Pineapple Financial Inc.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS.

 

Please read the following management’s discussion and analysis of our financial condition and results of operations, along with our consolidated financial statements and the related notes and other information included in this Annual Report on Form 10-Q. It is important to note that this discussion and analysis contain forward-looking statements with certain risks and uncertainties. These risks and uncertainties could cause our results to differ materially from anticipated in these forward-looking statements. You can find more information about these risks and uncertainties under the heading “Special Note Regarding Forward-Looking Statements” in Part I and elsewhere in this Form 10- Q.

 

Special Note Regarding Forward-Looking Statements

 

This Form 10-Q includes forward-looking statements that entail potential risks and uncertainties. These statements are usually identified by the use of specific terminology such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and other comparable terminology. All the statements in this Form 10-Q that are not about historical facts, including those related to our future operations, financial position, Revenue, projected costs, strategy, plans, management objectives, and expected market growth, are forward-looking. While reading this Form 10-Q, you should know that these statements do not guarantee our performance or results. They include known and unknown risks, uncertainties, and assumptions, as mentioned under the “Risk Factors” section in this Form 10-Q. We believe that these forward- looking statements are based on reasonable assumptions. Still, you must be aware that many factors, including those mentioned under the “Risk Factors” section in this Form 10-Q, could affect our financial results or operations and cause actual results to differ from those stated in the forward-looking statements. These statements were made as of the date of this Form 10-Q, and we are not obligated to update or revise any forward-looking statements made here to reflect any change in our expectations or any change in events, conditions, or circumstances on which these statements are based. All written or oral forward-looking statements made by us or on our behalf are qualified by the cautionary statements mentioned in this Form 10-Q.

 

Objective

 

In this section, we provide an analysis of the Company’s financial condition, cash flows, and results of operations from management’s perspective. We recommend you read this with the consolidated financial statements and notes in Part II, Item 8 of this Annual Report on Form 10Q.

 

Executive Summary

 

The Company is a technology-enabled mortgage platform operating in Canada, with an expanding focus on data-driven financial services and capital allocation strategies.

 

During the period, the Company began executing a strategic transition from a primarily transactional mortgage brokerage model toward an integrated platform consisting of:

 

●	A core mortgage origination and servicing platform
●	Data-driven and subscription-based revenue streams
●	A disciplined digital asset treasury strategy designed to enhance capital efficiency and generate yield

 

This transition reflects management’s focus on improving earnings quality, increasing recurring revenue, and driving operating leverage over time. While reported financial results for the period were significantly impacted by non-cash fair value adjustments related to crypto asset holdings, the Company’s underlying operating performance remained stable, supported by continued revenue generation, cost optimization initiatives, and early contributions from new strategic initiatives.

 

Management believes the Company has now completed the majority of its balance sheet repositioning and cost restructuring initiatives and is entering a phase of execution focused on operating leverage, earnings quality, and scalable growth.

 

 

Business Model Transformation

 

The Company is currently in a transition phase, moving from a period of capital formation and strategic investment toward one of execution, operating leverage, and performance delivery.

 

Historically, the Company operated primarily as a transactional mortgage brokerage platform, with revenue largely dependent on origination volumes. As part of its strategic evolution, the Company is building an integrated operating model across three core pillars:

 

1.	Core Mortgage Platform – focused on agent productivity, volume growth, and cost efficiency
2.	Data & Analytics – focused on monetizing mortgage data through structured, recurring revenue products
3.	Digital Asset Treasury – focused on capital efficiency, yield generation, and treasury optimization

 

Management believes this integrated model will support:

 

●	Higher-margin revenue mix
●	Increased recurring and subscription-based revenue
●	Improved operating leverage and earnings durability
●	Enhanced capital efficiency

 

Recent Developments

 

Business Trends

 

During the six months ended February 28, 2026, the Canadian mortgage market continued to adjust to changes in monetary policy following the Bank of Canada’s easing cycle that commenced in mid-2024. Through the current period, the Bank of Canada reduced its benchmark overnight interest rate. While these reductions contributed to improved borrowing conditions and greater rate stability, overall mortgage origination volumes remained below pre-2022 levels, reflecting ongoing affordability constraints, limited housing supply, and continued underwriting discipline among lenders.

 

Within this operating environment, mortgage renewal and refinance transactions represented a greater proportion of total industry activity, while purchase-related originations continued to recover at a more gradual pace. The Company’s operating performance remained stable during the period, supported by its diversified agent network and continued presence across key Canadian markets.

 

The Company continued to invest in and enhance its proprietary Pineapple Plus technology platform. During the period, the Company advanced workflow automation capabilities, expanded customer relationship management functionality, and further integrated insurance and ancillary financial product offerings. These initiatives contributed to operational efficiencies, improved agent productivity, and sustained client engagement despite ongoing market challenges. In addition, continued investment in digital marketing and lead-generation tools supported the stability of the Company’s fee-based revenue streams.

 

Subsequent to the quarter, early indicators suggest increased mortgage application volumes and lead-generation activity, primarily driven by renewal and refinance demand. Management believes that these trends, together with ongoing platform enhancements and disciplined capital allocation, may support a gradual recovery in mortgage activity as interest rate conditions stabilize. However, the extent and timing of such recovery remain subject to macroeconomic conditions, including interest rate dynamics and housing market activity.

 

 

In addition to its core mortgage brokerage operations, the Company has implemented a structured digital asset treasury strategy. During the six months ended February 28, 2026, the Company deployed $45.4 million into digital assets, primarily allocated to Injective (INJ).

 

This program is designed to enhance capital efficiency through staking yield generation, disciplined capital allocation, and long-term asset appreciation. The Company’s approach emphasizes governance, liquidity management, and risk controls, and is not intended to represent speculative trading activity.

 

Due to applicable accounting standards, these holdings are subject to fair value remeasurement, which may introduce significant non-cash volatility in reported earnings.

 

RESULTS OF OPERATIONS

 

Three Months Ended February 28, 2026 Compared to February 28, 2025

 

Net Loss

 

For the three months ended February 28, 2026, the Company reported a net loss of $19.5 million, compared to a net loss of $0.6 million for the same period in the prior year.

 

The increase in net loss was primarily driven by:

 

●	A $16.9 million non-cash, market-driven fair value remeasurement of digital asset holdings
●	$3.2 million of one-time, non-recurring financing-related costs associated with the Company’s PIPE transaction, including $1.3 million of warrant-related expenses and $1.5 million of ELOC-related charges
●	$0.36 million of incremental interest expense associated with new borrowings related to the Company’s digital asset treasury strategy

 

These factors were partially offset by growth in revenue and continued cost management. Reported GAAP results for the period were significantly impacted by non-cash fair value adjustments related to digital asset holdings. Management believes these adjustments introduce volatility that is not reflective of the Company’s core operating performance or underlying cash flow generation. Of note, the Company’s reported net loss was significantly impacted by non-cash, market-driven fair value remeasurement of digital asset holdings, which does not reflect underlying operating performance or cash flow generation. Excluding these non-cash adjustments and financing-related costs, the Company’s core operating results were materially improved relative to the prior year period, reflecting revenue growth and the impact of structural cost reduction initiatives implemented during the period.

 

Revenue

 

Revenue for the three months ended February 28, 2026 was $0.9 million, compared to $0.7 million in the comparable prior-year period, representing an increase of $0.2 million, or 25%.

 

The increase in revenue was driven by:

 

●	Improved mortgage origination volumes
●	Continued contribution from subscription, insurance, and underwriting revenue streams
●	Incremental contribution from digital asset activities, including staking income

 

Operating Expenses

 

Total operating expenses for the three months ended February 28, 2026 were $18.7 million, compared to $1.3 million in the same period of the prior year.

 

The increase was primarily attributable to:

 

●	$16.9 million non-cash, market-driven fair value remeasurement of digital asset holdings $2.8 million of one-time, non-recurring financing-related costs related to the Company’s recent PIPE transaction, including $1.3 million of warrant-related expenses and $1.5 million of ELOC-related charges
●	$0.3 million of interest expense associated with new borrowings related to the Company’s digital asset treasury strategy
●	One-time advertising and marketing expenses pertaining to the financing

 

 

Excluding digital asset remeasurement and financing-related costs, operating expenses decreased modestly, reflecting:

 

●	Relatively stable general and administrative expenses
●	Lower personnel-related costs compared to the prior year due to cost optimization measures
●	A reduction in in operating expenses driven by structural cost optimization initiatives, including workforce realignment, reduced reliance on third-party software and professional services, and the implementation of a leaner, technology-enabled operating model
●	These reductions reflect the Company’s broader operational restructuring initiative, which has materially reduced its fixed cost base and lowered its operating cash burn

 

Operating Expenses and Fair Value Adjustments

 

During the quarter, operating expenses included a $16.9 million non-cash, market-driven fair value remeasurement of the Company’s digital asset holdings

 

This loss was driven by market-driven valuation changes in Injective tokens and is not indicative of the Company’s core mortgage and platform operations.

 

Additionally, the Company recognized:

 

●	A gain on the change in fair value of warrant liabilities
●	Interest income and derivative gains

 

These items are presented below operating income and partially offset overall losses.

 

Operating Loss and Net Loss

 

As a result of the foregoing, the Company reported a loss from operations of $17.8 million, compared to $0.6 million in the comparable prior-year period.

 

Management believes that, excluding the impact of:

 

●	Non-cash, market-driven fair value remeasurement of digital asset holdings, and
●	Financing-related costs,

 

the Company’s underlying operating performance remained stable, supported by:

 

●	Continued revenue growth
●	Ongoing cost management initiatives
●	Strategic investment in platform and growth initiatives

 

In addition, during the period and subsequent to quarter end, the Company implemented a comprehensive operational restructuring initiative designed to materially reduce its fixed cost base and improve operating leverage.

 

To date, approximately $1.46 million of annualized cost savings have been implemented and are expected to be reflected in the Company’s run-rate by March 31, 2026, with additional savings currently being executed. In aggregate, these initiatives are expected to reduce annual operating expenses by more than $2.5 million.

 

The restructuring included a realignment toward a leaner, technology-enabled operating model, including a significant reduction in headcount, as well as reductions across professional services, software, marketing, and other operating expenses.

 

A key component of this transformation has been the integration of artificial intelligence across core business functions, enabling the Company to automate processes historically supported by manual workflows, including agent onboarding, data processing, and customer engagement.

 

 

As a result of these initiatives, the Company has structurally reduced its operating cost base while maintaining platform capabilities and scalability. Management believes these changes represent a permanent reset of the Company’s expense structure and position the business to achieve improved operating leverage and enhanced earnings durability as revenue scales.

 

The three-month period reflects the Company’s current operating profile following recent financing and restructuring initiatives, while the six-month period reflects both pre- and post-transition performance.

 

Six Months Ended February 28, 2026 Compared to February 28, 2025

 

The six-month results reflect the impact of both legacy cost structure and recent strategic initiatives, including capital deployment and operational restructuring.

 

Net Loss

 

For the six months ended February 28, 2026, the Company reported a net loss of $25.9 million, compared to a net loss of $1.3 million in the prior-year period.

 

The increase in net loss was primarily driven by:

 

●	A $23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings
●	Increased financing costs associated with capital-raising activities
●	Higher interest expense due to new borrowings

 

Revenue

 

Revenue for the six months ended February 28, 2026 was $1.43 million, compared to $1.51 million in the comparable prior-year period, representing an decrease of $0.08 million, or 5.3%.

 

The increase was driven by:

 

●	Stabilization in mortgage market activity
●	Growth in ancillary revenue streams, including subscription, insurance, and underwriting services
●	Contribution from digital asset-related activities

 

Operating Expenses

 

Total operating expenses for the six months ended February 28, 2026 were $25.8 million, compared to $2.8 million in the same period of the prior year.

 

The increase was primarily attributable to:

 

●	$23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings $1.5 million financing costs related to ELOC arrangements
●	Warrant-related financing costs
●	Increased interest expense

 

Excluding these items, operating expenses increased moderately due to:

 

●	Continued investment in marketing and growth initiatives
●	Ongoing technology platform development
●	General inflationary cost pressures

 

Operating Expenses and Fair Value Adjustments

 

During the six-month period, the Company recognized a $23.0 million non-cash, market-driven fair value remeasurement of digital asset holdings

 

 

This loss was driven by market volatility in the price of Injective tokens and does not represent cash outflows or core operating performance.

 

In addition, the Company recognized:

 

●	A $1.2 million gain on remeasurement of warrant liabilities
●	Interest income from financing arrangements

 

Operating Loss and Net Loss

 

As a result of the foregoing, the Company reported a loss from operations of $24.4 million, compared to $1.3 million in the prior-year period.

 

Management believes that, excluding the impact of:

 

●	Digital asset fair value adjustments, and
●	Financing-related costs,

 

the Company’s core operating performance remained stable, supported by:

 

●	Consistent revenue generation
●	Improved cost structure relative to historical levels
●	Ongoing operational efficiencies

 

Non-GAAP Financial Measures

 

The Company presents certain non-GAAP financial measures, including Adjusted Operating Income (Loss) and Adjusted EBITDA, as supplemental metrics to assist investors in evaluating the Company’s operating performance.

 

These measures exclude certain items, including:

 

●	Non-cash fair value adjustments related to digital assets;
●	Changes in the fair value of warrant and derivative liabilities;
●	Financing-related costs associated with capital raising activities;
●	Certain items that may not be comparable across reporting periods.

 

Management believes these measures provide additional insight into period-to-period operating performance by reducing the impacts of items that are subject to significant variability or are not directly reflective of the Company’s operating performance for the period.

 

However, these measures have limitations. In particular, fair value adjustments related to digital assets and financial instruments may be significant and recurring, and are an integral component of the Company’s results of operations.

 

These measures should not be considered in isolation or as a substitute for financial results prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies.

 

The Company presents GAAP results with equal or greater prominence than non-GAAP measures and provides a reconciliation to the most directly comparable GAAP measures.

 

These measures are intended to supplement, and not replace, the Company’s GAAP results

 

Six Months Ended February 28, 2026

 

Adjusted Operating Income (excluding fair value changes)

 

For the six months ended:	February 28, 2026
	$
Net loss (GAAP)		(25,930,939	)
Adjustments to reconcile GAAP net loss to adjusted Operating Income (loss)
Unrealized loss on digital assets		23,026,713
Share based compensation		142,000
Financing-related costs (ELOC, warrants)		2,862,658
Advertising and marketing expenses not considered indicative of period-over-period comparability		473,057
Interest expense		629,280
Gain on fair value of warrant liabilities		(1,199,502	)
Adjusted operating income (loss) (Non-GAAP)		3,267

 

Management uses these measures internally; however, they are not intended to represent cash flow or liquidity measures.

 

In addition to Adjusted Operating Income (Loss), management also evaluates performance using Adjusted EBITDA, which further excludes non-cash items such as depreciation and amortization, as well as interest-related items and other non-cash, items not indicative of ongoing operating performance non-operating items, to provide a view of operating performance on a cash-flow oriented basis.

 

For the six months ended:	February 28, 2026
	$
Adjusted operating income (loss) (Non-GAAP)		3,267
Adjustments:
Interest (income)		(214,334	)
Gain (loss) on change in fair value of derivative liability		(15,653	)
Foreign exchange (gain) loss		157,675
Depreciation		464,271
Adjusted EBITDA (Non-GAAP)		395,226

 

	Six months period ended February 28,
	2026				2025				2024
Mortgage volume		829,317,884				811,483,270				697,411,000
Gross billing		7,387,821				8,648,249				7,358,172
Commission expense		6,676,704				7,813,115				6,740,307
Net sales revenue		711,116				835,134				617,864
Underwriting revenue		50,756				57,707				73,781
Subscription revenue		418,463				368,119				378,632
Other income		248,932				251,276				282,581

 

 

	Three months ended February 28,
	2026				2025				2024
Mortgage volume		367,228,328				386,325,122				314,963,000
Gross billing		3,310,819				4,242,341				3,484,852
Commission expense		2,949,030				3,821,489				3,140,234
Net sales revenue		361,789				420,852				344,618
Underwriting revenue		23,611				30,364				31,675
Subscription revenue		210,715				185,939				195,387
Other income		111,227				106,154				213,189

 

Six Months Ended February 28, 2026

 

To provide additional insight into the Company’s underlying operating performance, management presents adjusted operating income (loss), a non-GAAP financial measure.

 

This measure excludes:

 

●	Non-cash, market-driven fair value remeasurement of digital asset holdings
●	Changes in fair value of warrant liabilities
●	Financing-related costs associated with capital raising activities

 

After adjusting for these items, the Company’s adjusted operating income was $0.003 million, reflecting a substantially lower loss compared to the reported GAAP net loss and a meaningful improvement versus the $1.01 million loss compared to the six months period ended February 28, 2025.

 

Management believes this measure more accurately was driven by the performance of the Company’s core operating business, which improved meaningfully during the period, supported by:

 

●	Consistent mortgage-related revenue generation
●	Improved cost structure following optimization initiatives across headcount, overhead, and other selling, general, and administrative expenses.
●	Early contributions from new revenue streams

 

This improvement was driven by the combined impact of revenue stability and the structural reduction in the Company’s operating cost base, positioning the business for improved operating leverage as revenue scales.

 

Management believes that this adjusted measure provides a more meaningful view of the Company’s core operating performance, as it removes the effects of:

 

●	Market-driven volatility in digital asset fair market value remeasurements
●	Financing activities and related accounting impacts, including one-time, non-recurring expenses for the period
●	Non-cash remeasurement adjustments

 

However, this non-GAAP measure should not be considered in isolation or as a substitute for financial results prepared in accordance with U.S. GAAP, and may not be comparable to similarly titled measures used by other companies.

 

Digital Asset Treasury Strategy

 

The Company has implemented a disciplined digital asset treasury program designed to enhance capital efficiency and generate yield on excess capital. The primary objectives of this strategy include:

 

●	Generating yield through staking activities
●	Maintaining liquidity while optimizing capital allocation
●	Supporting long-term balance sheet strength

 

 

Modified Net Asset Value (mNAV) Framework

 

To provide additional transparency into the relationship between the Company’s market valuation and its digital asset holdings, management utilizes a modified net asset value metric (“mNAV”), a non-GAAP financial measure.

 

mNAV is defined as 1) Enterprise Value divided by 2) Treasury Value, where:

 

●	Enterprise Value represents the Company’s market capitalization, adjusted for debt and cash balances; and
●	Treasury Value represents the fair market value of digital assets held, as well as capital deployed in digital asset-related strategies, including stablecoin collateral, restricted balances, and yield-generating positions.

 

Management believes mNAV is a useful metric for evaluating the extent to which the Company’s market valuation reflects its underlying digital asset holdings versus its operating business. However, mNAV should not be considered in isolation or as a substitute for financial results prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies.

 

	February 28, 2026
Common stock issued and outstanding		26,088,651
Share price	$	0.696
Market capitalization		18,157,701
Less: Cash		(17,736,423	)
Plus: Loans payable		18,972,000
Plus: Interest payable		134,837
Plus: Warrant liability		743,188
Enterprise Value		20,271,303
Crypto assets		22,427,134
Plus: Loans receivable		5,000,000
Plus: Interest receivable		35,068
Plus: Restricted cash		158,659
Plus: Derivative liability		18,730
Treasury Value		27,639,591
mNAV		0.73 : 1.00

 

As of February 28, 2026, the Company’s Treasury Value consisted primarily of digital assets, including Injective (INJ), as well as capital deployed in treasury-related strategies.

 

The Company’s cash balance is currently managed at the corporate level and is not fully allocated between operating liquidity and treasury activities. Accordingly, cash has been excluded from Treasury Value for purposes of the mNAV calculation in this period. To the extent cash is deployed into digital asset strategies in future periods, it is expected to be included within Treasury Value.

 

In addition, certain amounts related to financing and collateral arrangements, including stablecoin balances and restricted cash, may be included within Treasury Value where such amounts represent capital actively deployed in support of the Company’s digital asset strategy.

 

The Company’s treasury strategy is governed by internal policies that prioritize liquidity and risk management, including:

 

●	Maintaining minimum operating cash reserves
●	Limiting the use of leverage
●	Avoiding rehypothecation of assets
●	Implementing governance through internal review processes

 

Staking rewards generated from digital asset holdings represent an incremental and recurring yield component of the Company’s capital allocation strategy.

 

Digital asset holdings are measured at fair value, with changes recognized in earnings. As a result, reported financial results may experience volatility that may introduce volatility that does not align with management’s assessment of period-to-period operating performance or cash generation.

 

The calculation of mNAV involves significant judgment, including the determination of which assets and liabilities are included in Treasury Value, and may differ from methodologies used by other companies. Accordingly, the measure may not be comparable and could produce materially different results if calculated under alternative assumptions.

 

Revenue and Operating Metrics

 

The Company’s primary sources of revenue include:

 

●	Commissions earned from mortgage originations
●	Underwriting income

●	Subscription fees charged to mortgage agents
●	Digital asset-related income, including staking rewards
●	Other ancillary income streams

 

Six Months Ended February 28, 2026

 

For the six-month period, the Company generated revenue from a diversified set of sources, supported by both its mortgage operations and digital asset strategy.

 

●	Mortgage volume increased to $829.3 million, compared to $811.5 million in the prior-year period, reflecting modest improvement in origination activity.
●	Gross billings were $7.4 million, compared to $8.6 million in the prior year, primarily reflecting competitive pricing dynamics and market conditions.
●	Commission expense totaled $6.7 million, consistent with the level of mortgage activity.
●	Net sales revenue was $0.7 million, compared to $0.8 million in the prior year.

 

Additional revenue streams included:

 

●	Underwriting revenue of $0.05 million
●	Subscription revenue of $0.4 million, reflecting continued agent platform engagement
●	Staking income of $0.2 million, representing income generated from the Company’s digital asset holdings
●	Other income of $0.2 million, consistent with prior periods

 

Overall, while mortgage-related revenues remained relatively stable, the Company’s diversification into digital asset activities contributed incremental income streams during the period.

 

Three Months Ended February 28, 2026

 

For the three-month period ended February 28, 2026:

 

●	Mortgage volume was $367.2 million, compared to $386.3 million in the prior-year period
●	Gross billings were $3.3 million, compared to $4.2 million in the prior year
●	Commission expense totaled $3.0 million
●	Net sales revenue was $0.36 million, compared to $0.42 million in the prior year

 

Other revenue components included:

 

●	Underwriting revenue of $0.02 million
●	Subscription revenue of $0.2 million
●	Staking income of $0.2 million, reflecting the Company’s digital asset strategy
●	Other income of $0.1 million

 

The decrease in mortgage-related revenue metrics during the quarter was driven by ongoing market softness and competitive pressures, partially offset by stable subscription revenue and contributions from digital asset activities.

 

Overall Performance Commentary

 

Management believes that the Company’s operating results for both the three- and six-month periods demonstrate:

 

●	Resilience in core mortgage operations, despite a challenging macroeconomic environment
●	Successful diversification into digital asset activities, including staking income generation
●	Continued focus on cost management and operational efficiency

 

While reported results were significantly impacted by non-cash, market-driven fair value remeasurement of digital asset holdings and financing-related costs, the Company’s underlying operating performance improved modestly during the period. These results reflect the impact of structural cost reductions implemented during the period, which have materially lowered the Company’s fixed cost base and improved its operating leverage profile.

 

The Company’s primary sources of revenue include commissions earned from lenders on mortgage originations, underwriting income, and membership fees charged to mortgage agents. In addition, the Company generates other income, including staking rewards earned on its digital asset holdings.

 

Path to Operating Leverage

 

As the Company advances its strategic initiatives, management is focused on driving operating leverage and improving earnings quality through:

 

●	Increasing revenue per mortgage transaction
●	Expanding higher-margin ancillary and subscription-based revenue streams
●	Driving efficiency across operations and reducing cost per funded loan

 

The Company expects that improvements in agent productivity, data monetization, and capital efficiency will contribute to a more scalable and profitable operating model over time.

 

 

Gross Billing:

 

The Company earns revenue from its mortgage brokerage operations based on commissions received from financial institutions with whom it has contractual arrangements. Gross billing represents the total commission earned from lending institutions on funded mortgage transactions. As the Company engages licensed mortgage agents and brokers who are responsible for originating and closing mortgage transactions, a significant portion of the gross billing is paid out as commissions and referral fees to those agents. Accordingly, the Company presents revenue on a net basis, calculated as gross billing less commissions and payouts to mortgage agents, as the Company acts as an agent in these arrangements.

 

Under ASC 606, Revenue from Contracts with Customers, the Company evaluates each contract to identify performance obligations, determine the transaction price, allocate the transaction price to the performance obligations, and recognize revenue when control of the promised service is transferred to the customer.

 

For each mortgage transaction, revenue is recognized when:

 

●	A binding contract exists between the borrower, the mortgage agent, and the lending institution;
●	The Company provides access to, and support through, its technology platform to facilitate the mortgage transaction;
●	The mortgage loan is funded by the lender; and
●	The Company’s commission from the lender becomes fixed and collectible.

 

The Company’s performance obligation is satisfied at a point in time, when the mortgage is funded and all platform-related services for that transaction have been completed. Revenue is measured as the net amount retained by the Company after remitting the applicable commission and referral fees to mortgage agents and sub-brokers.

 

This net revenue was driven by the Company’s role as an intermediary providing technology infrastructure, compliance oversight, and workflow support, rather than acting as the primary obligor in the mortgage funding transaction.

 

Subscription Revenue:

 

Users access and use our technology platform, Pineapple Plus, for a flat monthly service fee of $145.00 In exchange for this fee, users of Pineapple Plus have access to a network management system that allows them to perform back- office procedures more efficiently and effectively. This platform will enable them to process the deal described above prepare, and complete the package for submission to be funded by the financial institution. We have a strong user base, which has experienced significant growth since our inception. Revenue is recognized at the beginning of the month when a user is invoiced and pays the fee.

 

The Company continues to expand the functionality of its Pineapple Plus platform, including initiatives focused on data standardization, workflow digitization, and the development of a unified data architecture across mortgage transactions. These efforts are expected to form the foundation for future data-driven products, including analytics, benchmarking, and other value-added services that may be offered on a subscription or recurring revenue basis.

 

Management believes that, over time, these initiatives may enable the Company to monetize its platform beyond traditional transaction-based revenue, supporting higher-margin, recurring revenue streams and improved earnings quality. However, these capabilities remain under development, and there can be no assurance as to their timing, scope, or ultimate commercial impact.

 

These initiatives may also support the structured digitization and utilization of mortgage-related data assets, enabling new forms of data accessibility, reporting, and monetization over time.

 

Staking Income

 

The Company earns staking income from its digital asset holdings by participating in blockchain network validation activities. Staking rewards are received in the form of additional digital tokens and are not considered revenue from contracts with customers under ASC 606.

 

Staking income is recognized within other income when the Company obtains control of the reward tokens, which generally occurs when the rewards are received or become claimable by the Company. Such rewards are measured at fair value at the time of receipt using quoted market prices in active markets (Level 1 inputs) in accordance with ASC 820, Fair Value Measurement.

 

Subsequent to initial recognition, the related digital assets are included within digital assets and are remeasured at fair value at each reporting date, with changes in fair value recognized in earnings in accordance with the Company’s accounting policy for digital assets.

 

Underwriting Fee:

 

Users can optionally use our expert risk pre-assessment service, which assists them in pre-underwriting their loans before submission to a lender for approval and funding. This service significantly reduces the time for the lender partners’ assessment of the deal. For mortgages of $179,575 and less, we charge an underwriting fee of $251; for mortgages greater than $179,575, the Company charges an underwriting fee of $359. The Company has undertaken a special program to educate and inform users of this service in further detail. 40% of the deals originated by users are using this service. This program is intended to further increase the number of deals and improve the services offered.

 

Insurance commission Revenue:

 

The Company earns insurance commission revenue through Pineapple Insurance, which acts as a broker for third-party insurance carriers. When customers purchase insurance policies through our platform, the Company receives commissions from the insurance providers based on premiums written. The Company acts as a principal in these transactions because it is responsible for sourcing customers, facilitating the placement of insurance products, and managing the full service process. Commission revenue is recognized at the point in time when the underlying insurance policy becomes effective and our performance obligations are satisfied. Insurance commission revenue is presented net of referral fees, agent commissions, and other consideration payable to mortgage agents or third-party partners, as these amounts represent direct transaction-related costs. Renewal commissions are recognized only when they become fixed and determinable based on confirmation from the insurance carriers.

 

Other Income:

 

Other income includes a technology setup fee and sponsorship fee.

 

 

Components of operating expenses

 

Our operating expenses, as presented in the statement of operations data, include salaries, commissions and team member benefits, general and administrative expenses, marketing and advertising expenses, and others.

 

Salaries and commissions and team member benefits

 

All payroll expenses include our team members’ salaries, commissions, and benefits.

 

Selling, general and administrative expenses

 

Selling, general and administrative expenses include software subscriptions, license fees, professional services, marketing expenses, and other operating expenses.

 

Share-based compensation

 

Share-based compensation comprises equity awards and is measured and expensed accordingly under Accounting Standards Codification (“ASC”) 718 Compensation—Stock Compensation.

 

Comparison of the six months ended February 28, 2026 and 2025

 

Six months ended	February 28, 2026 ($)		February 28, 2025 ($)		Increase/ (Decrease) ($)			Increase/ (Decrease) %
Revenue		1,429,267		1,512,236		(82,969	)		(5.49	)
Expenses
Selling, general and administrative		1,052,703		995,190		57,513			5.78
Advertising and Marketing		416,852		326,945		89,907			27.50
Salaries, wages and benefits		350,730		828,764		(478,034	)		(57.68	)
Interest expense and bank charges		629,280		273,812		355,468			129.82
Depreciation		464,271		429,645		34,626			8.06
Fair value loss on crypto assets		23,026,713		-		23,026,713			100.00
Share based compensation		142,000				142,000			100.00