Sernova Biotherapeutics Strengthens Balance Sheet with $7.1 Million in Financings Plus Net Retirement of a Cumulative $17 Million of Debt Subject to Shareholder Approval

Rhea-AI Summary

Sernova (OTC: SEOVF) announced financing transactions totaling $7.1 million on March 4, 2026, including three private financings: $1.6M non‑brokered equity, $1.5M convertible debenture, and $4.0M insider equity subject to shareholder approval.

Proceeds will retire a $4.0M secured term loan if approved and collectively materially improve the company's capital structure and liquidity ahead of an AGM on April 8, 2026.

Positive

• $7.1M total financings closed or announced
• $4.0M financing earmarked to retire secured term loan
• 10% annual interest on $1.5M convertible debenture (insider)
• Financings materially improve capital structure and liquidity

Negative

• Insider-related financings require disinterested shareholder approval
• Issued securities subject to a four-month hold under Canadian law
• Potential dilution from convertible debenture and multiple warrant issuances

Toronto, Ontario and Boston, Massachusetts--(Newsfile Corp. - March 4, 2026) - Sernova Biotherapeutics (TSX: SVA) (OTC: SEOVF) (FSE: PSHO) ("Sernova" or the "Company"), a leading regenerative medicine company focused on developing its Cell Pouch Bio-hybrid Organ as a functional cure for type 1 diabetes (T1D), today announced financing transactions totaling $7.1 million, significantly strengthening the Company's balance sheet and financial position.

The transactions include:

• $1.6 million equity financing in a non-brokered private placement at $0.15 per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at $0.25 for 36 months, subject to acceleration provisions. This private placement is planned to close on March 6, 2026.
• $1.5 million convertible debenture financing from an insider/director, bearing interest at 10% per annum and convertible at $0.15 per share, issued together with 10,000,000 warrants exercisable at $0.25 for 36 months, subject to acceleration provisions. The debenture funds have been advanced and the Company will close this transaction immediately upon TSX acceptance.
• $4.0 million equity financing from an insider/director, consisting of 26,666,667 units at $0.15 per unit, each unit including one common share and one common share purchase warrant exercisable at $0.20 for 36 months, subject to acceleration provisions. The close of this transaction is subject to shareholder approval at our Annual General Meeting on April 8, 2026.

Proceeds from the $4.0 million financing will be used to retire the Company's existing $4.0 million secured term loan maturing April 16, 2026, subject to shareholder approval of the equity financing transaction. Including approximately $900,000 raised in a non-brokered private placement in November of 2025, Sernova has raised over $4.0 million in private placement financings over the past five months. These financings together materially improve the Company's capital structure and liquidity profile.

Certain components of the financings constitute related party transactions under MI 61-101 and applicable TSX policies, for which the Company is relying on available exemptions or will seek required disinterested shareholder approval. Interested directors abstained from voting where applicable. The securities issued and issuable in connection with the foregoing financings are subject to a four-month hold period under applicable securities laws in Canada.

"Over the past year, we have taken decisive steps to stabilize and strengthen our foundation from a financial, management and board and partner perspective," said Jonathan Rigby, Chief Executive Officer of Sernova. "With these financings plus the expected net retirement of approximately $17 million of debt upon shareholder approval at our AGM, we believe Sernova is entering a period of renewed financial health. Our capital structure is significantly improved, our liquidity position is strengthened, and we remain focused on advancing our clinical programs toward delivering a functional cure for type 1 diabetes."

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws, and may not be offered or sold within the United States absent registration or an applicable exemption.

ABOUT SERNOVA BIOTHERAPEUTICS

Sernova Biotherapeutics is a clinical-stage company developing regenerative medicine therapeutics combining its Cell Pouch with human donor cells or stem-cell derived islet-like clusters in collaboration with Evotec to create bio-hybrid organs to treat T1D. A bio-hybrid organ is comprised of non-biomaterials, such as the Cell Pouch, integrated with living tissues to restore or enhance the function of a compromised organ.

FOR FURTHER INFORMATION ABOUT THE OPEN PRIVATE PLACEMENT PLEASE CONTACT:

David Burke
VP, Investor Relations
(917) 751-5713
Email: David.Burke@sernova.com
Website: https://sernova.com/

The TSX has not reviewed this news release and does not accept responsibility for the accuracy or adequacy of this news release.

FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements within the meaning of applicable Canadian securities laws. Forward-looking statements in this press release include our expectation to timely obtain TSX acceptance and shareholder approval, and our expectation of using the $4 million financing proceeds to retire our secured debt at maturity. With respect to the forward-looking statements contained in this press release, Sernova has made numerous assumptions regarding, among other things: the company's ability to secure additional financing on reasonable terms, or at all; and the ability to conduct all required preclinical and clinical studies for the company's Cell Pouch, including the timing and results of those trials. A more complete discussion of the risks and uncertainties facing Sernova appears in Sernova's Annual Information Form for the year ended October 31, 2025, filed with Canadian securities authorities and available at www.sedarplus.ca, as updated by Sernova's continuous disclosure filings, which are available at www.sedarplus.ca. All forward-looking statements herein are qualified in their entirety by this cautionary statement, and Sernova disclaims any obligation to revise or update any such forward-looking statements or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments, except as required by law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/286197

FAQ

What financings did Sernova (SEOVF) announce on March 4, 2026?

Sernova announced $7.1 million in financings, including equity and a convertible debenture. According to the company, the package comprises a $1.6M non‑brokered placement, a $1.5M convertible debenture, and a $4.0M insider equity financing.

How will the $4.0 million financing affect Sernova (SEOVF) debt on April 8, 2026?

If approved, the $4.0M financing will retire a secured term loan maturing April 16, 2026. According to the company, proceeds are planned to pay off that loan and reduce near‑term secured debt.

What are the key terms of the $1.5M convertible debenture for SEOVF?

The $1.5M debenture bears 10% interest and converts at $0.15 per share. According to the company, it was advanced by an insider and issued with 10,000,000 warrants exercisable at $0.25 for 36 months.

What shareholder approvals does Sernova (SEOVF) require for these financings?

Shareholder approval is required for the $4.0M insider equity financing and related party matters. According to the company, interested directors abstained and approvals will be sought at the April 8, 2026 AGM.

How do the financings impact Sernova's (SEOVF) liquidity and capital structure?

The financings materially improve near‑term liquidity and capital structure by adding cash and enabling debt retirement. According to the company, these steps strengthen balance sheet flexibility and runway for clinical programs.

What dilution or warrant exposure should SEOVF shareholders expect from the March 4, 2026 financings?

Shareholders face dilution from issued shares, convertible debenture conversion, and multiple warrants exercisable at $0.20–$0.25. According to the company, units and warrants span 36 months and include acceleration provisions.