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Press release Communiqué de presse

July 25, 2019 25 July, 2019

Sernova Announces Up to $3 Million Private Placement Financing


Source: Sernova Corp

July 25, 2019 8:30 a.m. EDT

LONDON, ONTARIO – July 25, 2019 – Sernova Corp. (TSX-V: SVA) (OTCQB: SEOVF) (FSE: PSH) announces a proposed private placement (the “Offering”) of up to $3 million in units (the “Units”) of the Company at a price of $0.20 per Unit including up to $1 million in Units that are being offered pursuant to the “existing shareholder prospectus exemption.”

Each Unit in the Offering will consist of one common share and one common share purchase warrant (“Warrant”). Each Warrant will be exercisable into one share at a price of $0.30 per share for a period of 36 months.

Terms Relating to the Existing Shareholder Exemption

The Company is pleased to invite existing shareholders who qualify under the “existing shareholder prospectus exemption” to participate in the Offering.

The criteria of the “existing shareholder prospectus exemption” (the “Existing Shareholder Exemption”) are set out in various regulatory instruments of the participating jurisdictions in Canada. To comply with the criteria of the Existing Shareholder Exemption, the offering will be subject to, among other criteria, the following:

• The subscriber must be a shareholder as of July 24, 2019, which has been set as the record date (the “Record Date”) for the purpose of determining existing shareholders entitled to purchase shares pursuant to the Existing Shareholder Exemption.

• To participate, a qualified shareholder must deliver (a) an executed subscription agreement in the required form, which will include requirements of the Existing Shareholder Exemption (e.g., that the subscriber was as of the Record Date and continues to be as of the date of closing, a shareholder of Sernova) and (b) pay the subscription amount no later than August 16, 2019. Contact information to obtain the subscription form is set out below.

• The aggregate acquisition cost to a subscriber under the Existing Shareholder Exemption cannot exceed $15,000 unless that subscriber has obtained advice from a registered investment dealer regarding the suitability of the investment.

• A maximum of $1 million of Units (“Maximum”) will be offered to shareholders as of the Record Date under the Existing Shareholder Exemption. There is no minimum amount in the Offering.

• If subscriptions received from shareholders who qualify under the Existing Shareholder Exemption exceed the Maximum, each such subscriber will be allocated Units in proportion to each such qualified shareholder’s share ownership as of the Record Date, or the additional subscriptions may be accepted (by increasing the Maximum) at the discretion of the Company.

• If subscriptions received for the Offering based on all available exemptions exceed the total amount of the Offering (after the fulfilment of subscriptions from existing shareholders), subscriptions may be accepted (by increasing the Offering size) at the discretion of the Company.

• In accordance with the Existing Shareholder Exemption, the Company confirms there is no material fact or material change related to the Company that has not been generally disclosed.

Further terms and conditions shall be set out in the form of subscription agreement that will be made available to interested shareholders, who are directed to contact the Company as follows:

Contact Person: Dominic Gray

Tel: 1 (519) 858 5126

Fax: 1 (519) 858 5099

Toll-Free: 1 (877) 299 4603


Assuming the Offering is fully subscribed, the Corporation plans to allocate the gross proceeds as follows: (i) $2 million for development of Sernova’s Cell Pouch technologies including advancing Sernova's US-based Phase I/II diabetes clinical trial, potential collaborations utilizing our Cell Pouch System platform technologies, and preclinical programs including haemophilia, hypothyroid disease and our advanced diabetes stem cell program and (ii) up to $210,000 for cash finders’ compensation, assuming such fees are paid on the entire amount, and (iii) the balance for general corporate purposes.

If the Offering is not fully subscribed, the Company will apply the proceeds to the above uses in priority and in such proportions as the Board of Directors and management of the Company determine is in the best interests of the Company. Although the Company intends to use the proceeds of the Offering as described above, the actual allocation of proceeds may vary from the uses set out above depending on future operations, events, or opportunities.

All securities issued in connection with the private placement will be subject to a statutory hold period of four months. The Company will compensate finders on a portion of the private placement, such compensation consisting of 7% in cash or 7% in finder warrants, or a combination thereof. Completion of the private placement is subject to the receipt of all necessary corporate and regulatory approvals, including approval of the TSX Venture Exchange.

Certain insiders of the Company are expected to participate in the Offering (the "Insider Participation"), which will be considered a related party transaction within the meaning of Multilateral Instrument 61-101 ("MI 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.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About the US Clinical Study

The approved protocol is a Phase I/II non-randomized, unblinded, single-arm, company-sponsored trial, where diabetic subjects with hypoglycemia unawareness are enrolled into the study. Participants are then implanted with Cell Pouches. Following the development of vascularized tissue chambers within the Cell Pouch, subjects are then stabilized on immunosuppression, and a dose of purified islets, under strict release criteria, is transplanted into the Cell Pouch.

A sentinel pouch is removed for an early assessment of the islet transplant. Subjects are followed for additional safety and efficacy measures for approximately six months. At this point, a decision is made with regards to the transplant of a second islet dose with subsequent safety and efficacy follow up. Patients are then further followed for one year. The primary objective of the study is to demonstrate safety and tolerability of islet transplantation into the Cell Pouch. The secondary objective is to assess efficacy through a series of defined measures.

For more information on this clinical trial, please visit For more information on enrollment and recruitment details, please visit

About Sernova Corp

Sernova Corp 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. For more information, please visit

For further information contact:

Dominic Gray Sernova Corp Tel: (519) 858-5126

Forward-Looking Information

This release may contain forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although Sernova believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance, and actual results may differ materially from those in forward-looking statements. Forward-looking statements are based on the beliefs, estimates, and opinions of Sernova’s management on the date such statements were made, which include our belief about the conduct and outcome of clinical trials and that Sernova will be able to raise additional capital to fund its clinical programs including its ongoing US FDA clinical trial. Sernova expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.