Significant accounting policies (FY) (Policies) - DevvStream Holdings, Inc. [Member] |
12 Months Ended | ||||||||||||||
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Jul. 31, 2024 | |||||||||||||||
| Significant Accounting Policies [Abstract] | |||||||||||||||
| Additional paid in capital |
Additional paid in capital is presented at the value of the shares issued as the
Company’s shares have no stated par value. Transaction costs directly attributable to the issuance of common shares are recognized
as a deduction from equity. Transactions with shareholders are disclosed separately in equity.
The proceeds from the exercise of stock options or warrants together with
amounts previously recorded in additional paid in capital over the vesting periods are recorded as additional paid in capital.
Share units
The Company uses the relative fair value method with respect to the measurement
of shares and warrants issued as private placement units. Under the relative fair value method, the Company first determines the fair value of the common shares and warrants issued in a private placement, calculates the total fair value of the
issued units, and then allocates the proceeds received between the common shares and warrants based on their respective percent of the total fair value.
Warrants modification
The modification of warrants is accounted for as a cancellation of the old
warrants, and the issuance of post-modification warrants as the new warrants. The fair value incremental calculated on the modification would be considered an additional cost of issuing equity as part of the exchange of the old instrument for
the new instrument. The impact of modifications to warrants previously issued for services is recognized as share-based compensation in the consolidated statements of operations and comprehensive loss.
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| Share-based payments |
The Company records stock-based compensation in accordance with ASC 718
(“Compensation – Stock Compensation”) using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration
received or the fair value of the equity instrument issued, whichever is more reliably measurable.
The Company uses the Black-Scholes option pricing model to calculate the fair
value of stock-based awards. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to, the Company’s expected stock price
volatility over the term of the awards. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the statement of operations over the requisite service period.
The Company records restricted stock units based on their fair value at grant
date and recognizes compensation expense on a graded basis over the vesting period. In circumstances where the restricted stock units vest on the date of grant, the expense would be immediately recognized on grant.
The cumulative expense is recognized for equity-settled transactions at each
reporting date until the vesting date reflects the Company’s best estimate of the number of equity instruments that will ultimately vest. At the end of each reporting period, the Company re-assesses its estimates of the number of awards that
are expected to vest and recognizes the impact of the revisions in the consolidated statements of loss and comprehensive loss. No
expense is recognized for awards that do not ultimately vest.
Where the terms of an equity settled award are modified, the minimum expense
recognized is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense or its reduction is recognized for any modification which increases or decreases the total fair value of
the
share-based payment arrangement or is otherwise beneficial to the employee as
measured at the date of modification. Where an award is cancelled by the Company or the counterparty, any remaining element of the fair value of the award is expensed immediately or reversed through profit or loss, depending on whether the
award was cancelled or forfeited.
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| Equipment |
Equipment is stated at cost and depreciated using the straight-line method over
the estimated useful life of the asset using the following annual rates:
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| Foreign currency translation |
Foreign currency transactions and balances
Foreign currency transactions are translated into the functional currency of the
Company, using the exchange rates prevailing at the dates of the transactions, with the resulting foreign exchange gains and losses recognized in the consolidated statements of loss and comprehensive loss. The foreign exchange gains and losses
resulting from the remeasurement of monetary items denominated in foreign currency at year end exchange rates are recognized in the consolidated statements operations and comprehensive loss.
Non-monetary items are not retranslated at year end and are measured at
historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.
Translation to presentation currency
The Company has a functional currency of the Canadian dollar and a presentation
currency of the US dollar. For presentation, assets and liabilities have been translated into US Dollar at the closing rate at the reporting date and income and expenses are translated at average exchange rates prevailing during the period.
Foreign currency translation gains and losses are recognized in other comprehensive loss.
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| Financial instruments |
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Financial assets are classified and measured at fair value with subsequent
changes in fair value recognized in either profit and loss as they arise unless restrictive criteria are met for classifying and measuring the asset at either amortized cost or FVOCI. Financial liabilities are measured at amortized costs unless
they are elected to be or required to be measured at fair value through profit and loss.
Financial assets are derecognized when the rights to receive cash flows from the
assets have expired or have been transferred, and the Company has transferred all risks and rewards of ownership. Financial liabilities are derecognized when the obligations specified in the contract are discharged, cancelled, or expire.
ASC 820, Fair Value Measurements and
Disclosures, establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable
inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs
that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances.
ASC 820 identifies fair value as the exchange price, or exit price, representing
the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements,
ASC 820 establishes a three-tier fair value hierarchy that distinguishes between
the following, based on the nature of the valuation inputs:
Determination of fair value and the resulting hierarchy requires the use of
observable market data where available. The classification of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement.
To the extent that the valuation is based on models or inputs that are less
observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. The
Company determined that the derivative liabilities relating to the embedded conversion feature in the convertible notes and the mandatory convertible debentures are liabilities at Level 3.
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| Income taxes |
The Company’s tax provision consists of taxes currently payable or receivable,
plus any change during the period in deferred tax assets and liabilities. The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to be recovered or settles. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the
enactment date. In addition, a valuation allowance is established to reduce any deferred tax asset for which it is determined that is it more likely than note that some portion of the deferred tax asset will not be realized.
During the ordinary course of business, there are many transactions and
calculations for which the ultimate tax determination is uncertain. Accounting for income taxes requires a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by
determining if available evidence indicates it is more likely than not that the tax position will be fully sustained upon review by taxing authorities, including resolution of related appeals or litigation processes, if any. The second step is
to measure the tax benefit as the largest amount with a greater than 50 percent likelihood of being realized upon ultimate settlement. For tax positions that are 50 percent or less likely of being sustained upon audit, the Company does not
recognize any portion of that benefit in the financial statements.
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| Loss per share |
Basic loss per share is calculated by dividing the net loss attributable to the
common shareholders of the Company by the weighted average number of subordinate voting stock outstanding and reduced by any shares held in escrow during the reporting period. Diluted loss per share is calculated by dividing the net loss
applicable to subordinate voting stock by the sum of the weighted average number of subordinate
voting stock issued and outstanding, all additional subordinate voting stock
that would have been outstanding if potentially dilutive instruments were converted and reduced by any shares held in escrow. If these computations prove to be anti-dilutive, diluted loss per share is the same as basic loss per share.
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| Advertising |
The Company expenses advertising costs when the advertising first takes place.
Advertising expense was approximately $481,104 for the year ended July 31, 2024 (2023 – $914,409).
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| Operating segments |
Operating segments are components of the Company that engage in business
activities which generate revenues and incur expenses. The operations of an operating segment are distinct, and the operating results are regularly reviewed by the CODM for the purposes of resource allocation decisions and assessing its
performance. The Company has assessed the above criteria and has determined that the entity as a whole is one operating segment
comprising of a single operating segment.
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| Convertible debentures |
The Company accounts for convertible debentures in accordance with ASC 470,
Debt. Convertible debentures are recorded at face value less unamortized issuance costs, assuming the conversion feature does not meet the requirements for bifurcation.
If the conversion feature does not meet the requirements to be classified as
equity, it is bifurcated and accounted for separately as a derivative liability under ASC 815, Derivatives and Hedging, and measured at fair value, with subsequent changes recognized in earnings.
If the conversion feature meets the equity classification criteria, no separate
accounting for the conversion feature is required, and the entire instrument is classified as a liability.
Interest expense is recognized using the effective interest method, which
includes the amortization of any debt issuance costs and discounts or premiums.
Debt Modifications and Extinguishments
The Company evaluates modifications to convertible debt instruments in
accordance with ASC 470-50, Modifications and Extinguishments.
A modification is deemed to be substantial if:
If the modification is determined to be substantial, the original debt is
extinguished, and the modified instrument is accounted for as a new debt issuance.
The Company also assesses whether a modification constitutes a troubled debt
restructuring under ASC 470-60. A restructuring is considered troubled if the Company is experiencing financial difficulty and the creditor has granted a concession.
For modifications that are not substantial, the Company accounts for the changes
prospectively, adjusting the effective interest rate to reflect the revised cash flows.
In evaluating convertible debt where the conversion option is bifurcated as a
derivative liability before and after the modification, the 10% cash flow test is applied to the host debt instrument (without the conversion feature). Any change in fair value of the bifurcated conversion option is recognized in earnings.
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| Comparative Information |
Certain comparative figures have been reclassified to conform with the current
year’s presentation.
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| Standards issued but not yet effective |
From time to time, new accounting pronouncements are issued by the Financial
Accounting Standards Board (the “FASB”) or other standard-setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are
not yet effective will not have a material impact on its financial position or results of operations upon adoption.
Income Taxes (Topic 740)
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740):
Improvements to Income Tax Disclosures (“ASU-740”). ASU-740 requires public entities to provide enhanced disclosure of specific categories of reconciling items included in the rate reconciliation; disclosure of the nature, effect and underlying
causes of each reconciling item in the rate reconciliation and the judgment used in the categorization of such items; and enhanced disclosures for income taxes paid. The amendments in this ASU are effective for fiscal years beginning after
December 15, 2024, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU-740 on its consolidated financial statements and disclosures.
Segment Reporting (Topic 280)
In November 2023, the FASB issued Accounting Standards Update (“ASU”) No.
2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 280”). ASU 280 requires public entities to disclose significant segment expenses that are regularly provided to the chief operating decision maker and
to disclose how reported measures of segment profit or loss are used in assessing segment performance and allocating resources. The amendments in ASU-280 are effective for fiscal years beginning after December 15, 2023 and interim periods
within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is evaluating the impact of the adoption of ASU-280 on its consolidated financial statements and related disclosures and does not expect the
adoption of ASU-280 to have a material impact on the Company’s consolidated financial statements.
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