Kovo HealthTech Corporation Secures Funding for up to CAD$8.8M
Company Partners with Flow Capital Corp. to Power Strategic Acquisitions
Vancouver, British Columbia--(Newsfile Corp. - November 12, 2021) - Kovo HealthTech Corporation (TSXV: KOVO) (the "Company" "Kovo") — a leader in healthcare Billing-as-a-Service — announced today it has entered into an agreement (the "Loan Agreement") to borrow up to approximately CAD$8.8 million from Flow Capital Corp. ("Flow") to fund the Company's ongoing acquisition growth strategy.
Accelerating Growth with Minimal Dilution
"We're excited to move forward with our partners at Flow to continue to deliver on our acquisition and growth model, while minimizing dilution for shareholders," explains Kovo CEO Greg Noble, who adds the Company's consistent cash flow and proven ability to add immediate accretive growth through "roll-up" acquisitions means the Company can manage short-term debt agreements as a way to accelerate its growth. Earlier this month, Kovo HealthTech Corporation announced an agreement to acquire The Cvikota Company, a Wisconsin-based medical billing specialist firm that has been in business for more than 50 years, providing SaaS-style billing services for physicians, health providers and healthcare clinics across the United States with offices in Wisconsin and Tennessee.
The Loan Agreement with Flow is structured as a non-revolving senior secured multi-draw term facility to fund acquisitions. Under the terms of the Agreement, up to US$7 million, or approximately CAD$8.8 million (the "Amount") may be loaned to Kovo in a series of draws. The first draw will be under CAD$2 million, (the "First Tranche Loan"). Pursuant to the First Tranche Loan, the Company will issue to the lender 2,133,943 warrants to acquire common shares of the Company ("Warrants") at an exercise price of CAD$0.35 per common share. The repayment terms are interest-only, and in the range of 15 to 16 per cent for the term of the loan with a balloon payment after 36 months from the first tranche being drawn and are subject to certain financial covenants. This transaction is subject to approval of the TSX Venture Exchange.
About Kovo HealthTech Corporation and US Healthcare Billing-as-a-Service
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 US healthcare clinics, hospitals and private practices. Kovo helps healthcare providers digitally track and manage complex patient care registration, services, billing and payments in a seamless way, using its proprietary OneRev technology platform. By offering effective billing practices and technology through long-term SaaS-style contracts, Kovo helps healthcare practitioners 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
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.
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.
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