Mr. Jonathan Rigby reports

SERNOVA BIOTHERAPEUTICS ANNOUNCES $13 MILLION DEBT-TO-EQUITY CONVERSION ELIMINATING SIGNIFICANT FINANCING OVERHANG

Sernova Biotherapeutics Inc. has signed debt-to-equity conversion agreements with vendors to convert approximately $13.3-million of outstanding accounts payable debt into equity of Sernova. This represents a significant portion of precurrent management historic accounts payable debt on Sernova's balance sheet as of its past fiscal quarter ended July 31, 2025. Sernova executive management, including the chief executive officer and chief financial officer, and board members, also participated in converting amounts owed to them to equity in the company.

"This debt-to-equity conversion is a strong vote of confidence from supportive partners and vendors," said Jonathan Rigby, chief executive officer of Sernova. "It underscores the shared vision and commitment we have to deliver a functional cure for patients living with Type 1 diabetes. 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 in order to secure the capital necessary to advance our Cell Pouch biohybrid organ into the final cohort of our phase 1/2 clinical trial prior to year-end."

The debt-to-equity conversion was completed by way of a non-brokered private placement of 66,346,502 million units at a unit price of 19 cents. Each unit consists of either one common share or one preferred share of Sernova, a half warrant with an exercise price of 25 cents for two years and a second half warrant with an exercise price of 30 cents for three years. Both warrants have features that allow the company to accelerate the expiry of the warrants at preset common share price levels.

The company also announced that it negotiated the removal of a potential early repayment clause of its $4-million term debt so that no amount is payable before April, 2026. With settlement of the majority of accounts payable debt, Sernova is no longer subject to monthly repayments of debt nor required to allocate any proportion of financing proceeds to repay debt.

All securities issued in connection with the private placement will be subject to a statutory hold period of four months. Completion of the private placement is subject to customary closing conditions, including acceptance of the Toronto Stock Exchange.

The company expects insider participation in the private placement, which may be considered a related-party transaction within the meaning of Multilateral Instrument 61-101. Sernova intends to rely on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in sections 5.5(a) and 5.7(1)(a) of MI 61-101 in respect of any insider participation.

About Sernova Biotherapeutics Inc.

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 biohybrid organs to treat T1D. A biohybrid organ is composed of non-biomaterials, such as the Cell Pouch, integrated with living tissues to restore or enhance the function of a compromised organ. This innovative approach aims to deliver a potentially revolutionary treatment for patients with chronic diseases, initially focusing on T1D and thyroid disorders.

We seek Safe Harbor.