Vancouver, British Columbia--(Newsfile Corp. - September 17, 2024) - Kovo HealthTech Corporation (TSXV: KOVO) ("Kovo" or the "Company") is pleased to announce that it has entered into a second amended and restated senior loan and security agreement (the "2^nd A&R Loan Agreement") with its subsidiaries (collectively, the "Borrower Entities") and Avonlea Ventures #2 Inc. ("AVI"), amending the amended and restated senior loan and security agreement dated effective July 18, 2024 among the Borrower Entities as borrowers, and AVI as lender (the "Prior Loan Agreement").

The 2^nd A&R Loan Agreement increases the facility available to the Borrower Entities up to an aggregate principal amount of USD$9.1 million, which may be drawn in multiple advances (each a "Facility Advance") on an as-needed basis, at an interest rate of approximately 12%, subject to and in accordance with the terms and conditions of the 2^nd A&R Loan Agreement. The other terms as set out in the Prior Loan Agreement remain unchanged (see Kovo's news releases dated April 21, 2023, May 22, 2024 and July 24, 2024). Amounts drawn by the Company are secured against, among other things, all of the assets of the Borrower Entities and pledges of the shares of the Company's subsidiaries. Each Facility Advance shall be approved by AVI in its sole discretion.

"We are very grateful for the amazing working relationship with have with the team at AVI," said Mark Detz, CFO. "This further amendment and restatement of the Prior Loan Agreement enables Kovo to have the access to capital needed to activate the restructuring the Company has been working on for several months now, and puts us in a position to grow both organically and through strategic acquisitions."

"I appreciate all the dedication and hard work of the team at Kovo to solidify and begin executing on our new strategic direction," said a Family Office representative of AVI. "This new structure with incremental opportunities to fund growth as the team delivers has already unlocked some unique opportunities that place us firmly on track to achieve our objectives."

Related Party Transaction

AVI is a "related party" of the Company, and the entering into the 2^nd A&R Loan Agreement and matters relating thereto (the "Transactions") considered to be "related party transactions" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") 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(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 2^nd A&R Loan Agreement was 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 (the "Board"), 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 2^nd A&R Loan Agreement was designed to improve the financial position of Pathway, and (B) the terms of the 2^nd A&R Loan Agreement were reasonable in the circumstances.

The 2^nd A&R Loan Agreement was approved by the Board who are independent for the purposes of the 2^nd A&R Loan Agreement, being all directors other than Messrs. Michael Steele and Robert Galarza. Neither the Company nor, to the knowledge of the Company after reasonable inquiry, AVI, have 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 2^nd A&R Loan Agreement as the entire Board was engaged in respect thereof, and, other than Messrs. Steele and Galarza, who abstained from voting on the 2^nd A&R Loan Agreement, 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 2^nd A&R Loan Agreement, 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 2^nd A&R Loan Agreement were not finalized until immediately prior to its issuance, and the Company wished to close the 2^nd A&R Loan Agreement as soon as practicable for sound business reasons.

About Kovo HealthTech Corporation

Kovo HealthTech Corporation is a growing healthcare technology company that specializes in Billing-as-a-Service offering SaaS-style recurring revenue contracts and software for more than 2250 US healthcare providers. Kovo helps healthcare providers digitally track and manage complex patient care registration, services, billing and payments in a seamless way. Currently, through its clients, Kovo processes over $250 million CAD ($200M USD) in annual billing transactions for more than 3.5 million patients. By offering effective billing practices, Kovo helps healthcare practitioners get paid so they can focus on offering quality care. To learn more about Kovo and to keep up-to-date on Kovo news, visit www.kovo.co.

Forward-Looking Information

This news release contains forward‐looking statements and forward‐looking information within the meaning of applicable securities laws. These statements relate to future events or future performance. All statements other than statements of historical fact may be forward‐looking statements or information. More particularly and without limitation, this news release contains forward‐looking statements and information relating to the amounts available to be drawn by the Borrower Entities, including the approval of AVI; and the future condition of the Company and its prospects, including its restructuring and growth. The forward‐looking statements and information are based on certain key expectations and assumptions made by management of the Company. Although management of the Company believes that the expectations and assumptions on which such forward-looking statements and information are based are reasonable, undue reliance should not be placed on the forward‐looking statements and information since no assurance can be given that they will prove to be correct.

Forward-looking statements and information are provided for the purpose of providing information about the current expectations and plans of management of the Company relating to the future. Readers are cautioned that reliance on such statements and information may not be appropriate for other purposes, such as making investment decisions. Since forward‐looking statements and information address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to, the Company's ability to continue operations without adequate capital, the Company's ability to raise further capital, the Company's ability to meet the terms of its current debt obligations and to repay its indebtedness, including under the 2^nd A&R Loan Agreement, the likelihood of the Company satisfying its ongoing obligations under the 2^nd A&R Loan Agreement, the Company's ability to efficiently and successfully develop new opportunities and failure to identify future transactional counterparties, and the Company not defaulting in the future. Accordingly, readers should not place undue reliance on the forward‐looking statements and information contained in this news release. Readers are cautioned that the foregoing list of factors is not exhaustive. The forward‐looking statements and information contained in this news release are made as of the date hereof and no undertaking is given to update publicly or revise any forward‐looking statements or information, whether as a result of new information, future events or otherwise, unless so required by applicable securities laws. The forward-looking statements or information contained in this news release are expressly qualified by this cautionary statement.

Neither 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.