Sernova Corp
TSX VENTURE : SVA

Sernova Corp

May 10, 2011 06:00 ET

Sernova Announces $3M Brokered Private Placement

LONDON, ONTARIO--(Marketwire - May 10, 2011) -

THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Sernova Corp. ("Sernova" or the "Company") (TSX VENTURE:SVA) is pleased to announce a brokered private placement (the "Offering") of up to 15,800,000 units of the Company ("Units") at a price of $0.19 per Unit for gross proceeds of up to $3,002,000. Macquarie Private Wealth Inc. (the "Agent") is offering the Units as agent on a commercially reasonable efforts basis. In addition, the Company will grant to the Agent exercisable in whole or in part by notice given at any time up until the closing of the Offering, an overallotment option (the "Over Allotment Option") to offer for sale additional Units of up to 15% of the Units sold under the Offering, for additional gross proceeds of up to $450,300.

Each Unit will consist of one common share of the Company (a "Share") and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder thereof to purchase one Share for a period of two years, subject to acceleration of the expiry date as noted below, at a price of $0.20 per Share in the first year and at a price of $0.35 per Share in the second year.

The Agent is entitled to receive a commission equal to 8% of the gross proceeds of the Offering and the Over Allotment Option, a corporate finance fee of $25,000 (plus applicable taxes), and broker warrants (the "Broker Warrants") to acquire that number of Shares equal to 10% of the Units sold under the Offering and upon exercise of the Over Allotment Option. Each Broker Warrant will be exercisable at $0.19 per Share for a period of 18 months following the closing, subject to acceleration of the expiry date as noted below.

The Company will be entitled to accelerate the expiry date of the Warrants and Broker Warrants on the occurrence of a "trigger event" to a date that is 30 days or more following the date the Company gives written notice of a trigger event to the holders thereof. A trigger event shall occur if on any day four months after closing the twenty-day volume-weighted average trading price of the Shares on the TSX Venture Exchange is greater than one and one-half times the applicable warrant exercise price.

The proceeds from the Offering will be used by Sernova for further development of the Cell Pouch™ for safety and efficacy evaluation in diabetic patients receiving donor islets. Proceeds will also be used in part for potential university and corporate collaborations, additional preclinical studies and general and administrative activities.

The Offering is subject to standard closing conditions, including the Agent's satisfactory due diligence and the acceptance of the TSX Venture Exchange. All securities issued under the private placement will be subject to a four month hold period.

About Sernova

Sernova Corp. is a Canadian-based, health-sciences company focused on commercializing medical technologies. Sernova is currently developing a platform technology for a number of serious disease indications, starting with a novel treatment for insulin-dependent diabetes, using the novel Cell Pouch System™ and its patented Sertolin™ cell technology.

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. 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.

The securities offered have not been, and will not be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or any applicable exemption from the registration requirement of such Act. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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