Sernova converts debt of $13.3-million into units

Executive Summary

• Sernova Biotherapeutics completed a $13.3 million debt‑to‑equity conversion, eliminating a large portion of its accounts‑payable liabilities.
• The transaction was executed via a non‑brokered private placement of 66,346,502 units at $0.19 per unit, each unit including common or preferred share plus two warrants (exercisable at $0.25 and $0.30).
• Sernova also removed an early‑repayment clause on its $4 million term debt, postponing any repayment until after April 2026 and ending monthly debt service obligations.

Key Details

• Conversion amount: Approximately $13.3 million of outstanding accounts payable converted to equity.
• Units issued: 66,346,502 units at a price of $0.19 per unit (gross proceeds ≈ $12.6 million).
• Unit composition: Each unit = one common share or one preferred share + two half‑warrants (25¢ exercise for 2 years; 30¢ exercise for 3 years) with acceleration features tied to preset share prices.
• Hold period: All securities subject to a statutory four‑month hold period.
• Closing conditions: Subject to customary closing conditions, including acceptance by the Toronto Stock Exchange.
• Term debt amendment: Early repayment clause on $4 million term loan removed; no repayments required before April 2026; monthly debt service eliminated.
• Insider participation: Expected insider involvement qualifies as a related‑party transaction under MI 61‑101; Sernova will rely on exemptions from valuation and minority shareholder approval requirements per sections 5.5(a) and 5.7(1)(a).

Notable Quotes

“This debt-to-equity conversion is a strong vote of confidence from supportive partners and vendors… 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, Sernova Biotherapeutics.