| | The Reporting Person acquired the Common Shares for investment purposes through a series of related transactions, each of which is described below, as well as to effect the transfer of the Reporting Person's then wholly-owned subsidiary, Fort Products Limited, a private company incorporated under the laws of England and Wales ("Fort UK"), into a publicly traded vehicle, thereby providing Fort UK with access to public capital markets, enhanced liquidity and a platform for the continued growth and expansion of its e-commerce consumer products business, while enabling the Reporting Person to retain a controlling equity interest in the combined enterprise and to continue to support the Issuer's operations as its parent company.
Share Purchase Agreement and Closing of the Acquisition. On February 6, 2025, the Issuer (then known as Impact Acquisitions Corp., a capital pool company listed on the TSX Venture Exchange (the "TSXV")) entered into a share purchase agreement (the "Share Purchase Agreement") with the Reporting Person and Fort UK, pursuant to which the Reporting Person agreed to sell all of the issued and outstanding shares of Fort UK to the Issuer (the "Acquisition"). The Acquisition closed on July 7, 2025, and in connection therewith, the Issuer changed its name from "Impact Acquisitions Corp." to "Fort Technology Inc." Pursuant to the Share Purchase Agreement, the Reporting Person sold to the Issuer all of the issued and outstanding common shares of Fort UK in consideration for the issuance to the Reporting Person of 7,142,857 Common Shares at the closing and up to an additional 4,714,287 contingent right shares (the "Contingent Right Shares"), each entitling the holder thereof to acquire one Common Share for no additional consideration upon the achievement of certain pre-determined milestones, at a deemed price per share of CAD $1.198722, representing a post-closing equity interest in the Issuer of approximately 75.02%.
February 2026 Share Transfer. On December 18, 2025, the Reporting Person entered into a share transfer agreement with certain institutional investors pursuant to which, on February 23, 2026, the Reporting Person sold and transferred 714,286 Common Shares to such investors for aggregate consideration of CAD $928,571 (approximately US $680,000).
Contingent Right Shares. As part of the consideration under the Share Purchase Agreement, the following amount of Contingent Right Shares will be issued to the Reporting Person upon the achievement of the following milestones: (i) 1,571,429 Common Shares upon the completion of a transaction resulting in the listing of the Issuer's securities on the New York Stock Exchange, the Nasdaq Stock Market LLC, or another U.S. national securities exchange, if completed within 24 months from the closing date of the Acquisition; (ii) 1,571,429 Common Shares upon the successful capital raising by the Issuer, within 48 months of the closing date, of aggregate equity and/or debt financing of $8,000,000 or more; and (iii) 1,571,429 Common Shares upon the Issuer reaching annual revenues of at least $15,000,000 by December 31, 2028, as reflected in its audited financial statements.
Upon the effectiveness of the listing of the Common Shares on the Nasdaq Capital Market ("Nasdaq") on June 8, 2026, the Issuer issued to the Reporting Person 1,571,429 Common Shares representing a portion of the Contingent Right Shares in satisfaction of the first milestone described above.
August 2025 Private Placement. On August 21, 2025, the Issuer closed a private placement (the "August 2025 Private Placement") of convertible debentures (the "August 2025 Convertible Debentures") for aggregate gross proceeds of US $3,630,513. The Reporting Person participated in the August 2025 Private Placement and acquired August 2025 Convertible Debentures for gross proceeds of US $1,597,653, representing approximately 858,031 Common Shares on conversion. The August 2025 Convertible Debentures mature on August 21, 2027, bear interest at 10% per annum payable quarterly, and are convertible at the option of the holder into units (each an "August 2025 Unit") at a conversion price of US $1.862 per unit. Each August 2025 Unit is comprised of one Common Share and one common share purchase warrant (an "August 2025 Warrant"), with each August 2025 Warrant entitling the holder to acquire one additional Common Share at an exercise price of US $1.862 per share until August 21, 2030.
On December 31, 2025, the Issuer received irrevocable conversion notices from all holders of the August 2025 Convertible Debentures, pursuant to which, immediately following the effectiveness of the listing of the Common Shares on Nasdaq on June 8, 2026, the aggregate outstanding principal amount of the August 2025 Convertible Debentures was automatically converted into 1,949,794 August 2025 Units, of which the Reporting Person received approximately 858,031 Common Shares and warrants to purchase 858,031 additional Common Shares.
Debt Settlement Agreement. On December 24, 2025, the Issuer entered into a debt settlement agreement with the Reporting Person (the "Debt Settlement Agreement"), pursuant to which the Issuer issued to the Reporting Person 1,700,801 Common Shares, at a price per share equal to CAD $1.98 (approximately US $1.44), in full and final settlement of accrued and outstanding indebtedness in the aggregate amount of CAD $3,367,587 (approximately US $2,462,767). The settled indebtedness was originally incurred by Fort UK and Fort Products LLC, the Issuer's wholly-owned U.S. subsidiary, under a service agreement entered into between Fort UK and the Reporting Person on March 30, 2023 (the "2023 Service Agreement"), and was subsequently assigned to the Issuer. Pursuant to the 2023 Service Agreement, the Reporting Person provides corporate management, business strategy and execution, administrative, finance, bookkeeping, and operational services to Fort UK. The Common Shares issued to the Reporting Person pursuant to the Debt Settlement Agreement are subject to a four-month-and-one-day hold period under applicable Canadian securities laws.
Except as described above in this Item 4, the Reporting Person does not have any present plans or proposals concerning events or transactions of the kind described in Item 4(a) through (j) of Schedule 13D. On August 17, 2026, the Reporting Person announced that its board of directors authorized the Reporting Person to evaluate and consider a potential dividend to its shareholders of a portion of the Common Shares currently held by the Reporting Person, which potential dividend may represent up to 10% of the Reporting Person's current holdings in the Issuer. Any such dividend remains subject to further consideration, applicable legal and regulatory requirements, required approvals and the satisfaction of any other applicable conditions.
Except as otherwise described herein and the August 17, 2026 announcement of the evaluation of the potential dividend, and other than as may arise in connection with the service of the Reporting Person's representatives as directors or officers of the Issuer or their respective roles with the Reporting Person, the Reporting Person currently has no plan(s) or proposal(s) that relate to, or would result in, any of the events or transactions described in Item 4(a) through (j) of Schedule 13D, although the Reporting Person reserves the right, at any time and from time to time, to review or reconsider its or his position and/or change its purpose and/or formulate plans or proposals with respect thereto. In addition, the Reporting Person reserves the right to increase or decrease its position in the Issuer through, among other things, the purchase or sale of securities of the Issuer on the open market or in private transactions or otherwise, on such terms and at such times as the Reporting Person may deem advisable. Notwithstanding the foregoing, in connection with the Acquisition and at the request of the TSX Venture Exchange pursuant to its policies regarding the maintenance of a minimum public float, the Reporting Person undertook not to acquire any securities, or exercise or convert any securities currently held, to the extent that, after giving effect thereto, it would directly or indirectly own in excess of 80% of the outstanding Common Shares. The Reporting Person reserves the right to change its intention with respect to any and all matters referred to in this Item 4. |
