Mr. Peter Bak reports

KOVO+ ANNOUNCES NOTICE OF DEFAULT AND DEMAND NOTICE

Kovo+ Holdings Inc. (Kovo), along with its wholly owned subsidiaries, including, without limitation, Kovo+ (USA) Inc. (formerly Medworxs Inc.), Nexus AI Data Inc., Heal Global Holdings Inc., AI Vector 2.0 Inc., Heal Vue Inc., NOC5280 LLC, RPM Billing LLC, Kovo Acquisitions LLC, Kovo Human Capital LLC and RSKM LLC, has received a default notice and demand for repayment, accompanied by a notice of intent to enforce security under Section 244 of the Bankruptcy and Insolvency Act (Canada) from its senior secured creditor, Avonlea Ventures #2 Inc. (AVI), in connection with certain defaults under the company's second amended and restated senior loan and security agreement dated Aug. 29, 2024, between Kovo and AVI, and secured promissory grid note dated May 1, 2025, both as extended and amended pursuant to extension agreements dated May 1, 2025, June 30, 2025, July 31, 2025, Aug. 29, 2025, and April 20, 2026.

Under the default notice, AVI has alleged that certain events of default have occurred under the transaction documents, including, among other things, in relation to certain legal proceedings against the company and the impact that such proceedings are likely to have on company's ability to satisfy its obligations to the AVI.

Under the terms of the enforcement notice, Kovo and its subsidiaries (which are each a borrower under the transaction documents) have until close of business on Aug. 15, 2026, to repay an aggregate principal amount of $27,088,273 (U.S.), or AVI may take such steps as it deems appropriate to seek repayment of such amounts, including enforcing its rights under the transaction documents and applicable law, without further notice to the borrowers, or any of them, including commencing legal proceedings against the borrowers, or any one of them, and enforcing its security.

The company is reviewing the creditor default notices and considering the borrowers' available alternatives. The company currently has no ability to satisfy its obligations to AVI.

Resignation of Micheal Steele

Mr. Steele, a director and officer of the corporation, and the principal of AVI, has tendered his resignation effective immediately, prior to the delivery of the creditor default notices.

About Kovo+ Holdings Inc.

Kovo is a versatile technology company leading the charge in AI (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 exploitive 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 AI-applied methods, Kovo embodies a commitment to ensured and enduring profitability.

We seek Safe Harbor.