Mr. Jonathan Rigby reports

SERNOVA BIOTHERAPEUTICS CLOSES FIRST TRANCHE OF A PRIVATE PLACEMENT OF EQUITY FINANCING TO SUPPORT ONGOING CLINICAL EFFORTS

Sernova Biotherapeutics Inc. has closed the first tranche of a private placement totalling $874,600 in gross proceeds from existing and new investors. The company aims to raise up to $5-million with the proceeds being used to support the advancement of its clinical program in T1D.

Under the terms of the financing, Sernova issued 5,466,250 units at 16 cents per unit. Each unit consists of one common share and one warrant with an exercise price of 40 cents, exercisable for 36 months. The funds raised will be used for general operating capital and the launch of the final Cohort C in the company's continuing phase 1/2 clinical trial evaluating its proprietary cell pouch biohybrid organ for the treatment of Type 1 diabetes. Sernova plans to incorporate tegoprubart, a novel investigational immunomodulatory antibody, in place of the current standard of care tacrolimus, as part of the final Cohort C. The company and its advisers anticipate improved clinical outcomes given positive clinical data on tegoprubart versus tacrolimus with respect to insulin-producing islet cell engraftment, survival and function in patients with T1D.

In addition to the equity financing, Sernova is pursuing non-dilutive financing, which the company believes it will secure to further support the clinical program.

"This financing and the anticipated subsequent tranches plus a further increase in the previously announced settlement conversion of $13.8-million of legacy debt to equity significantly strengthens our balance sheet as we enter an exciting new phase of clinical development," said Jonathan Rigby, chief executive officer of Sernova. "With the launch of Cohort C, which will incorporate tegoprubart, we are building on promising clinical results to further optimize patient outcomes and move closer to a functional cure for insulin-dependent diabetes."

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.

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.

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