders.

Vancouver, British Columbia--(Newsfile Corp. - May 3, 2024) - DevvStream Holdings Inc. (NEO: DESG) (OTCQB: DSTRF) (FSE: CQ0) ("DevvStream" or the "Company") is pleased to announce that, further to its news release of September 13, 2023, it has amended certain terms of that certain Business Combination Agreement, amongst the Company, Focus Impact Acquisition Corp. ("Focus Impact"), and Focus Impact Amalco Sub Ltd. ("Amalco Sub"). The primary purpose of the amendment is to provide for a reverse split of (i) the Class A common stock of Focus Impact and (ii) the share consideration payable to the Company's shareholders at the closing of the Business Combination (as defined below), in each case, to be completed prior to closing of the Business Combination. Capitalized terms used and not otherwise defined in this news release shall have the respective meanings ascribed to them in the Business Combination Agreement (as defined below), a copy of which is available under the Company's profile at www.sedarplus.ca.

On May 1, 2024, the Company, Focus Impact, and Amalco Sub entered into Amendment No. 1 to the Business Combination Agreement (the "First Amendment"), which amends the Business Combination Agreement (as so amended, the "Business Combination Agreement"). The transactions contemplated by the Business Combination Agreement are referred to as the "Business Combination." The First Amendment provides, among other things, that:

(i) Pursuant to the SPAC Continuance, (a) each issued and outstanding unit of Focus Impact, consisting of (I) one share of Focus Impact's Class A common stock, par value $0.0001 per share (the "Class A Common Stock"), and (II) one-half of one redeemable warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 (the "Focus Impact Warrants"), that has not been previously separated into its component securities prior to the SPAC Continuance shall automatically convert into securities of New PubCo identical to (i) a number of New PubCo Common Shares equal to the Reverse Split Factor (as defined below) and (ii) a number of warrants to purchase one New PubCo Common Share equal to one-half (1/2) of the Reverse Split Factor at an exercise price equal to the Adjusted Exercise Price (as defined below), (b) each issued and outstanding share of Class A Common Stock that has not been redeemed shall remain outstanding and automatically convert into a number of New PubCo Common Shares equal to the Reverse Split Factor, (c) each issued and outstanding share of Class B common stock of Focus Impact, par value $0.0001 per share (the "Class B Common Stock"), shall automatically convert into a number of New PubCo Common Shares equal to the Reverse Split Factor or be forfeited in accordance with the Sponsor Side Letter (as defined below), and (d) each Focus Impact Warrant and the warrants issued to Focus Impact Sponsor, LLC, a Delaware limited liability company and our sponsor ("Sponsor"), in the private placement consummated simultaneously with Focus Impact's initial public offering, which entitles the holder thereof to purchase one whole share of Class A Common Stock at $11.50 per share (the "Private Placement Warrants" and together with the FIAC Warrants, the "Warrants"), will be assumed by New PubCo and automatically converted into the right to exercise such warrant for a number of New PubCo Common Shares equal to the Reverse Split Factor at an exercise price equal to the Adjusted Exercise Price. Any fractional shares or warrants to be issued pursuant to the SPAC Continuance will be rounded down to the nearest whole share or warrant; and

(ii) Pursuant to the Amalgamation, New PubCo shall issue, and the holders of Company Shares (as defined below) collectively shall be entitled to receive a number of New PubCo Common Shares equal to (a) the Common Amalgamation Consideration (as defined below), plus (b) solely to the extent any Multiple Voting Company Shares and Subordinate Voting Company Shares are required to be issued to Approved Financing Sources (as defined below) pursuant to Approved Financings (as defined below) in connection with the Closing, a number of New PubCo Common Shares equal to (i) each such Company Share multiplied by (ii) the Per Common Share Amalgamation Consideration (as defined below) in respect of such Company Share.

The "Per Common Share Amalgamation Consideration" means (i) with respect to each Multiple Voting Company Share, an amount of New PubCo Common Shares equal to (a) ten, multiplied by (b) the Common Conversion Ratio (as defined below), and (ii) with respect to each Subordinated Voting Company Share, an amount of New PubCo Common Shares equal to the Common Conversion Ratio. The "Common Conversion Ratio" means, in respect of a Company Share, the number equal to the Common Amalgamation Consideration divided by the Fully Diluted Common Shares Outstanding (as defined below). The "Common Amalgamation Consideration" means, with respect to the Company Securities, a number of New PubCo Common Shares equal to the product of (A) the Reverse Split Factor, multiplied by (B) the quotient of (i) the Amalgamation Consideration Value (as defined in the Business Combination Agreement), divided by (ii) $10.20. The "Fully Diluted Common Shares Outstanding" means, without duplication, at any measurement time (a)(i) ten, multiplied by (ii) the aggregate number of Multiple Voting Company Shares that are issued and outstanding, plus (b) the aggregate number of Subordinated Voting Company Shares that are issued and outstanding, plus (c) the aggregate number of Subordinated Voting Company Shares to be issued pursuant to the exercise and conversion of the Company Options in accordance therewith, plus (d) the aggregate number of Subordinated Voting Company Shares to be issued pursuant to the exercise and conversion of the Company Warrants in accordance therewith, plus (e) the aggregate number of Subordinated Voting Company Shares to be issued pursuant to the vesting of the restricted stock units of the Company in accordance therewith. For the avoidance of doubt, "Fully Diluted Common Shares Outstanding" shall not include any Subordinated Voting Company Shares to be issued (including pursuant to the exercise and conversion of Company Warrants) to any Approved Financing Source pursuant to an Approved Financing. The "Approved Financing Source" means a person engaged by the Company after the date of the First Amendment to act as an investment bank, financial advisor, broker or similar advisor in connection with any financing which has been approved by Focus Impact in accordance with the terms of the Business Combination Agreement (an "Approved Financing"). The "Reverse Split Factor" means an amount equal to the lesser of (a) the quotient obtained by dividing the Final Company Share Price by $0.6316 and (b) one. The "Final Company Share Price" means the closing price of the Subordinated Voting Company Shares on the Cboe Canada stock exchange, as of the end of last trading day prior to the Closing (and if there is no such closing price on the last trading day prior to the Closing, the closing price of the Subordinated Voting Company Shares on the last trading day prior to the Closing on which there is such a closing price), converted into United States dollars based on the Bank of Canada daily exchange rate on the last business day prior to the Closing. The "Adjusted Exercise Price" means $11.50 multiplied by a fraction (x) the numerator of which is the number of shares of common stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of common stock purchasable immediately thereafter.

Concurrently with the execution of the First Amendment, Focus Impact and Sponsor entered into Amendment No. 1 (the "Sponsor Side Letter Amendment") to that certain Letter Agreement, dated as of September 12, 2023 (as so amended, the "Sponsor Side Letter"), pursuant to which, among other things, Sponsor agrees and acknowledges that (i) each share of Class B Common Stock (other than those subject to forfeiture pursuant to the Sponsor Side Letter) shall convert only into a number of New PubCo Common Shares (and not any other Focus Impact shares prior to such automatic conversion) equal to the Reverse Split Factor and (b) that each Private Placement Warrant shall only convert into the right to exercise such warrants for New PubCo Common Shares equal to the Reverse Split Factor. No fractional shares shall be issued and the total number of New PubCo Common Shares to be received by Sponsor shall be rounded down to the nearest whole share after aggregating all New PubCo Common Shares held by Sponsor. As a third-party beneficiary of the Sponsor Side Letter, the Company consented in all respects to the Sponsor Side Letter Amendment.

About DevvStream

Founded in 2021, DevvStream is a leading authority in the use of technology in carbon project development. The Company's mission is to create alignment between sustainability and profitability, helping organizations achieve their climate initiatives while directly improving their financial health. With a pipeline of over 140 technology-based projects worldwide, DevvStream makes it simple for corporations and governments to address their net-zero goals while generating premium carbon credits in the process. DevvStream takes a programmatic approach to evaluating project opportunities, and co-develops projects spanning energy-efficient buildings, facilities and homes, industrial facilities, LED systems, EV charging stations, and technologies to seal oil wells. The Company's end-to-end proprietary solution removes the risk and complexity from every step, allowing organizations to move from project ideation to credit monetization with ease. The result is a multi-year stream of carbon credit revenue that transforms sustainability into a financial investment. In addition, for organizations that need help to offset their most difficult-to-reduce emissions, we also provide premium carbon credits for purchase.

On September 13, 2023, DevvStream and Focus Impact announced that they have entered into the Business Combination Agreement in respect of the Business Combination that would result in the combined company (DevvStream) to be listed on the Nasdaq Stock Market under the ticker symbol "DEVS". On December 11, 2023, DevvStream announced the filing of a registration statement on Form S-4 with the U.S. Securities and Exchange Commission, which contains a preliminary proxy statement/prospectus in connection with the proposed Business Combination. Upon closing, the Business Combination is expected to result in DevvStream being the first publicly traded carbon credit company on a major U.S. stock exchange.

Disclaimer

Certain statements in this news release may be considered forward-looking statements. Forward-looking statements are statements that are not historical facts and generally relate to future events or DevvStream's future financial or other performance metrics. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expect", "intend", "will", "estimate", "anticipate", "believe", "predict", "potential" or "continue", or the negatives of these terms or variations of them or similar terminology. These forward-looking statements, including, without limitation DevvStream's expectations with respect to future performance and anticipated financial impacts of the Agreement and Business Combination are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by DevvStream and its management, are inherently uncertain and subject to material change. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of negotiations and any subsequent definitive agreements with respect to the Business Combination; (2) the outcome of any legal proceedings that may be instituted against Focus Impact, DevvStream, the combined company or others; (3) the inability to complete the Business Combination due to the failure to obtain approval of the stockholders of Focus Impact and DevvStream or to satisfy other conditions to closing; (4) changes to the proposed structure of the Business Combination that may be required or appropriate as a result of applicable laws or regulations; (5) the ability to meet Nasdaq's or another stock exchange's listing standards following the consummation of the Business Combination; (6) the risk that the Business Combination disrupts current plans and operations of Focus Impact or DevvStream as a result of the announcement and consummation of the Business Combination; (7) the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and retain its management and key employees; (8) costs related to the Business Combination; (9) changes in applicable laws or regulations; (10) the possibility that Focus Impact, DevvStream or the combined company may be adversely affected by other economic, business, and/or competitive factors; (11) estimates of expenses and profitability and underlying assumptions with respect to stockholder redemptions and purchase price and other adjustments; (12) various factors beyond management's control, including general economic conditions and other risks, uncertainties and factors set forth in the section entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Registration Statement on Form S-4 that includes a proxy statement and prospectus of Focus Impact (as amended, the "Registration Statement"), filed with the SEC on December 4, 2023, and other filings with the SEC; and (13) certain other risks identified and discussed in DevvStream's Annual Information Form for the year ended July 31, 2023, and DevvStream's other public filings with Canadian securities regulatory authorities, available on DevvStream's profile on SEDAR at www.sedarplus.ca.

These forward-looking statements are expressed in good faith, and DevvStream believes there is a reasonable basis for them. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and DevvStream is not under any obligation, and expressly disclaims any obligation, to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review the statements set forth in DevvStream's public filings with Canadian securities regulatory authorities. This news release is not intended to be all-inclusive or to contain all the information that a person may desire in considering an investment in DevvStream and is not intended to form the basis of an investment decision in DevvStream. All subsequent written and oral forward-looking statements concerning DevvStream, the proposed transaction or other matters and attributable to DevvStream or any person acting on DevvStream's behalf are expressly qualified in their entirety by the cautionary statements above.

On Behalf of the Board of Directors,
Sunny Trinh, CEO

DevvStream Media Contacts

DevvStream@icrinc.com and info@fcir.ca
Phone: (332) 242-4316

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/207881

FAQ

What amendments did DevvStream announce to the Business Combination Agreement with Focus Impact Acquisition Corp.?

DevvStream announced amendments involving a reverse split of stock and share consideration adjustments to the Business Combination Agreement with Focus Impact Acquisition Corp.

What is the purpose of the amendments to the Business Combination Agreement?

The amendments aim to provide clarity and efficiency in the transaction process between DevvStream and Focus Impact Acquisition Corp.

When were the amendments to the Business Combination Agreement finalized?

The amendments were finalized on May 1, 2024, with the execution of Amendment No. 1 to the Business Combination Agreement.