Star Metro - Caravan Announces Initial Distributions Update on Winding-Up

Winding Up Process

Following the unanimous approval by its shareholders of the Winding Up resolution at the November 20, 2025 Special Meeting, the Corporation has obtained a Certificate of Intent to Dissolve under section 212 of the Business Corporations Act (Alberta) and accordingly, Caravan shall cease to carry on business except to the extent necessary for the Winding Up, though its corporate existence will continue until the Winding Up has been completed and the Registrar has issued a certificate of dissolution. That certificate will not be obtained until all final distributions of funds are completed.

Distributions of Funds

As noted in the information circular dated October 29, 2025 that Caravan sent to all shareholders in respect of the Special Meeting, there were two pre-conditions to be satisfied prior to any such distributions of funds, namely: 1. Receipt by the Corporation of its Final 2024 Notice of Assessment from the Canada Revenue Agency in respect of its 2024 financial year; and 2. Confirmation by the CRA of the balance of the Corporation's Capital Dividend Account. Both of those conditions have now been satisfied.

The funds being paid out to Caravan shareholders are being distributed in a combination of several different ways - as taxable dividends, as capital (non-taxable) dividends and as a return of capital. In order to determine the path most beneficial to shareholders, the Board conducted a detailed assessment of these alternatives in consultation with its tax advisors. Following that review, it was determined that the most efficient path for shareholders is to declare taxable dividends initially, as this will allow the Corporation to reclaim refundable tax of close to $1.5M, which will be available for distribution to shareholders subsequent to the filing of the Corporation's tax returns for its financial year ended October 31, 2026 and receipt of the CRA's Notice of Assessment in respect thereof. The December distribution will therefore consist entirely of taxable dividends and the January one will be comprised of a combination of taxable dividends, return of capital and capital (non-taxable) dividends. With that in mind, the following is a detailed breakdown of the Initial Distributions:

December 17, 2025 - Distribution of $2,339,240

• Taxable Dividend #1 (Dividend re CSF Payment under litigation Settlement Agreement) - $380,000 ($2.869766 per Class A Share other than CSF holdings) - payable to all holders of Class A Shares other than the Cowper-Smith Family members

• Taxable Dividend #2 (Dividend re Styles Payment under litigation Settlement Agreement) - $186,340 ($0.705967 per Class A and Class B Share other than Styles holdings) - payable to all holders of Class A Shares and Class B Shares other than Herb Styles

• Taxable Dividend #3 (General Dividend) - $1,772,900 ($6.57562 per Class A and Class B Share) - payable to all holders of Class A and Class B Shares

End of January 2026 - Distribution of $2,725,019

• Taxable Dividend #4 (General Dividend) - $1,772,900 ($6.57562 per Class A and Class B Share) - payable to all holders of Class A and Class B Shares

• Return of Capital - $152,119 in aggregate, comprised of $147,119 on Class A Shares ($0.86736 per Class A Share) and $5,000 on Class B Shares ($0.05 per Class B Share)

• Capital Dividend #1 (General Dividend) - $800,000 ($2.96717 per Class A and Class B Share) - payable to all holders of Class A and Class B Shares

In connection with the December distribution, cheques have been prepared and will be delivered by Alliance Trust Company (the Corporation's Distribution Agent for the Winding-Up) to all registered shareholders as of December 17, 2025 to their address of record (which will be the same address that meeting materials were sent to unless otherwise updated).

As noted in the aforementioned Information Circular, the Corporation is retaining $2.5 million, $1.5 million of which is being retained for a period of two years as a form of self-insurance for directors (due to the inability of the Corporation to obtain directors' and officers' liability insurance), $750,000 of which will be held pending receipt of a Clearance Certificate from the CRA (which will only be sought after all tax related matters are resolved) and $250,000 of which is to be held as a reserve to cover unforeseen expenses. All of these funds are being held under an interest earning GIC.

As noted above, the result of paying out the taxable dividends described in this release is that the Corporation is expected to be able to claim approximately $1.5 million in refundable tax, which will be available for distribution to shareholders following receipt by the Corporation of its Notice of Assessment from the CRA in respect of its tax returns for its financial year ended October 31, 2026. It is therefore expected that the next distribution of funds to shareholders will occur in roughly the first calendar quarter of 2027.

Missing Shareholders

As noted in the Information Circular delivered to all registered shareholders in connection with the Special Meeting, the Corporation has undertaken significant efforts to locate Missing Shareholders over recent years. Notwithstanding those efforts, there remain 47,820 Class A Shares registered in the names of 124 Missing Shareholders from whom nothing has been heard or received for several years despite the numerous attempts by the Corporation to locate them. In September 2025, the Corporation initiated an application seeking an exemption from the requirements of the Unclaimed Personal Property and Vested Property Act (Alberta) (the "UPPVPA"), which dictates that funds payable to Missing Shareholders are required to be paid to the Minister responsible for the UPPVPA. The application was opposed by counsel to the Minister. Following attempts to negotiate with the Minister's office and an assessment of the likelihood of success of the application, potential timeline for a result and potential costs associated with further pursuing that application, the Board determined to refrain from pursuing it any further. Accordingly, the portion of each distribution that is payable to Missing Shareholders will be delivered to the Minister responsible for the UPPVPA in accordance with that statute and Missing Shareholders (or their beneficiaries) will be entitled to establish their claim for such funds through the procedures set out thereunder and to register a claim via https://missingmoney.com/. The UPPVPA further requires that any funds attributable to Missing Shareholders at the end of the prescribed period are to be forfeited to the Minister responsible for the UPPVPA.

Forward Looking Statements

Except for statements of historical fact relating to the Company, certain information contained herein constitutes forward-looking statements. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Calum Stewart
Chairman, President and Director
[email protected]

Legal Inquiries can also be directed to Caravan's independent counsel, Tingle Merrett LLP, attention: Paul Bolger (ph: (403)571-8006) (re corporate matters).

SOURCE: Caravan Trailer Lodges of Alberta Ltd.

View the original press release on ACCESS Newswire

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