Kovo HealthTech Corporation (TSX-V:KOVO) said it has closed its previously announced private placement for gross proceeds of C$4.4 million and has entered into a senior loan and security agreement with Avonlea Ventures #2 Inc (AV) to establish a US$7 million credit facility.
"AV's strategic investment in Kovo will be used to drive growth through our pipeline of strategic acquisitions," said Kovo CEO Greg Noble in a statement.
“AV's partnership will also accelerate further development on Kovo's SaaS-based medical billing technology platforms.”
Under the private placement, Kovo said it issued 17.6 million units, consisting of one share and one-half of a transferable share purchase warrant, at a price of C$0.25 per unit for gross proceeds of C$4.4 million.
Each whole share purchase warrant entitles the holder to acquire an additional share of the company for C$0.40 for a period of 24 months.
About 85% of the proceeds have been used to retire the company’s debts, and the remainder will be used for working capital.
The credit facility provides up to US$7 million which can be drawn in multiple advances as needed at an interest rate of approximately 12%, Kovo said.
It has a facility of one year and is secured against, among other things, the company’s assets, its subsidiaries, and pledges of the shares of the company’s subsidiaries.
Each facility needs to be approved by AV with the proceeds to be used to finance certain approved acquisitions. The first facility totalling US$2.7 million has been authorized.
Kovo is a growing healthcare technology company specializing in Billing-as-a-Service offering SaaS-style recurring revenue contracts and software for more than 1700 US healthcare providers.
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