Kovo+ Announces Extension of Senior Loan Agreement and Secured Promissory Grid Note, Management Change

Executive Summary

• Kovo+ Holdings Inc. entered into a third extension agreement with its largest shareholder and secured creditor, Avonlea Ventures #2 Inc. (AVI), extending the maturity of its Senior Loan and Secured Promissory Note to August 29, 2025.
• The company increased the principal borrowing capacity under the Secured Promissory Note from USD$850,000 to USD$1,250,000, subject to a 2% fee on the aggregate indebtedness payable at maturity.
• Concurrently, Chief Financial Officer Bosco Chan resigned effective July 28, 2025, and the company is actively searching for a replacement.

Key Details

• Loan Extension: The 2nd Amended & Restated Senior Loan and Security Agreement and the Secured Promissory Note have been extended for one month, with a new maturity date of August 29, 2025.
• Increased Borrowing Capacity: The principal amount available for borrowing under the Secured Promissory Note was increased from USD$850,000 to USD$1,250,000.
• Fee Structure: Kovo granted AVI a fee of 2% of the aggregate indebtedness owing under the Senior Loan Agreement and Secured Promissory Note. This fee is payable in cash at the Maturity Date or a mutually agreed later date.
• Related Party Transaction Compliance: The transaction was structured as a related party transaction under Multilateral Instrument 61-101. The Company relied on exemptions from formal valuation and minority shareholder approval requirements, citing serious financial difficulty and that the terms were reasonable and on commercial basis.
• Board Approval: The transactions were unanimously approved by independent directors (Messrs. Steele, Galarza, and Gahunia abstained).
• Management Resignation: Bosco Chan resigned as Chief Financial Officer effective July 28, 2025. He will remain as a consultant to assist with the transition.
• Succession: CEO Justin Anderson confirmed the company is conducting a search for a new Chief Financial Officer.

Notable Quotes

• "On behalf Kovo, we would like to thank Bosco for his contributions to the Company and for making this transition as smooth as possible," said Justin Anderson, Chief Executive Officer of Kovo. "We wish him continued success in his future endeavors."