Company Announcements

TORONTO , May 21, 2025 /CNW/ - Argo Corporation ("Argo" or the "Company") (TSXV: ARGH) (OTCQX: ARGHF), a leader in next-generation transit solutions, announced today that its board of directors has declared a special stock dividend intended to provide its legacy shareholders with their proportionate stake in the net proceeds realized upon the eventual sale by the Company of its ownership interest in FoodsUp Inc. To facilitate this eventual sale, the Company previously disclosed that it and one of its wholly-owned subsidiaries are parties to Option Agreements (defined below), which if fully exercised, would result in gross proceeds of between $21.6 million and $30.2 million.

Background

The Company has an ownership interest in FoodsUp Inc. This ownership interest is represented by one of the Company's wholly-owned subsidiaries holding 45,932 subordinate voting shares of FoodsUp Inc. (the "FoodsUp Shares"). FoodsUp Inc. is a Canadian restaurant supply platform with annual revenues of $108 million in fiscal 2024, and the Company's ownership interest in FoodsUp Inc. stems from a legacy business line of the Company that predates the founding of Argo's current business and leadership.

Further to its previous disclosure, the Company remains committed to implementing a sale of the FoodsUp Shares (the "FoodsUp Divestment"), so that the Company can mark the formal separation between the business of FoodsUp Inc. and the business of Argo. In the meantime, the Company remains committed to providing its legacy shareholders with their proportionate stake in the net proceeds realized upon the eventual FoodsUp Divestment, and as such, the Company is proceeding with the Stock Dividend as an interim measure that moves the Company meaningfully closer to its objectives.

Special Stock Dividend

The board of directors of the Company has declared a special stock dividend (the "Stock Dividend"), pursuant to which all of the Company's common shareholders of record on August 13, 2025 (the "Record Date") will be entitled to receive, one Preferred Share, Series A of Argo (the "Series A Preferred Shares") for each common share of Argo held on the Record Date (the "Common Shares"). The payment date for the Stock Dividend is August 20, 2025 (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.

The Company expects the Common Shares will commence trading on a "due-bill" basis at the opening of trading on the Record Date, August 13, 2025 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 is expected to 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.

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 that are owned by the Company as the date the articles were amended (the "FoodsUp Shares"). 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.

The Amendment has been conditionally approved by the TSX Venture Exchange and is subject to the final approval of the TSXV Venture Exchange.

FoodsUp Divestment

The Company's new leadership has been working to achieve the FoodsUp Divestment since 2024. Given that the Company does not control FoodsUp Inc., and the FoodsUp Shares are private company shares, the Company believes that the best path for selling the FoodsUp Shares is pursuant to the Option Agreements (defined below). If the transactions contemplated by the Option Agreements are fully exercised, the Company has the potential to receive 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. Importantly, however, the Company can make no assurance that the transactions contemplated under the Option Agreements will occur.

One of the Company's wholly-owned subsidiaries is party to an option agreement (the "FoodFlow Option Agreement") with FoodFlow Partner, FoodGrowup Partner and Foods Up Inc., pursuant to which FoodFlow has the option (but not the obligation) to purchase up to 30,219 subordinate-voting shares of FoodsUp Inc. from Argo. The Company and one of its wholly-owned subsidiaries are also party to an option agreement (the "359 Option Agreement", and together with the FoodFlow Option Agreement, the "Option Agreements") with 16786359 Canada Inc., pursuant to which 16786359 Canada Inc. has the option (but not the obligation) to purchase up to 15,713 subordinate-voting shares of FoodsUp Inc. from Argo.

The transactions contemplated under the FoodFlow Option Agreement may be considered related party transactions within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101") as Argo, through one of its wholly-owned subsidiaries owned more than 50% of the subordinate-voting shares of FoodsUp Inc. on the effective date of the FoodFlow Option Agreement and the principals of FoodFlow Partner and FoodGrowup Partner are directors of FoodsUp Inc. The transactions contemplated under the 359 Option Agreement may be considered related party transactions within the meaning of MI 61-101 as Junaid Razvi, the principal of 16786359 Canada Inc., is a director of the wholly-owned subsidiary of Argo that owns the subordinate-voting shares of FoodsUp Inc. and FoodsUp Inc. The Option Agreements are each exempt from the formal valuation requirement in Section 5.4 of MI 61-101 in reliance on Section 5.5(b) of MI 61-101 as the Company is not listed on a specified market within the meaning of MI 61-101. The Company intends to seek minority approval under Section 5.6 of MI 61-101 in respect of each of the Option Agreements at its upcoming annual and special meeting of shareholders scheduled for June 30, 2025.

The Company's ability to complete the transactions provided for in the Option Agreements remain subject to any required approvals, including conditional approval of the TSX Venture Exchange in respect of the 359 Option Agreement, final approval of the TSX Venture Exchange in respect of both Option Agreements, and approval of the shareholders of the Company in respect of both Option Agreements. Argo expects to provide an update on the Option Agreements following its annual and special meeting of shareholders as well as following the closing of any of the transactions contemplated under the Option Agreements, if applicable.

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; matters to be approved at Argo's upcoming annual and special meeting of shareholders; and Argo's ability to obtain all necessary approvals in respect of the Amendment and 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