Financial Performance - The company generated $1.399 billion in residential mortgage loans for the year ended August 31, 2023, a decrease of $386 million or 21.63% compared to $1.790 billion in the previous year[144]. - The net loss for the year was $2.874 million, an improvement from the net loss of $3.015 million recorded in the previous year[144]. - Adjusted EBITDA for the year was a loss of $1.239 million, representing a decrease of $0.376 million or 23.26% compared to the previous year's loss of $1.615 million[144]. - Total revenue for the year ended August 31, 2023, was $2.502 million, down from $3.600 million in the previous year, indicating a decline of approximately 30.61%[151]. - Net revenue decreased by 30.51% from $3,600,851 in 2022 to $2,502,264 in 2023[165]. - Gross revenue fell by 19.37% from $20.381 million in 2022 to $16.434 million in 2023, attributed to a decline in real estate transactions[166]. - Gross profit margin decreased from 17.67% in 2022 to 15.23% in 2023 due to increased volume by low-margin agents[167]. - Total expenses decreased by 17.58% from $6,410,911 in 2022 to $5,284,158 in 2023[165]. Mortgage and Real Estate Market - The company's mortgage volume decreased to $1.398 billion in 2023 from $1.785 billion in 2022, reflecting a decline of 21.63%[155]. - The Bank of Canada's prime rate increases have led to a significant shrinkage in the mortgage origination market, impacting demand for mortgage originations[143]. - The number of real estate transactions in Canada decreased by 21.02%, from 558,591 in 2022 to 441,536 in 2023[166]. Revenue Streams - Subscription revenue increased to $736,708 in 2023 from $616,734 in 2022, showing a growth of 19.43%[155]. - The company reported a commission expense of $13.932 million in 2023, down from $16.780 million in 2022, a decrease of 16.96%[155]. - Approximately 40% of deals originated by users utilized the pre-assessment underwriting service, indicating a significant uptake of this offering[159]. Investments and Development - The company invested $1,300,225 in software development for mortgage applications during the year[183]. - Depreciation increased by 72.41% from $255,871 in 2022 to $441,159 in 2023, driven by investments in software development[174]. - The Company invested $36,830 in two mortgage-related firms, representing 5% of the total issued shares of each firm, enhancing its service offerings and revenue potential[199]. Cash Flow and Liquidity - Cash used in operating activities increased to $2,116,105 in 2023 from $1,834,909 in 2022, primarily due to a net loss of $2,809,036[181]. - Cash and cash equivalents decreased from $3,896,839 in 2022 to $720,365 in 2023, a decline of $3,176,474[186]. - The Company reported cash and cash equivalents of $720,365 as of August 31, 2023, a significant decrease from $3,896,839 in the previous year[221]. - The Company has a liquidity risk management strategy to ensure sufficient liquidity to meet obligations, with accounts payable and accrued liabilities totaling $605,318 due within one year[222]. Internal Controls and Compliance - The Company’s internal controls over financial reporting were assessed as lacking adequate segregation of duties and documentation as of August 31, 2023[209]. - The Company has adopted ASC 606 for revenue recognition, ensuring revenue reflects the consideration expected from customers[189]. Other Financial Metrics - Share-based compensation dropped by 95.42% from $723,217 in 2022 to $33,091 in 2023, with no options granted during the year[175]. - The total stock-based compensation expense recognized for vested options was $57,340 for the year ended August 31, 2023[206]. - The Company’s lease obligations total $1,107,961, with $138,372 due within one year[222]. - As of August 31, 2023, the Company’s total assets included cash of $720,365 and investments valued at $10,013[213]. - The Company operates an online platform powered by Salesforce, facilitating efficient deal closures for brokers and agents[191].
Pineapple(PAPL) - 2023 Q4 - Annual Report