Mr. Dominic Gray reports

SERNOVA COMPLETES ACQUISITION OF CELLULAR LOCAL IMMUNE PROTECTION TECHNOLOGY

Sernova Corp. has completed the acquisition of a cellular local immune protection technology from Converge Biotech Inc.

"This acquisition is a strategic accelerator for expansion of Sernova's total regenerative medicine cell therapy therapeutics platform," stated Dr. Philip Toleikis, Sernova's President and Chief Executive Officer. "Local immune protection technologies to cloak therapeutic cells have the potential to protect cells from immune system attack within Sernova's Cell Pouch through different and independent mechanisms to eliminate the need for life-long immunosuppression medications."

Pursuant to the asset acquisition, Sernova acquired all intellectual property associated with Converge's conformal coating cell encapsulation technology ("Conformal Coating Technology"), including issued patents, patent applications, and know-how.

ABOUT SERNOVA'S CONFORMAL COATING TECHNOLOGY

The Conformal Coating Technology consists of a thin proprietary coating layer that effectively cloaks coated therapeutic cells to protect them from an auto-response attack by one's own immune system post cell transplantation into the body.

The advantages and potential benefits of this novel cell encapsulating technology are as follows:

• Provides protection of therapeutic cells from immune system attack locally within Sernova's Cell Pouch, potentially avoiding the need for life-long immunosuppression medications, that are currently required after cell transplantation;
• Enables intimate contact of therapeutic cells with the vascularized tissue matrix of the Cell Pouch improving essential physiological interactions of the cells for survival and function, unlike other micro and macro-encapsulation technologies;
• Improves the diffusion of small molecules and biomolecules (glucose, insulin, and other proteins or hormones), providing a physiological glucose-stimulated insulin response without delay that occurs with other encapsulation technologies;
• With improved diffusion of biomolecules, may require a smaller load of therapeutic cells to achieve the desired therapeutic effect in comparison to standard microcapsules.

Sernova has also completed its announced $1,000,000 unsecured convertible debenture financing, with the proceeds used to fund the Conformal Coating Technology acquisition. The debenture is repayable on December 9, 2022, unless earlier converted or redeemed, and carries an 8% interest rate. The Company also issued 3,000,000 non-transferable share purchase warrants, each warrant being exercisable into one common share at a price of $0.20 per share up to December 9, 2022. The debenture holder will have the right to convert the principal amount of the debenture into common shares of Sernova at a conversion price of $0.25 per share. The debenture and warrants are subject to a four-month hold period under securities regulations.

ABOUT SERNOVA'S CELL POUCH SYSTEM

The Cell Pouch, as part of the Cell Pouch System, is a novel, proprietary, scalable, implantable macro- encapsulation device solution designed for the long-term survival and function of therapeutic cells. The device upon implantation is designed to incorporate with tissue, forming highly vascularized tissue chambers for the transplantation and function of therapeutic cells, which then release proteins and hormones as required to treat disease. The Cell Pouch, along with therapeutic cells, has been shown to provide long-term safety and efficacy in small and large animal models of diabetes and has been proven to provide a biologically compatible environment for insulin-producing cells in humans.

ABOUT SERNOVA CORP.

Sernova is developing regenerative medicine therapeutic technologies using a medical device and immune protected therapeutic cells (i.e., human donor cells, corrected human cells and stem-cell-derived cells) to improve the treatment and quality of life of people with chronic metabolic diseases such as insulin-dependent diabetes, blood disorders including hemophilia, and other diseases treated through replacement of proteins or hormones missing or in short supply within the body.

We seek Safe Harbor.