Pineapple Financial Inc.: Form 10-Q for the period ended Nov 30, 2025

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.

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.

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.

Our sources of revenue include commissions from lenders, underwriting revenue, membership fees from mortgage agents, and other income.

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.

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

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.

Selling, General and Administrative Expenses.

The breakdown of selling, general and administrative expenses are as follows:

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.

Expenses

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.

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:

Net cash flow from (used in) operating activities

26

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.

The following table presents our liquidity:

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.

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.

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.

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.