Sernova arranges $7.1-million in financings

Executive Summary

• Sernova Biotherapeutics has arranged a total of $7.1 million in new financing transactions to strengthen its balance sheet and liquidity position.
• The company is simultaneously executing a net retirement of approximately $17 million in existing debt, contingent upon shareholder approval for specific components of the equity financing.
• The capital raise includes a mix of non-brokered private placements, convertible debentures, and insider equity investments, with proceeds directed toward debt retirement and general corporate purposes.

Key Details

• Total Financing Amount: $7.1 million.
• Transaction 1: Non-Brokered Private Placement
  • Amount: $1.6 million.
  • Price: 15 cents per unit.
  • Structure: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Exercisable at 25 cents for 36 months, subject to acceleration provisions.
  • Closing Date: Planned for March 6, 2026.
• Transaction 2: Convertible Debenture Financing
  • Amount: $1.5 million.
  • Source: Insider/Director.
  • Interest Rate: 10% per annum.
  • Conversion Price: 15 cents per share.
  • Warrant Terms: Issued with 10 million warrants exercisable at 25 cents for 36 months, subject to acceleration provisions.
  • Status: Funds advanced; closing immediately upon Toronto Stock Exchange (TSX) acceptance.
• Transaction 3: Insider Equity Financing
  • Amount: $4.0 million.
  • Source: Insider/Director.
  • Units Issued: 26,666,667 units.
  • Price: 15 cents per unit.
  • Structure: Each unit consists of one common share and one common share purchase warrant.
  • Warrant Terms: Exercisable at 20 cents for 36 months, subject to acceleration provisions.
  • Conditions: Closing subject to shareholder approval at the Annual General Meeting (AGM) on April 8, 2026.
• Debt Retirement:
  • Proceeds from the $4 million insider equity financing will be used to retire a $4 million secured term loan maturing April 16, 2026.
  • Total net debt retirement is approximately $17 million, including the $4 million loan retirement and other existing debt obligations.
• Historical Context:
  • Approximately $900,000 was raised in a non-brokered private placement in November 2025.
  • Total private placement financings raised over the past five months exceed $4 million.
• Regulatory & Legal:
  • Components constitute related party transactions under Multilateral Instrument 61-101; exemptions are relied upon or disinterested shareholder approval will be sought.
  • Securities are subject to a four-month hold period under Canadian securities laws.
  • Interested directors abstained from voting where applicable.

Notable Quotes

• "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."