Pineapple Financial Inc. (NYSE American: PAPL), a finance services company, has converted a portion of its debt into equity, issuing new common shares to an investor, according to a recent 8-K filing with the Securities and Exchange Commission. On Monday, the company disclosed that Brown Stone Capital Ltd., an investor based in England and Wales, has chosen to convert $44,912.90 of a convertible promissory note into 64,922 common shares of Pineapple Financial.
The conversion stems from an agreement dated May 10, 2024, under which Pineapple Financial sold a note with a principal amount of $300,000 to Brown Stone Capital Ltd. This note carried an 8% annual interest rate and was set to mature 24 months from the date of issuance. The shares issued as a result of the conversion have been registered under a previously filed and effective registration statement.
As a result of this conversion, Pineapple Financial's total issued and outstanding common shares have increased to 7,883,859. The transaction was conducted in accordance with the terms specified in the Securities Purchase Agreement and the Convertible Promissory Note, which were included as exhibits in a Form 8-K filed on May 16, 2024.
In other recent news, Pineapple Financial has been the subject of a positive outlook from EF Hutton, which initiated coverage with a Buy rating. The firm's analysis highlights Pineapple Financial's strategic expansion into non-mortgage insurance products, which are expected to contribute positively to the company's financial health due to higher commission percentages. The company's decision to form an internal sales team to generate leads is attributed to improving net margins, reducing the need to pay external insurance advisors higher commissions for client acquisition.
In addition to this, Pineapple Financial has expanded its affiliate network in Ontario, adding six new mortgage brokerages to its roster. This move, part of the company's growth strategy, is expected to boost both revenue and volume. The company's affiliate network contributed to 36.8 percent of the total funded volume in the 2023 fiscal year, reflecting a significant portion of its revenue.
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