Pineapple Financial (PAPL) risk factors, FY2025 10-K

Risks Related to the Company

1. 01We have adopted a digital asset treasury strategy with a focus on INJ, and we may be unable to successfully implement this new strategyNew
2. 02Our 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 holdingsNew
3. 03Our shift towards an Injective-focused strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risksNew
4. 04The concentration of our INJ holdings enhances the risks inherent in our Injective-focused strategyNew
5. 05If the Injective network is disrupted or encounters any unanticipated difficulties, the value of INJ could be negatively impactedNew
6. 06INJ 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 prospectsNew
7. 07Changes in regulatory interpretations could require us to register as a money services business or money transmitter, leading to increased compliance costs or operational shutdownsNew
8. 08If 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 operationsNew
9. 09The 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 operationsNew
10. 10We 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 advisersNew
11. 11Our Digital asset holdings are illiquid and cannot serve as a source of liquidity for us, subject to limited exceptionsNew
12. 12The lack of legal recourse and insurance for digital assets increases the risk of total loss in the event of theft or destructionNew
13. 13The irreversibility of digital asset transactions exposes us to risks of theft, loss and human error, which could negatively impact our businessNew
14. 14Although 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 partiesNew
15. 15The 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 securitiesNew
16. 16Our financial performance is closely connected to the strength of the residential real estate market, which is subject to a number of general business and macroeconomic conditions beyond our control
17. 17We may not be able to secure additional capital and achieve adequate liquidity to grow and compete
18. 18We have a limited operating history and, therefore, cannot accurately project our revenues and operating expenses
19. 19We may continue to incur substantial losses and negative operating cash flows and may not achieve or maintain positive cash flow or profitability in the future
20. 20Currency exchange rates fluctuations could adversely affect our operating results
21. 21Our operating results may be subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult
22. 22Our growth strategy may not achieve the anticipated results
23. 23We may be unable to effectively manage rapid growth in our business
24. 24To grow our business, we will continue to depend on relationships with third parties, such as insurance companies, financial institutions and lenders
25. 25Our insurance business is highly regulated, and statutory and regulatory changes may materially adversely affect our business, financial condition and results of operations
26. 26We may be subject to fraudulent activity that may negatively impact our operating results, brand and reputation
27. 27We may experience security breaches that could result in the loss or misuse of data, which could harm our business and reputation
28. 28Our software systems may contain errors, defects or security vulnerabilities that could interrupt operations or materially impact our ability to originate, monitor or service customer accounts or comply with contractual obligations
29. 29If we fail to protect the privacy and personal information of our customers, agents or employees, we may be subject to legal claims, government action and damage to its reputation
30. 30We may need to develop new products and services and rapid technological change could harm our business, results of operations and financial condition
31. 31The failure by us to sustain or increase its current level of mortgage origination from independent mortgage brokers could have a material adverse effect on our business, financial condition and results of operations
32. 32Increases in interest rates may have an adverse effect on our business, financial condition and results of operations and on the amount of cash available for dividends to shareholders
33. 33If any of information from third parties is misrepresented and the misrepresentation is not detected before mortgage funding, the value of the mortgage may be significantly lower than expected
34. 34Global economy risk may negatively impact our business operations and our ability to raise capital
35. 35A decline in the global macroeconomic outlook, including as a result of Russia’s invasion of Ukraine and the threat, or outbreak of more widespread armed conflict in Eastern Europe would cause financial market activity to continue to decrease, which could negatively affect the Company’s revenues
36. 36Changes in regulatory legislation or the interpretation thereof, or the introduction of any new regulatory requirements could have a negative effect on us and our operating results
37. 37The real estate brokerage industry is highly competitive which could have a material adverse effect on our business, financial condition and results of operations.
38. 38A failure in the demand for its services to materialize as a result of competition, technological change or other factors could have a material adverse effect on our business, results of operations and financial condition
39. 39Reputation loss may result in decreased customer confidence and an impediment to our overall ability to advance its services with customers, thereby having a material adverse impact on our financial performance, financial condition, cash flows and growth prospects
40. 40The Company’s intellectual property rights are valuable, and any failure or inability to protect them could adversely affect our business
41. 41We depend on highly skilled personnel to grow and operate our business. If we are not able to hire, retain, and motivate our key personnel, our business may be adversely affected
42. 42It may be difficult to enforce civil liabilities under Canadian securities laws
43. 43Future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt, contingent liabilities and/or amortization expenses related to goodwill and other intangible assets, which could materially adversely affect our business, results of operations and financial condition
44. 44Failure to implement required new or improved controls, or difficulties encountered in their implementation, could harm our results of operations or cause us to fail to meet our reporting obligations
45. 45Canada does not have a system of exchange controls, and control of the Company by “non-Canadians” may be subject to review and further government action

Risks Related to Our Securities

1. 46An investment in our securities carries a high degree of risk and should be considered as a speculative investment
2. 47The trading price of our Common Shares is likely to be volatileNew
3. 48We may, in the future, issue additional Common Shares or other securities, which would reduce investors’ percent of ownership and dilute our share value49% rewritten
4. 49Digital-Asset Treasury and Market-Value Volatility Could Adversely Affect Our Financial Position and LiquidityNew
5. 50We have never paid dividends on our Common Shares and we do not anticipate paying any dividends in the foreseeable future
6. 51We are an “emerging growth company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our Common Shares less attractive to investors
7. 52Investors could find our Common Shares less attractive if we choose to rely on these exemptions. If some investors find our Common Shares less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Common Shares and our share price may be more volatile
8. 53We are a “smaller reporting company” and, even if we no longer qualify as an emerging growth company, we may still be subject to reduced reporting requirements
9. 54If we fail to maintain compliance with the continued listing requirements of the NYSE American, the Common Shares may be delisted from the NYSE American, which would result in a limited trading market for our Common Shares and make obtaining future debt or equity financing more difficult for the Company
10. 55If our Common Shares were to be delisted from the NYSE American, they may become subject to the SEC’s “penny stock” rules53% rewritten
11. 56On September 4, 2025, the Company entered into a Common Stock Purchase Agreement with White Lion Capital LLC, providing a discretionary Equity Line of Credit (ELOC) of up to US $250 million over a 24-month periodNew