What is the timeline and likelihood of the debentures being converted before the two‑year maturity date?

Timeline – The convertible debentures were issued on 12 August 2025 and carry a two‑year maturity, i.e. they can be redeemed at face value on 12 August 2027. The conversion feature is “at‑any‑time” from the issuance date, so the holder may elect to turn the CAD 5 million principal into Fort’s equity in any of the 24 months between now and the maturity date. The first interest payment (10 % p.a., quarterly) is due at the end of September 2025, which means the holder will already have received two interest coupons before the first full month of the conversion window elapses.

Likelihood of early conversion – Several factors point to a relatively high probability that the debentures will be converted well before August 2027:

1. Strategic ownership – Jeffs’ Brands owns 75 % of Fort. Converting the debentures would further cement its control and simplify the capital structure, a move that aligns with Jeffs’ typical “data‑driven” growth strategy.
   
2. Cost of carry – The 10 % annual coupon is steep for a TSX‑Venture‑listed company, especially given the quarterly cash‑flow burden. If Fort’s operating cash generation improves, the holder will have a strong incentive to swap the high‑cost debt for equity and eliminate the interest expense.
   
3. Conversion economics – The debentures are convertible into “Units” of Fort at a price that values the CAD 5 million as roughly CAD 27 million of equity. Assuming the conversion price is set at a modest discount to the current market price, any upside in Fort’s share price—driven by product roll‑outs, Amazon‑Marketplace performance, or broader tech‑sector rallies—makes conversion attractive.
   
4. Market dynamics – Fort’s stock is thinly traded on the TSX‑Venture, so a conversion would create a noticeable buying pressure on the limited float, often prompting a short‑term price spike. Traders typically price‑in this potential, and the market has already factored in a modest premium for the conversion right (sentiment score 35).

Trading implications – Until the conversion window opens, the debenture market will price the instrument with a “conversion‑probability” premium. As Fort’s share price moves above the conversion price, the likelihood of early conversion rises sharply, and the equity side of the trade will see increased demand. For a short‑term play, consider a long position in Fort’s common shares or a long‑duration convertible‑bond position with a view to unwind if the conversion is announced (typically triggering a sharp rally). Conversely, if the equity price stalls below the conversion threshold, the debenture’s interest‑paying nature will dominate, and the bond will trade at a discount—presenting a potential short‑bond, long‑cash opportunity. Monitoring quarterly interest‑payment dates (late Sept 2025, Dec 2025, Mar 2026, etc.) and any public statements from Jeffs’ Brands about capital‑structure rationalisation will help gauge the exact timing of a conversion decision.