PAPL 10-K & 10-Q changes, risk factors and insider trading

We intend to use the net proceeds from the Private Placement to purchase digital assets, including INJ, the price of which has been, and will likely continue to be, highly volatile. Our operating results and share price may significantly fluctuate, including due to the highly volatile nature of the price of such digital assets and erratic market movements.

We intend to use the net proceeds from the Private Placement to purchase or otherwise acquire INJ and for the establishment of our digital asset treasury operations. Digital assets, such as INJ, generally are highly volatile assets, including as a result of shifts in market sentiment, speculative trading, macroeconomic trends, technology-related disruptions and regulatory announcements. In addition, digital assets do not pay interest or other returns, unless utilized in staking or financial applications, and so the ability to generate a return on investment from the net proceeds of any capital raisings will principally depend on whether there is appreciation in the value of digital assets following our purchases of digital assets with the net proceeds from such capital raisings. Future fluctuations in digital asset trading prices may result in our converting digital assets into cash with a value substantially below what we paid for such digital assets.

We have adopted a digital asset treasury strategy with a focus on INJ, and we may be unable to successfully implement this new strategy.

We have adopted a digital asset treasury primarily dedicated to INJ and potential acquisitions INJ, including through staking and other decentralized finance activities. There is no assurance that we will be able to successfully implement this new strategy or operate Injective-related activities at the scale or profitability currently anticipated. This strategic shift requires specialized employee skillsets and operational, technical and compliance infrastructure to support INJ and related staking activities. This also requires that we implement different security protocols and treasury management practices. Further, there is ongoing scrutiny and limited formal guidance from regulatory agencies, including NYSE American and the SEC, with respect to the treatment of public company cryptocurrency strategies. There is no assurance that we will be able to execute this Treasury Strategy by building out the needed infrastructure within the timeframe that we currently anticipate. Errors by key management could result in significant loss of funds and reduced rewards. As a result, our shift towards INJ could have a material adverse effect on our business and financial condition.

Our Common Shares may trade at a discount to our net asset value, and investors could experience losses unrelated to the performance of our underlying digital asset holdings.

The market price of our Common Shares may not reflect, and at times may trade materially below, our net asset value (“NAV”) per share. A variety of factors may cause the trading price of our Common Shares to deviate from our NAV, including overall market conditions, investor sentiment toward digital assets or our business model, the liquidity and volatility of the specific digital assets we hold, the availability and cost of capital to market participants, the level of short interest in our Common Shares, actual or perceived governance or operational risks, and the absence of any redemption or exchange feature that would allow shareholders to realize NAV directly. As a result, the market price of our Common Shares may be influenced by factors other than the value of our underlying assets alone and there can be no assurance that our Common Shares will trade at or near NAV.

If our Common Shares trade at a discount to NAV, investors who sell shares may receive less than the value of our underlying assets per share, and the discount could impair our ability to raise capital on favorable terms. We may from time to time consider capital markets transactions, financing arrangements or other corporate actions intended to address any discount, but we are under no obligation to take such actions and any such actions, if implemented, may be limited in scope or effectiveness.

Our shift towards an Injective-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks.

Our shift towards an INJ treasury-focused strategy, including staking and other decentralized finance activities, exposes us to significant operational risks. The Injective ecosystem rapidly evolves, with frequent upgrades and protocol changes that may require significant adjustments to our operational setup. The upgrades and protocol changes may require that we incur unanticipated costs and could cause temporary service disruptions to the Injective network. We may also need to employ third-party service providers in our operations, which may introduce risks outside of our control, including significant cybersecurity risks. Any of these operational risks could materially and adversely affect our ability to execute the Treasury Strategy and may prevent us from realizing positive returns and could severely hurt our financial condition.

The concentration of our INJ holdings enhances the risks inherent in our Injective-focused strategy.

We have and intend to purchase INJ and increase our overall holdings of INJ in the future. The intended concentration of our INJ holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio of treasury assets, and the absence of diversification enhances the risks inherent in our Injective-focused strategy.

If the Injective network is disrupted or encounters any unanticipated difficulties, the value of INJ could be negatively impacted.

If the Injective network is disrupted or encounters any unanticipated difficulties, then the processing of transactions on the Injective network may be disrupted, which in turn may prevent us from depositing or withdrawing INJ from our accounts with our custodian or otherwise affecting INJ transactions. Such disruptions could include, for example: the insolvency, business failure, interruption, default, failure to perform, security breach, or other problems of participants, custodians, or others; the closing of INJ trading platforms due to fraud, failures, security breaches or otherwise; or network outages or congestion, power outages, or other problems or disruptions affecting the Injective network. Any disruption of the Injective network could result in the inability of the Company to transfer or sell INJ, and the price of INJ.

INJ and other digital assets are novel assets, and are subject to significant legal, commercial, regulatory and technical uncertainty, which could materially adversely affect the Company’s financial position, operations and prospects.

INJ and other digital assets, as well as applications on blockchain networks such as Injective, are relatively novel and are subject to significant uncertainty, which could adversely impact their price. The application of state and federal securities laws and other laws and regulations to digital assets and blockchain-based applications is unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of INJ or other digital assets, or the ability of blockchain-based applications to operate.

The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of INJ or the ability of individuals or institutions such as us to own or transfer INJ and utilize blockchain-based applications on networks such as Injective. For example, the U.S. executive branch, the SEC, the European Union’s Markets in Crypto Assets Regulation, among others, have been active in recent years, and in the United Kingdom, the Financial Services and Markets Act 2023 became law. Additionally, legislative and regulatory priorities may change depending on changes in leadership, as evidenced by recent and proposed initiatives such as the Genius Act of 2025, the anticipated Digital Asset Market Clarity Act, and updates to the Commission’s Regulatory Flexibility Agenda. It is not possible to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC, Commodity Futures Trading Commission (“CFTC”), or other regulators, or whether, or when, any other federal, state or foreign legislative bodies will take any similar actions. It is also not possible to predict the nature of any such additional authorities, how additional legislation or regulatory oversight might impact the ability of digital asset markets to function or the willingness of financial and other institutions to continue to provide services to the digital assets industry, nor how any new regulations or changes to existing regulations might impact the value of digital assets generally and INJ specifically. The consequences of increased regulation of digital assets and digital asset activities could adversely affect the market price of INJ and in turn adversely affect the market price of our Common Shares.

Moreover, the risks of engaging in a digital asset treasury strategy are relatively novel and have created, and could continue to create complications due to the lack of experience that third parties have with companies engaging in such a strategy, such as increased costs of director and officer liability insurance or the potential inability to obtain such coverage on acceptable terms in the future.

The growth of the digital assets industry in general, and the use and acceptance of INJ in particular, may also impact the price of INJ and is subject to a high degree of uncertainty. The pace of worldwide growth in the adoption and use of the Injective network and INJ may depend, for instance, on public familiarity with digital assets, ease of buying, accessing or gaining exposure to INJ, institutional demand for INJ as an investment asset, the participation of traditional financial institutions in the digital assets industry, consumer demand for INJ as a means of payment, and the availability and popularity of alternatives to INJ. Even if growth in INJ adoption occurs in the near or medium term, there is no assurance that INJ and the Injective network usage will continue to grow over the long term.

A variety of technical factors related to the Injective blockchain could also impact the price of INJ. The liquidity of INJ may also be reduced and damage to the public perception of Injective may occur, if financial institutions were to deny or limit banking services to businesses that hold INJ, provide Injective-related services or accept INJ as payment, which could also decrease the price of INJ.

The liquidity of INJ may also be impacted to the extent that changes in applicable laws and regulatory requirements negatively impact the ability of exchanges and trading venues to provide services for INJ and other digital assets.

Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdowns.

The regulatory regime for digital assets in the U.S. and elsewhere is uncertain. The Company may be unable to effectively react to proposed legislation and regulation of digital assets, which could adversely affect its business.

If regulatory changes or interpretations require us to register as a money services business with The Financial Crimes Enforcement Network (FinCEN) under the U.S. Bank Secrecy Act, or as a money transmitter under state laws, we may be subject to extensive regulatory requirements, resulting in significant compliance costs and operational burdens. In such a case, we may incur extraordinary expenses to meet these requirements or, alternatively, may determine that continued operations are not viable. If we decide to cease certain operations in response to new regulatory obligations, such actions could occur at a time that is unfavorable to investors.

Multiple states have implemented or proposed regulatory frameworks for digital asset businesses. Compliance with such state-specific regulations may increase costs or impact our business operations. Further, if we or our service providers are unable to comply with evolving federal or state regulations, we may be forced to dissolve or liquidate certain operations, which could materially impact our investors.

If any of the digital assets that we hold are classified as a security, we may be subject to extensive regulation, which could result in significant costs or force us to cease operations.

Regulatory changes or interpretations that classify digital assets that we hold as a security under the Securities Act of 1933, as amended, or the Investment Company Act, could require us to register and comply with additional regulations. Compliance with these requirements could impose extraordinary, non-recurring expenses on our business. If the costs and regulatory burdens become too great, we may be forced to modify or cease certain operations, which could be detrimental to our investors.

The SEC has previously indicated that certain digital assets may be considered securities depending on their structure and use. Future developments could change the legal status of digital assets that we may hold, requiring us to comply with securities laws. If we fail to do so, we may be forced to discontinue some or all of our business activities, negatively impacting investments in our securities.

If the SEC or other regulators determine that digital assets that we may hold qualify as securities, we may be required to change our operations, wind down our operations, or register as an investment company under the Investment Company Act. This classification would subject us to additional periodic reporting, disclosure requirements, and regulatory compliance obligations, significantly increasing our operational costs. Compliance with the requirements of the Investment Company Act applicable to registered investment companies may make it difficult for us to continue our current operations, and this would materially and adversely affect our business, financial condition and results of operations. In addition, if INJ or another digital asset we hold were determined to constitute a security for purposes of the federal securities laws, we would likely take steps to reduce the percentage of INJ or such other digital assets that constitute investment assets under the Investment Company Act. These steps may include, among others, selling INJ that we might otherwise hold for the long term and deploying our cash in non-investment assets, and we may be forced to sell our INJ or other digital assets at unattractive prices, or cease our operations.

Although we do not currently engage in investing, reinvesting, or trading securities, and we do not hold ourselves out as an investment company, we could inadvertently be deemed one under the Investment Company Act. If we are unable to rely on an exclusion, we would be required to register with the SEC, which could impose additional financial and regulatory burdens.

Further, state regulators may conclude that the digital assets we hold are securities under state laws, requiring us to comply with state-specific securities regulations. States like California have stricter definitions of “investment contracts” than the SEC, increasing the risk of additional regulatory scrutiny.

The classification of digital assets that we hold as a commodity could subject us to additional CFTC regulation, resulting in significant compliance costs or the cessation of certain operations.

Under current interpretations, INJ could be classified as a commodity under the Commodity Exchange Act and could be subject to regulation by the CFTC. If our activities require CFTC registration, we may be required to comply with extensive regulatory obligations, which could result in significant costs and operational disruptions. Additionally, current and future legislative or regulatory developments, including new CFTC interpretations, could further impact how INJ is classified and traded.

If INJ are regulated as a commodity, we may be required to register as a commodity pool operator and register the Company as a commodity pool with the CFTC through the National Futures Association. Compliance with these additional regulatory requirements could result in substantial, non-recurring expenses, adversely affecting an investment in our securities. If we determine not to comply with such regulations, we may be forced to cease certain operations, which could negatively impact our investors.

We are not subject to legal and regulatory obligations that apply to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.

Mutual funds, exchange-traded funds (ETFs) and their management are subject to extensive regulation as “investment companies” and “investment advisers” under U.S. federal and state law; this regulation is intended for the benefit and protection of investors. We are not subject to, and do not otherwise voluntarily comply with, these laws and regulations. This means, among other things, that the execution of our changes to our digital asset strategy, our use of leverage, our ability to engage in transactions with affiliated parties and our operating and investment activities generally are not subject to the extensive legal and regulatory requirements and prohibitions that apply to investment companies and investment advisers.

Due to the unregulated nature and lack of transparency surrounding the operations of many digital asset trading venues, digital asset trading venues experience greater risk of fraud, market manipulation and other deceptive marketing practices, as well as security failures or regulatory or operational problems than trading venues for more established asset classes, which may result in a loss of confidence in digital asset trading venues and adversely affect the value of digital assets, and the Company’s financial position, operations and prospects.

Digital asset trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many digital asset trading venues that do not provide the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance. As a result, the marketplace may lose confidence in digital asset trading venues, including prominent exchanges that handle a significant volume of such trading and/or are subject to regulatory oversight, in the event one or more digital asset trading venues cease or pause for a prolonged period the trading of digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational problems.

Negative perception, a lack of stability in the broader digital asset markets and the closure, temporary shutdown or operational disruption of digital asset trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants in the digital asset ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other reason, may result in a decline in confidence in digital assets and the broader digital asset ecosystem and greater volatility in the price of digital assets. The price of our listed securities may be affected by the value of our future digital asset holdings, and the failure of a major participant in the ecosystem could have a material adverse effect on the market price of our listed securities.

Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to our proposed holdings of digital assets. Accordingly, it may be difficult to evaluate the Company’s business and future prospects, and the Company may not be able to achieve or maintain profitability in any given period.

Our historical financial statements do not reflect the potential variability in earnings that we may experience in the future from holding or selling digital assets. The price of digital assets generally has historically been subject to dramatic price fluctuations and is highly volatile. We will need to perform an analysis each quarter to identify whether events or changes in circumstances indicate that our digital assets are impaired. As a result, volatility in our earnings may be significantly more than what we experienced in prior periods.

Our Digital asset holdings are illiquid and cannot serve as a source of liquidity for us, subject to limited exceptions.

Historically, the digital asset market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, concerns regarding pseudonymity of digital asset addresses, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. While these risks can adversely affect holders of digital assets generally, our exposure is distinct because we are contractually prohibited from liquidating our cryptocurrency positions, including our INJ holdings, other than in limited circumstances in which material liquidations of our digital assets would require board and/or shareholder approval. As a result, we cannot sell our digital assets to meet working capital needs, respond to market dislocations, rebalance our positions, or reduce losses during periods of heightened volatility. Because we are unable to liquidate our digital assets, those holdings cannot serve as a source of liquidity for us, and we must rely on cash, cash equivalents, and other external financing sources to satisfy our obligations. Further, digital assets we hold with our custodians and transact with our trade execution partners do not enjoy the same protections or insurance as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. Additionally, we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered digital assets or otherwise generate funds using our digital asset holdings, including in particular during times of market instability or when the price of digital assets has declined significantly. If we are unable to raise additional capital, refinance existing obligations, or otherwise generate funds from sources other than the sale of our digital assets, or if the value of our digital assets declines significantly while we remain unable to sell, our liquidity, business, financial condition, and results of operations could be materially and adversely affected.

The lack of legal recourse and insurance for digital assets increases the risk of total loss in the event of theft or destruction.

Digital assets that we acquire will not be insured against theft, loss or destruction. If an event occurs where we lose our digital assets, whether due to cyberattacks, fraud or other malicious activities, we may not have any viable legal recourse or ability to recover the lost assets. Unlike funds held in insured banking institutions, our digital assets are not protected by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. If our digital assets are lost under circumstances that render another party liable, there is no guarantee that the responsible party will have the financial resources to compensate us. As a result, we and our shareholders could face significant financial losses.

The Company will face risks relating to the custody of its digital assets. If we or our third-party service providers experience a security breach or cyberattack and unauthorized parties obtain access to our private keys, or if our private keys are lost or destroyed, or other similar circumstances or events occur, we may lose some or all of our digital assets and our financial condition and results of operations could be materially adversely affected.

We expect our primary counterparty risk with respect to our INJ will be custodian performance obligations under the custody arrangements we enter into. A series of high-profile bankruptcies, closures, liquidations, regulatory enforcement actions and other events relating to companies operating in the digital asset industry, the closure or liquidation of certain financial institutions that provided lending and other services to the digital assets industry, SEC enforcement actions against other providers, or placement into receivership or civil fraud lawsuit against digital asset industry participants have highlighted the perceived and actual counterparty risk applicable to digital asset ownership and trading. Legal precedent created in these bankruptcies and other proceedings may increase the risk of future rulings adverse to our interests in the event one or more of our custodians becomes a debtor in a bankruptcy case or is the subject of other liquidation, insolvency or similar proceedings.

No assurance can be provided that our custodially held INJ will not become part of the custodian’s insolvency estate if one or more of our custodians enters bankruptcy, receivership or similar insolvency proceedings. Additionally, if we pursue any strategies to create income streams or otherwise generate funds using our INJ holdings, we would become subject to additional counterparty risks. We will need to carefully evaluate market conditions, including price volatility as well as service provider terms and market reputations and performance, among others, prior to implementing any such strategy, all of which could affect our ability to successfully implement and execute on any such future strategy. These risks, along with any significant non-performance by counterparties, including in particular the custodian or custodians with which we will custody substantially all of our INJ, could have a material adverse effect on our business, prospects, financial condition, and operating results.

The irreversibility of digital asset transactions exposes us to risks of theft, loss and human error, which could negatively impact our business.

Digital asset transactions are not, from an administrative perspective, reversible without the consent and active participation of the recipient of the transaction or, in theory, control or consent of a majority of the processing power on that digital asset network. Once a transaction has been verified and recorded in a block that is added to the blockchain, an incorrect transfer of digital assets or a theft of digital assets generally will not be reversible, and we may not be capable of seeking compensation for any such transfer or theft Although we plan to regularly transfer digital assets to or from vendors, consultants and services providers, it is possible that, through computer or human error, or through theft or criminal action, such assets could be transferred in incorrect amounts or to unauthorized third parties.

To the extent we are unable to seek a corrective transaction to identify the third party which has received our digital assets through error or theft, we will be unable to revert or otherwise recover the impacted digital assets, and any such loss could adversely affect our business, results of operations and financial condition

The emergence or growth of other digital assets, including those with significant private or public sector backing, including by governments, consortiums or financial institutions, could have a negative impact on the price of INJ and adversely affect the Company’s securities.

Following the launch of the Company’s proposed digital asset treasury strategy, as a result of our Injective strategy, we expect our assets to be concentrated in INJ holdings. Accordingly, the emergence or growth of digital assets other than INJ, including those with significant private or public sector backing, including by governments, consortiums or financial institutions, may have a material adverse effect on our financial condition. There are numerous alternative digital assets and many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned blockchain platforms. If the mechanisms or network effects on alternative blockchain platforms are perceived as superior to the Injective network, those digital assets could gain market share relative to Injective.

The trading price of our Common Shares is likely to be volatile.

Throughout fiscal 2025, the Canadian mortgage market continued to adjust following the Bank of Canada’s multi-stage monetary policy easing that began in mid-2024. The Bank reduced its benchmark overnight rate by a cumulative 225 basis points through September 2025, helping to stabilize borrowing costs and gradually improve affordability in several regional housing markets. While these rate reductions provided meaningful relief to borrowers, overall mortgage origination volumes remained below pre-2022 levels due to lingering affordability constraints, limited housing supply, and sustained lender prudence.

Within this environment, renewal and refinance activity continued to represent a larger proportion of total mortgage transactions, while new-purchase originations grew at a more measured pace. Despite these headwinds, Pineapple Financial Inc. remained resilient and continued to expand its operational footprint.

The Company also advanced its technology capabilities through continued development of its proprietary Pineapple Plus platform, including upgraded workflow automation tools, enhanced CRM features, and integrated insurance and financial-product modules. These improvements contributed to higher productivity per agent and stronger client engagement, even in a subdued housing market. In addition, the Company’s investments in data-driven marketing and digital lead-generation tools supported stable fee-based revenues during the year.

Early fourth-quarter indicators reflected increased application activity and lead generation driven primarily by renewal and refinance transactions, positioning the Company to benefit from a gradual recovery in mortgage activity as interest rates normalize and borrower confidence continues to improve heading into fiscal 2026.

Our net loss for the year ended August 31, 2025, was approximately $3.538 million, compared to a net loss of $4.093 million for the prior fiscal year. The year-over-year improvement in net loss primarily reflects higher funded mortgage volumes, efficiency gains from technology investments, and disciplined cost management, partially offset by continued expenditures in platform development, compliance enhancements, and strategic growth initiatives.

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:

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.

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.

Gross billings increased from $16.264 million for the fiscal year ended August 31, 2024, to $17.431 million for the fiscal year ended August 31, 2025, representing a year-over-year increase of approximately 7.18%. This growth was primarily driven by a moderate recovery in mortgage origination activity, improved renewal and refinance volumes, and higher agent productivity. The Bank of Canada’s continued monetary easing, reducing the policy rate from 5.00% in mid-2024 to 3.25% by August 31, 2025, contributed to improved affordability and renewed consumer confidence, though housing market activity remained below pre-2022 levels.

Revenue for the year ended August 31, 2025 was $2.987 million, compared to $2.689 million for the year ended August 31, 2024, representing an increase of $297,836, or 11.08% year-over-year. The increase was primarily driven by stronger net mortgage-brokerage revenue, supported by higher funded volumes and improved agent productivity. Subscription revenue and underwriting fees remained stable, reflecting continued adoption and usage of the Company’s Pineapple Plus platform. The overall growth in revenue demonstrates the resilience of the Company’s core operations despite ongoing softness in the Canadian real estate market and tighter lending conditions.

The Company continues to balance growth in gross billings with disciplined cost management through enhanced automation, centralized underwriting, and agent-performance analytics to improve profitability margins over time.

Selling, General and Administrative (“SG&A”) Expenses

Selling, general, and administrative (“SG&A”) expenses decreased by $128,281, or 5.38%, from $2,382,225 for the fiscal year ended August 31, 2024, to $2,253,944 for the fiscal year ended August 31, 2025. The reduction reflects the Company’s continued focus on prudent cost management and operational efficiency while maintaining robust support for its national mortgage network and technology-driven growth initiatives. Management implemented targeted efficiency measures, particularly in software, administrative overhead, and travel, without compromising business effectiveness or service quality.

Software Subscription

Software subscription expenses decreased by $151,636, or 16.87%, to $747,234 in fiscal 2025, primarily reflecting the optimization of technology infrastructure and the consolidation of third-party software tools into the Company’s proprietary Pineapple Plus platform. This reduction demonstrates the Company’s strategic progress toward self-sufficiency and reduced reliance on external software providers.

Office and General

Office and general expenses increased by $6,424, or 3.22%, to $206,180 for fiscal 2025, reflecting modest increases in administrative expenditures associated with operational support and office-related costs.

Professional Fees

Professional fees decreased by $123,398, or 29.77%, to $291,084, due to reduced reliance on external advisors following the completion of post-IPO regulatory and compliance activities. The Company has continued to strengthen internal accounting and legal functions to maintain cost efficiency while ensuring regulatory compliance.

Dues and Subscriptions

Dues and subscriptions increased by $343,370, or 127.60%, to $612,476 in fiscal 2025. This increase primarily reflects higher listing and regulatory compliance costs associated with maintaining the Company’s NYSE American listing, as well as expanded use of data-analytics subscriptions supporting the Pineapple Plus platform.

Rent

Rent expense remained consistent, rising slightly by $2,646, or 1.27%, to $210,206, reflecting stable lease terms and effective space-utilization management.

Consulting Fees

Consulting fees decreased marginally by $3,708, or 5.92%, to 58,890, as the Company continues to transition project-based consulting functions to in-house resources.

Travel

Travel expenses declined significantly by $127,355, or 79.28%, to $33,289, as management prioritized virtual engagement and implemented cost controls for non-essential travel.

Donations

Donations decreased by $6,661, or 89.42%, to $788, reflecting the Company’s ongoing focus on cost efficiency and resource reallocation toward growth and technology investments.

Lease Expense

Lease expenses decreased by $69,343, or 97.46%, to $1,805, following the expiration of prior-year short-term lease commitments.

Insurance

Insurance expenses increased slightly by $1,380, or 1.52%, to $91,993, due to normal fluctuations in annual premiums and policy renewals.

Advertising and marketing expenses decreased by $190,565, or 22.16%, from $860,047 in fiscal 2024 to $669,482 in fiscal 2025. The decrease reflects a continued shift toward cost-efficient, digital-first marketing initiatives and reduced discretionary brand-promotion spending. Management focused on targeted agent-acquisition and retention campaigns, which require lower cash investment while maintaining brand visibility and market engagement.

Salaries, Wages, and Benefits

Salaries, wages, and benefits decreased by $791,759 or 32.49%, from $2,436,783 in fiscal 2024 to $1,645,024 in fiscal 2025. This reduction was primarily driven by organizational streamlining efforts and the reallocation of certain operational functions. The decrease also reflects improved workforce efficiency and cost optimization initiatives implemented during the year, with further benefits expected to be realized in future periods.

Interest Expense and Bank Charges

Interest expense and bank charges increased by $242,643, or 259.59%, from $93,472 in fiscal 2024 to $336,115 in fiscal 2025. This increase primarily reflects higher interest costs arising from short-term financing arrangements and director-related loans used to support working-capital needs. These borrowings were undertaken at higher interest rates due to prevailing market conditions, contributing to the year-over-year increase.

The following risk factors reflect material changes to, and should be read together with, the risk factors previously disclosed in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2025. The risks described below are not the only risks facing the Company. Additional risks and uncertainties that are not presently known to the Company, or that the Company currently considers immaterial, may also materially adversely affect its business, financial condition, results of operations, liquidity, cash flows and the market price of its common shares.

The Company commenced its Digital Asset Treasury strategy during fiscal 2026. Because this represents a material change to the Company’s business, capital structure and risk profile, the related risks should be disclosed as updates to the risks included in the prior Form 10-K. Form 10-Q requires disclosure of material changes to previously disclosed risk factors, while Item 105 of Regulation S-K calls for material, company-specific risks organized under relevant headings and an explanation of how each risk affects the registrant or its securities.

Risks Related to Our Digital Asset Treasury Strategy

Our substantial concentration in INJ exposes us to significant price volatility and could materially adversely affect our financial condition, results of operations and liquidity.

Our digital asset holdings are substantially concentrated in Injective tokens (“INJ”). As of May 31, 2026, we recognized 7,561,000 INJ tokens with a fair value of approximately $49.4 million. Accordingly, our financial condition, results of operations and shareholders’ equity are materially exposed to changes in the market price of a single digital asset.

Digital asset prices, including the price of INJ, have historically experienced significant volatility and may decline rapidly for reasons that may be difficult to predict, including changes in market sentiment, trading activity, token supply, protocol use, staking economics, regulatory developments, technological developments, cybersecurity incidents, macroeconomic conditions, actions by large token holders and developments affecting the Injective ecosystem.

Because our INJ holdings are measured at fair value, changes in the market price of INJ are recognized in earnings each reporting period. As a result, even when we do not sell any INJ, a decline in its market price could produce significant non-cash losses, reduce our assets and shareholders’ equity, adversely affect our ability to comply with collateral requirements and increase the risk that we will be required to provide additional collateral, repay borrowings or liquidate digital assets at unfavorable prices. Conversely, reported fair value gains may not represent realized cash proceeds or liquidity available to fund our operations.

We have not established a diversified portfolio of digital assets that would materially mitigate our exposure to INJ. A material or sustained decline in the price or utility of INJ could therefore have a disproportionate adverse effect on our business, financial condition, results of operations, liquidity and the market price of our common shares.

We may be unable to liquidate our INJ holdings at quoted market prices or in the amounts and within the time periods required to meet our obligations.

Although INJ is traded on digital asset markets, the liquidity, trading volume and market depth for INJ may vary significantly over time and across trading venues. The quoted market price used to measure our INJ holdings may not represent the price at which we could sell a significant quantity of INJ, particularly during periods of market stress, reduced trading activity or rapid price declines.

An attempt to sell a material portion of our holdings could adversely affect the market price of INJ, result in significant price slippage, incur substantial transaction costs or take longer than anticipated. Our ability to liquidate INJ may also be limited by custody procedures, collateral restrictions, staking arrangements, withdrawal delays, exchange limitations, blockchain congestion, regulatory restrictions or counterparty requirements.

If we are required to monetize INJ to meet operating expenses, debt maturities, collateral calls or other obligations, we may be unable to do so on acceptable terms or within the required time. This could materially adversely affect our liquidity, require us to seek additional financing on unfavorable terms or cause a default under our financing arrangements.

The custody of our digital assets exposes us to risks of loss, theft, cyberattack, unauthorized transactions and loss of access.

Our digital assets are maintained through institutional custody arrangements and digital wallets. Digital asset custody presents risks that differ from the custody of traditional financial assets, including risks associated with private keys, wallet credentials, transaction authorization, blockchain settlement, cybersecurity, operational controls and the technological infrastructure of custodians and service providers.

Our digital assets could be lost, stolen, misappropriated, transferred without authorization or rendered inaccessible as a result of cyberattacks, phishing, malware, compromised credentials, private-key loss, employee or service-provider misconduct, inadequate segregation of duties, software vulnerabilities, protocol failures or failures in our or a custodian’s operational controls.

Transactions on a blockchain may be irreversible. If INJ is transferred to an incorrect address, obtained through unauthorized access or otherwise lost, we may have no effective means of recovering the assets. Insurance maintained by us or our custodians, if any, may not cover all types of losses, may be subject to exclusions and limits, and may not be sufficient to compensate us fully.

Any loss of or inability to access our digital assets could materially reduce our assets, impair our ability to meet financing and collateral obligations and materially adversely affect our business, financial condition, results of operations, liquidity and reputation.

The failure, insolvency or misconduct of a custodian, lender, trading venue, asset manager or other digital asset counterparty could result in the loss of assets or restrict our access to liquidity.

We use a limited number of institutional counterparties in connection with digital asset custody, financing, trading, staking, treasury placement and collateral arrangements. These counterparties may hold our cash, stablecoins, INJ or other assets, execute transactions on our behalf, maintain collateral accounts or provide financing and related services.

A counterparty could experience insolvency, bankruptcy, liquidity constraints, cybersecurity incidents, fraud, operational failures, regulatory enforcement, suspension of withdrawals or other events that impair its ability to return our assets or satisfy its obligations. The legal status of assets held through a digital asset custodian or trading counterparty may be uncertain in an insolvency proceeding, and such assets may be treated as part of the counterparty’s bankruptcy estate rather than as assets held solely for our benefit.

Our contractual rights, security interests and legal remedies may be limited, delayed or difficult to enforce, particularly where a counterparty, custodian, wallet or relevant asset is located in a different jurisdiction. Any material counterparty failure could result in losses, delayed access to assets, inability to satisfy collateral or operating requirements and material adverse effects on our business, financial condition, results of operations and liquidity.

Staking our digital assets exposes us to lock-up, validator, slashing, protocol, liquidity and income-recognition risks.

We stake certain INJ holdings to generate staking rewards. Staking may require tokens to be delegated, committed or subject to unbonding or withdrawal periods during which they cannot be immediately transferred or sold. As a result, staked tokens may not be available when needed to satisfy operating requirements, collateral calls, debt obligations or other liquidity needs.

Staking rewards depend on factors outside our control, including protocol rules, validator performance, token inflation, participation rates, network activity and changes made by the Injective protocol or its governance participants. Staking yields may decline, rewards may be delayed or suspended, and the value of rewards may decline before they can be monetized.

Our staked assets may also be subject to slashing, penalties or loss if a validator fails to perform required functions, engages in prohibited conduct, experiences technical failures or is compromised. Even where staking is conducted through a third-party validator, we may bear some or all of the economic loss.

Changes in protocol design, network security, tax treatment, accounting requirements or regulatory treatment could reduce or eliminate the anticipated benefits of staking. Any such development could reduce staking income, result in losses of digital assets or restrict access to our tokens and could materially adversely affect our business, financial condition, results of operations and liquidity.

Our secured financing arrangements expose us to collateral calls, forced liquidation and loss of digital assets.

We have entered into secured financing arrangements in connection with our Digital Asset Treasury strategy, including arrangements with FalconX. These arrangements contain collateral maintenance requirements that may be affected by changes in the value of INJ, stablecoins or other collateral, as well as changes in applicable advance rates, valuation methodologies, eligibility criteria and contractual terms.

A decline in the value of collateral or an increase in required collateral levels could require us to deposit additional cash, stablecoins, INJ or other eligible assets on short notice. We may not have sufficient unrestricted liquidity or eligible collateral to satisfy such requirements. Failure to satisfy a collateral call or other financing obligation could constitute an event of default and permit the lender to seize, liquidate or otherwise enforce against pledged assets.

Forced liquidation could occur during a period of significant market volatility or depressed INJ prices, resulting in losses substantially greater than those that would have occurred through an orderly sale. Liquidation of collateral could also reduce our ability to participate in a subsequent market recovery and could adversely affect the market price of INJ.

The enforcement of security interests, guarantees or other creditor remedies could materially reduce our digital asset holdings and liquidity and materially adversely affect our business, financial condition, results of operations and ability to continue as a going concern.

Our use of leverage increases our exposure to market losses, interest expense, refinancing risk and debt maturity obligations.

As of May 31, 2026, we reported loans payable of approximately $21.4 million. Our borrowings increase our fixed obligations and expose us to interest expense, collateral requirements, repayment obligations, refinancing risk and potential events of default.

Leverage magnifies the effect of declines in the value of our digital assets. If the value of INJ declines while the principal amount of our debt remains fixed, our net asset value, liquidity and ability to repay the debt could deteriorate rapidly. Income from staking or other treasury activities may not be sufficient to cover interest expense, operating expenses and principal repayments.

We may be required to repay or refinance our debt under unfavorable market conditions. Additional financing may not be available when required or may be available only on terms that involve higher interest rates, additional collateral, restrictive covenants or substantial dilution to existing shareholders. If we cannot repay, refinance or otherwise satisfy our debt obligations, we may be required to sell assets at unfavorable prices, curtail operations or face enforcement by creditors.

Our derivative and option transactions may result in significant losses, collateral requirements and valuation uncertainty.

We have entered into derivative transactions relating to digital assets, including purchased puts, written calls and written put options. These instruments expose us to market, liquidity, counterparty, collateral, settlement and valuation risks.

Written call options may limit our participation in increases in the value of the underlying digital assets, while written put options may require us to acquire digital assets at prices above their market value or make cash payments under unfavorable market conditions. The combination of derivative positions may not provide the expected economic protection, particularly where market movements, volatility, liquidity or correlations differ from the assumptions used when the transactions were entered into.

Certain derivative values may depend on models and assumptions involving volatility, interest rates, remaining term, market liquidity and other inputs. Actual settlement values may differ materially from recorded fair values. Derivative transactions may also require additional collateral and could contribute to liquidity pressure or cross-default risk under related financing arrangements.

Losses or liquidity requirements arising from our derivative transactions could be material and could adversely affect our financial condition, results of operations, cash flows and ability to satisfy other obligations.

Our fair value measurements depend on our determination of a principal market and may not reflect realizable values.

We measure our recognized INJ holdings at fair value using quoted prices in the principal market that is accessible to us. We have identified Coinbase as our principal market for INJ as of May 31, 2026. This determination requires judgment regarding market accessibility, volume and level of activity.

Prices for INJ may differ among trading venues because of differences in liquidity, trading volume, market participants, geographic access, transaction costs, withdrawal restrictions and market disruption. The price used for financial reporting may therefore differ from prices available on other platforms or from the net amount we could realize through an actual sale.

Our principal market may change, cease supporting INJ, restrict our access, experience an outage or become less active. If observable market activity declines, we may be required to use different valuation inputs or methodologies that involve greater judgment and valuation uncertainty. Changes in the principal market or pricing methodology could result in material changes in recorded fair value and earnings.

Digital asset laws and regulations are evolving and could restrict or adversely affect our treasury activities.

The legal and regulatory treatment of digital assets, staking, digital asset custody, derivatives, stablecoins, lending and related activities continues to evolve in the United States, Canada and other jurisdictions. Regulatory authorities or courts may adopt differing or changing interpretations regarding whether a digital asset, transaction or service is subject to securities, commodities, banking, money-transmission, derivatives, tax, sanctions, anti-money-laundering, consumer-protection or other laws.

INJ or activities involving INJ could become subject to new or additional regulation, registration, licensing, reporting, custody, trading or transfer restrictions. Digital asset exchanges, custodians, lenders, validators and other counterparties on which we rely could also become subject to enforcement actions, operating restrictions or requirements that limit the services available to us.

New laws, regulations, interpretations or enforcement actions could increase compliance costs, restrict our ability to acquire, hold, stake, finance, transfer or liquidate INJ, reduce the liquidity or market value of INJ, require changes to our business strategy or expose us to fines, penalties, litigation or reputational damage. The SEC has historically emphasized disclosure of material regulatory, counterparty, custody, liquidity and market risks arising from crypto-asset activities, although its 2022 crypto-market sample letter was withdrawn in May 2025. The obligation to disclose material, company-specific risks under Item 105 and Form 10-Q nevertheless remains.

Unidentified or potentially returnable tokens could result in claims, liabilities, accounting adjustments and weaknesses in our wallet-reconciliation controls.

As of May 31, 2026, we observed 295,436 additional INJ tokens in certain wallets, with an estimated fair value of approximately $1.9 million, for which management had not confirmed the source, ownership or right to retain the tokens. These tokens were excluded from recognized Company-owned digital assets and related income pending completion of management’s assessment.

The tokens may belong to a lender, custodian, counterparty, staking participant or another third party and may be subject to return, transfer or other settlement. We may receive claims from one or more parties, and the ultimate resolution may require us to transfer the tokens, recognize a liability, incur legal or professional costs, modify previously reported accounting or strengthen our custody and wallet-reconciliation controls.

If management later determines that the tokens should have been recognized, returned or otherwise accounted for differently, we may be required to record an adjustment or, depending on materiality and the circumstances, revise or restate previously issued financial statements. The presence of unidentified tokens also indicates risks relating to completeness, ownership verification, wallet reconciliation, transaction authorization and segregation of duties in our digital asset activities.

We cannot assure investors when the ownership and nature of these tokens will be resolved or that the resolution will not materially adversely affect our financial statements, internal control over financial reporting, reputation or relationships with counterparties.

Risks Related to Related-Party and Counterparty Arrangements

Certain financing, collateral and treasury arrangements involve significant shareholders or related parties, which may create actual or perceived conflicts of interest.

The Injective Foundation became a significant shareholder following the completion of the Company’s private placement and has provided support in connection with certain financing and collateral arrangements. The Company has also entered into treasury placement, financing or related arrangements involving entities that may be affiliated with shareholders, advisors, directors or other related parties.

Related-party transactions may create actual or perceived conflicts between the interests of the related party and the interests of the Company and its other shareholders. A related party may have interests relating to financing terms, collateral, repayment, strategic decisions, token prices or other matters that differ from the interests of the Company or its unaffiliated shareholders.

Although the Company has established governance and approval procedures for related-party transactions, these procedures may not eliminate all conflicts or ensure that the terms obtained are as favorable as those that could have been obtained from an unrelated third party. Any failure to identify, disclose, review or appropriately approve a related-party transaction could result in financial loss, regulatory scrutiny, litigation, reputational harm or deficiencies in internal control over financial reporting.

If a related-party guarantee, collateral arrangement or other form of support is withdrawn, reduced, challenged or found to be unenforceable, the Company may be required to provide replacement collateral, repay financing or obtain alternative financing on unfavorable terms.

Risks Related to Our Capital Structure

During the nine months ended May 31, 2026, the Company expanded its business through the implementation of a Digital Asset Treasury strategy while continuing to operate its core Canadian mortgage brokerage and technology platform. As a result, the Company now operates through two reportable operating segments: Mortgage Operations and Crypto Asset Operations.

Mortgage Operations continued to generate revenue through mortgage brokerage, underwriting, insurance, subscription-based software, sponsorship and other technology-enabled financial services. During the period, management remained focused on operating efficiency, expense management and the continued expansion of recurring revenue streams despite a mortgage market that remained affected by housing affordability, elevated borrowing costs and reduced origination activity.

During the period, the Company also established its Digital Asset Treasury strategy as part of its broader capital allocation framework. The strategy includes the acquisition, financing, custody and staking of digital assets and is governed by the Company’s Treasury Reserve Policy, which establishes liquidity, governance, custody, financing and risk management requirements. As of May 31, 2026, the Company held digital assets with a fair value of approximately $49.4 million, generated $620,849 of staking income during the period and maintained financing arrangements designed to support its treasury activities.

The Company’s reported financial results were significantly affected by the application of ASC 350-60, which requires digital assets to be measured at fair value with changes recognized in earnings each reporting period. Accordingly, reported net income included significant non-cash fair value gains resulting from changes in the market value of the Company’s digital asset holdings. Management believes investors should evaluate these non-cash fair value adjustments together with the Company’s operating performance, liquidity position and capital management activities when assessing period-to-period financial results.

Historically, the Company’s operations were primarily focused on mortgage brokerage services and related technology-enabled solutions within the Canadian residential mortgage market. Revenue was largely derived from mortgage origination activity together with subscription, underwriting, insurance and other ancillary service offerings.

During fiscal 2026, the Company expanded its business through the implementation of its Digital Asset Treasury strategy, establishing Crypto Asset Operations as a second reportable operating segment. As a result, management now evaluates the business through two complementary operating platforms: Mortgage Operations and Crypto Asset Operations.

Mortgage Operations continue to focus on growing mortgage origination volumes, expanding subscription-based and other recurring revenue streams, enhancing agent productivity through technology, and improving operating efficiency.

Crypto Asset Operations focus on the disciplined deployment and management of treasury assets through digital asset ownership, staking activities, financing arrangements and other treasury management activities conducted pursuant to the Company’s Treasury Reserve Policy. These activities are intended to complement, rather than replace, the Company’s core mortgage operations by providing an additional framework for capital allocation and treasury management.

Management believes this operating structure provides greater diversification of earnings while maintaining a disciplined approach to liquidity, governance and risk management.

During the period, the Company continued to enhance its technology platform through workflow automation, customer relationship management capabilities and additional insurance and ancillary financial service integrations. Management believes these initiatives will continue to support agent productivity, operational efficiency and the expansion of recurring revenue streams over time.

As part of its broader capital allocation strategy, the Company also implemented its Digital Asset Treasury strategy during fiscal 2026. The strategy is governed by the Company’s Treasury Reserve Policy and is designed to deploy excess treasury assets in a disciplined manner while maintaining appropriate liquidity, governance and risk management standards. Activities undertaken during the period included digital asset acquisitions, treasury financing arrangements and delegated staking activities.

As of May 31, 2026, the Company held digital assets with a fair value of approximately $49.4 million, generated $620,849 of staking income during the nine-month period and recognized $2.8 million of non-cash fair value gains resulting from changes in market prices. Because the Company’s digital assets are measured at fair value under U.S. GAAP, reported earnings may experience significant period-to-period volatility that does not necessarily correspond to realized cash flows or underlying operating performance.

Management continues to evaluate both mortgage market conditions and digital asset markets in allocating capital, managing liquidity and assessing future operating opportunities.

The Company’s results of operations for the three and nine months ended May 31, 2026 reflect the combination of its traditional mortgage operations together with the implementation of its Digital Asset Treasury strategy. As a result, comparisons with prior periods should be viewed in the context of the Company’s expanded business activities.

Reported operating results during the current period were significantly influenced by:

Because fair value adjustments are recognized in earnings each reporting period, reported net income may vary significantly based on changes in digital asset market prices and may not correspond to realized cash flows during the period.

For the three months ended May 31, 2026, the Company reported net income of $25.3 million, compared to a net loss of $0.6 million during the prior-year period. The improvement primarily reflects the implementation of the Company’s Digital Asset Treasury strategy during fiscal 2026, which contributed non-cash fair value gains on digital assets, staking income and interest income. These benefits were partially offset by higher financing costs associated with the Company’s treasury financing arrangements and continued operating expenses related to its mortgage platform.

The principal drivers of the period-over-period change were:

● A $25.8 million non-cash, market-driven fair value gain on the Company’s recognized digital asset holdings;

● $0.4 million of staking income generated from the Company’s digital asset treasury activities;

● $0.2 million of interest income earned on treasury financing and lending activities; and

● Continued cost management across the Company’s mortgage operations.