Sernova Biotherapeutics Announces $13 Million Debt-to-Equity Conversion Eliminating Significant Financing Overhang

Executive Summary

• Sernova Biotherapeutics converted approximately CAD 13.3 million of outstanding accounts‑payable debt into equity via a private placement of 66,346,502 units at $0.19 per unit.
• The transaction removes a large portion of historic vendor liabilities and eliminates monthly debt repayments, improving the company’s balance sheet and financing flexibility for its Phase 1/2 clinical trial.
• Insider participation is expected; securities are subject to a four‑month statutory hold period and customary closing conditions, including TSX acceptance.

Key Details

• Conversion Amount: ~CAD 13.3 million of accounts‑payable debt converted to equity.
• Units Issued: 66,346,502 units at $0.19 per unit (non‑brokered private placement).
• Unit Composition: Each unit = either one common share or one preferred share, plus two half‑warrants:
• Half‑warrant 1 – exercise price $0.25, expires in 2 years.
• Half‑warrant 2 – exercise price $0.30, expires in 3 years.
• Warrant Features: Ability for the company to accelerate expiry if preset common‑share price levels are reached.
• Debt Terms Adjusted: Removal of early repayment clause on existing $4 million term debt; no repayments required before April 2026.
• Repayment Obligations: With the conversion, Sernova is no longer subject to monthly debt repayments or required allocation of financing proceeds to debt service.
• Statutory Hold Period: All securities issued are subject to a four‑month hold period per Canadian securities regulations.
• Closing Conditions: Transaction completion contingent on customary conditions, including acceptance by the Toronto Stock Exchange (TSX).
• Insider Participation: Expected; will be treated as a related‑party transaction under MI 61‑101, with reliance on exemption provisions for valuation and minority‑shareholder approval.

Notable Quotes

“This debt‑to‑equity conversion is a strong vote of confidence from supportive partners and vendors,” said Jonathan Rigby, CEO of Sernova.
“By removing a large portion of this inherited liability from our balance sheet, we are in a stronger financial position to advance an array of ongoing funding discussions…” – Jonathan Rigby, CEO.