TORONTO, Oct. 1, 2024
/CNW/ - Argo Corporation ("Argo") (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 restructuring and divestment activities
relating to prior ventures of the predecessor in its entity Steer
Technologies Inc. ("Steer").
Vehicle Subscriptions Venture
Further to its May 23, 2024
disclosure, Argo's wholly owned subsidiaries, Steer EV Canada Inc.
and Steer Holdings LLC, shut down their electric vehicles
subscription business operations in Canada and the
United States, which has allowed new management to launch
Argo and focus on its core business. Additionally:
- Steer EV Canada Inc.: On October 1, 2024, Steer EV Canada Inc. filed an
assignment into bankruptcy under the Bankruptcy and Insolvency Act
in Canada. A first meeting of
creditors will occur on October 21,
2024, with B. Riley Farber Inc. appointed as the licensed
bankruptcy trustee. This subsidiary has in excess of
$4.8M in liabilities (net of certain
intercompany balances) and minimal assets, as of June 30, 2024.
- Steer Holdings LLC: On September 27, 2024, Steer Holdings LLC
("Assignor"), made a General Assignment for the Benefit of
Creditors (the "Assignment") to Steer Holdings (assignment for the
benefit of creditors), LLC ("Assignee"), as Assignee, pursuant to
California law. Pursuant to the
Assignment, Assignor transferred ownership of all of its rights in
tangible and intangible assets (collectively the "Assets") to
Assignee for liquidation. The Assignee has confirmed that Assignor
has debt in an amount substantially in excess of the value of the
Assets. Accordingly, there will be no distribution to any equity
holder in Assignor on account of the equity interest of such
holder. This subsidiary has in excess of $5.8M in liabilities (net of certain intercompany
balances) and minimal assets, as of June 30,
2024.
FoodsUp
Argo maintains a 59.95% non-controlling ownership interest in
FoodsUp Inc. ("FoodsUp"), one of Canada's leading restaurant supply platforms.
Further to its May 23, 2024
disclosure, since February 9, 2024,
Argo has been undertaking steps to achieve the divestment of most
of its interest in FoodsUp (the "FoodsUp Divestment"). While Argo
had previously been working toward a transaction structure whereby
Argo's shareholders as of a to-be-determined record date, would
receive a direct ownership interest in FoodsUp, Argo's view is that
it has not received the cooperation needed from FoodsUp to give
effect to that transaction structure. However, Argo remains
committed to implementing the FoodsUp Divestment and is exploring
alternative transaction structures, the effect of which will be to
provide the shareholders of Argo with either the proceeds of sale
of its interest in FoodsUp to a third party, or an indirect or
tracking ownership interest in FoodsUp, in each case, as of a
to-be-determined record date. The FoodsUp Divestment, if it occurs,
will mark an important step in Argo's formal separation between the
business of FoodsUp and Argo.
While Argo works toward achieving the FoodsUp Divestment, Argo
is also navigating a number of issues presented by its ongoing
association with FoodsUp, including Argo's view of failures by
FoodsUp to comply with contracts entered into between Argo and
FoodsUp, delays by FoodsUp in providing financial information to
Argo in connection with Argo's continuous disclosure obligations
(which prior delays resulted in Argo being the subject of a cease
trade order earlier this year) and the status of FoodsUp's ongoing
fundraising efforts, which have the potential to impact Argo's
ownership position in FoodsUp.
Steer's Former CEO, Suman
Pushparajah
100 Consilium Place Office Lease
Argo's balance sheet for the six-months ended June 30, 2024 includes a $3.1M liability related to a disputed office
lease with landlord 8174709 Canada Inc. and Steer's former CEO,
Suman Pushparajah, who was
previously dismissed by Steer with cause. Under the disputed office
lease, Mr. Pushparajah is subject to a personal indemnity of up to
$1M. On October 1, 2024, Argo filed a statement of claim
against Mr. Pushparajah and Steer's former landlord alleging that
Mr. Pushparajah breached his fiduciary duty as CEO of Steer in
negotiating and executing the disputed office lease without the
knowledge or approval of Steer's Board of Directors and to advance
his own personal benefit, and that Steer's former landlord
knowingly assisted in the breach of his fiduciary duties.
Baseless Court Action
On September 27, 2024, Argo was
served a statement of claim by Mr. Pushparajah. The claim seeks
$10M from Argo, its current Co-CEO,
Qamar Qureshi, and its former CEO,
Junaid Razvi, alleging breach of a
settlement agreement, slander and defamation (the "Action"). Argo
believes the Action is entirely without merit and intends to
vigorously defend it.
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, Co-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 Assignment in Bankruptcy, any proceedings or settlements with
the Steer Subsidiaries' creditors, the timing of the Creditors'
Meeting, actions the Trustee may take in connection with its
appointment as bankruptcy trustee and the FoodsUp Divestment,
including the potential delivery to shareholders of proceeds or
tracking interests therefrom.
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
involve substantial known and unknown risks, uncertainties and
other factors which cause actual results to vary from those express
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
