Kovo+ Announces Corporate Update

(MENAFN- Newsfile Corp) Calgary, Alberta--(Newsfile Corp. - September 2, 2025) - Kovo+ Holdings Inc. (TSXV: KOVO) (" Kovo " or the " Company ") is pleased to announce that, further to its news release dated July 31, 2025, it has entered into a fourth extension agreement (the " Extension Agreement ") with Avonlea Ventures #2 Inc. (" AVI "), Kovo's largest shareholder and secured creditor, whereby AVI has agreed, among other things: (i) to extend the terms of the 2^nd Amended & Restated Senior Loan and Security Agreement (the " Senior Loan Agreement ") and secured promissory grid note (the " Secured Prom Note "), respectively, for a period of four (4) months, with a maturity date of December 31, 2025 (" Maturity Date "); and (ii) to increase the principal amount available for borrowing under the Secured Prom Note from USD$1,250,000 to USD$3,750,000. In connection with the Extension Agreement, Kovo drew down USD$300,000 from the Secured Prom Note (for an aggregate amount drawn of USD$1,250,000) and granted AVI a one-time loan fee of USD$250,000 and a monthly fee in the amount equal to 1.0% of the aggregate indebtedness owing by Kovo to AVI under the Senior Loan Agreement and Secured Prom Note, which fee is payable in cash at the Maturity Date, or such later date as mutually agreed between the parties. The other terms, as set out in the Senior Loan Agreement and Secured Prom Note, remain unchanged.

Asset Acquisition

The Company further announces that its indirect wholly-owned subsidiary, Nexus AI Data, Inc., has acquired (the " Acquisition ") 100% of the assets (the " Assets ") of AI Vector, LLC (" AI Vector "), a Utah business solutions company specializing in AI-driven IT infrastructure management, proprietary monitoring systems, network security, and support services.

The integration of Ai Vector LLC's technology and talent will strengthen Kovo's existing portfolio and accelerate the development of new AI-powered solutions for clients seeking improved efficiency and productivity.", commented Justin Anderson, Chief Executive Officer of Kovo.

The aggregate purchase price for the Assets totaled approximately USD$3.993 million and was subject to an immediate reduction of USD$1.0 million as partial satisfaction of purchase price accommodation negotiated with AVI (see press release dated May 28, 2025) and such that the purchase price payable by the Company to AI Vector was approximately USD$2.993 million (the " Adjusted Purchase Price "). The Adjusted Purchase Price comprised: (i) USD$350,000 in cash paid as a deposit prior to closing; and (ii) the assumption of liabilities in an aggregate amount of approximately USD$2.6 million.

Further to its news release dated May 28, 2025, Kovo entered into a definitive asset purchase agreement with AVI to acquire, among other things, the exclusive right (the " Exclusive Right ") to purchase the Assets (the " AVI Transaction "). The AVI Transaction remains subject to certain customary conditions, including, without limitation, third-party and regulatory approvals, including TSX Venture Exchange (" TSXV ") approval. The Company sought, and received, a limited waiver from AVI to complete the Acquisition prior to the closing of the AVI Transaction and whereby AVI agreed to take no action and refrain from immediate enforcing its Exclusive Right (the " Waiver "). In accordance with the terms of the Waiver, AVI shall continue to use commercially reasonable efforts refraining from taking any steps adverse to Kovo strictly as it relates to the Acquisition and the Exclusive Right, provided that, among other things, the AVI Transaction closes on or before October 31, 2025.

Director Resignation and Appointment

Kovo also announces the resignation of Mr. Robert Galarza as a director of the Company, and the appointment of Dr. Wayne Young as a director of the Company.

Dr. Peter Bak, Chair of Kovo's board of directors (the " Board ") commented, "we extend our sincere gratitude to Robert for his service and contributions during his time on our board. Robert has been a valued member of Kovo, and his vision, commitment and dedication have been instrumental to the Company. We thank him for his unwavering service as a pivotal member of the Kovo team."

Dr. Wayne Young, BSc (Distinction), DDS (Distinction), James McCutcheon Award, and Silver Medal (University of Alberta, 1992) recipient, is a highly sought-after consultant specializing in general dentistry, implants, oral surgery, and orthodontics, Dr. Young currently serves as Chief Clinical and Business Advisor at Young Innovations, consulting nationally. He also mentors dental students and new dentists at T.I.D.E., performs humanitarian dental work in Thailand, and sits on the Alberta Health Care Steering Committee. Previously, he was the team dentist for the Calgary Flames (2014-2019) and Clinical Director of Lifepath Dental Group. Dr. Young is a dedicated mentor to youth in Southern Alberta and California, and a member of the Canadian and Alberta Dental Associations.

In addition and in connection with Mr. Galarza's resignation, Kovo announces it has changed the composition of its audit committee. The Company appointed Dr. Young to the audit committee. Dr. Young is "financially literate" and not an executive officer, employee or control person of Kovo or of an affiliate, each as pursuant to National Instrument 52-110 - Audit Committees.

Interim CFO Appointment

Kovo is pleased to name David Pinkowitz as the interim CFO, effective immediately. Mr. Pinkowitz has over 20 years of experience in the financial services sector.

Related Party Matters

AVI is an Ontario corporation controlled by Mr. 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 TSXV.

As AVI is a "related party" of the Company, entering into the Extension Agreement and matters relating thereto (the " Transactions ") are 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), 5.7(1)(e) and 5.7(1)(f) 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) the Board, acting in good faith, and Kovo's independent director (Messr. Bak), 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. Additionally, the Secured Prom Note (including the amendments made thereto) is a non-convertible loan obtained on reasonable commercial terms that is not less advantageous to the Company than if the Secured Prom Note were obtained from a person dealing at arm's length and not repayable, directly or indirectly, in equity or voting securities of the Company or a subsidiary.

The Transactions were unanimously approved by the Board member who is independent for the purposes thereof, being Messr. Bak. 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 Messrs. Steele, Young and Gahunia, who abstained from voting thereon, no materially contrary view or abstention was expressed or made by any director of the Company in relation thereto.

About Kovo+ Holdings Inc.

Kovo is a versatile technology company leading the charge in AI 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 healthcare 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. To learn more about Kovo and to keep up to date on Kovo news, visit .

Cautionary Note Regarding Forward-Looking Information and Other Disclaimers

Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking statements" within the meaning of applicable Canadian securities laws. Such forward-looking statements or information are provided to inform the Company's shareholders and potential investors about management's current expectations and plans relating to the future and include, but are not limited to, (i) expectations regarding the characteristics, value drivers, and anticipated benefits of the Related Party Transactions; (ii) expectations regarding the Company's use of proceeds in connection with the Secured Prom Note; (iii) expectations concerning the Company's ability to close the AVI Transaction, including the timing thereof; and (iv) expectations concerning the Company's business plans and operations. Readers are cautioned that reliance on such information may not be appropriate for other purposes. Any such forward-looking information may be identified by words such as "anticipate", "proposed", "estimates", "would", "expects", "intends", "plans", "may", "will", and similar expressions.

Forward-looking statements or information are based on a number of factors and assumptions that have been used to develop such statements and information, but which may prove to be incorrect. By its nature, such forward-looking information is subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed. These risks and uncertainties, include, but are not limited to, the Company being unable to close the AVI Transaction, including Kovo failing to obtain regulatory, TSXV and any other applicable approvals as required thereby; use the proceeds of the Secured Prom Note as described, legal or regulatory impediments regarding the Secured Prom Note; the Company defaulting on the Secured Prom Note or Senior Loan Agreement and leading to enforcement under the security; the proceeds being insufficient for the Company's purposes; the Company's inability to repay the Secured Prom Note and Senior Loan Agreement at the end of the terms thereof; and the Company being unable to raise additional funds on terms acceptable to the Company or at all. Although the Company believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Company can give no assurance that such expectations will prove to be correct. The forward-looking information in this news release reflects the current expectations, assumptions and/or beliefs of the Company based on information currently available to the Company. Any forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or expressly qualified by this cautionary statement.

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 Related Party Transactions, which have 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 Related Party Transactions were not finalized until immediately prior to its issuance, and the Company wished to close the Related Party Transactions as soon as practicable for sound business reasons.

Contact Information

For further information, please contact:

Justin Anderson
Chief Executive Officer
...
1-866-714-0308

Neither the 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.

To view the source version of this press release, please visit

SOURCE: Kovo+ Holdings Inc.

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