Pineapple Financial, Inc. Announces Closing of $1.0 Million Registered Direct Offering at $0.60 per share

Rhea-AI Summary

Pineapple Financial (NYSE: PAPL), a Canadian tech-focused mortgage brokerage, has closed a registered direct offering raising $1 million in gross proceeds. The offering consisted of 1,666,667 common shares and pre-funded warrants, priced at $0.60 per share (or $0.5999 per pre-funded warrant). D. Boral Capital served as the exclusive placement agent. The offering was conducted under a shelf registration statement on Form S-3 that was declared effective by the SEC on October 29, 2024.

Positive

• Successfully raised $1 million in gross proceeds through registered direct offering

Negative

• Share dilution due to issuance of 1,666,667 new common shares
• Offering price of $0.60 per share may indicate downward pressure on stock value

Insights

Financial Analyst

The $1 million registered direct offering at $0.60 per share represents significant dilution for existing shareholders, given the company's market cap of about $5.3 million. The offering price reflects a substantial discount to recent trading levels and the inclusion of pre-funded warrants adds another layer of potential dilution. While the capital raise provides needed working capital, the terms are notably unfavorable and indicate challenging market conditions for the company.

The shelf registration and placement structure suggests institutional interest, forcing the company to accept less favorable terms. The involvement of a smaller placement agent rather than major investment banks also signals market confidence. For a mortgage technology company operating in a high-interest rate environment, this capital raise appears to be more of a necessity than an opportunity for growth.

Toronto, Nov. 14, 2024 (GLOBE NEWSWIRE) -- Pineapple Financial, Inc. (NYSE: PAPL) (the “Company”), Canada’s tech-focused mortgage brokerage with an integrated network of partner brokerages and agents across the country, today announced the closing of its registered direct offering (the “Offering”) with aggregate gross proceeds to the Company of approximately $1,000,000, prior to deducting fees and other expenses payable by the Company. The Offering consisted of 1,666,667 common shares and pre-funded warrants. Each common share (or pre-funded warrant in lieu thereof) was sold at a purchase price of $0.60 per share (or $0.5999 per pre-funded warrant after reducing $0.0001 attributable to the exercise price of the pre-funded warrants).

D. Boral Capital LLC acted as exclusive placement agent for the offering.

Sichenzia Ross Ference Carmel LLP acted as U.S. legal counsel to Pineapple Financial, Inc.

The proposed offering of the securities described above was offered by the Company pursuant to a “shelf” registration statement on Form S-3 (File No. 333-282629) filed with the Securities and Exchange Commission (SEC) and declared effective by the SEC on October 29, 2024, and the accompanying prospectus contained therein.

The offering was made only by means of a prospectus supplement and accompanying prospectus. A final prospectus supplement describing the terms of the public offering was filed with the SEC and forms a part of the effective registration statement.

Copies of the prospectus supplement and the accompanying prospectus relating to this offering may be obtained, when available, on the SEC’s website at http://www.sec.gov or by contacting D. Boral Capital LLC Attention: Syndicate Department, 590 Madison Avenue, 39th Floor, New York, NY 10022, by email at syndicate@dboralcapital.com, or by telephone at (212) 970-5150.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Pineapple Financial, Inc.

Pineapple is a leader in the Canadian mortgage industry, breaking the mold by focusing on both the long-term success of agents and brokerages, as well as the overall experience of homeowners. With approximately 600 brokers within the network, Pineapple utilizes cutting-edge cloud-based tools and AI-driven systems to enable its brokers to help Canadians realize their ultimate dream of owning a home. Pineapple is active within the community and is proud to sponsor cancer charities across Canada, improving the lives of fellow Canadians touched by cancer.

Forward Looking Statements

Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company's proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs, including the expectation that the Offering will be successfully completed. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations that arise after the date hereof, except as may be required by law. These statements are subject to uncertainties and risks including, but not limited to, the uncertainties related to market conditions and the completion of the initial public offering on the anticipated terms or at all, and other factors discussed in the “Risk Factors” section of the registration statement filed with the SEC. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov.

Given these uncertainties, you should not place undue reliance on these forward-looking statements. The forward-looking statements included in this press release are made only as of the date hereof. We do not undertake any obligation to update any such statements or to publicly announce the results of any revisions to any of such statements to reflect future events or developments.

For media inquiries, please contact Shuba Dasgupta, Chief Executive Officer & Co-Founder, at Pineapple

Email: shuba@gopineapple.com

FAQ

How much did Pineapple Financial (PAPL) raise in its November 2024 offering?

Pineapple Financial raised $1 million in gross proceeds through a registered direct offering.

What was the share price for PAPL's November 2024 registered direct offering?

The shares were priced at $0.60 per share, with pre-funded warrants priced at $0.5999.

How many shares did Pineapple Financial (PAPL) issue in its November 2024 offering?

The offering consisted of 1,666,667 common shares and pre-funded warrants.

Who was the placement agent for PAPL's November 2024 offering?

D. Boral Capital acted as the exclusive placement agent for the offering.