Pineapple Financial Inc.

Good morning. Welcome, everyone, to today's Fireside Chat with Pineapple Financial, hosted by KCSA-IR. I'm joined today by Sridhar Dasgupta, Chief Executive Officer of Pineapple Financial, along with Anthony Georgiades, General Partner at Innovating Capital and a member of Pineapple's Board of Directors. We appreciate today's attendees taking the time to join us as we walk through Pineapple's Q2 2026 results. Before we begin, I'd like to remind everyone that statements made during today's discussion may be considered forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable security laws. Actual results may differ materially due to risks and uncertainties described in Pineapple Financial's filings with the SEC. The company undertakes no obligation to update forward-looking statements except as required by law. In a moment, Shubha and Anthony will provide an overview of the business and recap of Pineapple's Q2 results and strategic priorities. Following our discussion, we will turn to the audience for live questions regarding Pineapple, its core mortgage platform, and its partnership with the Injective Foundation. For those who have not yet submitted a question, please feel free to do so at any time using the Q&A function. If we're unable to address your question during today's session, you can also follow up after today's discussion by contacting us through Pineapple Investor Relations email at pineapple at kcsa.com. Please note that today's call is being recorded on Thursday, April 16th at 11 a.m. Eastern Time and a replay link will be made available following the conclusion of the presentation. With that, I'd like to pass the line to Shubha to get us started today before we get into some Q&A. Over to you, Shubha.

Thank you so much, Jeff. And on behalf of our board of directors, our management, Anthony, and myself, I'd like to thank all of you for joining us here today, for your interest in Pineapple, and for your support over the years. With our Q2 earnings now complete, this is a great moment for us to step back and talk about where Pineapple is today and also talk more about where we're headed. The focus today is really on execution, discipline, and what comes next for their business. We've gone through a meaningful transformation from a traditional mortgage brokerage into an integrated fintech platform in the last few quarters, and we want to frame it for everybody here. Let's start off with their point of this today. We spent the last decade building an incredible national mortgage brokerage We're supporting hundreds of mortgage brokers from coast to coast and funding almost $2 billion a year in annual mortgage originations. Our Q2 2026 mortgage volume is posted at $367.2 million, with six-month aggregated volume being $829.3 million, implying that our annual run rate is near $1.6 to $1.7 billion for the year. For context, the six-month mortgage volume edged up to about $829.3 from $811.5 million in the prior year. This might seem like a modest increase, but it's very worth noting that the broader Canadian mortgage and origination market still operating below its 2022 levels. We're still seeing significant effects of the rise in interest rates and inflation that have caused consumer sentiment to be dampened and continuously impact affordability and the ability for new Canadians to enter the housing market with constraints and limited housing supply. So the fact that we're continuing to see stable to improving activity across our network, even in this environment, speaks to the resilience of our platform as well as the reoccurring nature of Canada's renewal-driven mortgage stable. This is not a concept business. This is an operating age firm with real skill, real revenue, and a contrary footprint in one of the most resilient markets in the world. What's changed is where we are in that journey. We've moved out of the build phase and into a phase that is really about execution and performance as an integrated platform. Let me talk to you a little bit about a recent operation recent. Over the last couple of quarters, we've made a very deliberate decision to resetting the operating model. That was really about tightening discipline across the business with a key focus around reducing our fixed cost base, improving capital efficiency, and aligning the organization around execution while continuing to modernize and optimize our platform for the future of digital finance. This work included a workforce realignment, moving to a cleaner, technology-enabled moment, rationalizing software and third-party spend, ensuring that we were streamlining and allocating our funds to the right places, and integrating AI across a number of workflows, including automating agent onboarding, data and customer engagement, as well as a multitude of others. Initiating tokenization and mortgage data is also a big part of the last couple of quarters, and we'll be diving into that in more detail throughout this presentation. The results speak for themselves. We've implemented over $1.5 million of annualized cost savings to date. Total expected reductions will exceed $2.5 million on June 30th, later this year. We've reduced our monthly cash burn by over 50%, and this is a structured reset of our expense base and not just a temporary move. But I want to be clear. This is not about demand softening. This is about platform modernization and building a more efficient, more scalable platform for the years and decades ahead. Our goal is simple. We're building a business that's scalable, with materially better unit economics, and a more durable, multifaceted earnings profile. Let me talk to you a little bit about how we think about numbers. We now think of a pilot as one integrated operating system built around three core pillars. The first is the mortgage platform. This remains to be our core foundation and fundamental. It drives origination, relationships, and cash flow. A real operating business with a concrete footprint in the Canadian mortgage market and growing. Canada's mortgage market is structurally resilient. Let me talk to you a little bit about how it differs from that of the U.S. market. The U.S. market may see more longer-term 30-year mortgages. We have more short-term mortgages, typically between one to five years. And this short-term renewal cycle creates a reoccurring pipeline of refinance and renewal activity that continues to drive business independent of new home purchases. Q2 revenue was $0.7 million. but supported by stable subscription revenue and diversified income streams. Now, the second component is data antagonization. We've been collecting mortgage data for years across our expansive network. Now it's about structuring, standardizing, and ultimately, monetizing it. This is the path toward lender-facing, reoccurring revenue products, and a higher margin revenue mix. and our third, the Digital Asset Treasury. This is about capital efficiency and yield generation within a structured, governed framework. As of February 2028, the DAT was valued at approximately $22.4 million, comprised primarily of approximately $7.21 million on NJ tokens, injector tokens, During this period, we generated $221,718 in staking revenue. This is a new, incremental, reoccurring income stream, and that's just the start. We've assembled a best-in-place institutional infrastructure, the Injector Foundation, Kraken, FalconX, Monarch, and Canary Capital, covering custody, execution, advisory, and yield optimization. and we've also selectively deployed capital through lending arrangements and stricter derivative strategies to generate incremental yield while maintaining strict risk controls. The key point here is that these are not three separate businesses. These are designed to reinforce one another in the value compounds through integration. How do our Q2 results fit into that? Well, when we look at the second quarter, it was really about execution against the market. We completed the operational reset. We strengthened the cost structure and reduced cash burn. We generated over $220,000 in staking income, a new tangible revenue stream. We authorized a $3 million share repurchase program expected to commence in the coming days to reinforce our commitment to disciplined capital allocation and long-term shareholder value. And our balance sheet is the strongest position it's ever been. with $17.9 million in cash, $3.1 million in positive working capital, and a treasury value of approximately 22.4 million dollars. So this was not a quarter of new ideas. It was a quarter of putting our foundation in place and delivering tangible results. Now, we'd love to pass the line to Anthony, who's going to put the 2-2 financials in the greater context. Anthony?

Yeah, absolutely. Thanks for that, Shubha. So I just wanted to take a quick moment to really reframe the quarter a bit because I think it's critical that investors understand the underlying performance relative to some of the reported numbers directly. And also just really understand the magnitude of what's actually changed inside the business over the last six and 12 months. So if you look at the headline number, There's obviously a reported net loss of roughly $19 million or so. But that really reflects three non-core and largely non-cash items. You have a $17 million unrealized non-cash mark-to-market adjustment on digital assets. Obviously, the digital asset landscape has been largely volatile over the last several months related to both monetary policy as well as a number of different global and macro concerns. Simultaneously, this quarter reflected the consummation of the pipe transaction that officially went through in January. So, there's $2.8 million of one-time financing costs associated with said pipe that hit the quarter. There's also around $2 million or so of fair value changes in different instruments, such as warrant liabilities, as well as incremental interest expense tied to the treasury strategy. that interest being largely PIC and non-cash pay. So if you normalize for that, what you see is really a business that has undergone a material financial and operational inflection. So to quantify that for a moment, we generated positive adjusted operating income of approximately $125,000, which while on the face might seem de minimis, if you compare that to the previous year, we're on the same metric, the business generated a negative loss of around 2 million and around minus 500,000 for the same period. That's a roughly 150% plus improvement in operating performance and a swing from both cash flow negative generation to cash flow positivity. Adjusted EBITDA as well came in at roughly half a million dollars versus a loss of roughly $600,000 last year. a $1 million improvement on a three-month basis year over year, or roughly 165% swing on a relative basis. What's important to really understand here is that that improvement was achieved while maintaining a relatively stable revenue base in a still constrained mortgage environment. So this tells you this is not really a cyclical improvement. This is structural. It has to do with a lot of what Shubha had alluded to. And this is really kind of where the narrative and work since. Over the last two quarters, we executed a full operating model reset. As Shuva mentioned, we reduced fixed costs materially. We rationalized vendor and software spend, and we reoriented the workforce towards a more technology-enabled model. Simultaneously, we've begun embedding AI across a number of different core workflows. To date, we've implemented over $1.5 million in annualized comp savings with line of sight to around $2.5 million later this calendar quarter, which will take us to break even on the cash flow and operating basis going forward. That equates to, as Shubha mentioned, a 50% plus reduction in monthly cash burn. So I want to be clear on one thing as well. You know, this was a very deliberate re-architecture of the cost base to really support a more scalable, capital-efficient platform. And these quarterly earnings are really the first time we're actually starting to see this trickle through the numbers here. What that means going forward is higher incremental margins, stronger operating leverage, and really a business that can compound earnings without scaling costs linearly. Now, stepping back to look at the balance sheet, because, you know, this is where a lot of the transformation begins and becomes far more evident itself. The business has obviously 50X plus its overall cash balance, largely by way of the pipe transaction that took place several months ago. We're also sitting at a positive working capital of roughly $3.5 million versus a deficit in the prior period. The slide here references a 22.4 million digital asset treasury. I do want to just clarify that that's roughly $22.4 million of INJ at the fair market value. There's also stable coins that are outstanding as well as a meaningful cash position. And so, we actually look at the digital asset component on a fair market basis. close to around $45 million in liquid and liquid equivalent assets. From a liquidity standpoint to that vein, we now have several years of operational runway, which gives us the ability to execute deliberately without really dependence on external capital or really shareholder dilutive capital sources. This is a fundamentally different company than really what it was 12 months ago. To spend another minute or so on the digital asset treasury, because I think it's still somewhat maybe misunderstood or underappreciated. At a high level, we think about the DAT as a structured capital allocation program, not necessarily passive balance sheet exposure. As I mentioned and as Shubh alluded to, we've generated several hundred thousand in staking income during the period. which has become a new recurring yield stream. We only forecast that to continue to grow as we continue to execute and deploy and state a variety of these different instruments. But that's really just the base layer. Where we've also really been focused is active yield generation within the discipline framework. This includes structured derivative strategies, including writing puts to generate premium against our underlying I&J positions. Accumulator-style exposures, which allow us to systematically build position at favorable levels. Meaningful discounts to open market transaction or purchases. Also, secured and unsecured lending strategies, where we deploy assets to generate incremental year. And broader market-neutral or partially hedged strategies to enhance returns while managing volatility. All of this is done within a governed framework to find liquidity thresholds, position limits, counterparty diversification, and board-level oversight. And importantly, we've really built a first-class institutional great stack around this, working with groups like FalconX on prime brokerage and lending, working with groups like Kraken on OTC transactions, working with groups like Monarch and Canary on structuring trades and structuring products. Each of these different counterparties handles very distinct functions across custody, execution, advisory, and yield generation strategies overall. From a valuation standpoint, we've also introduced MNAV, which we think is an important lens for investors overall. At quarter end, MNAV was approximately 0.73 times. In other words, what MNAV signifies is the fully diluted enterprise value of the business relative to the fair market value of its underlying crypto holdings and digital asset holdings itself. In other words, the market is valuing the company at a relative discount to the underlying asset base before fully attributing value to the operating platform itself or potential forward earnings power. And obviously, that dislocation is something we're very focused on, which leads us really directly to capital allocation. We've structured and authorized a $15 million share repurchase program. The board's approved that initial $3 million tranche, which we're expecting to commence imminently in the coming days. We'll operate within Rule 10b-18 parameters. We'll have an initial ceiling in terms of price per share in the open market that we're going to be acquiring in terms of $1.50. Obviously, that's subject to board oversight. But at concurrent levels, the board and management see compelling risk-adjusted return in our own equity And this gives us a disciplined mechanism to act on that. The last thing I want to touch on briefly is really where the business is going from here. We've alluded to this both in terms of what we've done on the cost reduction side, what we've done with respect to really re-architecting the business. But the next phase of the platform is really focused around intelligence and automation. We've already begun embedding AI across onboarding, across underwriting workflows, across customer engagement. That's really just the tipping point and starting point. As we continue to structure and tokenize the underlying data layer and integrate that across our platform, we believe there's a real opportunity to continue to build out and execute on software-driven, high margin, recurring revenue products that sit on top of really the existing mortgage infrastructure. Think automated underwriting support, data-driven lender products, intelligent lead routing, conversion optimization, and potentially eventually AI-native financial workflows. Directionally, we're very, very excited about where the platform is heading. We've already made tremendous progress in our respect, and we're excited to obviously continue to execute on the strategy from here.