Pineapple Financial secures $1 million in direct offering

TORONTO - Pineapple Financial, Inc. (NYSE: PAPL), a Canadian mortgage brokerage firm known for its technological approach, has entered into a securities purchase agreement with an institutional investor for the sale of approximately $1 million in common shares. This transaction is part of a registered direct offering, with the closing expected around November 15, 2024, contingent on standard closing conditions.

The gross proceeds from this offering are projected to be about $1 million before the deduction of fees for the placement agent and other estimated offering expenses. D. Boral (OTC:BOALY) Capital LLC is the exclusive placement agent for the offering, while Sichenzia Ross Ference Carmel LLP provides U.S. legal counsel to Pineapple Financial.

The offering is made possible through a shelf registration statement on Form S-3, which was filed and declared effective by the Securities and Exchange Commission (SEC) on October 29, 2024. The terms of the public offering will be detailed in a final prospectus supplement to be filed with the SEC, forming part of the effective registration statement.

Pineapple Financial has distinguished itself in the Canadian mortgage industry by emphasizing long-term success for agents and brokerages and the homeowner experience. It operates a network of approximately 600 brokers and utilizes advanced cloud-based tools and AI systems. The company is also actively involved in community sponsorship of cancer charities across Canada.

The announcement includes forward-looking statements regarding the expected completion of the offering. These statements are based on the company's current expectations and projections about future events. However, they are subject to market conditions, the completion of the offering, and other risk factors detailed in the "Risk Factors" section of the registration statement filed with the SEC.

Investors are cautioned that actual results may differ materially from those anticipated and are advised to review the company's filings with the SEC for a more detailed discussion of potential risks. The information for this article is based on a press release statement.

In other recent news, Pineapple Financial Inc. has reported significant developments. The company recently announced the immediate resignation of board member Christa Mitchell, who will continue her role as Chief Strategy Officer. Pineapple Financial has also converted a portion of its debt into equity, issuing 64,922 new common shares to an investor, Brown Stone Capital Ltd, increasing its total issued and outstanding common shares to 7,883,859.

In addition, EF Hutton initiated coverage of Pineapple Financial with a Buy rating, recognizing its strategic expansion into non-mortgage insurance products and the formation of an internal sales team. Lastly, the company has broadened its affiliate network in Ontario by adding six new mortgage brokerages, a move that aligns with its growth strategy and is expected to boost both revenue and volume. These are among the recent developments for Pineapple Financial Inc.

InvestingPro Insights

Pineapple Financial's recent $1 million securities purchase agreement comes at a crucial time for the company, as revealed by InvestingPro data. The firm's market capitalization stands at a modest $6.57 million, highlighting the significance of this capital injection.

Despite the company's innovative approach in the Canadian mortgage industry, InvestingPro Tips indicate that Pineapple Financial is "quickly burning through cash" and is "not profitable over the last twelve months." This context underscores the importance of the recent funding round for the company's operations and growth strategies.

On a positive note, InvestingPro data shows a strong return over the last month, with a 19.08% price total return. This recent uptick, coupled with the fact that "liquid assets exceed short term obligations," suggests that the company may be positioning itself for a turnaround.

However, investors should note that analysts do not anticipate the company will be profitable this year, according to another InvestingPro Tip. This aligns with the reported operating income margin of -127.56% for the last twelve months as of Q3 2024.

For a more comprehensive analysis, InvestingPro offers 10 additional tips for Pineapple Financial, providing investors with a deeper understanding of the company's financial health and market position.

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