An anonymous director reports

KOVO+ ANNOUNCES EXTENSION OF SENIOR LOAN AGREEMENT AND SECURED PROMISSORY GRID NOTE

Kovo+ Holdings Inc. has entered into a definitive agreement with Avonlea Ventures #2 Inc., Kovo's largest shareholder and secured creditor, whereby AVI has agreed to extend the terms of the second amended and restated senior loan and security agreement and secured promissory grid note for a period of one month, respectively.

Extension agreement

Under the extension agreement, Kovo and AVI extended the maturity date of the senior loan agreement and secured prom note, respectively, upon which the indebtedness owing thereunder was to be repaid for a one-month period, now maturing on July 31, 2025. The other terms, as set out in the senior loan agreement and secured prom note, remain unchanged.

Related-party transactions

AVI is an Ontario corporation controlled by Michael Steele, a current director and controlling indirect shareholder of the company. Mr. Steele is also a director, officer and the sole indirect beneficial shareholder of AVI, which is also considered a non-arm's-length party pursuant to the policies of the TSX Venture Exchange.

As AVI is a related party of the company, the extension agreement and matters relating thereto are considered to be related-party transactions within the meaning of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) requiring Kovo, in the absence of exemptions, to obtain a formal valuation and minority shareholder approval of the related-party transactions.

Pursuant to sections 5.5(b), 5.5(g) and 5.7(1)(e) of MI 61-101, the company relied on exemptions from the formal valuation and minority shareholder requirements, respectively, as, in addition to no securities of the company being listed or quoted on certain specified exchanges: (i) Kovo was (and continues to be) in serious financial difficulty; (ii) the transactions are each designed to improve the financial position of the company; (iii) paragraph 5.5(f) (Bankruptcy, Insolvency, Court Order) of MI 61-101 was not applicable; and (iv) Kovo's board of directors, acting in good faith, and at least two-thirds of Kovo's independent directors, acting in good faith, determined that: (A) the company was (and continues to be) in serious financial difficulty, and the transactions are each designed to improve the financial position of Kovo; and (B) the terms of the transactions were reasonable in the circumstances.

The transactions were unanimously approved by the board members who were independent for the purposes thereof, being all directors other than Michael Steele and Robert Galarza. Neither the company, nor, to the knowledge of the company after reasonable inquiry, AVI had knowledge of any material information concerning the company or its securities that has not been generally disclosed. No special committee of the board was established in connection with the transactions as the entire board was engaged in respect thereof, and, other than Mr. Steele and Mr. Galarza, who abstained from voting thereon, no materially contrary view or abstention was expressed or made by any director of the company in relation thereto.

Neither the company nor any director or senior officer of the company has knowledge, after reasonable inquiry, of any prior valuation in respect of the company that relates to the subject matter of or is otherwise relevant to the transactions, which has been made in the 24 months prior to the date of this news release. The company did not file a material change report more than 21 days before the expected closing as the details of the transactions were not finalized until immediately prior to its issuance, and the company wished to close the transactions as soon as practicable for sound business reasons.

About Kovo+ Holdings Inc.

Kovo is a versatile technology company leading the charge in artificial intelligence initiatives to drive impact and innovation across diverse industries. Kovo remains committed to its core business model of strategic growth opportunities within mid-market medical billing firms, where exploitative business optimization synergies exist. Moving forward, Kovo will integrate accretive broader health care sector additions to its portfolio and opportunities beyond in multiple new markets. Dedicated to revolutionizing business process optimization through technological advancements and evolving artificial-intelligence-applied methods, Kovo embodies a commitment to ensured and enduring profitability.

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