Pineapple Financial Reports $25.3 Million in Third-Quarter Net Income as Company Enters Its Next Stage of Growth

About this update from Pineapple Financial Inc.

Toronto, Ontario--(Newsfile Corp. - July 20, 2026) - Pineapple Financial Inc. (NYSE American: PAPL) ("Pineapple" or the "Company"), a technology-focused Canadian mortgage brokerage and fintech company, today reported its financial results for the three- and nine-month periods ended May 31, 2026. During the quarter, the Company continued executing its Digital Asset Treasury strategy while maintaining its core mortgage operations, further strengthening its balance sheet, growing recurring staking income and improved capital flexibility. Pineapple reported third-quarter net income of approximately $25.3 million, or $0.99 per basic and diluted share, for the fiscal third quarter, compared with a net loss of approximately $0.6 million, or $0.93 per share, during the same period last year. Third-quarter results included a $25.8 million non-cash increase in the reported value of the Company's digital asset holdings, along with approximately $399,000 in staking income and $155,000 in interest income. Beyond the quarterly results, the Company believes the period marked an important milestone in Pineapple's evolution. At quarter-end, Pineapple had approximately $75.9 million of total assets, $51.6 million of shareholders' equity and approximately $10.5 million of cash and restricted cash, providing a significantly stronger capital base from which to execute its long-term strategy. Management believes Pineapple now operates with two complementary growth platforms: its established Canadian mortgage business and its Digital Asset Treasury strategy. THIRD-QUARTER AND YEAR-TO-DATE HIGHLIGHTS Net income of approximately $25.3 million for the quarter, compared with a net loss of approximately $0.6 million in the prior-year period. Basic and diluted earnings per share of $0.99, compared with a loss of $0.93 per share in the prior-year period. Shareholders' equity increased to approximately $51.6 million, compared with $0.9 million at the beginning of the fiscal year. Total assets increased to approximately $75.9 million as of May 31, 2026, compared with $5.4 million as of August 31, 2025. Cash and restricted cash totaled approximately $10.5 million at quarter-end. Digital assets totaled approximately $49.4 million as of May 31, 2026. Digital asset staking activities generated approximately $399,000 during the quarter and $621,000 during the first nine months of fiscal 2026. Nine-month mortgage volume remained resilient at approximately $1.15 billion, compared with approximately $1.18 billion during the prior-year period. Nine-month subscription revenue increased 11.6% to approximately $625,000. Salaries, wages and benefits decreased approximately 39.5% during the nine-month period, reflecting the Company's continued focus on cost management and operating efficiency. The Company generated positive Adjusted EBITDA of approximately $479,000 for the first nine months of fiscal 2026. MANAGEMENT COMMENTARY "This quarter is about more than a single financial result. It represents the progress we have made in building a stronger, more efficient and more diversified Pineapple," said Shubha Dasgupta, Chief Executive Officer of Pineapple Financial. "Our mortgage business remains the foundation of the Company. Despite a challenging Canadian housing market, we maintained resilient mortgage volumes, continued to grow subscription revenue and further streamlined our operating cost structure, creating a more scalable platform for long-term growth." "At the same time, our Digital Asset Treasury strategy has strengthened our balance sheet, generated recurring staking income and enhanced our capital allocation capabilities. We ended the quarter with $51.6 million of shareholders' equity, approximately $75.9 million of total assets and approximately $10.5 million of cash and restricted cash." "Just as importantly, we're building a business that is becoming more efficient every quarter. Between our cost optimization initiatives, continued investment in AI-driven automation and disciplined capital allocation, we believe Pineapple is positioned to become both more scalable and more profitable over time. Our current share repurchase program reflects that same discipline, as we continue allocating capital where we believe it can generate the greatest long-term value for shareholders." "We believe Pineapple is entering its next phase from a position of financial strength. With two complementary operating platforms, disciplined capital management and a continued focus on technology, recurring revenue and operational efficiency, we believe we are well positioned to create long-term value for our shareholders." A STRONGER FINANCIAL FOUNDATION Pineapple's total assets increased to approximately $75.9 million as of May 31, 2026, supported by approximately $49.4 million in digital assets, $12.0 million in treasury-related loan receivables and $10.5 million in cash and restricted cash. Shareholders' equity increased to approximately $51.6 million, compared with approximately $0.9 million at the beginning of the fiscal year. Management believes this strengthened balance sheet enhances the Company's financial flexibility, supports continued investment in both its mortgage platform and Digital Asset Treasury strategy, and provides additional capacity to pursue long-term growth opportunities while maintaining a disciplined approach to liquidity and capital allocation. Management also continued executing its share repurchase program during the quarter. The Company believes that repurchasing shares at current trading levels represents an attractive use of capital, particularly where management believes the Company's market valuation does not fully reflect the value of its underlying treasury assets and operating businesses. The Board continues to evaluate additional repurchases as part of its broader capital allocation strategy. RESILIENCE IN THE CORE MORTGAGE BUSINESS Pineapple's mortgage operations continued to demonstrate resilience despite a Canadian housing market characterized by affordability pressures, lower purchase activity and cautious consumer sentiment. During the first nine months of fiscal 2026, mortgage volume totaled approximately $1.15 billion, remaining within approximately 3% of the prior-year period despite challenging market conditions. The Company also continued to diversify beyond transaction-based mortgage revenue. Subscription revenue increased 11.6% to approximately $625,000 for the nine-month period, reflecting continued adoption of the Pineapple Plus platform and the Company's focus on expanding recurring revenue. The Company also continues investing in artificial intelligence and agentic workflow capabilities across its technology platform. Early internal deployments are already improving workflow automation, reducing manual processes and enhancing operational efficiency. Management believes these initiatives will support both agent productivity and future operating leverage as deployment expands across the platform. Management believes Pineapple's technology platform, national mortgage network and growing base of recurring revenue position the Company to benefit from improving market conditions while continuing to enhance operating leverage over time. TWO COMPLEMENTARY OPERATING PLATFORMS During fiscal 2026, Pineapple established its Digital Asset Treasury strategy to complement its mortgage operations and broader the Company's capital-allocation framework. As of May 31, 2026, the Company held approximately $49.4 million of digital assets, which generated approximately $621,000 of staking income during the first nine months of fiscal 2026. The Company also maintained approximately $12.0 million of treasury-related loan receivables and $5.4 million of restricted collateral supporting its treasury activities. The strategy operates under the Company's Treasury Reserve Policy and is overseen by the Board of Directors through its Special Advisory Committee. Management continues to manage treasury activities alongside the Company's operating liquidity requirements, risk management framework and long-term capital allocation objectives. Management believes the combination of a technology-enabled mortgage platform and a disciplined Digital Asset Treasury strategy creates a more diversified operating model with multiple sources of potential long-term value creation. LOOKING AHEAD Pineapple's priorities are centred on turning its stronger financial position into sustainable growth and improved operating performance. The Company intends to focus on: Growing recurring subscription revenue; Increasing revenue generated per mortgage transaction; Enhancing productivity through continued investment in Pineapple Plus and workflow automation; Maintaining disciplined cost management and improving operating leverage; Managing its Digital Asset Treasury strategy with a focus on liquidity, capital efficiency and prudent risk management; and Evaluating additional opportunities to expand shareholder value through disciplined capital allocation. Management's cost optimization initiatives continued to improve operating performance during the period, contributing to positive Adjusted EBITDA for the first nine months of fiscal 2026 and demonstrating the benefits of the Company's operational efficiency initiatives. The Company continues to evaluate additional efficiency initiatives across the organization, with further operational improvements expected to be implemented over the coming months. Management believes the combination of improving mortgage market fundamentals, continued investment in technology and disciplined execution of the Company's Digital Asset Treasury strategy positions Pineapple to create long-term shareholder value. FINANCIAL RESULTS The Company's unaudited condensed interim consolidated financial statements for the three- and nine-month periods ended May 31, 2026, including comparative prior-year results, are included with this release and in the Company's Quarterly Report on Form 10-Q. Pineapple Financial Inc. Condensed Interim Consolidated Balance Sheets - Unaudited For the nine month period ended May 31, 2026 (Expressed in US Dollars) As at: May 31, 2026 August 31, 2025 $ $ Assets Current assets Cash 5,089,707 2,117,371 Restricted cash 5,424,320 - Trade and other receivables 452,244 92,223 Loans receivable - related parties 12,002,619 - Prepaid expenses and deposits 524,555 110,001 23,493,445 2,319,595     Investment 9,819 9,733 Digital assets 49,400,549 - Right-of-use asset - net 444,758 530,163 Property and equipment - net 32,250 61,957 Intangible assets - net 2,472,291 2,495,773 75,853,112 5,417,221     Liabilities and Shareholders' Equity     Current liabilities     Accounts payable and accrued liabilities 1,659,294 2,125,160 Loans payable - related parties 21,442,877 - Deferred revenue 78,370 108,552 Warrant liability 150,198 632,753 Derivative liability 65,241 - Loans from directors - 629,120 Current portion of lease liability 146,338 138,859 23,542,318 3,634,444     Deferred government incentive 235,942 314,998 Lease liability 455,547 561,100 24,233,807 4,510,542     Shareholders' Equity     Common shares (*), no par value; unlimited authorized; 25,534,070 issued and outstanding shares as of May 31, 2026 and 1,340,941 as at August 31, 2025. 62,378,305 11,621,468 Common shares to be issued 88,136 88,136 Additional paid-in capital 4,428,359 3,102,814 Accumulated other comprehensive loss (532,087 ) (509,300 ) Accumulated deficit (14,743,408 ) (13,396,439 ) 51,619,305 906,679 75,853,112 5,417,221   Pineapple Financial Inc. Condensed Interim Consolidated Statements of Operations and Comprehensive Loss (Unaudited) For the three month and nine month periods ended May 31, 2026 (Expressed in US Dollars) Three months ended Nine months ended May 31, 2026 May 31, 2025 May 31, 2026 May 31, 2025 For the period ended                             (Unaudited) (Unaudited) (Unaudited) (Unaudited) $ $ $ $ Revenue 622,502 746,903 2,052,335 2,259,396         Expenses and other income         Selling, general and administrative 552,659 527,835 1,747,235 1,522,778 Advertising and Marketing 292,314 292,489 708,691 617,987 Salaries, wages and benefits 391,309 394,648 740,798 1,223,722 Interest expense and bank charges 448,510 31,216 1,077,031 306,267 Depreciation and amortization 255,023 219,355 719,173 648,991 Fair value gain on Digital assets (25,824,284 ) - (2,809,970 ) - Staking income (399,134 ) - (620,849 ) - Government Incentive (27,423 ) (22,109 ) (81,792 ) (70,657 ) (24,311,026 ) 1,443,434 1,480,317 4,249,088         Gain/(Loss) from operations 24,933,528 (696,531 ) 572,018 (1,989,692 ) Foreign exchange (loss) gain 186,281 (6,018 ) 27,068 (1,905 ) Interest income 155,480 - 369,539 - Financing cost - warrants - (164,703 ) (1,325,558 ) (164,280 ) Financing cost -Equity line of credit - - (1,500,000 ) - Gain (loss) on derivative liability 26,812 - 42,556 - Gain (loss) on change in fair value of warrant liability (52,018 ) 309,516 467,408 341,765 Gain/(Loss) before income taxes 25,250,083 (557,736 ) (1,346,969 ) (1,814,112 )         Income taxes (recovery) expense - - - -         Net gain/(loss) 25,250,083 (557,736 ) (1,346,969 ) (1,814,112 ) Foreign currency translation adjustment (76,597 ) (34,703 ) 22,787 52,853         Net gain/(loss) and comprehensive (loss) 25,173,486 (592,439 ) (1,324,182 ) (1,761,259 )         Gain/(loss) per share - basic 0.99 (0.93 ) (0.09 ) (3.50 )         Gain/(loss) per share - diluted 0.99 (0.93 ) (0.09 ) (3.50 ) Weighted average number of common shares outstanding - basic 25,534,070 635,712 14,513,147 503,374 Weighted average number of common shares outstanding - diluted 25,580,507 635,712 14,513,147 503,374   NON-GAAP FINANCIAL MEASURES This press release refers to Adjusted EBITDA and other non-GAAP financial measures used by management to provide additional insight into the Company's underlying operating performance. These measures should not be considered substitutes for financial results prepared in accordance with U.S. GAAP and may not be directly comparable with similarly titled measures reported by other companies. A reconciliation of the applicable non-GAAP measures to their most directly comparable U.S. GAAP measures will be included with the financial tables accompanying this release. ABOUT PINEAPPLE FINANCIAL INC. Pineapple Financial Inc. is a technology-focused Canadian mortgage brokerage and fintech company. Through its Mortgage Operations, Pineapple provides mortgage origination support, proprietary technology, subscription-based software, underwriting, insurance and related financial services to mortgage professionals and consumers across Canada. During fiscal 2026, Pineapple expanded its business to include Digital Asset Operations as part of its broader treasury and capital-allocation strategy, creating two complementary operating platforms. Pineapple's common shares trade on the NYSE American under the symbol PAPL. FORWARD-LOOKING STATEMENTS This press release contains forward-looking statements within the meaning of applicable securities laws. These statements include, but are not limited to, statements regarding Pineapple's growth plans, operating leverage, recurring revenue, technology development, mortgage-market opportunities, Digital Asset Treasury strategy, liquidity, future financial performance and ability to create long-term shareholder value. Forward-looking statements are based on management's current expectations, assumptions and estimates and are subject to risks and uncertainties that could cause actual results to differ materially. These risks include digital asset price volatility, liquidity and collateral requirements, custody and cybersecurity risks, regulatory developments, Canadian mortgage-market conditions, interest rates, housing affordability, access to financing and the Company's ability to successfully execute its growth and cost-management initiatives. Additional risks are described in Pineapple's filings with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on forward-looking statements. Pineapple undertakes no obligation to update these statements except as required by applicable law. INVESTOR RELATIONS CONTACT Pineapple Financial Inc. Investor Relations Email: [email protected] Website: www.gopineapple.com To view the source version of this press release, please visit https://www.newsfilecorp.com/release/305815

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