An anonymous director reports

KOVO+ HOLDINGS INC. ANNOUNCES AMENDMENTS TO SECURED PROMISSORY NOTE

Kovo+ Holdings Inc. (formerly, Kovo Healthtech Corp.) has entered into a second amendment agreement with Vantage Business Management Services, whereby it agreed to make certain amendments to a secured promissory note dated Jan. 21, 2021, as amended by way of amendment No. 1 to the original note dated Nov. 8, 2021.

Amendment

Under the amendment agreement, the parties amended the note to provide for, among other things, an extended term for a five-year period expiring April 28, 2030. The indebtedness owing thereunder will be made in 20 quarterly instalments, with the first payment due June 30, 2025, and each instalment due on the last day of each quarter thereafter. Commencing May 1, 2025, the outstanding principal amount ($195,586.76 (U.S.)) bears interest at a rate of 4 per cent per annum, calculated monthly and compounded annually.

No new security has been granted in favour of the lender in connection with the amendment agreement, and the loan is secured by the existing security granted and perfected pursuant to a pledge agreement entered into concurrently with the first amendment to provide the lender with security for the repayment of amounts due under the note. The other terms, as set out in the note, remain unchanged.

Related-party transaction

Vantage is a related party of the company, and the note, entering into of the amendment 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) and 5.7(1)(a) of MI 61-101, the company is relying on exemptions from the formal valuation and minority shareholder approval requirements, respectively, as no securities of the company are listed or quoted on certain specified exchanges, and neither the fair market value of the subject matter, nor the consideration for the note or the amendments thereto, insofar as it involves the insider, exceeds 25 per cent of the company's market capitalization.

The transactions were approved by members of the board of directors who were independent for the purposes thereof, being all directors other than Peter Bak. Neither the company, nor, to the knowledge of the company after reasonable inquiry, Vantage has 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. Bak, who abstained from voting on the transactions, 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 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 artificial-intelligence-applied methods, Kovo embodies a commitment to ensured and enduring profitability.

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