Pineapple Financial (NYSE: PAPL) hit by $6.1M Injective crypto asset loss
Pineapple Financial Inc. reported a sharp deterioration in results for the three months ended November 30, 2025, and flagged substantial doubt about its ability to continue as a going concern. Revenue slipped to
The company posted a net loss of
As of November 30, 2025, Pineapple had negative shareholders’ equity of
Positive
- Post-period $100M equity financing and cash inflow: On January 4, 2026, the company closed a $100 million equity financing tied to the Injective Digital Asset Treasury Initiative and received approximately $19.0 million in cash, then used proceeds to repay the FalconX loan, improving liquidity and eliminating this current borrowing.
- Cost reductions in core operations: Excluding the crypto fair value loss, operating expenses trended lower, with advertising and marketing down about 54%, salaries and benefits down about 63%, and selling, general and administrative expenses down about 5%, reflecting active cost control.
Negative
- Severe loss driven by crypto fair value decline: Net loss rose to $6.4 million from $0.7 million year over year, primarily due to a $6.1 million non-cash fair value loss on Injective crypto assets whose carrying value fell to $5.8 million against an $11.9 million cost base.
- Going concern uncertainty and negative equity: As of November 30, 2025 the company reported a working capital deficit of $13.0 million, negative shareholders’ equity of $5.5 million, and stated that these conditions raise substantial doubt about its ability to continue as a going concern.
- High leverage and near-term obligations at quarter-end: Before subsequent financing, Pineapple carried a current FalconX loan balance of $11.98 million at 11.5% interest plus other current liabilities, creating significant short-term funding pressure.
Insights
Losses, leverage and going concern risk are partly offset by a large post‑period equity raise.
Pineapple Financial shows a stressed balance sheet as of
Quarterly net loss widened to
Subsequent events materially change the liquidity picture. On
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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 | 19 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31 |
| Item 4. | Controls and Procedures | 31 |
| PART II. | OTHER INFORMATION | |
| Item 1. | Legal Proceedings | 31 |
| Item 1A. | Risk Factors | 31 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 31 |
| Item 3. | Defaults Upon Senior Securities | 32 |
| Item 4. | Mine Safety Disclosures | 32 |
| Item 5. | Other Information | 32 |
| Item 6. | Exhibits | 32 |
| SIGNATURES | 33 |
| i |
Pineapple Financial Inc.
Condensed Interim Consolidated Balance Sheets - Unaudited
For the three month period ended November 30, 2025
(Expressed in US Dollars)
| As at: | November 30, 2025 | August 31, 2025 | ||||||||
| $ | $ | |||||||||
| Assets | ||||||||||
| Current assets | ||||||||||
| Cash | ||||||||||
| Trade and other receivables | ||||||||||
| Prepaid expenses and deposits | ||||||||||
| Total current assets | ||||||||||
| Investment | Note 4 | |||||||||
| Crypto assets | Note 10 | - | ||||||||
| Right-of-use asset - net | Note 9 | |||||||||
| Property and equipment - net | ||||||||||
| Intangible assets - net | Note 5 | |||||||||
| Total Assets | ||||||||||
| Liabilities and Shareholders’ Equity | ||||||||||
| Current liabilities | ||||||||||
| Accounts payable and accrued liabilities | ||||||||||
| Loan payable | Note 12 | - | ||||||||
| Deferred revenue | ||||||||||
| Loan from directors | ||||||||||
| Current portion of lease liability | Note 9 | |||||||||
| Total current liabilities | ||||||||||
| Deferred government incentive | Note 13 | |||||||||
| Lease liability | Note 9 | |||||||||
| Warrant liability | Note 7 | |||||||||
| Total liabilities | ||||||||||
| Shareholders’ Equity | ||||||||||
| Common shares (*), | 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)
Subsequent events (note 18)
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 ended November 30, 2025
(Expressed in US Dollars)
| For the three months ended | November 30, 2025 | November 30, 2024 | ||||||||
| $ | $ | |||||||||
| Revenue | Note 15 | |||||||||
| Expenses | ||||||||||
| Selling, general and administrative | ||||||||||
| Advertising and marketing | ||||||||||
| Salaries, wages and benefits | ||||||||||
| Interest expense and bank charges | ||||||||||
| Depreciation and amortization | Note 5,9 | |||||||||
| Fair value loss on crypto assets | Note 10 | - | ||||||||
| Government incentive | Note 13 | ( | ) | ( | ) | |||||
| Total expenses | ||||||||||
| Loss from operations | ( | ) | ( | ) | ||||||
| Foreign exchange gain | ||||||||||
| Gain on change in fair value of warrant liability | Note 7 | |||||||||
| Net loss | ( | ) | ( | ) | ||||||
| Foreign currency translation adjustment | ( | ) | ( | ) | ||||||
| Net loss and comprehensive loss | ( | ) | ( | ) | ||||||
| Net loss per share - basic and diluted | ( | ) | ( | ) | ||||||
| Weighted average number of common shares (*) outstanding - basic and diluted (numbers) | ||||||||||
| (*) |
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 | Accumulated | |||||||||||||||||||||||
| Common | Common | Paid in | other | Accumulated | Total | |||||||||||||||||||
| Shares | shares to | Capital | comprehensive | (deficit) | shareholders’ | |||||||||||||||||||
| (note 6) | be issued | (note 6 and 7) | loss | earnings | equity | |||||||||||||||||||
| $ | $ | $ | $ | $ | $ | |||||||||||||||||||
| Balance, August 31, 2024 | - | | ( | ) | ( | ) | ||||||||||||||||||
| Shares issued against S3 | - | - | - | - | ||||||||||||||||||||
| Shares against pre-funded warrants | - | - | - | - | ||||||||||||||||||||
| Foreign exchange translation | - | - | - | ( | ) | - | ( | ) | ||||||||||||||||
| Net loss | - | - | - | - | ( | ) | ( | ) | ||||||||||||||||
| Balance, November 30, 2024 | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance, August 31, 2025 | ( | ) | ( | ) | ||||||||||||||||||||
| Balance | ( | ) | ( | ) | ||||||||||||||||||||
| Shares issued against warrants exercise | - | - | - | - | ||||||||||||||||||||
| Foreign exchange translation | - | - | - | |||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||
| Balance, November 30, 2025 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| 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 three month ended November 30, 2025
(Expressed in US Dollars)
| For the year ended: | November 30, 2025 | November 30, 2024 | ||||||||
| For the three months ended: | November 30, 2025 | November 30, 2024 | ||||||||
| $ | $ | |||||||||
| 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 | - | |||||||||
| Amortization of intangible assets | Note 5 | |||||||||
| Depreciation on right of use asset | Note 9 | |||||||||
| Interest expense on lease liability | Note 9 | |||||||||
| Change in fair value of warrant liability | Note 7 | ( | ) | ( | ) | |||||
| Fair value loss on crypto assets | Note 10 | - | ||||||||
| 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 6 | |||||||||
| Additional share capital issued | - | |||||||||
| Proceed from director’s loan | - | |||||||||
| Proceed from warrant exercise | ( | ) | - | |||||||
| Repayment of loan | - | ( | ) | |||||||
| Proceed from loan payable | Note 11 | - | ||||||||
| Repayment of lease obligations | Note 9 | ( | ) | ( | ) | |||||
| Net cash provided by financing activity | ||||||||||
| Investing activities | ||||||||||
| Additions to intangible assets | Note 5 | ( | ) | ( | ) | |||||
| Additions to property and equipment | ( | ) | - | |||||||
| Purchase of crypto assets | Note 11 | ( | ) | - | ||||||
| Net cash used in investing activity | ( | ) | ( | ) | ||||||
| Net change in cash | ( | ) | ||||||||
| Effect of changes in foreign exchange rates | ( | ) | ||||||||
| Cash, beginning of year | ||||||||||
| Cash, end of year | ||||||||||
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 November 30, 2025
(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
Company continues to incur significant operating losses and negative operating cash flows, a trend expected to persist in the near
term. For the three months period ended November 30, 2025, the Company incurred a net loss of $
Management’s
ability to sustain operations depends on realizing assets and managing obligations as they come due, as well as securing additional financial
resources. Subsequent to period end, the Company entered into the Injective Digital Asset Treasury Initiative, pursuant to which the Company
received approximately $
Management’s plans to address these conditions include:
| 1. | securing the proceeds expected under the Injective initiative, | |
| 2. | pursuing additional capital and financing arrangements, and | |
| 3. | implementing further cost-containment and working capital measures. |
These plans are discussed further in Note 17, Subsequent Events. There is no assurance that these initiatives will be achieved as planned. Accordingly, substantial doubt remains regarding the Company’s ability to continue as a going concern.
Impact from the global inflationary pressures leading to higher interest rates
During fiscal 2024, global inflationary pressures resulted in central banks, including the Bank of Canada, increasing benchmark interest rates to mitigate inflation. The resulting higher borrowing costs led to a slowdown in real-estate activity, reduced pricing pressures, and lower transaction volumes across the housing market.
In fiscal 2025, the Bank of Canada began to gradually reduce interest rates as inflationary trends moderated and economic conditions softened. While these decreases are expected to improve housing affordability and support market recovery over time, the full impact on the real-estate sector and related businesses remains uncertain as of November 30, 2025.
2. Significant accounting policies
Statement of compliance
These consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”).
The consolidated financial statements were authorized for issue by the Board of Directors on January 20, 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. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
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.
| 5 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
2. Significant accounting policies (continued from previous page)
Operating segments
The
Company determines its reporting units in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) 280, Segment Reporting. The Company evaluates a reporting unit by first identifying its operating segments
under ASC 280. The Company operates as
Adjustment for reverse stock split
In
July 2023, the Board of Directors approved a
On
July 16, 2025, the Company effected a
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.
New Accounting Policies
Crypto Assets
The Company holds crypto assets, which meet the definition of crypto assets under ASC 350-60, Intangibles - Goodwill and Other - Crypto Assets. Crypto assets are fungible digital assets secured by cryptography and recorded on a distributed ledger.
Crypto assets are recognized when the Company obtains control of the assets, which occurs upon settlement and transfer of the assets to an account or wallet under the Company’s control.
Crypto assets are measured at fair value at each reporting date in accordance with ASC 350-60, with changes in fair value recognized in earnings in the period in which they occur.
Fair value is determined in accordance with ASC 820, Fair Value Measurement, using quoted closing prices in active markets accessible to the Company at the measurement date. These quoted prices represent Level 1 inputs within the fair value hierarchy because they are unadjusted, observable prices for identical assets in active markets. The Company uses the principal market, defined as the market with the greatest volume and level of activity for the crypto assets at the measurement date.
Crypto assets are classified as long-term assets in the consolidated balance sheets because management does not expect to utilize or liquidate such assets within twelve months of the balance sheet date. This assessment is based on management’s current holding strategy and is consistent with ASC 210, Balance Sheet, and prevailing SEC practice.
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.
| 6 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
2. Significant accounting policies (continued from previous page)
Recently Adopted Accounting Pronouncements
None.
The Company did not adopt any new accounting standards during the three months ended November 30, 2025 that had a material impact on its consolidated financial statements or disclosures.
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 by mandating additional disaggregation in the rate reconciliation, disclosure of income (loss) from continuing operations before income taxes, and disclosure of 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 required to be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.
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 ASC Topic 718. The ASU provides illustrative examples to assist in determining whether such awards should be accounted for as equity-classified awards, liability-classified awards, or outside the scope of Topic 718 and instead accounted for under ASC Topic 710.
This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.
ASU 2025-01- Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date
In January 2025, the FASB issued ASU 2025-01, which clarifies the effective dates related to the expense-disaggregation disclosure requirements previously issued in 2024. The ASU confirms that public business entities are required to present the new disclosures in annual periods beginning after December 15, 2026, and in interim periods beginning after December 15, 2027.
Because this amendment affects only the timing of disclosures, the Company does not expect adoption of this guidance to have a material impact on its consolidated financial statements.
ASU 2025-03 - Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in a Variable-Interest Entity
In June 2025, the FASB issued ASU 2025-03, which clarifies how to determine the accounting acquirer when a business combination is primarily effected through an exchange of equity interests and the legal acquiree is a variable-interest entity (“VIE”) that meets the definition of a business. The guidance requires entities to apply the acquisition-accounting factors in ASC 805-10-55-12 through 55-15, rather than relying solely on the VIE consolidation model.
This guidance is effective for annual periods beginning after December 15, 2026, with early adoption permitted. The amendments should be applied on a prospective basis, although retrospective application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.
| 7 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
3. Significant accounting judgments, estimates and assumptions
The preparation of 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 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 financial liabilities recorded on the consolidated statements of financial position, cannot be derived from active markets, 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.
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 consolidated statements of income 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 consolidated statements of operations and comprehensive loss.
The warrants are not precluded from equity classification and are accounted for as such on the date of issuance and will be on each consolidated balance sheet date thereafter. As the warrants are equity classified, they are initially measured at fair value (or allocated value).
| 8 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(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 its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the 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 three months period ended November 30, 2025, the Company capitalized development costs related to internally generated software classified as intangible 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, November 30, 2025 | $ | |||
| Accumulated amortization | ||||
| Balance, August 31, 2024 | $ | |||
| Amortization | ||||
| Translation adjustment | ( | ) | ||
| Balance, August 31, 2025 | $ | |||
| Amortization | ||||
| Translation adjustment | ( | ) | ||
| Balance, November 30, 2025 | $ | |||
| Net carrying value | ||||
| November 30, 2025 | $ | |||
| August 31, 2025 | $ | |||
| 9 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
6. 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 warrants conversion | ||||||||
| Balance, November 30, 2025 | ||||||||
November 14, 2024 - Issuance under Form S-3 Offering
On
November 14, 2024, the Company issued
Following
the
January – May 2025 - Exercise of Prefunded Warrants
Between
January 2025 and May 2025, holders of prefunded warrants exercised
May 5, 2025 - Form S-1 Offering
On
May 5, 2025, the Company completed a registered public offering under Form S-1, issuing
In
connection with this offering, the Company issued
The
warrant liability was initially recognized at fair value of $
Residual
proceeds of $
July – November 2025 - Warrant Conversions
During
July and August, a total of
Reverse Stock Split
On
July 16, 2025, the Company effected a
The Reverse Split did not affect the total shareholders’ equity, the carrying amount of common shares, or the par value of the Company’s common shares.
All share, per-share, warrant, option, and RSU figures presented in these consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the Reverse Split for all periods presented.
Summary of Share Capital
As
of November 30, 2025, the Company had
| 10 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
7. Warrants
| a) | Common Share purchase warrant |
Schedule of common share purchase warrant
| # | $ | |||||||
| Balance, August 31, 2024 | ||||||||
| Share-based compensation expense | - | |||||||
| Balance, August 31, 2025 | ||||||||
| Balance, November 30, 2025 | ||||||||
| b) | Warrant Liability |
The Company issued
The
warrants issued on November 3, 2023 were valued using the Black-Scholes method with the share price of $
The
warrants issued in May 2025, were valued using the Black-Scholes method with the share price 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 | ( | ) | ( | ) | ||||
| Change in fair value of warrants liability | - | ( | ) | |||||
| Translation adjustment | - | ( | ) | |||||
| Fair Value of Warrants at November 30, 2025 | ||||||||
Schedule of estimate fair value of warrant
| November 30, 2025 | 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 | ||||||||
As
at November 30, 2025, the warrants had a weighted-average intrinsic value of $
8. Share-based benefits reserve
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
During
the year ended August 31, 2025, the Company granted
No
additional stock options or RSUs were granted, exercised, forfeited, or cancelled during the three months ended November 30, 2025, and
Schedule of options outstanding granted
| November 30, 2025 | 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 November 30, 2025, all outstanding stock options were fully vested and exercisable. The options have a contractual term of
| 11 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
9. 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, November 30, 2025 | $ | |||
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, November 30, 2025 | $ | |||
| Carrying Amount | ||||
| November 30, 2025 | $ | |||
| August 31, 2025 | $ | |||
| 12 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
9. 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
| November 30, 2025 | 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 | $ |
| 13 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
10. Crypto Assets
As of November 30, 2025, the Company held crypto assets that were measured at fair value and presented within long term assets in the accompanying condensed interim consolidated balance sheets.
During
the quarter ended November 30, 2025, the Company acquired
As
of November 30, 2025, the fair value of the Company’s crypto assets was $
During
the quarter ended November 30, 2025, the Company recognized a fair value loss on crypto assets of $
Schedule of crypto assets
11. Related party transactions and balances
| 1. | Voltedge Ltd. is an entity associated with the Injective Foundation. During the three months ended November 30, 2025, the Company entered into a secured borrowing arrangement with FalconX Bravo Inc. (the “FalconX Loan”), which included a guarantee provided by Voltedge Ltd. in connection with the financing arrangements as mentioned in note 12. |
As of November 30, 2025, the Injective Foundation did not hold any equity ownership interest in the Company, and neither the Injective Foundation nor Voltedge Ltd. had control over, or significant influence on, the Company. However, the FalconX Loan and the related guarantee arrangements were entered into in connection with the Company’s Injective Digital Asset Treasury Initiative, a strategic transaction pursuant to which the Injective Foundation became the Company’s largest shareholder subsequent to the reporting period, following the completion of a private placement on that closed on January 4, 2026.
Information regarding FalconX Loan and related gurantee arrangements, including events occurring subsequent to November 30, 2025, is disclosed in Note 18, Subsequent Events, for further information.
As
of November 30, 2025, the outstanding balance under the FalconX Loan totaled $
| 2. | Compensation of key management personnel includes the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer: |
Schedule of related party transactions
| November 30, 2025 | November 30, 2024 | |||||||
| $ | $ | |||||||
| 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 November
30, 2025, the outstanding principal balance of the advances totaled $
The terms of the advances were determined by management to be comparable to those available from third-party lenders under similar circumstances.
| 14 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
12. Loan payable
During
the three months ended November 30, 2025, the Company entered into a secured borrowing arrangement with FalconX Bravo Inc.
(“FalconX”), pursuant to which the Company borrowed an aggregate principal amount of $
The FalconX Loan
bears interest at a stated rate of
Interest
expense is recognized in accordance with ASC 835, Interest. For the quarter ended November 30, 2025, the Company recognized interest
expense of $
Security and Guarantees
As
of November 30, 2025, the Company had an outstanding principal balance of $
Pursuant to the applicable financing arrangements, Voltedge Ltd. 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 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, Voltedge Ltd. is contractually required to provide additional collateral or margin support in the event that the fair value of the pledged Injective tokens declines below the required maintenance threshold specified in the loan agreements. Margin support may be satisfied through the contribution of additional Injective tokens or other acceptable collateral, as defined in the financing arrangements.
The guarantee and collateral arrangements do not result in the transfer of ownership or control of the Company’s digital assets to Voltedge Ltd., 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.
Refer to Note 10 - Crypto Assets for further information regarding the Company’s digital asset holdings and valuation.
Relationship Disclosure
Voltedge Ltd. is not a subsidiary, parent, or affiliate of the Company and is an independent entity associated with the Injective Foundation. As of November 30, 2025, the Company did not hold any equity ownership interest in, nor exercise control or significant influence over, Voltedge Ltd. or the Injective Foundation. Similarly, as of that date, neither Voltedge Ltd. nor the Injective Foundation held any equity ownership interest in, or exercised control or significant influence over, the Company.
During the three months ended November 30, 2025, the Company entered into a secured borrowing arrangement with FalconX Bravo Inc., which included a guarantee provided by Voltedge Ltd. The guarantee was provided in connection with the Company’s Injective Digital Asset Treasury Initiative, a strategic transaction that was completed subsequent to the reporting period.
Subsequent to November 30, 2025, the Injective Foundation, through a private placement transaction that closed on January 4, 2026, became the Company’s largest shareholder. Although the Injective Foundation was not a shareholder of the Company as of November 30, 2025.
Repayment and Subsequent Events
The
FalconX Loan contains customary events of default and collateral protection provisions. The Company intended to repay the FalconX Loan
from the proceeds of the $
Classification
As
of November 30, 2025, the FalconX loan was contractually repayable upon the closing of the Company’s $
Subsequent to November 30, 2025 the Company and FalconX agreed to extend the repayment period by one additional month. This extension was agreed after the balance-sheet date and is considered a subsequent event that does not affect the classification of the FalconX loan as of November 30, 2025.
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 November 30, 2025, 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
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.
| 15 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(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.
Schedule of maturity analysis lease liability
See note 9 related to lease commitments.
15. Revenue
Schedule of deferred revenue
November 30, 2025 | November 30, 2024 | |||||||
| Three months period ended | ||||||||
November 30, 2025 | November 30, 2024 | |||||||
| $ | $ | |||||||
| 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 three months period ended November 30, 2025 and 2024, all revenue was earned in Canada, as the Company operates exclusively within the Canadian mortgage market and has no foreign revenue-generating operations.
16. Loan from directors
Company
entered into unsecured loan agreements with its directors and shareholders, for total proceeds of $
As of November 30, 2025, the outstanding principal and accrued interest are included in loans payable within current liabilities. Management believes the terms of these loans are consistent with those available in arm’s-length commercial transactions. The loan along with accrued interest was paid in full in January 2026.
| 16 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
17. 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 – Current Expected Credit Losses (“CECL”), 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; however, the Company recognized a material ECL provision and related write-offs during fiscal 2025, reflecting an increase in past-due accounts and a more conservative application of the CECL model.
Accounts Receivable Aging
As of each reporting date, the Company monitors the aging of trade receivables as follows:
| ● | Current (0–60 days) | |
| ● | Past Due (61–90 days) | |
| ● | Impaired (>90 days) |
November 30, 2025
Schedule of Accounts receivable Aging
| 0-30 days | 30-60 days | 60-90 days | 90 plus days | Total | ||||||||||||||||
| 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 August 31, 2025 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.
The following table provides expected credit loss during the year:
Schedule of credit loss
| Year ended | ||||||||
| November 30, 2025 | August 31, 2025 | |||||||
| $ | $ | |||||||
| Opening balance | - | |||||||
| Increased during the year | ||||||||
| Closing balance at year end | ||||||||
| 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 the Going Concern discussion in Note 1.
As at November 30, 2025, the Company’s contractual payment obligations are as follows:
Schedule of contractual payment obligations
| Fiscal Year | 2026 | 2027 | 2028 | 2029 | 2030 | |||||||||||||||
| $ | $ | $ | $ | $ | ||||||||||||||||
| Lease payments | ||||||||||||||||||||
| Accounts payable | - | - | - | - | ||||||||||||||||
| Loan from directors | - | - | - | - | ||||||||||||||||
| Loan payable | - | - | - | - | ||||||||||||||||
| Warrant liability | - | - | - | - | ||||||||||||||||
| Total | ||||||||||||||||||||
Management believes that these obligations can be met through existing working-capital resources, expected operating cash flows, and planned financing initiatives.
| 17 |
Pineapple Financial Inc.
Notes to the Condensed Interim Consolidated Financial Statements - Unaudited
For period ended November 30, 2025
(Expressed in US Dollars)
17. 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 as a going concern. 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 three months ended November 30, 2025.
| 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 consolidated interim consolidated statements of operations.
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.
18. Subsequent events
Subsequent to November 30, 2025, the Company completed certain material transactions. Management has evaluated these events in accordance with ASC 855, Subsequent Events, and determined that they represent non-recognized subsequent events that require disclosure but do not require adjustment to the accompanying condensed interim consolidated financial statements as of and for the period ended November 30, 2025.
Equity Financing
On
January 4, 2026, the Company completed the closing of its previously announced $
Debt Repayment and Modification
In connection with the equity financing, the Company repaid the FalconX loan subsequent to the balance-sheet date. In addition, the Company and FalconX agreed to a one-month extension of the repayment period prior to settlement. Refer to Note 12 for additional information regarding the FalconX loan.
| 18 |
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
We are a fintech company based in Ontario, Canada. Our tech-driven businesses are focused on mortgages and insurance. Our goal is to provide clients with an industry-leading experience through our trusted digital solutions that are simple and fast.
| 19 |
Recent Developments
Business Trends
During fiscal 2025, the Canadian mortgage market continued to adjust to changes in monetary policy following the Bank of Canada’s multi-stage easing cycle that commenced in mid-2024. Through September 2025, the Bank of Canada reduced its benchmark overnight interest rate by an aggregate of approximately 50 basis points. These reductions contributed to improved borrowing conditions and greater rate stability; however, overall mortgage origination volumes remained below pre-2022 levels, reflecting ongoing affordability pressures, constrained housing supply, and continued underwriting discipline among lenders.
Within this operating environment, mortgage renewal and refinance transactions represented an increasing proportion of total industry activity, while purchase-related originations expanded at a more gradual pace. Notwithstanding these market conditions, Pineapple Financial Inc. maintained stable operations and continued to broaden its presence across key Canadian markets.
The Company also 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 supported improved operational efficiency, increased productivity per agent, and sustained client engagement despite the relatively subdued housing market. In parallel, continued investment in data-driven marketing initiatives and digital lead-generation tools contributed to the stability of the Company’s fee-based revenue streams.
In addition to its core mortgage-brokerage operations, the Company has initiated a strategic investment program focused on digital assets. During the quarter, the Company invested approximately $11.8 million in Injective digital assets, reflecting management’s broader treasury and capital-allocation strategy. During the quarter, the Company announced its intention to pursue up to $100 million in aggregate investment in Injective digital assets, subject to market conditions, regulatory considerations, availability of capital, and final execution of related investment arrangements. Management believes this initiative is complementary to the Company’s long-term vision of integrating innovative financial technologies into its broader fintech ecosystem; however, the timing, structure, and ultimate scale of future investments remain subject to change.
Early indicators in the fourth quarter reflected increased mortgage application volumes and lead-generation activity, primarily driven by renewal and refinance demand. Management believes these trends, together with ongoing platform enhancements and disciplined capital deployment, position the Company to participate in a gradual recovery in mortgage activity as interest-rate conditions stabilize and borrower confidence improves heading into fiscal 2026.
Results of Operations
Three Months Ended November 30, 2025 Compared to November 30, 2024
For the three months ended November 30, 2025, the Company reported a net loss of approximately $6.4 million, compared to a net loss of approximately $0.7 million for the same period in the prior year. The increase in net loss was driven primarily by a non-cash loss related to changes in the fair value of the Company’s Injective digital asset holdings, partially offset by reductions in operating expenses and continued cost-control initiatives.
Revenue
Revenue for the three months ended November 30, 2025 was approximately $0.7 million, compared to $0.8 million in the comparable prior-year period, representing a decrease of approximately $44 thousand, or 5.8%. The decline reflects continued softness in mortgage origination activity and changes in revenue mix during the quarter, partially offset by stable subscription and underwriting-related revenue streams.
| 20 |
Operating Expenses
Total operating expenses increased to approximately $7.3 million for the three months ended November 30, 2025, compared to approximately $1.5 million in the same period of the prior year. This increase was primarily attributable to a $6.1 million non-cash loss recognized from changes in the fair value of Injective digital assets during the quarter. Excluding this fair value adjustment, operating expenses declined year over year, reflecting management’s continued focus on cost discipline and operational efficiency.
Selling, general and administrative expenses decreased by approximately 5.4%, primarily due to lower professional fees and general overhead. Advertising and marketing expenses declined by approximately 54%, reflecting reduced discretionary spending and a greater emphasis on data-driven and digital marketing initiatives. Salaries, wages, and benefits decreased by approximately 63%, primarily as a result of workforce optimization measures implemented in prior periods.
These reductions were partially offset by an increase in interest expense and bank charges of approximately 52%, reflecting higher borrowings and financing activity during the quarter, as well as a modest increase in depreciation expense associated with technology and platform investments.
Operating Expenses and Fair Value Adjustments
During the three months ended November 30, 2025, operating expenses included a $6.1 million non-cash loss resulting from changes in the fair value of the Company’s Injective digital asset holdings, which is presented within operating expenses in the consolidated statements of operations. This loss reflects market-driven valuation movements of the digital assets during the period and does not relate to the Company’s core mortgage brokerage or technology operations.
In addition, the Company recognized gains related to changes in the fair value of warrant liabilities and foreign exchange movements, which are presented outside of operating income and partially offset the loss for the period.
Operating Loss and Net Loss
As a result of the foregoing, the Company reported a loss from operations of approximately $6.5 million for the three months ended November 30, 2025, compared to a loss from operations of approximately $0.7 million in the comparable prior-year period. Management believes that, excluding the impact of non-cash fair value adjustments related to digital assets, the underlying operating performance of the Company during the quarter benefited from cost reductions, improved operational efficiency, and continued stabilization of core mortgage-related activities.
| Three months period Ended November 30, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Mortgage volume | 457,087,448 | 424,076,207 | 381,777,717 | |||||||||
| Gross billing | 4,084,709 | 4,405,908 | 3,873,320 | |||||||||
| Commission expense | 3,721,246 | 3,991,626 | 3,570,110 | |||||||||
| Net sales revenue | 363,463 | 414,282 | 303,210 | |||||||||
| Underwriting revenue | 27,473 | 27,343 | 42,106 | |||||||||
| Subscription revenue | 207,746 | 182,180 | 183,245 | |||||||||
| Other income | 123,045 | 142,269 | 70,758 | |||||||||
Our sources of revenue include commissions from lenders, underwriting revenue, membership fees from mortgage agents, and other income.
| 21 |
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 reflects 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.
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. Approximately 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 three months ended November 30, 2025 and 2024
| Three months ended | November 30, 2025 ($) | November 30, 2024 ($) | Increase/ (Decrease) ($) | Increase/ (Decrease) % | ||||||||||||
| Revenue | 721,727 | 766,074 | (44,347 | ) | (5.79 | ) | ||||||||||
| Expenses | ||||||||||||||||
| Selling, general and administrative | 394,850 | 417,406 | (22,556 | ) | (5.40 | ) | ||||||||||
| Advertising and Marketing | 124,398 | 273,009 | (148,611 | ) | (54.43 | ) | ||||||||||
| Salaries, wages and benefits | 162,383 | 436,365 | (273,982 | ) | (62.79 | ) | ||||||||||
| Interest expense and bank charges | 265,236 | 174,505 | 90,731 | 51.99 | ||||||||||||
| Depreciation | 222,800 | 185,523 | 37,277 | 20.09 | ||||||||||||
Fair value loss on crypto assets | 6,140,379 | - | 6,140,379 | 100.00 | ||||||||||||
| Government incentive | (26,973 | ) | (27,219 | ) | 246 | (0.90 | ) | |||||||||
| Total expense | 7,283,073 | 1,459,588 | 5,823,484 | 398.98 | ||||||||||||
| Loss from operations | (6,561,346 | ) | (693,513 | ) | (5,867,831 | ) | 846.10 | |||||||||
| Foreign exchange gain (loss) | 28,831 | 5,089 | 23,742 | 466.54 | ||||||||||||
| Gain(loss) on change in fair value of warrant liability | 97,430 | 31,532 | 65,898 | 208.99 | ||||||||||||
| Net loss | (6,435,085 | ) | (656,894 | ) | (5,778,191 | ) | 879.62 | |||||||||
Revenue
For the three months ended November 30, 2025, the Company generated gross billings of approximately $4.1 million, compared to $4.4 million for the same period in the prior year. The modest decrease reflects changes in product mix and commission structures during the quarter, partially offset by higher residential mortgage origination volumes.
Mortgage origination volume increased to approximately $457.1 million for the three months ended November 30, 2025, compared to $424.1 million in the comparable prior-year period, representing an increase of approximately 7.8%. This growth was primarily driven by higher renewal and refinance activity and improved agent productivity. During the quarter, mortgage market conditions continued to benefit from the Bank of Canada’s prior interest-rate reductions, which supported borrowing activity, although overall housing market conditions remained below pre-2022 levels.
Net sales revenue for the three months ended November 30, 2025 was approximately $0.36 million, compared to $0.41 million in the same period of the prior year. The decrease was primarily attributable to lower gross billings during the quarter, partially offset by increased mortgage volumes.
Subscription revenue increased to approximately $0.21 million for the three months ended November 30, 2025, compared to $0.18 million in the comparable prior-year period. The increase reflects continued adoption and usage of the Company’s Pineapple Plus technology platform by its agent network. Underwriting and other ancillary revenue remained relatively consistent year over year.
Cost of Gross Billings
Cost of gross billings, which consists primarily of commission expense, totaled approximately $3.7 million for the three months ended November 30, 2025, compared to $3.99 for the same period in the prior year. The decrease in commission expense was generally consistent with the decline in gross billings and reflects ongoing optimization of commission arrangements and agent mix.
The Company continues to focus on balancing transaction volume growth with disciplined commission management. Initiatives implemented during the quarter, including enhanced workflow automation, centralized underwriting processes, and agent-performance analytics, are intended to support operating efficiency and improve margin performance over time while maintaining competitive agent compensation structures.
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Selling, General and Administrative Expenses.
The breakdown of selling, general and administrative expenses are as follows:
| Three months ended | November 30, 2025 ($) | November 30, 2024 ($) | Increase/ (Decrease) ($) | Increase/ (Decrease) % | ||||||||||||
| Software subscription | 115,980 | 219,908 | (103,928 | ) | (47.26 | ) | ||||||||||
| Office and general | 36,178 | 45,571 | (9,393 | ) | (20.61 | ) | ||||||||||
| Professional fee | 60,465 | 29,275 | 31,190 | 106.54 | ||||||||||||
| Dues and subscription | 68,964 | 31,600 | 37,364 | 118.24 | ||||||||||||
| Rent | 50,797 | 31,610 | 19,187 | 60.70 | ||||||||||||
| Consulting fee | 8,967 | 9,679 | (712 | ) | (7.36 | ) | ||||||||||
| Travel | 18,824 | 20,589 | (1,765 | ) | (8.57 | ) | ||||||||||
| Donations | - | 652 | (652 | ) | (100.00 | ) | ||||||||||
| Lease expense | - | 1,045 | (1,045 | ) | (100.00 | ) | ||||||||||
| Insurance | 34,675 | 27,477 | 7,198 | 26.20 | ||||||||||||
| 394,850 | 417,406 | (22,556 | ) | (5.40 | ) | |||||||||||
Selling, General and Administrative (“SG&A”) Expenses
Selling, general and administrative (“SG&A”) expenses for the three months ended November 30, 2025 were $394,851, compared to $417,406 for the same period in the prior year, representing a decrease of $22,555, or approximately 5.4%. The decrease reflects the Company’s continued focus on cost discipline and operating efficiency, partially offset by higher professional and compliance-related expenditures during the quarter.
Software Subscription
Software subscription expenses decreased to $115,980 for the three months ended November 30, 2025, compared to $219,908 in the comparable prior-year period, representing a decrease of $103,928, or approximately 47.3%. The reduction primarily reflects continued optimization of the Company’s technology stack, including the consolidation of third-party software tools and increased reliance on internally developed functionality within the Pineapple Plus platform.
Office and General
Office and general expenses totaled $36,178 for the three months ended November 30, 2025, compared to $45,571 in the same period of the prior year, representing a decrease of $9,392, or approximately 20.6%. The decrease reflects lower administrative overhead and continued cost-containment measures across general office operations.
Professional Fees
Professional fees increased to $60,465 for the three months ended November 30, 2025, compared to $29,275 in the comparable prior-year period, representing an increase of $31,190, or approximately 106.5%. The increase was primarily attributable to higher legal, accounting, and advisory costs incurred during the quarter in connection with regulatory compliance, reporting requirements, and transaction-related activities.
Dues and Subscriptionsz
Dues and subscriptions increased to $68,964 for the three months ended November 30, 2025, compared to $31,600 in the prior-year period, representing an increase of $37,364, or approximately 118.2%. The increase primarily reflects higher exchange listing fees, regulatory compliance costs, and expanded use of data and industry-related subscriptions.
Rent
Rent expense increased to $50,797 for the three months ended November 30, 2025, compared to $31,610 in the same period of the prior year, representing an increase of $19,187, or approximately 60.7%. The increase reflects changes in leased facilities and space utilization during the quarter.
Consulting Fees
Consulting fees were $8,967 for the three months ended November 30, 2025, compared to $9,679 in the comparable prior-year period, representing a decrease of $712, or approximately 7.4%, reflecting reduced reliance on external consultants as certain functions continued to be transitioned in-house.
Travel
Travel expenses decreased to $18,824 for the three months ended November 30, 2025, compared to $20,589 in the prior-year period, representing a decrease of $1,765, or approximately 8.6%, reflecting continued cost controls and a greater use of virtual engagement.
Donations and Lease Expense
Donations and lease expenses were nil for the three months ended November 30, 2025, compared to $652 and $1,045, respectively, in the prior-year period. The decreases reflect the absence of discretionary donations and the expiration of certain short-term lease commitments.
Insurance
Insurance expense increased to $34,675 for the three months ended November 30, 2025, compared to $27,477 in the same period of the prior year, representing an increase of $7,198, or approximately 26.2%, primarily due to higher premiums associated with coverage renewals and expanded insurance requirements.
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Expenses
| Three months ended | November 30, 2025 ($) |
November 30, 2024 ($) |
Increase/ (Decrease) ($) |
Increase/ (Decrease) % |
||||||||||||
| Advertising and marketing | 124,398 | 273,009 | (148,611 | ) | (54.43 | ) | ||||||||||
| Salaries, wages and benefits | 394,850 | 436,365 | (41,515 | ) | (9.51 | ) | ||||||||||
| Interest expense and bank charges | 265,236 | 174,505 | 90,731 | 51.99 | ||||||||||||
| Depreciation | 222,800 | 185,523 | 37,277 | 20.09 | ||||||||||||
Fair value loss on crypto assets |
6,140,379 | - | 6,140,379 | 100.00 | ||||||||||||
| Government incentive | (26,973 | ) | (27,219 | ) | 246 | (0.90 | ) | |||||||||
Operating Expenses
Three Months Ended November 30, 2025 Compared to November 30, 2024
Advertising and Marketing
Advertising and marketing expenses for the three months ended November 30, 2025 were $124,398, compared to $273,009 in the same period of the prior year, representing a decrease of $148,611, or approximately 54.4%. The decrease reflects reduced discretionary marketing spend, continued emphasis on cost-efficient digital marketing initiatives, and more targeted agent-acquisition and retention campaigns during the quarter.
Salaries, Wages and Benefits
Salaries, wages and benefits totaled $394,850 for the three months ended November 30, 2025, compared to $436,365 in the comparable prior-year period. The decrease reflects workforce optimization measures implemented in prior periods, improved operational efficiency, and disciplined personnel cost management during the quarter.
Interest Expense and Bank Charges
Interest expense and bank charges increased to $265,236 for the three months ended November 30, 2025, compared to $174,505 in the same period of the prior year, representing an increase of $90,731, or approximately 51.99%. The increase was primarily attributable to higher borrowings associated with the Company’s Injective digital asset investment, including loans bearing interest at approximately 11.5%, which resulted in higher financing costs during the quarter.
Depreciation
Depreciation expense increased modestly to $222,800 for the three months ended November 30, 2025, compared to $185,523 in the prior-year period, representing an increase of $37,277 or approximately 20.09%. The increase reflects continued investment in technology infrastructure and capitalized software assets supporting the Company’s digital platform and internal systems.
Change in Fair Value - Injective Digital Assets
During the three months ended November 30, 2025, the Company recognized a $6.14 million non-cash loss related to changes in the fair value of its Injective digital asset holdings, compared to no such adjustment in the comparable prior-year period. This fair-value loss reflects market-driven valuation changes and did not result in a corresponding cash outflow during the quarter.
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Government Incentive
Government incentives for the three months ended November 30, 2025 totaled $(26,973), compared to $(27,219) in the prior-year period, remaining relatively consistent quarter over quarter and reflecting refundable credits and program-based support.
Liquidity and Capital Resources
Going Concern
The Company has incurred recurring operating losses and continues to experience negative cash flows from operations. For the three months period ended November 30, 2025, the Company recorded a net loss of $6.4 million and negative operating cash flows of $498,367. As at November 30, 2025, the Company had an accumulated deficit of $19.832 million and a working-capital deficit. These factors raise substantial doubt about the Company’s ability to continue as a going concern within twelve months after the date of these financial statements.
| ● | Management has developed plans intended to improve liquidity and address these uncertainties. These plans include: | |
| ● | Accessing additional capital through the Injective Digital Asset Treasury Initiative | |
| ● | Pursuing additional financing and capital-raising activities as required to support ongoing operations and fund strategic initiatives. | |
| ● | Continuing cost-management measures, including reductions in payroll, operating expenses, and discretionary spending. |
While management believes these plans are achievable, there can be no assurance that the Company will obtain the necessary financing or that the planned initiatives will be successful. If the Company is unable to secure adequate funding or generate positive operating results, it may be unable to meet its obligations as they become due.
Our primary liquidity needs encompass working capital, capital expenditures, and technology investments, particularly those related to enhancing our proprietary Pineapple Plus platform, supporting skilled personnel, and maintaining compliance infrastructure. These items continue to represent the largest components of our capital deployment. We finance these needs primarily through cash on hand, cash flow from operations, and strategic financing facilities obtained from external lenders and related parties.
The following table summarizes our cash flows from operating, investing and financing activities:
| Three months ended | November 30, 2025 ($) | November 30, 2024 ($) | Increase/ (Decrease) ($) | |||||||||
| Cash (used) provided in operating activities | (489,745 | ) | (663,597 | ) | 173,852 | |||||||
| Cash (used) provided by financing activities | 11,954,105 | 1,188,036 | 10,766,069 | |||||||||
| Cash (used) provided in investing activities | (12,106,830 | ) | (282,298 | ) | (11,824,532 | ) | ||||||
| Cash at the end of the period | 1,479,167 | 619,581 | 859,586 | |||||||||
Net cash flow from (used in) operating activities
| Three months ended | ||||||||
| Description | November 30, 2025 ($) | November 30, 2024 ($) | ||||||
| Operating activities | ||||||||
| Net loss | (6,435,085 | ) | (656,894 | ) | ||||
| Adjustments for the following non-cash items: | ||||||||
| Depreciation of property and equipment | 10,611 | 21,618 | ||||||
| Bad debts written off | 7,154 | - | ||||||
| Amortization of intangible assets | 182,493 | 131,030 | ||||||
| Depreciation on right of use asset | 29,696 | 32,874 | ||||||
| Interest expense on lease liability | 10,096 | 13,921 | ||||||
| Fair value loss on crypto assets | 6,140,379 | - | ||||||
| Change in fair value of warrant liabilities | (97,430 | ) | (31,532 | ) | ||||
| Foreign exchange gain (loss) | - | (5,089 | ) | |||||
| Net changes in non-cash working capital balances: | ||||||||
| Trade and other receivables | (58,663 | ) | (27,302 | ) | ||||
| Prepaid expenses and deposits | (56,974 | ) | 2,928 | |||||
| Accounts payable and accrued liabilities | (123,226 | ) | (33,677 | ) | ||||
| Deferred Government Grant | (28,241 | ) | (45,236 | ) | ||||
| Deferred revenue | (70,555 | ) | (66,238 | ) | ||||
| (489,745 | ) | (663,597 | ) | |||||
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Net Cash Used in Operating Activities
Net cash used in operating activities for the three months ended November 30, 2025 was $489,745 compared to $663,597 for the same period in the prior year, representing an improvement of $173,852. The reduction in operating cash outflows was primarily driven by non-cash adjustments, including a $6.1 million change in the fair value of Injective digital assets and depreciation and amortization, partially offset by changes in working-capital balances.
Working-capital movements during the quarter included increases in trade and other receivables, prepaid expenses, and reductions in accounts payable and accrued liabilities, which together resulted in a net working-capital outflow. Non-cash items such as fair-value remeasurements, depreciation, amortization, and foreign exchange movements significantly reduced the impact of the net loss on operating cash flows but did not affect cash usage.
Net Cash Provided by Financing Activities
Net cash provided by financing activities for the three months ended November 30, 2025 totaled $11.95 million, compared to $1.19 million in the comparable prior-year period. The increase was primarily attributable to additional borrowings obtained during the quarter, including financing arrangements related to the Company’s Injective digital asset investment strategy. These borrowings provided significant liquidity to support investment activities and working-capital requirements, while also resulting in higher interest expense recognized during the quarter.
Net Cash Used in Investing Activities
Net cash used in investing activities for the three months ended November 30, 2025 was $12.11 million, compared to $0.28 million in the same period of the prior year. The increase in investing cash outflows was driven primarily by purchases of Injective digital assets during the quarter. These outflows reflect management’s execution of its treasury and capital-allocation strategy and did not relate to routine capital expenditures.
Overall Liquidity Position
As of November 30, 2025, the Company had cash and cash equivalents of $1.48 million, compared to $2.34 million at November 30, 2024. The decrease reflects the timing of financing inflows and significant investing outflows during the quarter, partially offset by improved operating cash flows.
Management continues to monitor liquidity closely, particularly in light of increased borrowing levels and associated interest costs. Based on current operating plans, expected cash flows, and access to financing arrangements, management believes the Company has sufficient liquidity to meet its operating requirements and obligations for at least the next twelve months.
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The following table presents our liquidity:
| Period Ended | November 30, ($) | August 31, ($) | ||||||
| Cash | 1,479,167 | 2,117,371 | ||||||
| Trade and other receivables | 143,732 | 92,223 | ||||||
| Prepaid expenses and deposit | 166,975 | 110,001 | ||||||
| 1,789,874 | 2,319,595 | |||||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | 2,001,934 | 2,125,160 | ||||||
| Loan payable | 11,983,087 | - | ||||||
| Deferred revenue | 37,997 | 108,552 | ||||||
| Loan from directors | 629,728 | 629,120 | ||||||
| Current portion of lease liability | 140,288 | 138,859 | ||||||
| 14,793,034 | 3,001,691 | |||||||
As of November 30, 2025, the Company’s total current assets were $1,789,874, compared to $2,319,595 as of August 31, 2025, representing a decrease of approximately $529,721. The decrease was primarily attributable to changes in the Company’s cash position during the quarter, partially offset by increases in trade and other receivables and prepaid expenses.
Cash decreased to $1,479,167 as of November 30, 2025, from $2,117,371 as of August 31, 2025. The decrease primarily reflects the timing of significant investing activities during the quarter, including capital deployed toward the Company’s digital-asset investment strategy, partially offset by financing inflows and operating cash flows.
Trade and other receivables increased to $143,732 as of November 30, 2025, compared to $92,223 at August 31, 2025. The increase was primarily attributable to the timing of billings and collections toward the end of the quarter.
Prepaid expenses and deposits increased to $166,975 as of November 30, 2025, from $110,001 as of August 31, 2025, reflecting the timing of advance payments for software subscriptions, insurance premiums, and other service contracts.
Current Liabilities
As of November 30, 2025, the Company’s total current liabilities were $14,793,034, compared to $3,001,691 as of August 31, 2025. The increase was driven primarily by the recognition of the FalconX loan payable of $11,983,087, which was classified as a current liability based on its contractual repayment terms in effect at the balance-sheet date. Accounts payable and accrued liabilities decreased modestly to $2,001,934 from $2,125,160, reflecting the timing of vendor payments and accrued expenses. Deferred revenue declined to $37,997 from $108,552 as services were delivered during the quarter. The loan from directors, totaling $629,728, remained substantially unchanged, while the current portion of lease liabilities increased slightly to $140,288 from $138,859, primarily due to scheduled lease payments.
Overall, the Company’s liquidity position at November 30, 2025 reflects the timing of operating, investing, and financing activities during the quarter. Management continues to monitor working-capital levels and cash flows closely and believes that existing cash resources, together with expected operating cash flows and access to financing arrangements, are sufficient to meet the Company’s short-term obligations and near-term operating requirements.
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.
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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 reflects 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 reflects 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 reflects 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.
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.
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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.
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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 evaluated the effectiveness of the Company’s internal control over financial reporting as of November 30, 2025. Based on this evaluation, management concluded that a material weakness continues to exist related to segregation of duties within the finance function, primarily due to the limited number of personnel responsible for financial reporting and related control activities.
Notwithstanding this material weakness, management believes that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows in accordance with U.S. GAAP.
Management has initiated remediation efforts to address this material weakness, including enhancing review and approval controls and planning for the engagement of external accounting and internal-control resources. These remediation activities are ongoing, and the material weakness has not been fully remediated as of the end of the reporting period.
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.
| 31 |
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 November 30, 2025, formatted in Inline XBRL (included in Exhibit 101). |
| * | Filed herewith. |
| 32 |
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: January 20, 2026 | By: | /s/ Shubha Dasgupta |
| Shubha Dasgupta | ||
| Chief Executive Officer | ||
| Date: January 20, 2026 | By: | /s/ Sarfraz Habib |
| Sarfraz Habib | ||
| Chief Financial Officer | ||
| 33 |
FAQ
How did Pineapple Financial Inc. (PAPL) perform in the quarter ended November 30, 2025?
What is driving Pineapple Financial’s large net loss in this 10-Q?
What going concern risks does Pineapple Financial (PAPL) disclose?
What is the FalconX loan and how large is it?
What subsequent financing did Pineapple Financial complete after November 30, 2025?
How are Pineapple Financial’s core mortgage operations performing?
What is Pineapple Financial’s crypto asset strategy and exposure?
