Argo Corporation announces update on special stock dividend in connection with its ownership interest in FoodsUp Inc.

Argo Corporation announces update on special stock dividend in connection with its ownership interest in FoodsUp Inc.

TORONTO, Aug. 14, 2025 /CNW/ - On May 21, 2025 Argo Corporation ("Argo" or the "Company") (TSXV: ARGH) (OTCQX: ARGHF), a leader in next-generation transit solutions, announced that its board of directors had declared a special stock dividend (the "Stock Dividend") of one Preferred Share, Series A of Argo (the "Series A Preferred Shares") for each common share of Argo (the "Common Shares"). The Series A Preferred Shares track the Company's ownership of 45,932 subordinate-voting shares in the capital of FoodsUp Inc. (the "FoodsUp Shares"). The Company also announced it and one of its wholly-owned subsidiaries are parties to two option agreements (collectively, the "Option Agreements") which are intended to facilitate the sale of the FoodsUp Shares. If fully exercised, the Option Agreements would result in gross proceeds of between $21.6 million and $30.2 million, which are intended to be distributed to the holders of the Series A Preferred Shares. The payment date for the Stock Dividend is August 20, 2025 (the "Distribution Date") and any purchaser of Common Shares before the close of markets on the Distribution Date will be assigned the right to the Stock Dividend. The Common Shares of the Company will begin trading on an "ex-distribution" basis at the opening of markets on August 21, 2025.

Background

Argo's founding leadership team announced its plans in 2024 to develop the world's first vertically-integrated transit system for cities. Since then, Argo's Smart Routing™ system successfully doubled transit ridership in the Town of Bradford West Gwillimbury, replacing all of the municipality's legacy fixed bus routes. The Company also announced a landmark $10.9 million 12-month agreement with the City of Brampton, and is focused on expanding to more municipalities.

Simultaneously, the Company has been executing an ongoing strategy to monetize legacy assets that predate the founding of Argo's current business to maximize value for shareholders. Since then, Argo has realized $3.25 million in proceeds from previously disclosed legacy asset sales. As part of this ongoing strategy, and as previously disclosed, the Company is pursuing the sale of the FoodsUp Shares (the "FoodsUp Divestment"). The Company is proceeding with the Stock Dividend, which is intended to provide its shareholders with their proportionate stake in the net proceeds realized upon the eventual FoodsUp Divestment.

FoodsUp Divestment

FoodsUp Inc. is a Canadian restaurant supply platform with annual revenues of $108 million in fiscal 2024. To facilitate the FoodsUp Divestment, the Company previously disclosed that it and one of its wholly-owned subsidiaries are parties to the Option Agreements, which if fully exercised, would result in gross proceeds of between $21.6 million and $30.2 million, which are intended to be distributed to the holders of the Series A Preferred Shares, after deducting all applicable taxes and fees and expenses incurred in connection with the Company's ownership of the FoodsUp Shares. However, the Company can make no assurance of the timing of or quantum of proceeds to be received in connection with the transactions under the Option Agreements, or that such transactions will occur at all. The transactions provided for in the Option Agreements remain subject to final approval of the TSX Venture Exchange. See the Company's press release dated May 21, 2025 and management information circular dated May 22, 2025 for more information regarding the Option Agreements.

Special Stock Dividend

The Common Shares started trading on a "due-bill" basis at the opening of trading on August 13, 2025 (the "Record Date") and will commence trading on an "ex-distribution" basis at the opening of markets on August 21, 2025, the first trading day following the Distribution Date. A due bill will attach to each Common Share between the opening of markets on the Record Date and the close of markets on the Distribution Date (the "Due Bill Period"). During the Due Bill Period, any seller of Common Shares will also be deemed to sell and assign the right to the Stock Dividend to the purchaser of such Common Shares. The Common Shares will not commence trading on an ex-distribution basis (i.e., without the entitlement to receive the Stock Dividend) until the opening of markets on August 21, 2025, the first trading day following the Distribution Date.

The Stock Dividend has been designated as an eligible dividend for the purposes of the Income Tax Act (Canada). Shareholders as of the Record Date do not need to take any action to receive the Stock Dividend. Accounts for registered shareholders and beneficial shareholders (i.e., those who hold Common Shares through an intermediary) will be credited with the Series A Preferred Shares on or about the Distribution Date.

For most Canadian federal income tax purposes, the amount of a stock dividend, and therefore the amount included in the income of a shareholder who receives a stock dividend, is equal to the increase in the paid-up capital of the corporation by reason of the payment of the stock dividend. The amount that will be added to the stated capital of the Series A Preferred Shares, and therefore the increase in the paid-up capital of the Company, will be $1,000 in total. As a result, it is expected that the amount of the dividend that will be received by the shareholders for most Canadian federal income tax purposes will be approximately $0.000007 per Series A Preferred Share. This summary is of a general nature only and is not exhaustive of all possible Canadian federal income tax considerations. This summary is not and should not be construed as legal or tax advice to any holder or prospective holder of Series A Preferred Shares, and no representations with respect to the income tax consequences to any holder or prospective holder are made. Consequently, holders or prospective holders of Series A Preferred Shares should consult their own tax advisors regarding the Canadian federal income tax consequences with respect to their particular circumstances, and any other consequences to them of such transactions under Canadian federal, provincial, local or foreign tax laws.

In anticipation of the foregoing, the Company has amended its articles to create a new series of preferred shares, being the Series A Preferred Shares (the "Amendment"). The Series A Preferred Shares are intended to effectively track the ownership of the 45,932 subordinate-voting shares in the capital of FoodsUp Inc. that are owned by the Company as of the date the articles were amended. Holders of the Series A Preferred Shares will be entitled to receive dividends ("Series A Special Dividends") if, as, and when declared by the board of directors of the Company in an amount equal to the proceeds of disposition of the FoodsUp Shares received by the Company after deducting all applicable taxes and fees and expenses incurred in connection with the Company's ownership of the FoodsUp Shares. To the extent that any Series A Special Dividends are declared by the board of directors of the Company, such dividends will be paid in such manner, in such quantum and at such times, as the board of directors of the Company may from time to time determine. Except as required by law, holders of Series A Preferred Shares will not be entitled to receive notice of, or to attend, any meeting of the shareholders of the Company and will not be entitled to vote at any such meeting. In certain circumstances the Company may redeem all of the Series A Preferred Shares. The Series A Preferred Shares will not be listed or quoted on a marketplace. The complete rights, privileges, restrictions and conditions attaching to the Series A Preferred Shares are set out in the articles of amendment of the Company, which are available under the Company's SEDAR+ profile on www.sedarplus.ca.

About Argo

Argo delivers the first-ever vertically and publicly integrated city transit system, designed to augment public transportation and create a network of intelligently routed vehicles that work together to serve and scale to the needs of entire cities, putting people in control of their mobility. You can learn more at www.rideargo.com.

Praveen Arichandran, CEO
Argo Corporation
(800) 575-7051

Forward-Looking Information

Certain information set out in this news release constitutes forward-looking information within the meaning of applicable securities laws. Forward-looking information is often, but not always, identified by the use of words such as "seek", "anticipate", "hope", "plan", "continue", "estimate", "expect", "may", "will", "intend", "could", "might", "should", "scheduled", "believe" and similar expressions. The forward-looking information set out in this news release relates to future events or our future performance and includes, without limitation, statements concerning: the Company's intention to complete the FoodsUp Divestment; the distribution of the Series A Preferred Shares pursuant to the Stock Dividend; the payment of Series A Special Dividends; the completion of the exercise of the options granted pursuant to the Option Agreements by the holders thereof; Canadian federal, provincial, local or foreign tax treatment of holders or prospective holders of Series A Preferred Shares; and Argo's ability to obtain all necessary approvals in respect of the Option Agreements.

Although the forward-looking information contained in this news release is based upon what management of Argo believes are reasonable assumptions on the date of this news release, Argo cannot assure readers that actual results will be consistent with such forward-looking information. Forward-looking information involves substantial known and unknown risks, uncertainties and other factors which cause actual results to vary from those expressed or implied by such forward looking information, including without limitation those risks and uncertainties described in more detail in Argo's securities filings available at www.sedarplus.ca. Forward-looking information should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved.

The forward-looking information contained in this news release is provided as of the date hereof. Argo disclaims any intention or obligation to update or publicly revise any forward–looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. All forward-looking information contained in this news release is expressly qualified in its entirety by the foregoing cautionary statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE ARGO CORPORATION