Pineapple Financial Inc 10-Q for FY2026 Q2
Pineapple Financial Inc. (PAPL)
About this 10-Q
Pineapple Financial Inc filed this 10-Q on April 13, 2026, covering the quarter ended February 28, 2026 (FY2026 Q2).
Headline figures
Quarter ended February 28, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $707.34K
- down 4.8% from $743.31K a year earlier
- Net loss
- $19.5M
- compared with a net loss of $595.45K a year earlier
- Diluted EPS
- -$1.21
- compared with -$1.73 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission
File Number
(Exact name of registrant as specified in its charter)
| Not
applicable | ||
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
Registrant’s
telephone number, including area code:
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated Filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging Growth Company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol | Name of each exchange on which registered | ||
The number of shares of the registrant’s common stock issued and outstanding, as of April 10, 2026 was .
PINEAPPLE FINANCIAL INC.
TABLE OF CONTENTS FOR FORM 10-Q
| PART I. | FINANCIAL INFORMATION | |
| Item 1. | Financial Statements | |
| Condensed Interim Consolidated Balance Sheets - Unaudited | 1 | |
| Condensed Interim Consolidated Statements of Operations and Comprehensive Loss - Unaudited | 2 | |
| Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity - Unaudited | 3 | |
| Condensed Interim Consolidated Statements of Cash Flow – Unaudited | 4 | |
| Notes to the Condensed Interim Consolidated Financial Statements - Unaudited | 5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 26 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 48 |
| Item 4. | Controls and Procedures | 48 |
| PART II. | OTHER INFORMATION | |
| Item 1. | Legal Proceedings | 48 |
| Item 1A. | Risk Factors | 48 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 48 |
| Item 3. | Defaults Upon Senior Securities | 49 |
| Item 4. | Mine Safety Disclosures | 49 |
| Item 5. | Other Information | 49 |
| Item 6. | Exhibits | 49 |
| SIGNATURES | 50 |
| i |
Pineapple Financial Inc.
Condensed Interim Consolidated Balance Sheets - Unaudited
For the six month period ended February 28, 2026
(Expressed in US Dollars)
| As at: | February 28, 2026 | August 31, 2025 | ||||||||
| $ | $ | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash | ||||||||||
| Restricted cash | ||||||||||
| Trade and other receivables | ||||||||||
| Loans receivable | Note 12 | |||||||||
| Prepaid expenses and deposits | ||||||||||
| Total current assets | ||||||||||
| Investment | Note 4 | |||||||||
| Crypto assets | Note 6 | |||||||||
| Right-of-use asset - net | Note 10 | |||||||||
| Property and equipment - net | ||||||||||
| Intangible assets - net | Note 5 | |||||||||
| Total Assets | ||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable and accrued liabilities | ||||||||||
| Loans payable | Note 12 | |||||||||
| Deferred revenue | ||||||||||
| Derivative liability | Note 18 | |||||||||
| Loans from directors | ||||||||||
| Current portion of lease liability | Note 10 | |||||||||
| Total current liabilities | ||||||||||
| Deferred government incentive | Note 13 | |||||||||
| Lease liability | Note10 | |||||||||
| Warrant liability | Note 7 | |||||||||
| Total liabilities | ||||||||||
| Shareholders’ Equity | ||||||||||
| Common shares (*), par value; authorized; issued and outstanding shares as of February 28, 2026 and as at August 31, 2025. | Note 6 | |||||||||
| Common shares to be issued | ||||||||||
| Additional paid-in capital | Note 6,7 | |||||||||
| Accumulated other comprehensive loss | ( | ) | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||
| Total stockholders’ equity | ||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Description of business (note 1)
Going concern (note 1)
Contingencies and commitments (note 14)
Approved on behalf of Board of Directors
| “Shuba Dasgupta” | “Drew Green” |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements
| 1 |
Pineapple Financial Inc.
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss (Unaudited)
For the three month and six month ended February 28, 2026
(Expressed in US Dollars)
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |||||||||||||||
| Three months ended | Six months ended | |||||||||||||||||
| February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2025 | |||||||||||||||
| For the period ended | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| $ | $ | $ | $ | |||||||||||||||
| Revenue | Note 15 | |||||||||||||||||
| Expenses and other income | ||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||
| Advertising and Marketing | ||||||||||||||||||
| Salaries, wages and benefits | ||||||||||||||||||
| Interest expense and bank charges | ||||||||||||||||||
| Depreciation and amortization | Note 5 | |||||||||||||||||
| Fair value loss on crypto assets | ||||||||||||||||||
| Staking income | ( | ) | ( | ) | ||||||||||||||
| Share-based compensation | ||||||||||||||||||
| Government Incentive | Note 13 | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign exchange (loss) gain | ( | ) | ( | ) | ( | ) | ||||||||||||
| Interest income | ||||||||||||||||||
| Financing cost - warrants | ( | ) | ( | ) | ||||||||||||||
| Financing cost -Equity line of credit | Note 19 | ( | ) | ( | ) | |||||||||||||
| Gain (loss) on change in fair value of derivative liability | Note 18 | |||||||||||||||||
| Gain (loss) on change in fair value of warrant liability | Note 8 | |||||||||||||||||
| Loss before income taxes | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Income taxes (recovery) expense | ||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ( | ) | ||||||||||||
| Net loss and comprehensive loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss per share - basic and diluted | ) | ) | ) | ) | ||||||||||||||
| Weighted average number of common shares outstanding - basic and diluted | ||||||||||||||||||
| On July 16, 2025, the Company effected a 20-for-1 reverse stock split of its issued and outstanding common shares. All share and per-share information presented in the consolidated financial statements, including weighted-average shares outstanding, EPS, and disclosures related to stock options, RSUs, and warrants, have been retroactively adjusted to reflect the reverse stock split for all periods presented. |
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements
| 2 |
Pineapple Financial Inc.
Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity - Unaudited
(Expressed in US Dollars)
Additional Paid in | Accumulated | |||||||||||||||||||||||
| Common | Common | Capital | other | Accumulated | Total | |||||||||||||||||||
| Shares | shares to | (Note 7 | comprehensive | (deficit) | shareholders’ | |||||||||||||||||||
| (Note 7) | be issued | and 8) | loss | earnings | equity | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance, August 31, 2024 | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued against S3 | ||||||||||||||||||||||||
| Shares against pre-funded warrants | ||||||||||||||||||||||||
| Foreign exchange translation | ( | ) | ( | ) | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, February 28, 2025 | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, August 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||
| Balance | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued through PIPE - cash | ||||||||||||||||||||||||
| Shares issued through PIPE in-kind | ||||||||||||||||||||||||
| Shares issued against compensation | ||||||||||||||||||||||||
| Share issue cost | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued against warrants exercise | ||||||||||||||||||||||||
| Foreign exchange translation | ||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, February 28, 2026 | ( | ) | ||||||||||||||||||||||
| Balance | ( | ) | ||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements
| 3 |
Pineapple Financial Inc.
Condensed Interim Consolidated Statements of Cash Flow – Unaudited
For the six month ended February 28, 2026
(Expressed in US Dollars)
| For the six months ended: | February 28, 2026 | February 28, 2025 | ||||||||
| $ | $ | |||||||||
| Cash provided by (used for) the following activities | ||||||||||
| Operating activities | ||||||||||
| Net loss for the year | ( | ) | ( | ) | ||||||
| Adjustments for the following non-cash items: | ||||||||||
| Depreciation of property and equipment | ||||||||||
| Bad debt written off | ||||||||||
| Staking income | ( | ) | ||||||||
| Amortization of intangible assets | Note 5 | |||||||||
| Depreciation on right of use asset | Note 10 | |||||||||
| Interest expense on lease liability | Note 10 | |||||||||
| Derivative liability | ||||||||||
| Warrants expense | ||||||||||
| Share based compensation | ||||||||||
| Change in fair value of warrant liability | Note 8 | ( | ) | ( | ) | |||||
| Fair value loss on digital assets | Note 6 | |||||||||
| Foreign exchange gain (loss) | ||||||||||
| Net changes in non-cash working capital balances: | ||||||||||
| Trade and other receivables | ( | ) | ( | ) | ||||||
| Prepaid expenses and deposits | ( | ) | ( | ) | ||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||||
| Deferred government incentive | ( | ) | ||||||||
| Deferred revenue | ( | ) | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||
| Financing activities | ||||||||||
| Share capital issuance | Note 7 | |||||||||
| Additional share capital issued | ||||||||||
| Proceed from director’s loan | ||||||||||
| Proceed from warrant exercise | ||||||||||
| Repayment of loan | ( | ) | ||||||||
| Proceed from loan payable | Note 12 | |||||||||
| Repayment of lease obligations | Note 10 | ( | ) | ( | ) | |||||
| Net cash provided by financing activity | ||||||||||
| Investing activities | ||||||||||
| Additions to intangible assets | Note 5 | ( | ) | ( | ) | |||||
| Loan receivable | Note 12 | ( | ) | |||||||
| Additions to property and equipment | ( | ) | ||||||||
| Purchase of crypto assets | Note 6 | ( | ) | |||||||
| Net cash used in investing activity | ( | ) | ( | ) | ||||||
| Net change in cash | ( | ) | ||||||||
| Effect of changes in foreign exchange rates | ||||||||||
| Cash, beginning of year | ||||||||||
| Cash, end of period | ||||||||||
The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements
| 4 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
1. Description of business
Pineapple Financial Incorporation, (“the Company”) was incorporated in 2006, under the Ontario Business Corporations Act. Later the company was registered under Canadian Business Corp. The Company’s head office is located at 200-111 Gordon Baker Road, Toronto, Ontario, M2H 3R1 Canada and its securities are publicly listed on the New York Stock Exchange American (NYSE American) under ticker “PAPL”.
Going concern
The accompanying condensed interim consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business.
For
the six months ended February 28, 2026, the Company incurred a net loss of $
Of
note, the net loss for the period was primarily driven by (i) non-cash fair value losses on digital assets of $
These conditions, including recurring losses and negative operating cash flows, raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued.
Management has implemented and continues to pursue the following initiatives to improve liquidity and support ongoing operations:
| ● | Capital raising activities |
During the period, the Company completed a private placement financing and entered into a credit facility, resulting in significant financing inflows that strengthened the Company’s liquidity position.
| ● | Digital Asset Strategy and Yield Generation |
The
Company has deployed capital into digital assets, including Injective tokens, and is generating yield through staking activities. During
the period, staking income of $
| 5 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
1. Description of business (continued from previous page)
| ● | Cost Optimization Measures |
The Company has implemented cost reduction initiatives, including reductions in payroll and discretionary expenditures, to better align its cost structure with current operating levels.
| ● | Working Capital and Liquidity Management |
Management continues to actively monitor cash flows, manage working capital, and optimize the deployment of capital, including maintaining appropriate liquidity buffers.
While
management believes that the above plans, together with existing cash balances of $
Impact from the global inflationary pressures leading to higher interest rates
Following a period of elevated inflation in fiscal 2023 and early 2024, central banks, including the Bank of Canada, implemented significant monetary tightening measures, resulting in higher benchmark interest rates and increased borrowing costs. These conditions contributed to reduced housing affordability, lower transaction volumes, and a slowdown in real estate activity.
During fiscal 2025, as inflationary pressures moderated toward the Bank of Canada’s target range of 1% to 3%, the Bank began to gradually reduce policy interest rates from peak levels. By late 2025, the benchmark rate had declined to 2.25%, reflecting easing inflation and softer economic growth conditions.
As of February 28, 2026, the Bank of Canada has maintained its policy rate at 2.25%, reflecting a more cautious and data-dependent approach to monetary policy amid ongoing economic uncertainty. Inflation has generally stabilized near the Bank’s 2% target, although risks remain due to global factors such as geopolitical developments and energy price volatility.
While the stabilization of interest rates has provided some support to borrower confidence and housing market activity, overall mortgage origination volumes remain below historical levels, and the timing and pace of a sustained market recovery continue to be uncertain. Management continues to monitor macroeconomic conditions closely, as changes in interest rates and inflation expectations may materially impact the Company’s operating environment and financial performance.
2. Material accounting policies
Statement of compliance
These condensed interim consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”).
The condensed interim consolidated financial statements were authorized for issue by the Board of Directors on April 10, 2026.
Basis of preparation, functional and presentation currency
The condensed interim consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business on the historical cost basis except for certain financial instruments that are measured at fair value.
All financial information is presented in US Dollars (“USD”) as the Company’s presentation currency and functional currency is in Canadian Dollars (“CAD”). The interim financial statements are condensed and should be read in conjunction with the Company’s latest annual year-end consolidated financial statements for the year ended August 31, 2025. It is management’s opinion that all adjustments necessary for a fair statement of the results for the interim period has been made, and all adjustments are of a recurring nature or a description of the nature of and any amount of any adjustments other than normal recurring nature has been stated. Sufficient disclosures have been so as to not make the interim financial information misleading. There are no prior-period adjustments in these condensed interim consolidated financial statements.
| 6 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
2. Significant accounting policies (continued from previous page)
Adjustment for reverse stock split
In
July 2023, the Board of Directors approved a
On
July 16, 2025, the Company effected a
Operating segments
The Company determines its operating and reportable segments in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, Segment Reporting. Operating segments are identified based on the manner in which financial information is regularly reviewed by the Company’s chief operating decision makers (“CODM”) for the purposes of allocating resources and assessing performance.
During the six months ended February 28, 2026, the Company revised its internal reporting structure to reflect the expansion of its business activities. As a result, the Company now operates through two reportable segments:
| ● | Mortgage Operations - includes the Company’s traditional mortgage brokerage, underwriting, and related services, which generate revenue from commissions, fees, and other mortgage-related activities. | |
| ● | Crypto Asset Operations - includes the Company’s digital asset treasury strategy, comprising the acquisition, management, and valuation of digital assets, as well as yield-generating activities such as staking and other blockchain-based initiatives. |
The Company’s chief operating decision makers, identified as the Chief Executive Officer and Chief Financial Officer, review financial information for these two segments separately to evaluate performance and make decisions regarding resource allocation.
Segment performance is primarily evaluated based on revenue, operating income (loss), and key underlying drivers specific to each segment, including transaction volumes in the mortgage business and fair value movements and yield generation in the digital asset segment.
Basis of consolidation
The consolidated financial statements include the accounts of the Company, and its wholly owned subsidiaries, Pineapple Insurance Inc and Pineapple National Inc. All transactions with the subsidiaries and any intercompany balances, gains or losses have been eliminated upon consolidation. The subsidiaries have a USD presentation currency, and the functional currency is in CAD, and accounting policies have been applied consistently to the subsidiaries.
| 7 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
2. Significant accounting policies (continued from previous page)
New accounting policies
Crypto assets
The Company holds digital assets that meet the definition of crypto assets under ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets. These assets are fungible digital assets secured by cryptography and recorded on distributed ledger technology. The Company’s digital assets consist primarily of Injective (INJ) tokens and USD-denominated stablecoins.
Digital assets are recognized when the Company obtains control of the assets, defined as the ability to direct the use of, and obtain substantially all of the remaining benefits from, the assets, generally upon settlement and transfer to a wallet or account under the Company’s control.
Digital assets are subsequently measured at fair value at each reporting date in accordance with ASC 350-60, with changes in fair value recognized within consolidated statements of operations in the period in which they occur.
Fair value is determined in accordance with ASC 820, Fair Value Measurement, using quoted prices in active markets for identical assets (Level 1 inputs). The Company determines fair value based on prices from its principal market, which is the market with the greatest volume and level of activity for the digital assets at the measurement date, using pricing data from major active exchanges.
Digital assets are presented in the consolidated balance sheets based on their nature and the Company’s intended use, consistent with applicable accounting guidance. The classification of digital assets as current or non-current involves management judgment based on expected holding periods and liquidity considerations.
The fair value of the Company’s digital assets is determined in accordance with ASC 820, Fair Value Measurement, using quoted prices in active markets for identical assets (Level 1 inputs). The Company determines fair value based on prices from its principal market, which is the market with the greatest volume and level of activity at the measurement date, using pricing data from major active exchanges.
Staking Income
The Company participates in staking activities related to its digital assets, whereby it earns rewards in the form of additional digital tokens for supporting blockchain network operations.
Staking rewards are recognized as income when the Company obtains control of the reward tokens, which generally occurs when the rewards are received or become claimable by the Company. The determination of when control is obtained requires judgment based on the terms of the underlying staking arrangements.
Staking rewards are measured at fair value at the time of receipt or when they become claimable, using quoted market prices in active markets (Level 1 inputs) in accordance with ASC 820, Fair Value Measurement.
Staking income is recognized within other income as a component of digital asset-related income, which is distinct from the Company’s core operating revenue streams.
Subsequent to initial recognition, reward tokens are included within digital assets and are remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with the Company’s accounting policy for digital assets.
Derivative Liability
The Company’s written put options meet the definition of derivative instruments under ASC 815, Derivatives and Hedging, as they contain an underlying, require minimal initial investment, and are settled at a future date. Accordingly, these instruments are recognized as a derivative liability in the consolidated balance sheets.
Derivative instruments are initially recognized at fair value on the date the contracts are entered into. Premiums received are recorded as part of the derivative liability. Collateral posted in connection with these arrangements is accounted for separately and is not included in the measurement of the derivative.
The derivative liability is remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with ASC 815-10-35.
Fair value is determined in accordance with ASC 820, Fair Value Measurement, using market-based inputs, including the price of the underlying digital assets, volatility, and remaining contractual term. These inputs are classified within Level 3 of the fair value hierarchy, depending on their observability.
Loans payable and loan receivable
The Company accounts for borrowings under the FalconX facility as financial liabilities measured at amortized cost in accordance with ASC 835, Interest. A separate loan receivable arising from related collateral and financing arrangements is recognized as a financial asset.
The loan payable and loan receivable are presented on a gross basis in the consolidated balance sheets, as the Company has separate contractual rights and obligations and does not meet the criteria for offsetting under ASC 210-20, Balance Sheet—Offsetting.
Interest on the loan payable is recognized using the effective interest method and is included in interest expense. Interest income on the loan receivable is recognized over the term of the arrangement using the effective interest method and is included in interest income.
Recently issued and adopted accounting standards
As an “emerging growth company,” as defined under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), the Company is permitted to delay adoption of new or revised accounting pronouncements applicable to public business entities until such pronouncements are made applicable to private companies. The Company has elected to use this extended transition period provided under the JOBS Act. Accordingly, the adoption dates discussed below reflect this election.
| 8 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
2. Significant accounting policies (continued from previous page)
Accounting Pronouncements Not Yet Adopted
ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures
In December 2023, the FASB issued ASU 2023-09, which enhances income tax disclosure requirements. The amendments require additional disaggregation of information in the effective tax rate reconciliation, as well as disclosure of income (loss) from continuing operations before income taxes and income tax expense and cash taxes paid by jurisdiction (federal, state, and foreign).
This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures; however, based on a preliminary assessment, the Company expects the adoption to primarily affect disclosures and does not expect a material impact on its consolidated financial position or results of operations.
ASU 2024-01 – Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards
In March 2024, the FASB issued ASU 2024-01, which clarifies whether profits interest awards and similar instruments are within the scope of Topic 718. The amendments provide guidance and illustrative examples to assist entities in determining the appropriate accounting treatment, including whether such awards should be classified as equity awards, liability awards, or accounted for under other applicable guidance.
This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments are to be applied prospectively, with retrospective application permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures; however, based on a preliminary assessment, the Company does not expect the adoption of this guidance to have a material impact on its consolidated financial position or results of operations.
ASU 2025-01 – Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures
In January 2025, the FASB issued ASU 2025-01, which clarifies the effective dates for the expense disaggregation disclosure requirements previously issued. Public business entities are required to apply the amendments in annual periods beginning after December 15, 2026, and in interim periods beginning after December 15, 2027.
As this guidance affects disclosure requirements only, the Company does not expect adoption to have a material impact on its consolidated financial statements.
| 9 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
3. Significant accounting judgments, estimates and assumptions
The preparation of condensed interim consolidated financial statements requires the directors and management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, and revenue and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the critical estimates and judgments applied by management that most significantly affect the Company’s condensed interim consolidated financial statements. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Investments (level 3)
Where the fair values of financial assets and liabilities recorded in the condensed interim consolidated financial statements cannot be derived, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible. Where observable market data is not available, management’s judgment is required to establish fair values.
Crypto assets (fair value measurement and classification)
The valuation of digital assets requires management judgment in determining the principal market, selecting appropriate pricing sources, and assessing the classification of holdings as current or non-current based on intent and expected holding period. While fair value is based on observable market prices (Level 1 inputs), differences in pricing sources, market liquidity, and timing of measurements could result in different valuations. In addition, the determination of when control is obtained for digital assets and staking rewards requires judgment based on the terms of the underlying arrangements.
Expected credit losses (ECL)
The Company applies the expected credit loss model to accounts receivable in accordance with ASC 326. Determining the allowance for expected credit losses requires management judgment in assessing historical collection trends, customer creditworthiness, current economic conditions and forward-looking information. Because these factors may change over time, the allowance involves a degree of estimation uncertainty, and actual credit losses may differ from management’s estimates.
Share-based compensation
The Company accounts for share-based compensation in accordance with ASC 718 - Compensation - Stock Compensation. The Company’s share-based awards include stock options and restricted stock units (“RSUs”) granted to directors, officers, and employees.
Stock options
Certain stock options granted in prior fiscal years contain a service-based vesting period of up to 36 months. The fair value of these options is determined on the grant date using the Black-Scholes option-pricing model, which incorporates assumptions regarding share-price volatility, risk-free interest rates, expected dividend yields, and expected option life. Compensation expense for these awards is recognized on a straight-line basis over the vesting period.
During the current fiscal year, the Company granted stock options to directors and employees for services previously rendered. These awards were fully vested at the grant date and therefore did not contain any service or performance vesting conditions. The fair value of these immediately vested options was determined using the Black-Scholes model as of the grant date, and the entire fair value was recognized immediately as share-based compensation expense in the condensed interim consolidated statements of operations and comprehensive loss.
Restricted stock units (RSUs)
RSUs granted during the current fiscal year were also issued in consideration of past services and were fully vested at the date of grant. The fair value of RSUs is based on the market price of the Company’s common shares on the grant date, and the full fair value was recognized as compensation expense immediately upon issuance.
The Company records share-based compensation expense separately. For awards that are fully vested upon grant, no estimates of forfeitures, expected terms, or future service periods are required. For any future awards subject to vesting, compensation expense will be recognized on a straight-line basis over the requisite service period.
Warrant liability
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the condensed interim consolidated statements of operations and comprehensive loss.
Certain warrants issued by the Company do not meet the criteria for equity classification under ASC 815 and are therefore accounted for as liabilities. These warrants are initially recognized at fair value on the date of issuance and are subsequently remeasured at fair value at each reporting date, with changes recognized in the condensed interim consolidated statements of operations and comprehensive loss.
| 10 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
3. Significant accounting judgments, estimates and assumptions (continued from previous page)
Derivative financial instrument
The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, Derivatives and Hedging (“ASC 815”). For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at fair value on the date of issuance and subsequently remeasured at fair value at each reporting date, with changes in the fair value reported in the condensed interim consolidated statements of operations and comprehensive loss. For derivative instruments that are classified as equity, the derivative instruments are initially measured at fair value (or allocated value), and subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity.
Going concern
The interim condensed interim consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the settlement of liabilities in the ordinary course of business. The carrying values of the Company’s assets, including property and equipment and intangible assets, and the related depreciation and amortization are based on management’s assessment of their estimated useful lives and recoverability, which assume that the Company will continue as a going concern.
Should the Company be unable to continue as a going concern, the carrying values of non-current assets may not be recoverable, and adjustments could be required to reduce the carrying amounts of such assets, revise their estimated useful lives, or recognize impairment losses, and to reclassify certain assets and liabilities to current. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty, as management has concluded that the going-concern basis of accounting remains appropriate.
4. Investment
The
fair value of the Company’s
5. Intangible assets
During the six months period ended February 28, 2026, the Company capitalized development costs related to internally generated software classified as intangible assets. Amortization is recognized on a straight-line basis over the estimated useful life of the underlying assets.
Schedule of cost and accumulated depreciation
| Intangible assets | ||||
| Cost | ||||
| Balance, August 31, 2024 | $ | |||
| Additions | ||||
| Translation adjustment | ( | ) | ||
| Balance, August 31, 2025 | $ | |||
| Additions | ||||
| Translation adjustment | ||||
| Balance, February 28, 2026 | $ | |||
| Accumulated amortization | ||||
| Balance, August 31, 2024 | $ | |||
| Amortization | ||||
| Translation adjustment | ( | ) | ||
| Balance, August 31, 2025 | $ | |||
| Amortization | ||||
| Translation adjustment | ||||
| Balance, February 28, 2026 | $ | |||
| Net carrying value | ||||
| February 28, 2026 | $ | |||
| August 31, 2025 | $ | |||
| 11 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
6. Crypto assets at fair value
The following table presents the changes in the Company’s digital assets measured at fair value for the period:
Schedule of digital assets measured at fair value
| # | $ | |||||||
| Balance, August 31, 2025 | ||||||||
| Crypto assets acquired through financing | ||||||||
| Balance, November 30, 2025 | ||||||||
| Crypto assets acquired through financing | ||||||||
Crypto assets acquired through staking income | ||||||||
| Crypto assets received in exchange for equity issuance | ||||||||
| Crypto assets, February 28, 2026 | ||||||||
| Net change in fair value | ( | ) | ||||||
| Translation adjustment | ||||||||
| Balance, February 28, 2026 | $ | |||||||
Digital assets acquired through financing reflect assets obtained as part of structured financing arrangements. The net change in fair value represents non-cash unrealized losses recognized during the period based on market price movements.
Fair Value Changes Recognized in Earnings
During
the six months ended February 28, 2026, the Company recognized a net unrealized loss of $
7. Share capital
Authorized share capital
The authorized share capital of the Company consists of an unlimited number of common shares with no par value.
Schedule of authorized share capital
| # | $ | |||||||
| Balance, August 31, 2024 | ||||||||
| Issuance of common shares against S3 | ||||||||
| Issuance of common shares against prefunded warrants | ||||||||
| Issuance of common share against S1 | ||||||||
| Issuance of common shares against warrants conversion | ||||||||
| Share issuance costs | - | ( | ) | |||||
| Balance, August 31, 2025 | ||||||||
| Issuance of common shares against PIPE - cash | ||||||||
| Issuance of common shares against PIPE – in-kind (digital assets) | ||||||||
| Issuance of common shares against warrants conversion | ||||||||
| Issuance of common shares against share-based benefits Note 8 | ||||||||
| Share issue costs | - | ( | ) | |||||
| Balance, February 28, 2026 | ||||||||
| 12 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
7. Share capital (continued from previous page)
January 6, 2026 – Share issued against PIPE
On January 6, 2026, the Company completed a private investment in public equity (“PIPE”) financing, pursuant to which it issued an aggregate of common shares.
| ● |
common shares were issued for cash proceeds of $ | |
| ● |
common shares were issued in exchange for digital assets with a fair value of
$ |
The
Company incurred share issuance costs of $
During the three months ended February 28, 2026, the Company issued common shares to a third-party service provider in exchange for legal services. The shares were measured at their fair value on the grant date, resulting in stock-based compensation expense of $, which has been recognized in the consolidated statements of operations. The issuance of these shares is reflected within stockholders’ equity.
8. Warrants
| a) | Common Share purchase warrant |
| # | $ | |||||||
| Balance, August 31, 2024 | ||||||||
| Share-based compensation expense | ||||||||
| Balance, August 31, 2025 | ||||||||
| Balance, February 28, 2026 | ||||||||
| 13 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
8. Warrants (continued from previous page)
| b) | Warrant liability |
The
warrants issued in September 25, 2025, became effective on January 6, 2026 upon satisfaction of the related closing conditions.
These warrants were valued using the Black-Scholes method with the share price of $,
exercise price of $
term of
Schedule of warrant liability
| # | $ | |||||||
| Fair Value of Warrants at August 31, 2024 | ||||||||
| Change in fair value of expiration of warrants relating to conversion debt | ( | ) | ( | ) | ||||
| Issuance of warrants against S1 | ||||||||
| Conversion of warrants into shares | ( | ) | ( | ) | ||||
| Change in fair value of warrants liability | - | |||||||
| Translation adjustment | - | ( | ) | |||||
| Fair Value of Warrants at August 31, 2025 | ||||||||
| Conversion of warrants into shares | ( | ) | ( | ) | ||||
| Warrants issued | ||||||||
| Change in fair value of warrants liability | - | ( | ) | |||||
| Translation adjustment | - | |||||||
| Fair Value of Warrants at February 28, 2026 | ||||||||
| February 28,2026 | August 31, 2025 | |||||||
| Weighted average estimated fair value per common share | $ | |||||||
| Weighted average exercise price of the warrant | $ | |||||||
| Weighted average expected life of the warrant | ||||||||
The Company maintains two equity-based compensation plans, 2021 Stock Option Plan and the 2022 Omnibus Equity Incentive Plan, which are intended to attract, retain, and motivate directors, officers, employees, and consultants by providing share-based compensation aligned with the Company’s long-term performance.
Each stock option granted under the plans entitles the holder to acquire one common share of the Company upon exercise. No amounts are payable by the recipient on receipt of the option. The options carry no dividend or voting rights and may be exercised after vesting and prior to their expiry date. The total number of common shares reserved for issuance under the plans is limited to % of the Company’s issued and outstanding common shares at any given time.
During the year ended August 31, 2025, the Company granted restricted share units (“RSUs”) and stock options pursuant to resolutions of the Board of Directors dated July 16, 2025. These awards were granted in recognition of past performance and contributions and were therefore fully vested upon grant, with no remaining service or vesting conditions. The RSUs were valued at the market price of the Company’s common shares on the grant date, and the stock options were valued using the Black-Scholes option-pricing model.
| February 28, 2026 | August 31, 2025 | |||||||||||||||
| Number of Options | Weighted Average Exercise Price | Number of Options | Weighted Average Exercise Price | |||||||||||||
| # | $ | # | $ | |||||||||||||
| Balance, beginning of year | ||||||||||||||||
| Granted during the year | ||||||||||||||||
| Balance as at year end | ||||||||||||||||
| Exercisable as at period end | ||||||||||||||||
As of February 28, 2026, all outstanding stock options were fully vested and exercisable. The options have a contractual term of from the grant date. Options granted on July 16, 2025 expire on. The weighted-average remaining contractual life of options outstanding as of February 28, 2026 was years.
| 14 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
10. Right-of-use asset and lease liability
The Company leases all of its office premises in Ontario, Canada under non-cancellable operating lease arrangements accounted for under ASC 842 - Leases.
Ontario Offices
For
purposes of measuring the related lease liability and right-of-use asset under ASC 842, the Company applied an incremental borrowing
rate (“IBR”) of
British Columbia Office (Lease Surrender)
On
May 29, 2023, the Company entered into a lease for
Lease Surrender Agreement
The surrender resulted in a derecognition (“deletion”) of the associated right-of-use asset and corresponding lease liability in fiscal 2025, with no material gain or loss recognized.
The following schedule shows the movement in the Company’s right-of-use asset:
Schedule of right-of-use asset
| Right-of-use asset | ||||
| Balance, August 31, 2024 | ||||
| Derecognition of asset | ( | ) | ||
| Translation adjustment | ( | ) | ||
| Balance, August 31, 2025 | $ | |||
| Translation adjustment | ||||
| Balance, February 28, 2026 | $ | |||
The right-of-use asset is being depreciated on a straight-line basis over the remaining lease term.
| Accumulated Depreciation | ||||
| Balance, August 30, 2024 | $ | |||
| Depreciation | ||||
| Derecognition of asset | ( | ) | ||
| Translation adjustment | ( | ) | ||
| Balance, August 31, 2025 | $ | |||
| Depreciation | ||||
| Translation adjustment | ||||
| Balance, February 28, 2026 | $ | |||
| Carrying Amount | ||||
| February 28, 2026 | $ | |||
| August 31, 2025 | $ | |||
| 15 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
10. Right-of-use asset and lease liability (continued)
The following schedule shows the movement in the Company’s lease liability during the period ended:
Schedule of lease liability
| February 28, 2026 | August 31, 2025 | |||||||
| Balance, beginning of year | $ | $ | ||||||
| Derecognition of lease | ( | ) | ||||||
| Interest expense | ||||||||
| Lease payments | ( | ) | ( | ) | ||||
| Translation adjustment | ( | ) | ||||||
| Balance, end of period | $ | $ | ||||||
| Current | ||||||||
| Non-current | ||||||||
| $ | $ | |||||||
The following table provides a maturity analysis of the Company’s lease liability. The amounts disclosed in the maturity analysis are the contractual undiscounted cash flows before deducting interest or finance charges:
Schedule of maturity lease liability
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Total lease liability | $ |
| 16 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
11. Related party transactions and balances
| 1. | The Injective Foundation became one of the Company’s largest shareholders following the completion of a private placement on January 6, 2026. As a significant shareholder, the Injective Foundation is considered a related party in accordance with ASC 850, Related Party Disclosures.
The Injective Foundation is part of a broader ecosystem supporting the Company’s digital asset treasury strategy. The Injective Foundation, as the Company’s largest shareholder, may have the ability to exert significant influence over the Company’s strategic direction and financing initiatives.
During the three and six months ended February 28, 2026, the Company entered into a secured borrowing arrangement with FalconX Charlie Inc. (the “FalconX Loan”). In connection with this arrangement, the Injective Foundation provided a guarantee supporting the Company’s obligations under the facility (see Note 12).
The
Company also entered into related financing and collateral arrangements with FalconX in connection with this facility, including
a loan receivable of $ |
| 2. | Compensation of key management personnel includes the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer: |
Schedule of related party transactions
| February 28, 2026 | February 28, 2025 | |||||||
| $ | $ | |||||||
| Salaries, Wages and benefits | ||||||||
Last period figures also includes payroll of Chief Strategy Officer, who resigned in March 2025.
During
the year ended August 31, 2025, two directors of the Company advanced an aggregate amount of $
As of February 28, 2026, the outstanding principal balance of these advances, together with all accrued interest, had been fully repaid. The repayment was funded from proceeds received in connection with the Company’s private placement completed on January 6, 2026.
| 17 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
12. Loans payable, collateral and loans receivable
During the three months ended November 30, 2025, the Company entered into an initial secured borrowing arrangement with FalconX Charlie Inc. (“FalconX”) pursuant to which it obtained financing under a fixed-term facility.
Subsequently,
on January 16, 2026, the Company entered into a second amended and restated loan agreement, which amended and superseded the prior arrangement
and increased the total borrowing capacity to $
As
of February 28, 2026, the Company had $
During the six months ended February 28, 2026, the Company recognized expense of $
Collateral and loan receivable arrangement
In connection with the amended facility, the Company is required to maintain collateral, including:
| ● | Crypto assets (INJ tokens); and | |
| ● | A
minimum of $ |
Separately,
during the three months ended February 28, 2026, the Company entered into a separate lending arrangement with FalconX, whereby it advanced
$
This amount is presented as a loan receivable within current assets.
The loan receivable:
| ● | Bears
interest at | |
| ● | Has
a contractual maturity date of | |
| ● | Is repayable on demand or in accordance with the terms of the collateral arrangements | |
| ● | Can be used to satisfy certain of the cash collateral requirements under the Loans Payable |
| 18 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
12. Loans payable and loans receivable (continued from previous page)
Security and guarantees
The Company’s obligations under the FalconX Loan are secured through a collateral and guarantee structure involving the Injective Foundation. In connection with the financing arrangements, the Injective Foundation has provided a guarantee in respect of the Company’s obligations under the FalconX Loan.
The guarantee is supported by pledges of specified digital assets, consisting primarily of Injective protocol tokens, which serve as collateral for the loan. The collateral is subject to ongoing collateral maintenance and margin requirements based on its fair value. Under the terms of the financing agreements, the Injective Foundation is contractually required to provide additional collateral or margin support in the event that the fair value of the pledged digital assets declines below the required maintenance threshold specified in the loan agreements. Margin support may be satisfied through the contribution of additional digital assets or other acceptable collateral, as defined in the financing arrangements.
The
Company also entered into related financing and collateral arrangements with FalconX in connection with this facility, including a loan
receivable of $
The guarantee and collateral arrangements do not result in the transfer of ownership or control of the Company’s digital assets to the Injective Foundation, except for customary lender rights that may arise upon the occurrence of an event of default, including the right to enforce security interests in accordance with the terms of the loan and collateral agreements.
As of February 28, 2026, the Company was in compliance with all covenants and collateral maintenance requirements under the FalconX Loan. The Company met all required margin and collateral thresholds during the period.
Refer to Note 6 – Digital Assets for further information regarding the Company’s digital asset holdings and valuation.
Relationship Disclosure
The Injective Foundation became one of the Company’s largest shareholders following the completion of a private placement on January 6, 2026. As a significant shareholder, the Injective Foundation is considered a related party in accordance with ASC 850, Related Party Disclosures.
The Injective Foundation is part of a broader ecosystem supporting the Company’s digital asset treasury strategy and, as a significant shareholder, may have the ability to exert significant influence over the Company’s strategic direction and financing initiatives. During the three and six months ended February 28, 2026, the Company entered into a secured borrowing arrangement with FalconX Charlie Inc. (the “FalconX Loan”).
In connection with this arrangement, the Injective Foundation provided a guarantee supporting the Company’s obligations under the facility.
Repayment
The FalconX Loan contains customary events of default, collateral maintenance requirements, and margin provisions, including requirements to maintain specified collateral coverage ratios. As of February 28, 2026, the Company was in compliance with all covenants and terms of the agreement.
| 19 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
13. Deferred government grant
Government grants are recognized when there is reasonable assurance that the grants will be received and the Company will comply with the conditions. The grants is deferred and recognized as a liability and is recognized in the condensed interim consolidated financial statements of operations and comprehensive loss - unaudited over the useful life of the intangible asset.
As
of February 28, 2026, the Company had a deferred government incentive balance of $
The Company previously qualified for the Government of Canada Scientific Research and Experimental Development (“SR&ED”) program, which provides refundable tax incentives for eligible research and development activities performed in Canada.
The Company’s eligibility under the SR&ED program ceased on November 3, 2023. All SR&ED claims and related receivables were fully recognized in prior fiscal years, and no additional accruals, recoveries, or claims were recorded during the six months period ended February 28, 2026.
As disclosed in prior years, a portion of the SR&ED proceeds received related to expenditures that had been capitalized as internally generated software. Accordingly, the related government incentive continues to be recognized as deferred income and is amortized to income over the useful life of the associated intangible assets in accordance with the Company’s accounting policy.
The Company does not expect any further SR&ED recoveries in future periods.
| 20 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
14. Commitments and contingencies
In the ordinary course of operating, the Company may from time to time be subject to various claims or possible claims. Management believes that there are no claims or possible claims that if resolved, would either individually or collectively result in a material adverse impact on the Company’s financial position, results of operations, or cash flows. These matters are inherently uncertain, and management’s view of these matters may change in the future.
See note 10 related to lease commitments.
15. Revenue
Schedule of deferred revenue
| Six months ended | ||||||||
| February 28, 2026 | February 28, 2025 | |||||||
| $ | $ | |||||||
| Gross billing | ||||||||
| Commission expense | ( | ) | ( | ) | ||||
| Revenue | ||||||||
| Subscription revenue | ||||||||
| Insurance | ||||||||
| Sponsorship revenue | ||||||||
| Underwriting revenue | ||||||||
| Other revenue | ||||||||
| Total revenue | ||||||||
| Three months ended | ||||||||
| February 28, 2026 | February 28, 2025 | |||||||
| $ | $ | |||||||
| Gross billing | ||||||||
| Commission expense | ( | ) | ( | ) | ||||
| Revenue | ||||||||
| Subscription revenue | ||||||||
| Insurance | ||||||||
| Sponsorship revenue | ||||||||
| Underwriting revenue | ||||||||
| Other revenue | ||||||||
| Total revenue | ||||||||
The Company generates revenue primarily from mortgage brokerage activities, subscription fees, underwriting services, and ancillary technology-enabled services. Revenue is disaggregated by geographic region based on the location of the customer.
For the six months period ended February 28, 2026 and 2025, all revenue was earned in Canada, as the Company operates exclusively within the Canadian mortgage market and has no foreign revenue-generating operations.
16. Segment reporting
The
Company operates through
| ● | Mortgage operations – mortgage brokerage, underwriting, and related services | |
| ● | Crypto asset operations – digital asset treasury, staking, and fair value activities |
The Chief Executive Officer and Chief Financial Officer act as the CODM and evaluate performance based on segment revenue and operating loss.
| 21 |
Segment results – six months ended February 28, 2026
Schedule of Segment Reporting
| Mortgage Operation | Crypto Asset Operation | Total | ||||||||||||||||||
| For the period ended | February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2026 | February 28, 2025 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Expenses and other income | ||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Advertising and marketing | ||||||||||||||||||||
| Salaries, wages and benefits | ||||||||||||||||||||
| Interest expense and bank charges | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Fair value loss on crypto assets | ||||||||||||||||||||
| Staking income | ( | ) | ( | ) | ||||||||||||||||
| Share-based compensation | ||||||||||||||||||||
| Government incentive | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total expenses | ||||||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign exchange (loss) gain | ( | ) | ( | ) | ||||||||||||||||
| Interest income | ||||||||||||||||||||
| Financing cost - warrants | ( | ) | ( | ) | ||||||||||||||||
| Financing cost - Equity line of credit | ( | ) | ( | ) | ||||||||||||||||
| Gain (loss) on change in fair value of derivative liability | ||||||||||||||||||||
| Gain (loss) on change in fair value of warrant liability | ||||||||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Income taxes (recovery) expense | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Segment results – Three months ended February 28, 2026
| Mortgage Operation | Crypto Asset Operation | Total | ||||||||||||||||||
| For the period ended | February 28, 2026 | February 28, 2025 | February 28, 2026 | February 28, 2026 | February 28, 2025 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Expenses and other income | ||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Advertising and marketing | ||||||||||||||||||||
| Salaries, wages and benefits | ||||||||||||||||||||
| Interest expense and bank charges | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Fair value loss on crypto assets | ||||||||||||||||||||
| Staking income | ( | ) | ( | ) | ||||||||||||||||
| Share-based compensation | ||||||||||||||||||||
| Government incentive | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Total expenses | ||||||||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Foreign exchange (loss) gain | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Interest income | ||||||||||||||||||||
| Financing cost - warrants | ( | ) | ( | ) | ||||||||||||||||
| Financing cost - Equity line of credit | ( | ) | ( | ) | ||||||||||||||||
| Gain (loss) on change in fair value of derivative liability | ||||||||||||||||||||
| Gain (loss) on change in fair value of warrant liability | ||||||||||||||||||||
| Loss before income tax | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
| Income taxes (recovery) expense | ||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Comparative information for the Crypto Asset Operations segment is not presented for the prior period, as the Company had no crypto-related activities or reportable amounts prior to the current fiscal year.
Segment assets
| For the period ended | ||||||||
| February 28, 2026 | August 31, 2025 | |||||||
| $ | $ | |||||||
| Mortgage operations | ||||||||
| Crypto assets | ||||||||
| Total assets | ||||||||
| Total segment assets | ||||||||
17. Loan from directors
Company
entered into unsecured loan agreements with its directors and shareholders, for total proceeds of $
As of February 28, 2026, loan is fully repaid.
18. Derivative Liability
During the six months ended February 28, 2026, the Company entered into over-the-counter (“OTC”) put option transactions with FalconX Charlie, Inc. (the “Counterparty”) in connection with its digital asset activities.
Under these arrangements, the Company sold put options referencing digital assets, which provide the counterparty with the right, but not the obligation, to require the Company to purchase the underlying asset at a specified strike price upon settlement.
As of February 28, 2026, the fair value of the derivative
liability was $
| 22 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
19. Equity Line of Credit (ELOC) Arrangement
During
the period, the Company entered into an equity line of credit (“ELOC”) arrangement with White Lion Capital, LLC (“White
Lion”), which provides the Company with the ability to issue common shares to White Lion, at the Company’s discretion, up
to an aggregate commitment amount of $
In
connection with the execution of the ELOC arrangement, the Company incurred a commitment fee of $
The Commitment Fee has been recognized as a financing expense within the condensed interim consolidated statements of operations and comprehensive loss for the period ended February 28, 2026.
Under the terms of the ELOC arrangement, the Company may, from time to time, issue purchase notices to White Lion requiring the purchase of common shares at a price based on a discount to the prevailing market price, as defined in the agreement. The timing and amount of any such issuances are at the Company’s discretion, subject to certain contractual limitations.
20. Risk management arising from financial instruments
| a) | Credit risk |
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company’s primary exposure to credit risk arises from cash balances held with financial institutions and trade receivables, which consist almost entirely of subscription fees billed to mortgage agents and brokerages.
The Company manages this risk by holding cash only with major Canadian financial institutions and by monitoring the creditworthiness, payment history, and aging profile of all subscription receivables. Trade receivables are short-term in nature and generally collected within 30 to 60 days. The Company considers receivables past due when they exceed 60 days outstanding, and impaired when they exceed 90 days with no reasonable expectation of recovery.
In accordance with ASC 326 – Expected Credit Losses (“ECL”), the Company applies a lifetime expected credit loss model to trade receivables. Expected credit losses are estimated using a combination of historical loss rates, aging analysis, forward-looking information, and specific identification of high-risk accounts. Given the Company’s business model and the nature of subscription-based fees, historical credit losses have been limited.
| 23 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
20. Risk management arising from financial instruments (continued from previous page)
February 28, 2026
Schedule of accounts receivable aging
| 0-30 days | 30-60 days | 60-90 days | 90 plus days | Total | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Receivables | ||||||||||||||||||||
| Other receivables | ||||||||||||||||||||
| Less: Expected credit loss | ( | ) | ( | ) | ||||||||||||||||
| Total | ||||||||||||||||||||
August 31, 2025
| 0-30 days | 30-60 days | 60-90 days | 90 plus days | Total | ||||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Receivables | ||||||||||||||||||||
| Other receivables | ||||||||||||||||||||
| Less: Expected credit loss | ( | ) | ( | ) | ||||||||||||||||
| Total | ||||||||||||||||||||
The maximum exposure to credit risk as of February 28, 2026 is the carrying amount of cash and trade receivables on the consolidated balance sheet. Despite the increase in ECL during the year, management believes overall credit risk remains moderate and manageable, given the Company’s diversified customer base and the short-term nature of its receivables.
| b) | Interest rate risk |
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Company does not have any variable interest-bearing debt.
| c) | Liquidity risk |
Liquidity risk is the risk that the Company may be unable to meet its financial obligations as they become due. The Company manages this risk by monitoring actual and forecasted cash flows on an ongoing basis and assessing available sources of financing, as further described in Note 1.
As at February 28, 2026, the Company’s contractual payment obligations are as follows:
| Fiscal Year | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Lease payments | ||||||||||||||||||||
| Accounts payable | ||||||||||||||||||||
| Derivative liability | ||||||||||||||||||||
| Interest payable | ||||||||||||||||||||
| Loan payable | ||||||||||||||||||||
| Total | ||||||||||||||||||||
Management believes that these obligations can be met through existing working-capital resources, expected operating cash flows, and planned financing initiatives.
| 24 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended February 28, 2026
(Expressed in US Dollars)
20. Risk management arising from financial instruments (Continued)
| d) | Management of capital |
The Company’s objective of managing capital, comprising of shareholders’ equity, is to ensure its continued ability to operate. The Company manages its capital structure and makes changes to it based on economic conditions.
Management and the Board of Directors review the Company’s capital management approach on an ongoing basis and believe this approach, given the relative size of the Company, is reasonable. The Company is not subject to externally imposed capital requirements. The Company’s capital management objectives, policies and processes have remained unchanged during the six months ended February 28, 2026.
| e) | Foreign currency risk |
The Company’s operations and revenues are primarily denominated in Canadian dollars (“CAD”), which is also the functional currency of all of its subsidiaries. Accordingly, day-to-day operating exposure to foreign currencies is limited. However, the Company does incur foreign currency risk from certain USD-denominated transactions, including balances held in USD bank accounts and select vendor payments made in USD. These items can give rise to realized and unrealized foreign exchange gains or losses, which are recorded in the condensed interim consolidated statements of operations and comprehensive loss.
In addition, the Company is required to translate its CAD-denominated financial statements into U.S. dollars (“USD”) for SEC reporting. This translation process may result in period-to-period fluctuations in reported assets, liabilities, revenues, and expenses due to changes in the CAD-USD exchange rate. These translation adjustments do not affect the Company’s underlying cash flows or economic performance.
Given the Company’s limited operating exposure to foreign currencies, management does not currently utilize foreign exchange derivatives to manage this risk.
| 25 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.
Please read the following management’s discussion and analysis of our financial condition and results of operations, along with our consolidated financial statements and the related notes and other information included in this Annual Report on Form 10-Q. It is important to note that this discussion and analysis contain forward-looking statements with certain risks and uncertainties. These risks and uncertainties could cause our results to differ materially from anticipated in these forward-looking statements. You can find more information about these risks and uncertainties under the heading “Special Note Regarding Forward-Looking Statements” in Part I and elsewhere in this Form 10- Q.
Special Note Regarding Forward-Looking Statements
This Form 10-Q includes forward-looking statements that entail potential risks and uncertainties. These statements are usually identified by the use of specific terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and other comparable terminology. All the statements in this Form 10-Q that are not about historical facts, including those related to our future operations, financial position, Revenue, projected costs, strategy, plans, management objectives, and expected market growth, are forward-looking. While reading this Form 10-Q, you should know that these statements do not guarantee our performance or results. They include known and unknown risks, uncertainties, and assumptions, as mentioned under the “Risk Factors” section in this Form 10-Q. We believe that these forward- looking statements are based on reasonable assumptions. Still, you must be aware that many factors, including those mentioned under the “Risk Factors” section in this Form 10-Q, could affect our financial results or operations and cause actual results to differ from those stated in the forward-looking statements. These statements were made as of the date of this Form 10-Q, and we are not obligated to update or revise any forward-looking statements made here to reflect any change in our expectations or any change in events, conditions, or circumstances on which these statements are based. All written or oral forward-looking statements made by us or on our behalf are qualified by the cautionary statements mentioned in this Form 10-Q.
Objective
In this section, we provide an analysis of the Company’s financial condition, cash flows, and results of operations from management’s perspective. We recommend you read this with the consolidated financial statements and notes in Part II, Item 8 of this Annual Report on Form 10Q.
Executive Summary
The Company is a technology-enabled mortgage platform operating in Canada, with an expanding focus on data-driven financial services and capital allocation strategies.
During the period, the Company began executing a strategic transition from a primarily transactional mortgage brokerage model toward an integrated platform consisting of:
| ● | A core mortgage origination and servicing platform | |
| ● | Data-driven and subscription-based revenue streams | |
| ● | A disciplined digital asset treasury strategy designed to enhance capital efficiency and generate yield |
This transition reflects management’s focus on improving earnings quality, increasing recurring revenue, and driving operating leverage over time. While reported financial results for the period were significantly impacted by non-cash fair value adjustments related to crypto asset holdings, the Company’s underlying operating performance remained stable, supported by continued revenue generation, cost optimization initiatives, and early contributions from new strategic initiatives.
Management believes the Company has now completed the majority of its balance sheet repositioning and cost restructuring initiatives and is entering a phase of execution focused on operating leverage, earnings quality, and scalable growth.
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Business Model Transformation
The Company is currently in a transition phase, moving from a period of capital formation and strategic investment toward one of execution, operating leverage, and performance delivery.
Historically, the Company operated primarily as a transactional mortgage brokerage platform, with revenue largely dependent on origination volumes. As part of its strategic evolution, the Company is building an integrated operating model across three core pillars:
| 1. | Core Mortgage Platform – focused on agent productivity, volume growth, and cost efficiency | |
| 2. | Data & Analytics – focused on monetizing mortgage data through structured, recurring revenue products | |
| 3. | Digital Asset Treasury – focused on capital efficiency, yield generation, and treasury optimization |
Management believes this integrated model will support:
| ● | Higher-margin revenue mix | |
| ● | Increased recurring and subscription-based revenue | |
| ● | Improved operating leverage and earnings durability | |
| ● | Enhanced capital efficiency |
Recent Developments
Business Trends
During the six months ended February 28, 2026, the Canadian mortgage market continued to adjust to changes in monetary policy following the Bank of Canada’s easing cycle that commenced in mid-2024. Through the current period, the Bank of Canada reduced its benchmark overnight interest rate. While these reductions contributed to improved borrowing conditions and greater rate stability, overall mortgage origination volumes remained below pre-2022 levels, reflecting ongoing affordability constraints, limited housing supply, and continued underwriting discipline among lenders.
Within this operating environment, mortgage renewal and refinance transactions represented a greater proportion of total industry activity, while purchase-related originations continued to recover at a more gradual pace. The Company’s operating performance remained stable during the period, supported by its diversified agent network and continued presence across key Canadian markets.
The Company continued to invest in and enhance its proprietary Pineapple Plus technology platform. During the period, the Company advanced workflow automation capabilities, expanded customer relationship management functionality, and further integrated insurance and ancillary financial product offerings. These initiatives contributed to operational efficiencies, improved agent productivity, and sustained client engagement despite ongoing market challenges. In addition, continued investment in digital marketing and lead-generation tools supported the stability of the Company’s fee-based revenue streams.
Subsequent to the quarter, early indicators suggest increased mortgage application volumes and lead-generation activity, primarily driven by renewal and refinance demand. Management believes that these trends, together with ongoing platform enhancements and disciplined capital allocation, may support a gradual recovery in mortgage activity as interest rate conditions stabilize. However, the extent and timing of such recovery remain subject to macroeconomic conditions, including interest rate dynamics and housing market activity.
| 27 |
In addition to its core mortgage brokerage operations, the Company has implemented a structured digital asset treasury strategy. During the six months ended February 28, 2026, the Company deployed $45.4 million into digital assets, primarily allocated to Injective (INJ).
This program is designed to enhance capital efficiency through staking yield generation, disciplined capital allocation, and long-term asset appreciation. The Company’s approach emphasizes governance, liquidity management, and risk controls, and is not intended to represent speculative trading activity.
Due to applicable accounting standards, these holdings are subject to fair value remeasurement, which may introduce significant non-cash volatility in reported earnings.
RESULTS OF OPERATIONS
Three Months Ended February 28, 2026 Compared to February 28, 2025
Net Loss
For the three months ended February 28, 2026, the Company reported a net loss of $19.5 million, compared to a net loss of $0.6 million for the same period in the prior year.
The increase in net loss was primarily driven by:
| ● | A $16.9 million non-cash, market-driven fair value remeasurement of digital asset holdings | |
| ● | $3.2 million of one-time, non-recurring financing-related costs associated with the Company’s PIPE transaction, including $1.3 million of warrant-related expenses and $1.5 million of ELOC-related charges | |
| ● | $0.36 million of incremental interest expense associated with new borrowings related to the Company’s digital asset treasury strategy |
These factors were partially offset by growth in revenue and continued cost management. Reported GAAP results for the period were significantly impacted by non-cash fair value adjustments related to digital asset holdings. Management believes these adjustments introduce volatility that is not reflective of the Company’s core operating performance or underlying cash flow generation. Of note, the Company’s reported net loss was significantly impacted by non-cash, market-driven fair value remeasurement of digital asset holdings, which does not reflect underlying operating performance or cash flow generation. Excluding these non-cash adjustments and financing-related costs, the Company’s core operating results were materially improved relative to the prior year period, reflecting revenue growth and the impact of structural cost reduction initiatives implemented during the period.
Revenue
Revenue for the three months ended February 28, 2026 was $0.9 million, compared to $0.7 million in the comparable prior-year period, representing an increase of $0.2 million, or 25%.
The increase in revenue was driven by:
| ● | Improved mortgage origination volumes | |
| ● | Continued contribution from subscription, insurance, and underwriting revenue streams | |
| ● | Incremental contribution from digital asset activities, including staking income |
Operating Expenses
Total operating expenses for the three months ended February 28, 2026 were $18.7 million, compared to $1.3 million in the same period of the prior year.
The increase was primarily attributable to:
| ● | $16.9 million non-cash, market-driven fair value remeasurement of digital asset holdings $2.8 million of one-time, non-recurring financing-related costs related to the Company’s recent PIPE transaction, including $1.3 million of warrant-related expenses and $1.5 million of ELOC-related charges | |
| ● | $0.3 million of interest expense associated with new borrowings related to the Company’s digital asset treasury strategy | |
| ● | One-time advertising and marketing expenses pertaining to the financing |
| 28 |
Excluding digital asset remeasurement and financing-related costs, operating expenses decreased modestly, reflecting:
| ● | Relatively stable general and administrative expenses | |
| ● | Lower personnel-related costs compared to the prior year due to cost optimization measures | |
| ● | A reduction in in operating expenses driven by structural cost optimization initiatives, including workforce realignment, reduced reliance on third-party software and professional services, and the implementation of a leaner, technology-enabled operating model | |
| ● | These reductions reflect the Company’s broader operational restructuring initiative, which has materially reduced its fixed cost base and lowered its operating cash burn |
Operating Expenses and Fair Value Adjustments
During the quarter, operating expenses included a $16.9 million non-cash, market-driven fair value remeasurement of the Company’s digital asset holdings
This loss was driven by market-driven valuation changes in Injective tokens and is not indicative of the Company’s core mortgage and platform operations.
Additionally, the Company recognized:
| ● | A gain on the change in fair value of warrant liabilities | |
| ● | Interest income and derivative gains |
These items are presented below operating income and partially offset overall losses.
Operating Loss and Net Loss
As a result of the foregoing, the Company reported a loss from operations of $17.8 million, compared to $0.6 million in the comparable prior-year period.
Management believes that, excluding the impact of:
| ● | Non-cash, market-driven fair value remeasurement of digital asset holdings, and | |
| ● | Financing-related costs, |
the Company’s underlying operating performance remained stable, supported by:
| ● | Continued revenue growth | |
| ● | Ongoing cost management initiatives | |
| ● | Strategic investment in platform and growth initiatives |
In addition, during the period and subsequent to quarter end, the Company implemented a comprehensive operational restructuring initiative designed to materially reduce its fixed cost base and improve operating leverage.
To date, approximately $1.46 million of annualized cost savings have been implemented and are expected to be reflected in the Company’s run-rate by March 31, 2026, with additional savings currently being executed. In aggregate, these initiatives are expected to reduce annual operating expenses by more than $2.5 million.
The restructuring included a realignment toward a leaner, technology-enabled operating model, including a significant reduction in headcount, as well as reductions across professional services, software, marketing, and other operating expenses.
A key component of this transformation has been the integration of artificial intelligence across core business functions, enabling the Company to automate processes historically supported by manual workflows, including agent onboarding, data processing, and customer engagement.
| 29 |
As a result of these initiatives, the Company has structurally reduced its operating cost base while maintaining platform capabilities and scalability. Management believes these changes represent a permanent reset of the Company’s expense structure and position the business to achieve improved operating leverage and enhanced earnings durability as revenue scales.
The three-month period reflects the Company’s current operating profile following recent financing and restructuring initiatives, while the six-month period reflects both pre- and post-transition performance.
Six Months Ended February 28, 2026 Compared to February 28, 2025
The six-month results reflect the impact of both legacy cost structure and recent strategic initiatives, including capital deployment and operational restructuring.
Net Loss
For the six months ended February 28, 2026, the Company reported a net loss of $25.9 million, compared to a net loss of $1.3 million in the prior-year period.
The increase in net loss was primarily driven by:
| ● | A $23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings | |
| ● | Increased financing costs associated with capital-raising activities | |
| ● | Higher interest expense due to new borrowings |
Revenue
Revenue for the six months ended February 28, 2026 was $1.43 million, compared to $1.51 million in the comparable prior-year period, representing an decrease of $0.08 million, or 5.3%.
The increase was driven by:
| ● | Stabilization in mortgage market activity | |
| ● | Growth in ancillary revenue streams, including subscription, insurance, and underwriting services | |
| ● | Contribution from digital asset-related activities |
Operating Expenses
Total operating expenses for the six months ended February 28, 2026 were $25.8 million, compared to $2.8 million in the same period of the prior year.
The increase was primarily attributable to:
| ● | $23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings $1.5 million financing costs related to ELOC arrangements | |
| ● | Warrant-related financing costs | |
| ● | Increased interest expense |
Excluding these items, operating expenses increased moderately due to:
| ● | Continued investment in marketing and growth initiatives | |
| ● | Ongoing technology platform development | |
| ● | General inflationary cost pressures |
Operating Expenses and Fair Value Adjustments
During the six-month period, the Company recognized a $23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings
| 30 |
This loss was driven by market volatility in the price of Injective tokens and does not represent cash outflows or core operating performance.
In addition, the Company recognized:
| ● | A $1.2 million gain on remeasurement of warrant liabilities | |
| ● | Interest income from financing arrangements |
Operating Loss and Net Loss
As a result of the foregoing, the Company reported a loss from operations of $24.4 million, compared to $1.3 million in the prior-year period.
Management believes that, excluding the impact of:
| ● | Digital asset fair value adjustments, and | |
| ● | Financing-related costs, |
the Company’s core operating performance remained stable, supported by:
| ● | Consistent revenue generation | |
| ● | Improved cost structure relative to historical levels | |
| ● | Ongoing operational efficiencies |
Non-GAAP Financial Measures
The Company presents certain non-GAAP financial measures, including Adjusted Operating Income (Loss) and Adjusted EBITDA, as supplemental metrics to assist investors in evaluating the Company’s operating performance.
These measures exclude certain items, including:
| ● | Non-cash fair value adjustments related to digital assets; | |
| ● | Changes in the fair value of warrant and derivative liabilities; | |
| ● | Financing-related costs associated with capital raising activities; | |
| ● | Certain items that may not be comparable across reporting periods. |
Management believes these measures provide additional insight into period-to-period operating performance by reducing the impacts of items that are subject to significant variability or are not directly reflective of the Company’s operating performance for the period.
However, these measures have limitations. In particular, fair value adjustments related to digital assets and financial instruments may be significant and recurring, and are an integral component of the Company’s results of operations.
These measures should not be considered in isolation or as a substitute for financial results prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies.
The Company presents GAAP results with equal or greater prominence than non-GAAP measures and provides a reconciliation to the most directly comparable GAAP measures.
These measures are intended to supplement, and not replace, the Company’s GAAP results
Six Months Ended February 28, 2026
Adjusted Operating Income (excluding fair value changes)
| For the six months ended: | February 28, 2026 | |||
| $ | ||||
| Net loss (GAAP) | (25,930,939 | ) | ||
| Adjustments to reconcile GAAP net loss to adjusted Operating Income (loss) | ||||
| Unrealized loss on digital assets | 23,026,713 | |||
| Share based compensation | 142,000 | |||
| Financing-related costs (ELOC, warrants) | 2,862,658 | |||
Advertising and marketing expenses not considered indicative of period-over-period comparability | 473,057 | |||
| Interest expense | 629,280 | |||
| Gain on fair value of warrant liabilities | (1,199,502 | ) | ||
| Adjusted operating income (loss) (Non-GAAP) | 3,267 | |||
Management uses these measures internally; however, they are not intended to represent cash flow or liquidity measures.
In addition to Adjusted Operating Income (Loss), management also evaluates performance using Adjusted EBITDA, which further excludes non-cash items such as depreciation and amortization, as well as interest-related items and other non-cash, items not indicative of ongoing operating performance non-operating items, to provide a view of operating performance on a cash-flow oriented basis.
| For the six months ended: | February 28, 2026 | |||
| $ | ||||
| Adjusted operating income (loss) (Non-GAAP) | 3,267 | |||
| Adjustments: | ||||
| Interest (income) | (214,334 | ) | ||
| Gain (loss) on change in fair value of derivative liability | (15,653 | ) | ||
| Foreign exchange (gain) loss | 157,675 | |||
| Depreciation | 464,271 | |||
| Adjusted EBITDA (Non-GAAP) | 395,226 | |||
| Six months period ended February 28, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Mortgage volume | 829,317,884 | 811,483,270 | 697,411,000 | |||||||||
| Gross billing | 7,387,821 | 8,648,249 | 7,358,172 | |||||||||
| Commission expense | 6,676,704 | 7,813,115 | 6,740,307 | |||||||||
| Net sales revenue | 711,116 | 835,134 | 617,864 | |||||||||
| Underwriting revenue | 50,756 | 57,707 | 73,781 | |||||||||
| Subscription revenue | 418,463 | 368,119 | 378,632 | |||||||||
| Other income | 248,932 | 251,276 | 282,581 | |||||||||
| 31 |
| Three months ended February 28, | ||||||||||||
| 2026 | 2025 | 2024 | ||||||||||
| Mortgage volume | 367,228,328 | 386,325,122 | 314,963,000 | |||||||||
| Gross billing | 3,310,819 | 4,242,341 | 3,484,852 | |||||||||
| Commission expense | 2,949,030 | 3,821,489 | 3,140,234 | |||||||||
| Net sales revenue | 361,789 | 420,852 | 344,618 | |||||||||
| Underwriting revenue | 23,611 | 30,364 | 31,675 | |||||||||
| Subscription revenue | 210,715 | 185,939 | 195,387 | |||||||||
| Other income | 111,227 | 106,154 | 213,189 | |||||||||
Six Months Ended February 28, 2026
To provide additional insight into the Company’s underlying operating performance, management presents adjusted operating income (loss), a non-GAAP financial measure.
This measure excludes:
| ● | Non-cash, market-driven fair value remeasurement of digital asset holdings | |
| ● | Changes in fair value of warrant liabilities | |
| ● | Financing-related costs associated with capital raising activities |
After adjusting for these items, the Company’s adjusted operating income was $0.003 million, reflecting a substantially lower loss compared to the reported GAAP net loss and a meaningful improvement versus the $1.01 million loss compared to the six months period ended February 28, 2025.
Management believes this measure more accurately was driven by the performance of the Company’s core operating business, which improved meaningfully during the period, supported by:
| ● | Consistent mortgage-related revenue generation | |
| ● | Improved cost structure following optimization initiatives across headcount, overhead, and other selling, general, and administrative expenses. | |
| ● | Early contributions from new revenue streams |
This improvement was driven by the combined impact of revenue stability and the structural reduction in the Company’s operating cost base, positioning the business for improved operating leverage as revenue scales.
Management believes that this adjusted measure provides a more meaningful view of the Company’s core operating performance, as it removes the effects of:
| ● | Market-driven volatility in digital asset fair market value remeasurements | |
| ● | Financing activities and related accounting impacts, including one-time, non-recurring expenses for the period | |
| ● | Non-cash remeasurement adjustments |
However, this non-GAAP measure should not be considered in isolation or as a substitute for financial results prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures used by other companies.
Digital Asset Treasury Strategy
The Company has implemented a disciplined digital asset treasury program designed to enhance capital efficiency and generate yield on excess capital. The primary objectives of this strategy include:
| ● | Generating yield through staking activities | |
| ● | Maintaining liquidity while optimizing capital allocation | |
| ● | Supporting long-term balance sheet strength |
| 32 |
Modified Net Asset Value (mNAV) Framework
To provide additional transparency into the relationship between the Company’s market valuation and its digital asset holdings, management utilizes a modified net asset value metric (“mNAV”), a non-GAAP financial measure.
mNAV is defined as 1) Enterprise Value divided by 2) Treasury Value, where:
| ● | Enterprise Value represents the Company’s market capitalization, adjusted for debt and cash balances; and | |
| ● | Treasury Value represents the fair market value of digital assets held, as well as capital deployed in digital asset-related strategies, including stablecoin collateral, restricted balances, and yield-generating positions. |
Management believes mNAV is a useful metric for evaluating the extent to which the Company’s market valuation reflects its underlying digital asset holdings versus its operating business. However, mNAV should not be considered in isolation or as a substitute for financial results prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies.
| February 28, 2026 | ||||
| Common stock issued and outstanding | 26,088,651 | |||
| Share price | $ | 0.696 | ||
| Market capitalization | 18,157,701 | |||
| Less: Cash | (17,736,423 | ) | ||
| Plus: Loans payable | 18,972,000 | |||
| Plus: Interest payable | 134,837 | |||
| Plus: Warrant liability | 743,188 | |||
| Enterprise Value | 20,271,303 | |||
| Crypto assets | 22,427,134 | |||
| Plus: Loans receivable | 5,000,000 | |||
| Plus: Interest receivable | 35,068 | |||
| Plus: Restricted cash | 158,659 | |||
| Plus: Derivative liability | 18,730 | |||
| Treasury Value | 27,639,591 | |||
| mNAV | 0.73 : 1.00 | |||
As of February 28, 2026, the Company’s Treasury Value consisted primarily of digital assets, including Injective (INJ), as well as capital deployed in treasury-related strategies.
The Company’s cash balance is currently managed at the corporate level and is not fully allocated between operating liquidity and treasury activities. Accordingly, cash has been excluded from Treasury Value for purposes of the mNAV calculation in this period. To the extent cash is deployed into digital asset strategies in future periods, it is expected to be included within Treasury Value.
In addition, certain amounts related to financing and collateral arrangements, including stablecoin balances and restricted cash, may be included within Treasury Value where such amounts represent capital actively deployed in support of the Company’s digital asset strategy.
The Company’s treasury strategy is governed by internal policies that prioritize liquidity and risk management, including:
| ● | Maintaining minimum operating cash reserves | |
| ● | Limiting the use of leverage | |
| ● | Avoiding rehypothecation of assets | |
| ● | Implementing governance through internal review processes |
Staking rewards generated from digital asset holdings represent an incremental and recurring yield component of the Company’s capital allocation strategy.
Digital asset holdings are measured at fair value, with changes recognized in earnings. As a result, reported financial results may experience volatility that may introduce volatility that does not align with management’s assessment of period-to-period operating performance or cash generation.
The calculation of mNAV involves significant judgment, including the determination of which assets and liabilities are included in Treasury Value, and may differ from methodologies used by other companies. Accordingly, the measure may not be comparable and could produce materially different results if calculated under alternative assumptions.
Revenue and Operating Metrics
The Company’s primary sources of revenue include:
| ● | Commissions earned from mortgage originations | |
| ● | Underwriting income |
| ● | Subscription fees charged to mortgage agents | |
| ● | Digital asset-related income, including staking rewards | |
| ● | Other ancillary income streams |
Six Months Ended February 28, 2026
For the six-month period, the Company generated revenue from a diversified set of sources, supported by both its mortgage operations and digital asset strategy.
| ● | Mortgage volume increased to $829.3 million, compared to $811.5 million in the prior-year period, reflecting modest improvement in origination activity. | |
| ● | Gross billings were $7.4 million, compared to $8.6 million in the prior year, primarily reflecting competitive pricing dynamics and market conditions. | |
| ● | Commission expense totaled $6.7 million, consistent with the level of mortgage activity. | |
| ● | Net sales revenue was $0.7 million, compared to $0.8 million in the prior year. |
Additional revenue streams included:
| ● | Underwriting revenue of $0.05 million | |
| ● | Subscription revenue of $0.4 million, reflecting continued agent platform engagement | |
| ● | Staking income of $0.2 million, representing income generated from the Company’s digital asset holdings | |
| ● | Other income of $0.2 million, consistent with prior periods |
Overall, while mortgage-related revenues remained relatively stable, the Company’s diversification into digital asset activities contributed incremental income streams during the period.
Three Months Ended February 28, 2026
For the three-month period ended February 28, 2026:
| ● | Mortgage volume was $367.2 million, compared to $386.3 million in the prior-year period | |
| ● | Gross billings were $3.3 million, compared to $4.2 million in the prior year | |
| ● | Commission expense totaled $3.0 million | |
| ● | Net sales revenue was $0.36 million, compared to $0.42 million in the prior year |
Other revenue components included:
| ● | Underwriting revenue of $0.02 million | |
| ● | Subscription revenue of $0.2 million | |
| ● | Staking income of $0.2 million, reflecting the Company’s digital asset strategy | |
| ● | Other income of $0.1 million |
The decrease in mortgage-related revenue metrics during the quarter was driven by ongoing market softness and competitive pressures, partially offset by stable subscription revenue and contributions from digital asset activities.
Overall Performance Commentary
Management believes that the Company’s operating results for both the three- and six-month periods demonstrate:
| ● | Resilience in core mortgage operations, despite a challenging macroeconomic environment | |
| ● | Successful diversification into digital asset activities, including staking income generation | |
| ● | Continued focus on cost management and operational efficiency |
While reported results were significantly impacted by non-cash, market-driven fair value remeasurement of digital asset holdings and financing-related costs, the Company’s underlying operating performance improved modestly during the period. These results reflect the impact of structural cost reductions implemented during the period, which have materially lowered the Company’s fixed cost base and improved its operating leverage profile.
The Company’s primary sources of revenue include commissions earned from lenders on mortgage originations, underwriting income, and membership fees charged to mortgage agents. In addition, the Company generates other income, including staking rewards earned on its digital asset holdings.
Path to Operating Leverage
As the Company advances its strategic initiatives, management is focused on driving operating leverage and improving earnings quality through:
| ● | Increasing revenue per mortgage transaction | |
| ● | Expanding higher-margin ancillary and subscription-based revenue streams | |
| ● | Driving efficiency across operations and reducing cost per funded loan |
The Company expects that improvements in agent productivity, data monetization, and capital efficiency will contribute to a more scalable and profitable operating model over time.
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Gross Billing:
The Company earns revenue from its mortgage brokerage operations based on commissions received from financial institutions with whom it has contractual arrangements. Gross billing represents the total commission earned from lending institutions on funded mortgage transactions. As the Company engages licensed mortgage agents and brokers who are responsible for originating and closing mortgage transactions, a significant portion of the gross billing is paid out as commissions and referral fees to those agents. Accordingly, the Company presents revenue on a net basis, calculated as gross billing less commissions and payouts to mortgage agents, as the Company acts as an agent in these arrangements.
Under ASC 606, Revenue from Contracts with Customers, the Company evaluates each contract to identify performance obligations, determine the transaction price, allocate the transaction price to the performance obligations, and recognize revenue when control of the promised service is transferred to the customer.
For each mortgage transaction, revenue is recognized when:
| ● | A binding contract exists between the borrower, the mortgage agent, and the lending institution; | |
| ● | The Company provides access to, and support through, its technology platform to facilitate the mortgage transaction; | |
| ● | The mortgage loan is funded by the lender; and | |
| ● | The Company’s commission from the lender becomes fixed and collectible. |
The Company’s performance obligation is satisfied at a point in time, when the mortgage is funded and all platform-related services for that transaction have been completed. Revenue is measured as the net amount retained by the Company after remitting the applicable commission and referral fees to mortgage agents and sub-brokers.
This net revenue was driven by the Company’s role as an intermediary providing technology infrastructure, compliance oversight, and workflow support, rather than acting as the primary obligor in the mortgage funding transaction.
Subscription Revenue:
Users access and use our technology platform, Pineapple Plus, for a flat monthly service fee of $145.00 In exchange for this fee, users of Pineapple Plus have access to a network management system that allows them to perform back- office procedures more efficiently and effectively. This platform will enable them to process the deal described above prepare, and complete the package for submission to be funded by the financial institution. We have a strong user base, which has experienced significant growth since our inception. Revenue is recognized at the beginning of the month when a user is invoiced and pays the fee.
The Company continues to expand the functionality of its Pineapple Plus platform, including initiatives focused on data standardization, workflow digitization, and the development of a unified data architecture across mortgage transactions. These efforts are expected to form the foundation for future data-driven products, including analytics, benchmarking, and other value-added services that may be offered on a subscription or recurring revenue basis.
Management believes that, over time, these initiatives may enable the Company to monetize its platform beyond traditional transaction-based revenue, supporting higher-margin, recurring revenue streams and improved earnings quality. However, these capabilities remain under development, and there can be no assurance as to their timing, scope, or ultimate commercial impact.
These initiatives may also support the structured digitization and utilization of mortgage-related data assets, enabling new forms of data accessibility, reporting, and monetization over time.
Staking Income
The Company earns staking income from its digital asset holdings by participating in blockchain network validation activities. Staking rewards are received in the form of additional digital tokens and are not considered revenue from contracts with customers under ASC 606.
Staking income is recognized within other income when the Company obtains control of the reward tokens, which generally occurs when the rewards are received or become claimable by the Company. Such rewards are measured at fair value at the time of receipt using quoted market prices in active markets (Level 1 inputs) in accordance with ASC 820, Fair Value Measurement.
Subsequent to initial recognition, the related digital assets are included within digital assets and are remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with the Company’s accounting policy for digital assets.
Underwriting Fee:
Users can optionally use our expert risk pre-assessment service, which assists them in pre-underwriting their loans before submission to a lender for approval and funding. This service significantly reduces the time for the lender partners’ assessment of the deal. For mortgages of $179,575 and less, we charge an underwriting fee of $251; for mortgages greater than $179,575, the Company charges an underwriting fee of $359. The Company has undertaken a special program to educate and inform users of this service in further detail. 40% of the deals originated by users are using this service. This program is intended to further increase the number of deals and improve the services offered.
Insurance commission Revenue:
The Company earns insurance commission revenue through Pineapple Insurance, which acts as a broker for third-party insurance carriers. When customers purchase insurance policies through our platform, the Company receives commissions from the insurance providers based on premiums written. The Company acts as a principal in these transactions because it is responsible for sourcing customers, facilitating the placement of insurance products, and managing the full service process. Commission revenue is recognized at the point in time when the underlying insurance policy becomes effective and our performance obligations are satisfied. Insurance commission revenue is presented net of referral fees, agent commissions, and other consideration payable to mortgage agents or third-party partners, as these amounts represent direct transaction-related costs. Renewal commissions are recognized only when they become fixed and determinable based on confirmation from the insurance carriers.
Other Income:
Other income includes a technology setup fee and sponsorship fee.
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Components of operating expenses
Our operating expenses, as presented in the statement of operations data, include salaries, commissions and team member benefits, general and administrative expenses, marketing and advertising expenses, and others.
Salaries and commissions and team member benefits
All payroll expenses include our team members’ salaries, commissions, and benefits.
Selling, general and administrative expenses
Selling, general and administrative expenses include software subscriptions, license fees, professional services, marketing expenses, and other operating expenses.
Share-based compensation
Share-based compensation comprises equity awards and is measured and expensed accordingly under Accounting Standards Codification (“ASC”) 718 Compensation—Stock Compensation.
Comparison of the six months ended February 28, 2026 and 2025
| Six months ended | February 28, ($) | February 28, ($) | Increase/ (Decrease) ($) | Increase/ (Decrease) % | ||||||||||||
| Revenue | 1,429,267 | 1,512,236 | (82,969 | ) | (5.49 | ) | ||||||||||
| Expenses | ||||||||||||||||
| Selling, general and administrative | 1,052,703 | 995,190 | 57,513 | 5.78 | ||||||||||||
| Advertising and Marketing | 416,852 | 326,945 | 89,907 | 27.50 | ||||||||||||
| Salaries, wages and benefits | 350,730 | 828,764 | (478,034 | ) | (57.68 | ) | ||||||||||
| Interest expense and bank charges | 629,280 | 273,812 | 355,468 | 129.82 | ||||||||||||
| Depreciation | 464,271 | 429,645 | 34,626 | 8.06 | ||||||||||||
| Fair value loss on crypto assets | 23,026,713 | - | 23,026,713 | 100.00 | ||||||||||||
| Share based compensation | 142,000 | 142,000 | 100.00 | |||||||||||||
| Government incentive | (54,369 | ) | (48,518 | ) | (5,851 | ) | 12.06 | |||||||||
| Total expense | 25,806,462 | 2,805,838 | 23,222,342 | 827.64 | ||||||||||||
| Loss from operations | (24,377,195 | ) | (1,293,602 | ) | (23,083,593 | ) | 1,784.44 | |||||||||
| Foreign exchange gain (loss) | (157,675 | ) | 4,021 | (161,696 | ) | (4021.29 | ) | |||||||||
| Interest income | 214,334 | - | 214,334 | 100.00 | ||||||||||||
| Gain on change in fair value of derivative liability | 15,653 | - | 15,653 | 100.00 | ||||||||||||
| Financing cost – ELOC | (1,500,000 | ) | - | 1,500,000 | 100.00 | |||||||||||
| Financing cost - warrants | (1,325,558 | ) | - | 1,325,558 | 100.00 | |||||||||||
| Gain (loss) on change in fair value of warrant liability | 1,199,502 | 35,591 | 1,163,911 | 3,270.24 | ||||||||||||
| Net loss | (25,930,939 | ) | (1,253,990 | ) | (24,676,949 | ) | 1,967.87 | |||||||||
Comparison of the three months ended February 28, 2026 and 2025
| Three months ended | February 28, ($) | February 28, ($) | Increase/ (Decrease) ($) | Increase/ (Decrease) % | ||||||||||||
| Revenue | 707,342 | 743,309 | (35,967 | ) | (0.05 | ) | ||||||||||
| Expenses | ||||||||||||||||
| Selling, general and administrative | 659,855 | 572,853 | 87,002 | 15.19 | ||||||||||||
| Advertising and Marketing | 293,749 | 57,101 | 236,648 | 414.44 | ||||||||||||
| Salaries, wages and benefits | 188,529 | 391,418 | (202,889 | ) | (51.83 | ) | ||||||||||
| Interest expense and bank charges | 364,782 | 100,005 | 264,777 | 264.76 | ||||||||||||
| Depreciation | 241,589 | 242,181 | (592 | ) | (0.24 | ) | ||||||||||
| Fair value loss on crypto assets | 16,882,557 | - | 16,882,557 | 100.00 | ||||||||||||
| Share based compensation | 142,000 | - | 142,000 | 100.00 | ||||||||||||
| Staking income | (221,718 | ) | - | (221,718 | ) | 100.00 | ||||||||||
| Government incentive | (27,397 | ) | (21,301 | ) | (6,096 | ) | 28.62 | |||||||||
| Total expense | 18,523,946 | 1,342,257 | 17,181,689 | 1,280.06 | ||||||||||||
| Loss from operations | (17,816,604 | ) | (598,948 | ) | (17,217,656 | ) | 2,874.65 | |||||||||
| Foreign exchange gain (loss) | (188,189 | ) | (969 | ) | (187,220 | ) | 19,320.95 | |||||||||
| Interest income | 214,334 | - | 214,334 | 100.00 | ||||||||||||
| Gain on change in fair value of derivative liability | 15,653 | - | 15,775 | 100.00 | ||||||||||||
| Financing cost – ELOC | (1,500,000 | ) | - | (1,500,000 | ) | 100.00 | ||||||||||
| Financing cost – warrants | (1,325,558 | ) | - | (1,325,558 | ) | 100.00 | ||||||||||
| Gain (loss) on change in fair value of warrant liability | 1,104,576 | 4,468 | ) | 1,328,388 | 29,731.15 | |||||||||||
| Net loss | (19,495,788 | ) | (595,449 | ) | (18,899,370 | ) | 3,168.81 | |||||||||
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RESULTS OF OPERATIONS
Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses for the six months period ended Feb 28, 2026 are as follows:
| Six months ended | February 28, ($) | February 28, ($) | Increase/ (Decrease) ($) | Increase/ (Decrease) % | ||||||||||||
| Software subscription | 99,840 | 449,845 | (350,005 | ) | (77.81 | ) | ||||||||||
| Office and general | 140,244 | 82,638 | 57,606 | 69.71 | ||||||||||||
| Professional fee | 304,971 | 60,688 | 244,283 | 402.52 | ||||||||||||
| Dues and subscription | 219,212 | 199,336 | 19,876 | 9.97 | ||||||||||||
| Rent | 104,973 | 85,304 | 19,669 | 23.06 | ||||||||||||
| Consulting fee | 30,204 | 29,604 | 600 | 2.03 | ||||||||||||
| Travel | 24,541 | 23,247 | 1,294 | 5.57 | ||||||||||||
| Donations | - | 784 | (784 | ) | (100.00 | ) | ||||||||||
| Lease expense | - | 1,430 | (1,430 | ) | (100.00 | ) | ||||||||||
| Insurance | 128,718 | 62,314 | 66,404 | 106.56 | ||||||||||||
| 1,052,703 | 995,190 | (57,513 | ) | 5.78 | ||||||||||||
Revenue
Revenue for the six months ended February 28, 2026 was $1.65 million, compared to $0.77 million in the comparable prior-year period, representing an increase of $0.88 million, or 114.9%.
The increase in revenue was primarily attributable to:
| ● | Increased mortgage origination activity, contributing to higher commission-based revenues; and | |
| ● | Growth in underwriting and subscription-based revenue streams, reflecting continued platform engagement and service adoption. |
In addition, the Company recognized staking income of $221,718 during the period, generated from its digital asset holdings. In accordance with U.S. GAAP, staking income is presented within other income and not included in revenue.
Operating Expenses
Total operating expenses for the six months ended February 28, 2026 were $26.0 million, compared to $2.8 million in the prior-year period, representing a significant increase.
The increase in operating expenses was primarily driven by:
| ● | A $23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings; | |
| ● | $1.5 million of financing costs related to ELOC arrangements; | |
| ● | $1.3 million of warrant-related financing costs; and | |
| ● | An increase of $0.6 million in interest expense associated with new borrowings. |
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Other notable changes in operating expenses include:
| ● | Advertising and marketing expenses increased by 27.5%, reflecting investments in growth and customer acquisition initiatives; | |
| ● | Salaries, wages and benefits decreased by 57.7%, primarily due to workforce optimization initiatives implemented in prior periods; and | |
| ● | Selling, general and administrative expenses increased modestly by 5.8%, reflecting higher professional fees and insurance costs, partially offset by reductions in software-related expenses. |
Operating Loss and Net Loss
As a result of the foregoing, the Company reported:
| ● | Loss from operations of $24.4 million, compared to $1.3 million in the prior-year period; and | |
| ● | Net loss of $25.9 million, compared to $1.25 million in the prior-year period. |
The increase in net loss was primarily attributable to:
| ● | non-cash, market-driven fair value remeasurement of digital asset holdings; and | |
| ● | Financing-related costs, including warrant and ELOC-related expenses; |
These were partially offset by improved revenue performance and ongoing cost management initiatives.
Other Income and Expenses
Other income and expenses for the six-month period included:
| ● | Interest income of $214,334; | |
| ● | Gain on change in fair value of warrant liabilities of $1.2 million; | |
| ● | Foreign exchange loss of $157,675; and | |
| ● | Staking income of $221,718, recognized within other income. |
These items reflect the Company’s financing activities and exposure to digital asset markets and are not directly related to its core mortgage brokerage operations.
Three Months Ended February 28, 2026 Compared to February 28, 2025
Revenue
Revenue for the three months ended February 28, 2026 was $0.93 million, compared to $0.74 million in the comparable prior-year period, representing an increase of $0.19 million, or 25.0%.
The increase in revenue was driven by:
| ● | Improved mortgage origination activity; and | |
| ● | Continued growth in subscription and underwriting-related revenue streams. |
During the quarter, the Company also recognized staking income of $221,718, which is presented within other income.
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Operating Expenses
Total operating expenses for the three months ended February 28, 2026 were $18.7 million, compared to $1.3 million in the prior-year period.
The increase was primarily attributable to:
| ● | A $16.9 million non-cash, market-driven fair value remeasurement of digital asset holdings; | |
| ● | $1.5 million ELOC-related financing costs; | |
| ● | $1.3 million warrant-related financing costs; and | |
| ● | An increase of $0.3 million in interest expense. |
Additional changes include:
| ● | A significant increase in advertising and marketing expenses ( 414%), reflecting targeted investments in growth initiatives; | |
| ● | A decrease in salaries, wages and benefits ( 51.8%), reflecting prior cost optimization measures; and | |
| ● | An increase in selling, general and administrative expenses ( 15.2%), primarily driven by higher professional and administrative costs. |
Operating Loss and Net Loss
As a result of the foregoing, the Company reported:
| ● | Loss from operations of $17.8 million, compared to $0.6 million in the prior-year period; and | |
| ● | Net loss of $19.5 million, compared to $0.6 million in the prior-year period. |
The increase in net loss was primarily driven by:
| ● | Non-cash, market-driven fair value remeasurement of digital asset holdings; and | |
| ● | Financing-related costs; |
These were partially offset by revenue growth and continued cost management.
Other Income and Expenses
Other income and expenses for the quarter included:
| ● | Interest income of $216,275; | |
| ● | Gain on change in fair value of warrant liabilities of $1.1 million; | |
| ● | Foreign exchange loss of $188,189; and | |
| ● | Staking income of $221,718, recognized within other income. |
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Selling, General and Administrative Expenses
The breakdown of selling, general and administrative expenses for the six months period ended Feb 28, 2026 are as follows:
| Six months ended | February 28, ($) | February 28, ($) | Increase/ (Decrease) ($) | Increase/ (Decrease) % | ||||||||||||
| Software subscription | 99,840 | 449,845 | (350,005 | ) | (77.81 | ) | ||||||||||
| Office and general | 140,244 | 82,638 | 57,606 | (69.71 | ) | |||||||||||
| Professional fee | 304,971 | 60,688 | 244,283 | 402.52 | ||||||||||||
| Dues and subscription | 219,212 | 199,336 | 19,876 | 9.97 | ||||||||||||
| Rent | 104,973 | 85,304 | 19,669 | 23.06 | ||||||||||||
| Consulting fee | 30,204 | 29,604 | 600 | 2.03 | ||||||||||||
| Travel | 24,541 | 23,247 | 1,294 | 5.57 | ||||||||||||
| Donations | - | 784 | (784 | ) | (100.00 | ) | ||||||||||
| Lease expense | - | 1,430 | (1,430 | ) | (100.00 | ) | ||||||||||
| Insurance | 128,718 | 62,314 | 66,404 | 106.56 | ||||||||||||
| 1,052,703 | 995,190 | (57,513 | ) | 5.78 | ||||||||||||
Selling, general and administrative (“SG&A”) expenses for the six months ended February 28, 2026 were $1.05 million, compared to $1.00 million for the same period in the prior year, representing an increase of $57,513, or 5.8%. The modest increase was driven by higher professional and insurance-related costs, partially offset by reductions in software subscription expenses and continued cost optimization initiatives.
Software Subscription
Software subscription expenses decreased significantly to $99,840, compared to $449,845 in the prior-year period, representing a decrease of $350,005, or 77.8%. The reduction primarily was driven by decreased reliance on third-party software platforms, including tools such as Salesforce, and increased utilization of internally developed systems within the Company’s proprietary platform.
Office and General
Office and general expenses increased to $140,244, compared to $82,638 in the prior-year period, representing an increase of $57,606. The increase was driven by higher administrative and operational costs associated with business expansion and enhanced internal processes.
Professional Fees
Professional fees increased significantly to $304,971, compared to $60,688 in the prior-year period, representing an increase of $244,283, or 402.5%. The increase was primarily attributable to higher legal, accounting, and advisory expenses incurred in connection with financing activities, regulatory compliance, and ongoing corporate initiatives.
Dues and Subscriptions
Dues and subscriptions increased to $219,212, compared to $199,336 in the prior-year period, representing an increase of $19,876, or 10.0%. The increase was driven by higher regulatory, listing, and data subscription costs.
Rent
Rent expense increased to $104,973, compared to $85,304 in the prior-year period, representing an increase of $19,669, or 23.1%, reflecting changes in office space utilization and lease arrangements.
Consulting Fees
Consulting fees remained relatively stable at $30,204, compared to $29,604 in the prior-year period, representing a modest increase of $600, or 2.0%, reflecting consistent use of external advisory support.
Travel
Travel expenses increased slightly to $24,541, compared to $23,247 in the prior-year period, representing an increase of $1,294, or 5.6%, reflecting increased business development and operational travel activities.
Donations and Lease Expense
No donation or lease expenses were recorded during the six months ended February 28, 2026, compared to $784 and $1,430, respectively, in the prior-year period. The decrease was driven by the absence of discretionary donations and the expiration of certain lease-related obligations.
Insurance
Insurance expense increased to $128,718, compared to $62,314 in the prior-year period, representing an increase of $66,404, or 106.6%. The increase was primarily driven by higher premiums associated with expanded coverage requirements and the Company’s evolving risk profile.
Overall Commentary
Overall, SG&A expenses increased modestly despite significant changes in cost composition. The Company achieved substantial cost savings in software-related expenses through reduced reliance on third-party platforms, which partially offset increases in professional fees, insurance costs, and general administrative expenses. Management continues to focus on cost discipline while supporting strategic initiatives and compliance requirements.
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Liquidity and Capital Resources
Going Concern
The Company has incurred operating losses and has generated negative cash flows from operations. Under applicable accounting standards, these conditions raise substantial doubt about the Company’s ability to continue as a going concern within twelve months from the issuance date of these financial statements.
However, management believes that this assessment does not fully reflect the Company’s current financial position, capital resources, and the impact of actions taken during and subsequent to the reporting period to improve liquidity, strengthen the balance sheet, and enhance financial flexibility.
As of February 28, 2026, the Company had $17.9 million in cash and restricted cash and a positive working capital position of $3.1 million. This represents a significant improvement compared to prior periods and was driven by the successful execution of financing initiatives and capital allocation strategies during the period.
In addition, subsequent to the reporting period, the Company has continued to advance its liquidity management initiatives, including further refinement of its cost structure, disciplined capital allocation, and ongoing evaluation of financing alternatives.
Based on current operating trends, management estimates that existing liquidity provides a meaningful operational runway. This estimate is supported by reduced operating cash burn, improved cost discipline, and the Company’s ability to actively manage discretionary expenditures and capital deployment. This reduction was driven by the Company’s transition to a leaner operating model and represents a structural improvement in cash flow efficiency.
Management believes that its current capital resources, combined with ongoing strategic initiatives—including the expansion of recurring revenue streams, continued cost optimization, and disciplined treasury management—provide a sufficient foundation to support operations and execute its business plan.
Management’s Plans
Management has developed plans intended to improve liquidity and address these uncertainties, including:
| ● | Accessing additional capital through its digital asset treasury strategy, including investments in Injective (INJ) and related financing arrangements | |
| ● | Pursuing additional financing and capital-raising activities, including equity and debt financing, as required to support ongoing operations and strategic initiatives | |
| ● | Continuing cost management initiatives, including reductions in payroll, operating expenses, and discretionary spending | |
| ● | Generating additional income streams, including staking rewards from digital assets, and monetization of mortgage data | |
| ● | Implementation of performance-based incentive compensation plans with variable payout structures tied to the achievement of specified thresholds across core operating metrics, including mortgage origination volume, agent network growth, and platform revenue | |
| ● | Enhancing agent productivity through continued development of the Pineapple Plus platform, including improvements to origination workflow tools, deal management systems, and the core brokerage infrastructure used by Pineapple agents to process and submit mortgage transactions | |
| ● | Strengthening agent recruiting and retention through enhanced onboarding processes, structured agent feedback programs, and automation of key engagement workflows to improve the agent experience and reduce attrition across the network. |
Uncertainty and Risks
While management believes these plans are reasonable and achievable, there can be no assurance that the Company will be successful in implementing them. The Company’s ability to continue as a going concern is dependent upon:
| ● | Its ability to obtain additional financing on acceptable terms | |
| ● | The stabilization or improvement of operating cash flows | |
| ● | Market conditions affecting the value and performance of its digital asset holdings |
| 40 |
If the Company is unable to secure adequate funding or achieve its operating objectives, it may be unable to meet its obligations as they become due.
Liquidity Requirements
The Company’s primary liquidity requirements include:
| ● | Working capital to support ongoing operations | |
| ● | Capital expenditures related to technology development | |
| ● | Continued investment in its proprietary Pineapple Plus platform | |
| ● | Personnel costs and compliance infrastructure |
The Company currently funds these requirements through a combination of:
| ● | Cash on hand | |
| ● | Operating cash flows | |
| ● | External financing arrangements |
Capital Allocation Framework
The Company follows a disciplined capital allocation framework designed to balance operational needs and strategic investments:
| ● | Maintain sufficient liquidity to support core operations | |
| ● | Invest in the core mortgage platform to drive growth and efficiency | |
| ● | Expand data and technology capabilities to support recurring revenue | |
| ● | Allocate excess capital to digital asset treasury activities to enhance yield |
This framework is intended to support long-term value creation while maintaining financial flexibility and managing liquidity risk.
The following table summarizes our cash flows from operating, investing and financing activities:
| Six months ended | February 28, ($) | February 28, ($) | Increase/ (Decrease) ($) | |||||||||
| Cash (used) provided in operating activities | (3,762,796 | ) | (836,228 | ) | 2,926,568 | |||||||
| Cash (used) provided by financing activities | 38,199,966 | 1,226,321 | 36,973,645 | |||||||||
| Cash (used) provided in investing activities | (19,293,545 | ) | (539,410 | ) | (18,754,135 | ) | ||||||
| Cash at the end of the period | 17,895,082 | 493,607 | 17,401,475 | |||||||||
Net cash flow from (used in) operating activities
| For the six months ended: | February 28, 2026 | February 28, 2025 | ||||||
| $ | $ | |||||||
| Cash provided by (used for) the following activities | ||||||||
| Operating activities | ||||||||
| Net loss for the year | (25,930,939 | ) | (1,253,990 | ) | ||||
| Adjustments for the following non-cash items: | ||||||||
| Depreciation of property and equipment | 21,555 | 42,553 | ||||||
| Bad debt written off | 18,050 | - | ||||||
| Staking income | (221,718 | ) | - | |||||
| Amortization of intangible assets | 386,009 | 270,073 | ||||||
| Depreciation on right of use asset | 60,326 | 117,019 | ||||||
| Interest expense on lease liability | 20,000 | 26,824 | ||||||
| Derivative liability | 18,730 | - | ||||||
| Warrants expense | 1,325,558 | - | ||||||
| Share based compensation | 142,000 | - | ||||||
| Change in fair value of warrant liability | (1,199,502 | ) | (35,591 | ) | ||||
| Fair value loss on digital assets | 23,026,713 | - | ||||||
| Foreign exchange gain (loss) | - | 4,021 | ||||||
| Net changes in non-cash working capital balances: | ||||||||
| Trade and other receivables | (139,387 | ) | (22,557 | ) | ||||
| Prepaid expenses and deposits | (136,819 | ) | (41,552 | ) | ||||
| Accounts payable and accrued liabilities | (1,095,043 | ) | 103,551 | |||||
| Deferred government incentive | (48,769 | ) | 33,603 | |||||
| Deferred revenue | (9,560 | ) | (80,182 | ) | ||||
| (3,762,796 | ) | (836,228 | ) | |||||
| 41 |
Operating Activities
Net cash used in operating activities for the six months ended February 28, 2026 was $3.8 million, compared to $0.8 million in the prior-year period.
The increase in cash used in operating activities was primarily driven by:
| ● | A net loss of $25.9 million, largely attributable to non-cash, market-driven fair value remeasurement of digital asset holdings | |
| ● | Working capital outflows, including: |
| ○ | Decrease in accounts payable and accrued liabilities of $1.1 million | |
| ○ | Increases in prepaid expenses and receivables |
These were partially offset by significant non-cash adjustments, including:
| ● | $23.0 million unrealized loss on digital assets | |
| ● | $1.2 million warrant-related expense | |
| ● | $0.4 million amortization of intangible assets | |
| ● | $0.2 million staking income, which was recognized as non-cash income |
Overall, operating cash flows reflect ongoing net losses and working capital requirements, partially offset by non-cash charges.
Investing Activities
Net cash used in investing activities for the six months ended February 28, 2026 was $19.3 million, compared to $0.5 million in the prior-year period.
The increase was primarily attributable to:
| ● | Acquisition of digital assets, including investments funded through financing arrangements | |
| ● | Continued investment in technology and platform development |
The Company’s investing activities during the period were significantly influenced by its strategic allocation of capital toward digital assets.
Financing Activities
Net cash provided by financing activities for the six months ended February 28, 2026 was $38.2 million, compared to $1.2 million in the prior-year period.
This increase was primarily driven by:
| ● | Proceeds from equity financing, including PIPE transactions | |
| ● | Proceeds from loan arrangements, including ELOC facilities |
These inflows were partially offset by:
| ● | Financing costs | |
| ● | Transaction-related expenditures |
Liquidity Position
As of February 28, 2026, the Company had:
| ● | Cash and restricted cash of $17.9 million, compared to $0.5 million at February 28, 2025 |
| 42 |
The increase in cash balances was driven by the Company’s financing activities during the period, partially offset by investments in digital assets and operating cash outflows.
Overall Liquidity Assessment
The Company’s liquidity position improved significantly during the six-month period as a result of financing activities. However, the Company continues to generate negative cash flows from operations.
The Company’s ability to meet its obligations and sustain operations is dependent upon:
| ● | Continued access to capital markets | |
| ● | Management of operating cash flows | |
| ● | Performance of its digital asset investments and related income streams |
Liquidity Runway Analysis
The Company’s liquidity position is supported by cash on hand and access to external financing. As of February 28, 2026, the Company had $17.9 million in cash and restricted cash.
For the six months ended February 28, 2026, net cash used in operating activities was $3.8 million, or an average monthly operating cash outflow of $0.6 million. Based on this historical run rate, existing cash resources would be sufficient to fund operations for 28 to 30 months, assuming no significant changes in operating conditions.
However, the Company’s future liquidity requirements are subject to a number of uncertainties, including:
| ● | Variability in operating cash flows and working capital requirements | |
| ● | Ongoing investments in digital assets and technology initiatives | |
| ● | Interest and principal obligations associated with financing arrangements | |
| ● | Market volatility affecting digital asset valuations and related income streams, including staking rewards |
Management may adjust its capital allocation strategy, including the pace of digital asset investments and discretionary expenditures, in response to market conditions and liquidity needs.
The Company’s operating cash burn has been significantly reduced as a result of cost optimization initiatives, including workforce realignment and expense rationalization, which are expected to improve cash flow dynamics going forward.
The Company’s ability to maintain sufficient liquidity beyond the current runway is dependent on its ability to:
| ● | Generate positive operating cash flows | |
| ● | Access additional financing, if required | |
| ● | Manage costs and capital expenditures |
There can be no assurance that additional financing will be available on acceptable terms, or at all.
| 43 |
The following table presents our liquidity (Non-GAAP):
| Period Ended | February 28, 2025 ($) | August 31, 2025 ($) | ||||||
| Cash | 17,895,082 | 2,117,371 | ||||||
| Trade and other receivables | 213,560 | 92,223 | ||||||
| Loan | 5,000,000 | - | ||||||
| Prepaid expenses and deposit | 246,820 | 110,001 | ||||||
| 23,355,462 | 2,319,595 | |||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | 1,030,117 | 2,125,160 | ||||||
| Loan payable | 18,972,000 | - | ||||||
| Deferred revenue | 98,992 | 108,552 | ||||||
| Derivative liability | 18,730 | |||||||
| Loan from directors | - | 629,120 | ||||||
| Current portion of lease liability | 146,296 | 138,859 | ||||||
| 20,266,135 | 3,001,691 | |||||||
Liquidity and Capital Resources
Current Assets
As of February 28, 2026, the Company’s total current assets were $23.4 million, compared to $2.3 million as of August 31, 2025, representing an increase of $21.0 million.
The increase was primarily driven by:
| ● | A significant increase in cash to $17.9 million from $2.1 million, reflecting proceeds from financing activities, including equity issuances and loan arrangements | |
| ● | The recognition of a $5.0 million loan receivable, representing amounts advanced under financing arrangements | |
| ● | Modest increases in trade and other receivables and prepaid expenses and deposits, reflecting normal business activity and timing of payments |
Cash
Cash increased to $17.9 million as of February 28, 2026, compared to $2.1 million as of August 31, 2025.
The increase was primarily attributable to:
| ● | Proceeds from equity financing, including PIPE transactions | |
| ● | Loan proceeds received during the period |
These inflows were partially offset by:
| ● | Investments in digital assets | |
| ● | Operating cash outflows |
Trade and Other Receivables
Trade and other receivables increased to $213,560, compared to $92,223 at August 31, 2025. The increase was driven by the timing of billings and collections at period end.
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Prepaid Expenses and Deposits
Prepaid expenses and deposits increased to $246,820, compared to $110,001 at August 31, 2025. The increase was driven by advance payments for software subscriptions, insurance premiums, and other service contracts.
Loan Receivable
The Company recorded a loan receivable of $5.0 million as of February 28, 2026, which was not present in the prior period. This represents financing arrangements entered into during the period.
Current Liabilities
As of February 28, 2026, total current liabilities were $20.3 million, compared to $3.0 million as of August 31, 2025, representing an increase of $17.3 million.
The increase was primarily driven by:
| ● | Recognition of a loan payable of $19.0 million, related to financing arrangements entered into during the period | |
| ● | The recognition of a derivative liability of $18,730 |
These increases were partially offset by:
| ● | A decrease in accounts payable and accrued liabilities to $1.0 million, reflecting timing of vendor payments | |
| ● | Elimination of the loan from directors, which was repaid or settled during the period |
Other Current Liabilities
| ● | Deferred revenue decreased slightly to $98,992, reflecting the delivery of services during the period | |
| ● | The current portion of lease liabilities increased modestly to $146,296, reflecting scheduled lease payments |
Working Capital and Liquidity Position
As of February 28, 2026, the Company reported working capital of $3.1 million, compared to a working capital deficit in the prior period.
The Company’s liquidity position improved significantly during the period as a result of financing activities, including equity issuances and loan proceeds. These inflows strengthened the Company’s cash position and supported its investment and operational activities.
Management continues to monitor working capital levels, cash flows, and financing requirements closely. The Company believes that its current cash resources, together with access to financing arrangements and expected operating cash flows, are sufficient to meet its short-term obligations and support its near-term operating and strategic initiatives.
Outlook
Management believes the Company is entering a transition from a period of capital formation and strategic investment toward one of execution, operating leverage, and earnings quality.
With the majority of recent financing and balance sheet initiatives completed, the Company’s focus is shifting toward delivering consistent operating performance, improving unit economics, and scaling higher-margin and recurring revenue streams.
| 45 |
Key strategic priorities include:
| ● | Expanding mortgage origination volume through targeted agent recruitment, improved activation, and increased productivity across the existing agent base | |
| ● | Increasing revenue per transaction through pricing discipline and the expansion of ancillary products and services | |
| ● | Scaling recurring revenue streams, including subscription-based platform offerings and the development of data-driven products and analytics capabilities | |
| ● | Enhancing capital efficiency through disciplined treasury management, including the continued deployment and optimization of the Company’s digital asset treasury strategy | |
| ● | Maintaining cost discipline and driving operating leverage, including ongoing optimization of the Company’s cost structure and workflow efficiency. Management believes that the integration of these initiatives will support a more scalable and higher-margin operating model over time, with improved earnings quality and reduced reliance on purely transactional revenue streams. |
While near-term results may be impacted by macroeconomic conditions, including interest rate dynamics and housing market activity, as well as volatility in digital asset markets, management believes these factors do not alter the Company’s long-term strategic direction or underlying operating trajectory.
The Company remains focused on disciplined execution, capital allocation, and the delivery of measurable operating improvements as it progresses through 2026. Management believes that continued execution against these priorities will position the Company to deliver improved financial performance and long-term shareholder value.
Critical Accounting Policies and Significant Judgments and Estimates
This management’s discussion and analysis of the financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of Revenue and expenses during the reported period. Per U.S. GAAP, we base our estimates on historical experience and various other assumptions we believe to be reasonable under the circumstances. Actual results may differ from these estimates if conditions differ from our assumptions. While our significant accounting policies are more fully described in Note 2 in the “Notes to Financial Statements,” we believe the following accounting policies are critical to making effective judgments and estimates in preparing our financial statements.
Revenue Recognition
The Company has adopted ASC 606, Revenue from Contracts with Customers, which provides a single comprehensive model for revenue recognition. The core principle of the standard is that Revenue should be recognized when goods or services are transferred to customers at an amount that was driven by the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduced a new contract- based revenue recognition model with a measurement approach that is based on an allocation of the transaction price. It establishes a five-step model to account for revenue arising from contracts with customers. Under this standard, Revenue is recognized at an amount that was driven by the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise Judgment, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with customers. Additionally, the standard specifies the accounting for incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.
When the Company transfers goods or services to a customer, Revenue is recognized at an amount that was driven by the consideration expected to be received.
The Company operates an online platform, that enables brokers and agents to efficiently close deals.
The Company’s subsidiary, Pineapple Insurance Inc., generates Revenue by charging premiums for insurance policies and services. Pineapple Insurance is affiliated with a major insurance company, from which it earns commissions for providing services, primarily mortgage insurance. Mortgage insurance is a offered for each mortgage. Pineapple Insurance acts as the agent that supplies insurance services to the consumer and is paid a commission from the premiums collected by the insurance company whose products and services it provides to the end consumer.
| 46 |
Basis of presentation, functional and presentation currency
The Company’s headquarters is in Ontario, Canada, and the functional currency is in Canadian Dollars (CAD) with the presentation currency being US Dollars (USD). The Company’s subsidiaries have a functional currency of CAD and presentation currency of USD which have been applied consistently.
There will be a foreign currency translation undertaken to report under US GAAP which will be the basis of presentation.
Foreign Currency Transactions and Translation
Although the Company conducts substantially all of its operating activities and generates nearly all revenues and expenses in Canadian dollars (“CAD”), it engages in certain financing and vendor transactions that are denominated in U.S. dollars (“USD”). These USD-denominated balances include equity proceeds raised in USD, payments to U.S.-based service providers, and other non-operating expenditures.
Foreign currency transactions are translated into CAD at the exchange rate in effect on the transaction date. Monetary assets and liabilities denominated in USD are remeasured at the closing exchange rate at each reporting date, and the resulting foreign exchange gains or losses are recognized in the consolidated statements of operations.
In addition, because the Company reports its consolidated financial statements in U.S. dollars, CAD-denominated assets, liabilities, revenues, and expenses are translated into USD using appropriate period-end or average exchange rates. These translation adjustments are recorded within other comprehensive income (loss) and do not impact the Company’s underlying cash flows or economic performance.
Lease Accounting
The relevant criteria applicable is ASC 842. We assess at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. We apply a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. We recognize lease liabilities to make lease payments and right-of- use assets representing the right to use the underlying assets.
At the commencement date of the lease, we recognize lease liabilities measured at the present value of lease payments to be made over the lease term. Lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. Lease payments also include the exercise price of a purchase option reasonably certain to be exercised by us and payments of penalties for terminating the lease, if the lease term reflects us exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, we use our incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
We recognize right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets.
Investments
We invested in a commercial mortgage firm, MCommercial, based in Montreal and Toronto, Canada representing 5% of the total issued and outstanding shares. This strategic partnership allows Pineapple residential mortgage agents to have access to a leading commercial mortgage firm and experts, which will expand their product offerings, service levels and corporate Revenue through increased transactions.
The Company entered into a share purchase agreement with 9142-2964 Quebec Inc. pursuant to which the Company acquired five Class A Shares of 7326904 Canada Inc. (dba as Mortgage Alliance Corporation) (“Alliance”), representing 5% of the total issued and outstanding shares of Alliance. Alliance is a mortgage brokerage firm based in Ontario, Canada with locations in Calgary, Vancouver and Halifax.
The total amount of both investments was recorded at fair value, and any impairment loss is recognized in profit and loss account.
| 47 |
Item 3. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, this disclosure is not required.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of February 28, 2026.
Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of February 28, 2026 due to the material weakness in internal control over financial reporting described below.
Management has identified a material weakness in the Company’s internal control over financial reporting related to insufficient segregation of duties within the finance function, primarily due to a limited number of personnel responsible for financial reporting and accounting functions.
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 the Company’s financial statements will not be prevented or detected on a timely basis.
Notwithstanding the material weakness described above, management believes that the condensed interim consolidated financial statements included in this Quarterly Report fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows in accordance with U.S. GAAP.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1 Legal Proceedings.
To our best knowledge, we are currently not a party to any legal proceedings that, individually or in the aggregate, are deemed to be material to our financial condition or results of operations.
Item 1A Risk Factors.
Smaller reporting companies are not required to provide the information required by this item.
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds.
During the six months ended February 28, 2026, the Company issued common shares and warrants in connection with a private placement transaction pursuant to a Securities Purchase Agreement dated September 1, 2025.
Upon satisfaction of the escrow release conditions and effectiveness of the registration statement, the subscription receipts were exchanged into equity securities on January 6, 2026.
The Company issued:
| ● | 5,776,304 common shares for aggregate gross cash proceeds of $21,949,955; | |
| ● | 18,866,396 common shares in exchange for digital assets with a fair value of $31,323,740 at the date of issuance; and | |
| ● | 1,039,346 warrants exercisable at $3.80 per share with a contractual term of five years. |
In addition, during the period:
| ● | 5,010 warrants were exercised, resulting in the issuance of 5,010 common shares, including: |
| ● | 5,000 warrants exercised at an exercise price of $3.00; and | |
| ● | 10 warrants exercised at an exercise price of $3.90. |
The securities described above were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D, as transactions not involving a public offering. The investors were accredited investors, and no general solicitation was conducted.
| 48 |
Item 3 Defaults Upon Senior Securities.
None.
Item 4 Mine Safety Disclosures.
Not applicable.
Item 5 Other Information.
None.
Item 6. EXHIBITS
| Exhibit No. | Description | |
| 31.1 * | Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
| 31.2 * | Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a). | |
| 32.1 * | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 32.2 * | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
| 101.INS * | Inline XBRL Instance Document. | |
| 101.SCH* * | Inline XBRL Taxonomy Extension Schema Document. | |
| 101.CAL* * | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |
| 101.DEF* * | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |
| 101.LAB* * | Inline XBRL Taxonomy Extension Label Linkbase Document. | |
| 101.PRE * | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended February 28, 2026, formatted in Inline XBRL (included in Exhibit 101). |
| * | Filed herewith. |
| 49 |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| PINEAPPLE FINANCIAL INC. | ||
| Date: April 13, 2026 | By: | /s/ Shubha Dasgupta |
| Shubha Dasgupta | ||
| Chief Executive Officer | ||
| Date: April 13, 2026 | By: | /s/ Sarfraz Habib |
| Sarfraz Habib | ||
| Chief Financial Officer | ||
| 50 |
EXHIBIT 31.1
SECTION 302
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Shubha Dasgupta, certify that:
(1) I have reviewed this Quarterly Report on Form 10-Q of Pineapple Financial Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| April 13, 2026 | ||
| By: | /s/ Shubha Dasgupta | |
| Shubha Dasgupta | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
EXHIBIT 31.2
SECTION 302
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Sarfraz Habib, certify that:
(1) I have reviewed this Quarterly Report on Form 10-Q of Pineapple Financial Inc.;
(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
(4) The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
(5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| April 13, 2026 | ||
| By: | /s/ Sarfraz Habib | |
| Sarfraz Habib | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Shubha Dasgupta, hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that the Quarterly Report on Form 10-Q of Pineapple Financial Inc., (the “Company”) for the quarterly period ended February 28, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| By: | /s/ Shubha Dasgupta | |
| Shubha Dasgupta, Chief Executive Officer (Principal Executive Officer) |
April 13, 2026
The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document of Pineapple Financial Inc. or the certifying officers.
EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Sarfraz Habib, hereby certify pursuant to Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. Section 1350, that the Quarterly Report on Form 10-Q of Pineapple Financial Inc., (the “Company”) for the quarterly period ended February 28, 2026 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| By: | /s/ Sarfraz Habib | |
| Sarfraz Habib, Chief Financial Officer and Principal Accounting Officer) |
April 13, 2026
The certification set forth above is being furnished as an Exhibit solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document of Pineapple Financial Inc. or the certifying officers.