Mr. David Burke reports

SERNOVA BIOTHERAPEUTICS STRENGTHENS BALANCE SHEET WITH $7.1 MILLION IN FINANCINGS PLUS NET RETIREMENT OF A CUMULATIVE $17 MILLION OF DEBT SUBJECT TO SHAREHOLDER APPROVAL

Sernova Biotherapeutics Inc. has arranged financing transactions totalling $7.1-million, significantly strengthening the company's balance sheet and financial position.

The transactions include:

• $1.6-million equity financing in a non-brokered private placement at 15 cents per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at 25 cents for 36 months, subject to acceleration provisions; this private placement is planned to close on March 6, 2026;
• $1.5-million convertible debenture financing from an insider/director, bearing interest at 10 per cent per annum and convertible at 15 cents per share, issued together with 10 million warrants exercisable at 25 cents for 36 months, subject to acceleration provisions; the debenture funds have been advanced and the company will close this transaction immediately upon Toronto Stock Exchange acceptance;
• $4-million equity financing from an insider/director, consisting of 26,666,667 units at 15 cents per unit, with each unit consisting of one common share and one common share purchase warrant exercisable at 20 cents for 36 months, subject to acceleration provisions; the close of this transaction is subject to shareholder approval at the company's annual general meeting on April 8, 2026.

Proceeds from the $4-million financing will be used to retire the company's existing $4-million secured term loan maturing April 16, 2026, subject to shareholder approval of the equity financing transaction. Including approximately $900,000 raised in a non-brokered private placement in November, 2025, Sernova has raised over $4-million in private placement financings over the past five months. These financings together materially improve the company's capital structure and liquidity profile.

Certain components of the financings constitute related party transactions under Multilateral Instrument 61-101 and applicable TSX policies, for which the company is relying on available exemptions or will seek required disinterested shareholder approval. Interested directors abstained from voting where applicable. The securities issued and issuable in connection with the foregoing financings are subject to a four-month hold period under applicable securities laws in Canada.

"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."

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 (Type 1 diabetes). A biohybrid organ comprises non-biomaterials, such as the Cell Pouch, integrated with living tissues to restore or enhance the function of a compromised organ.

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