Business
Kovo HealthTech Announces Signing of Forbearance Agreement with Its Primary Lender
Vancouver, British Columbia--(Newsfile Corp. - April 3, 2024) - Kovo HealthTech Corporation ...
About this update from Kovo+ Holdings Inc
[{"type":"text","content":"Kovo HealthTech Announces Signing of Forbearance Agreement with Its Primary LenderVancouver, British Columbia--(Newsfile Corp. - April 3, 2024) - Kovo HealthTech Corporation (TSXV: KOVO) (the \"Company\" or \"Kovo\") - a leader in healthcare Billing-as-a-Service - announces a forbearance agreement with its primary lender Avonlea Ventures #2 Inc. (\"AVI\"), a corporation wholly-owned by Micheal Steele, a director of Kovo.Kovo's primary lender, AVI entered into a forbearance agreement (the \"Forbearance Agreement\") dated February 27th, 2024 in connection with the investment agreement and senior loan and security agreement (the \"Credit Agreement\") entered into between AVI and Kovo dated April 20, 2023 (see press release dated April 21, 2023). Pursuant to the Forbearance Agreement, AVI advanced an additional US$1,250,000 under the Credit Agreement and, notwithstanding the April 30, 2024 maturity date of the indebtedness advanced under the Credit Agreement, AVI has agreed to forbear on taking certain enforcement actions under the Credit Agreement until April 20, 2024 so long management delivers an operating plan acceptable to the lender in its sole and unfettered discretion (the \"New Operating Plan\"). In the event that such condition is satisfied, the forbearance period will extend until June 30, 2024. The forbearance is subject to a fee equal to 20% of the total indebtedness as at February 27, 2024 and to certain additional conditions customary for transactions of this nature such as strict adherence to the Credit Agreement and the approval by the independent directors of the New Operating Plan. The forbearance will allow Kovo to continue operating while AVI assesses the business strengths and opportunities. AVI's willingness to enter into the Forbearance Agreement and work collaboratively with the Board of Directors in the preparation of the New Operating Plan indicates a positive outlook on the Kovo business and its re-focused business model. AVI has assigned Mr. Justin Anderson as Chief Restructuring Officer to assist management to immediately begin the process of implementing changes to grow revenues, structure the business more efficiently and prepare the baseline business for transacting within its marketplace. Although Kovo has drawn approximately USD$5.0 million of the available USD$7.0 million under the Credi...