Pineapple Financial Inc.

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

Future issuances under equity-linked financing arrangements may result in substantial dilution and downward pressure on the market price of our common shares.

We have issued, and may continue to issue, common shares, warrants, pre-funded warrants, restricted share units, stock options or other equity-linked securities in connection with private placements, equity lines of credit, debt repayment, acquisitions, compensation arrangements and other financing transactions.

The issuance of additional common shares or securities convertible into or exercisable for common shares will dilute the ownership and voting interests of existing shareholders and may reduce earnings or book value per share. The degree of dilution may be significant, particularly if a financing permits shares to be issued based on market prices prevailing at the time of each issuance or if warrants and other convertible instruments become exercisable.

Sales or potential sales of a substantial number of common shares, or the perception that such sales may occur, could place downward pressure on the market price of our common shares. A decline in our share price could increase the number of shares required to raise a given amount of capital, resulting in further dilution.

Certain financing arrangements may also contain limitations based on trading volume, exchange rules, shareholder-approval requirements, registration-statement effectiveness or other conditions. We may therefore be unable to access the anticipated amount of financing when required. If equity financing is unavailable or insufficient, we may be required to use additional debt, sell digital assets or reduce operating expenditures.

Closing paragraph for Item 1A

Except as described above, there have been no material changes to 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.