TORONTO, Jan. 10, 2025 /CNW/ - Argo Corporation ("Argo" or the "Company") (TSXV: ARGH) (OTCQX: ARGHF), a new venture delivering the first-ever vertically and publicly integrated city transit system, announced today updates to its previously disclosed planned divestment of all or substantially all of the Company's ownership interest in FoodsUp Inc. ("FoodsUp"), one of Canada's leading restaurant supply platforms (the "FoodsUp Divestment"), and Argo's intention to extend the maturity date of its senior secured convertible debentures (the "Debentures").
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While Argo continues to maintain a majority non-controlling ownership interest in FoodsUp, the Company has made progress in resolving previously disclosed delays in the FoodsUp Divestment in collaboration with FoodsUp management, and expects to announce further plans with respect to its ownership of FoodsUp in Q1 2025. Notwithstanding this progress, at the time the Company issued the Debentures in February 2024, the Company expected that it would, in the near term, be able to complete the FoodsUp Divestment. In connection with this, the Debentures include a condition that in order for the Debentures to be settled through the issuance of units of the Company consisting of one common share and one common share purchase warrant (each a "Unit"), rather than settled in cash, the FoodsUp Divestment must be completed prior to the conversion of the Debentures (the "FoodsUp Condition"). Otherwise, the Debentures must be settled in cash. Under the current terms of the Debentures, the conversion or cash settlement must occur on or prior to current maturity date of February 8, 2025. Additionally, the interest rate of the Debentures is currently scheduled to increase from 12% to 17.99% if the Debentures are not settled on or prior to maturity on February 8, 2025.
In order to allow the Company to preserve cash, and to avoid the Company having to repay the principal amount outstanding under the debentures in the short-term or face an increase to the interest rate on the Debentures, the debentureholders are agreeable to allowing the Company more time to complete the FoodsUp Condition while maintaining the interest rate applicable to the Debentures at 12%, rather than increasing it to 17.99%. The Company has determined that this is in the best interest of shareholders and as such, subject to receipt of approval from the TSX Venture Exchange (the "TSXV"), the Debentures (along with the warrants which are to form a part of the Units) will be amended to extend their maturity date by one year, to February 8, 2026. All other terms of the Debentures and warrants, including keeping the interest rate on the Debentures at 12%, the conversion price of the Debentures, and the exercise price of the warrants, remain unchanged. For additional detail on the existing terms of the Debentures and warrants, see Argo's press release dated February 8, 2024.
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.
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 amendment to the Debentures and warrants and the terms thereof, Argo's ability to obtain all necessary approvals in respect of the amendment, Argo's intention with respect to the FoodsUp Condition and the future actions of the debentureholders.
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.
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