Vancouver, British Columbia--(Newsfile Corp. - April 21, 2023) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" or "Kovo") — a leader in healthcare Billing-as-a-Service — announced today: (i) the closing of the non-brokered private placement financing (the "Private Placement") previously announced on March 22, 2023; and (ii) entering into a senior loan and security agreement (the "Credit Agreement") with Avonlea Ventures #2 Inc. ("AV") to establish a US$7.0 million credit facility (the "Facility").

"AV's strategic investment in Kovo will be used to drive growth through our pipeline of strategic acquisitions," explains Kovo CEO Greg Noble. "AV's partnership will also accelerate further development on Kovo's SaaS-based medical billing technology platforms," says Noble.

Private Placement

Pursuant to the Private Placement, the Company issued 17,600,000 units (the "Units") at a price of C$0.25 per Unit for aggregate gross proceeds of CDN$4.4 million. Each Unit consisted of one common share ("Common Shares") of the Company, and one-half of one transferable common share purchase warrant (each whole common share purchase warrant, a "Warrant") exercisable to acquire an additional Common Share at CDN$0.40 for a period of twenty-four months. Approximately 85% of the proceeds of the Equity Financing have been applied to retire other indebtedness of the Company, with the remainder applied to working capital. No finder's fees or commissions were paid in connection with the Private Placement.

The Private Placement was approved by the TSX Venture Exchange (the "Exchange"), and all securities issued pursuant thereto will be subject to a four month hold period from the date of issue. In connection with the Private Placement, on March 23, 2023, Kovo shareholders approved by written resolution AV becoming a "Control Person" (as such term is defined in the policies of the Exchange).

In connection with the Private Placement, for so long as AV owns, directly or indirectly, 10% or more of the issued and outstanding Common Shares on an undiluted basis at any given time, it shall be entitled to nominate two directors to the Company's board of directors (the "Board"). The initial nominated director to join the Board effective immediately is Mr. Michael Steele and the Company is pleased to welcome Mr. Steele to the Board. Mr. Steele is an engineer and financier with over 30 years of experience in structured investments and new business start-ups. Mr. Steele has provided consulting services to various industry sectors including real estate, mining, oil and gas, healthcare and the Canadian medical sector.

Mr. Steele has consulted to or provided financial restructuring to various companies and business sectors internationally with an emphasis within North America, including but not limited to, oil & gas, mining, real-estate, food processing, environmental technology and of late medical health care & clinical operations. Mr. Steele was a previous director of Barkerville Gold Corp. (later amalgamated with Osisko Gold Royalties Ltd.) and the former Chairman of Pathway. Mr. Steele graduated from the University of Waterloo with a P.Eng (BASc) in civil engineering and received his MBA in 1981.

An additional board member will be named at the Company's next Annual General Shareholder Meeting.

Credit Facility

The Credit Agreement provides for the Facility of up to an aggregate principal amount of USD$7,000,000, 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 Credit Agreement. The Facility has a term of one year and is secured against, among other things, all of the assets of the Company, its subsidiaries and pledges of the shares of the Company's subsidiaries. Each Facility Advance shall be approved by AV in its sole discretion and the proceeds thereof used to finance certain approved acquisitions by the Company. The first Facility Advance in the amount of US$2,700,000 has been authorized.

Early Warning Disclosure

In connection with the Private Placement, Mr. Steele, through AV, a private Ontario corporation controlled by Mr. Steele, indirectly acquired ownership of 17,600,000 Common Shares, and 8,800,000 Warrants, requiring disclosure pursuant to National Instrument 62-103 - The Early Warning System and Related Take-Over Bid and Insider Reporting Issues. Immediately prior to the Closing, Mr. Steele did not, directly or indirectly, hold any securities of Kovo. Immediately following the Closing, Michael Steele holds, indirectly through AV, an aggregate of 17,600,000 Common Shares (representing approximately 30.6% of the issued and outstanding Common Shares on a non-diluted basis and approximately 39.8% on a partially diluted basis assuming exercise of such Warrants). The securities held by AV are for investment purposes. Michael Steele has a long-term view of the investment and may acquire additional securities of Kovo including on the open market or through private acquisitions or sell securities of Kovo including on the open market or through private dispositions, in the future depending on market conditions, reformulation of plans and/or other relevant factor.

A copy of the early warning report will be filed by AV under the Company's profile on SEDAR at www.sedar.com and may also be obtained by calling AV at (403) 268-7088 (1500-850 2 St SW, Calgary, AB T2P 0R8).

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 1700 US healthcare providers. Kovo helps healthcare providers digitally track and manage complex patient care registration, services, billing and payments in a seamless way, using its industry-leading OneRev technology platform. 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 and technology through long-term SaaS-style contracts, 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.

For more information:

Greg Noble, CEO
This email address is being protected from spambots. You need JavaScript enabled to view it.
1-866-558-6777

Forward-Looking Information and Statements

This press release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking information") concerning the Company and its subsidiaries within the meaning of applicable securities laws. Forward-looking information may relate to the future financial outlook and anticipated events or results of the Company and may include information regarding the Company's financial position, business strategy, growth strategies, acquisition prospects and plans, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding the Company's expectations of future results, performance, achievements, prospects or opportunities or the markets in which the Company operates is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "targets", "expects", "budgets", "scheduled", "estimates", "outlook", "forecasts", "projects", "prospects", "strategy", "intends", "anticipates", "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might", or "will" occur. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances.

Many factors could cause the Company's actual results, performance, or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking information, including, without limitation, those listed in the "Risk Factors" section of the final prospectus of the Company dated May 26, 2021. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance, or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this press release. Forward-looking information, by its nature, is based on the Company's opinions, estimates and assumptions in light of management's experience and perception of historical trends, current conditions and expected future developments, as well as other factors that the Company currently believes are appropriate and reasonable in the circumstances. Those factors should not be construed as exhaustive. Despite a careful process to prepare and review forward-looking information, there can be no assurance that the underlying opinions, estimates and assumptions will prove to be correct. These factors should be considered carefully, and readers should not place undue reliance on the forward-looking information. Although the Company bases its forward-looking information on assumptions that it believes were reasonable when made, which include, but are not limited to, assumptions with respect to the Company's future growth potential, results of operations, future prospects and opportunities, execution of the Company's business strategy, there being no material variations in the current tax and regulatory environments, future levels of indebtedness and current economic conditions remaining unchanged, the Company cautions readers that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which the Company operates may differ materially from the forward-looking statements contained in this press release. In addition, even if the Company's results of operations, financial condition and liquidity, and the development of the industry in which it operates are consistent with the forward-looking information contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods. This press release makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company's results of operations from management's perspective. The Company's definitions of non-IFRS measures used in this release may not be the same as the definitions for such measures used by other companies in their reporting. Non-IFRS measures have limitations as analytical tools and should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. The Company uses non-IFRS financial measures, including "ARR**", "EBITDA", "Adjusted EBITDA*" and "Adjusted EBITDA Margin" to provide investors with supplemental measures of its operating performance and to eliminate items that have less bearing on operating performance or operating conditions and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. "EBITDA" means net income (loss) before amortization and depreciation expenses, finance and interest costs, and provision for income taxes. *"Adjusted EBITDA" adjusts EBITDA for stock-based compensation expense, transactional gains or losses on assets, asset impairment charges, interest income, net foreign exchange gains or losses, income tax expense or recovery, forgivable one-time government financial payments related to the COVID-19 pandemic ("PPP Loans"), and any transactional expenses. Specifically, the Company believes that Adjusted EBITDA, when viewed with the Company's results under IFRS and the accompanying reconciliations, provides useful information about the Company's business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as depreciation and amortization methods and restructuring, impairment and other charges, the Company believes that Adjusted EBITDA can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated. The Company believes that securities analysts, investors and other interested parties frequently use non-IFRS financial measures in the evaluation of issuers. The Company's management also uses non-IFRS financial measures in order to facilitate operating performance comparisons from period to period.

Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information, which speaks only as of the date made (or as of the date they are otherwise stated to be made). Any forward-looking statement that is made in this press release speaks only as of the date of such statement.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.