Company: CSCIF
Filing Date: 2025-04-09
Form Type: 20-F
Source: 0001641172-25-003456
Chunk: 215

Company: COSCIENS Biopharma Inc.
Filing Date: 2025-04-09
Form: 20-F
Item: Item 18
Chunk 215
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Acquisition of Aeterna Zentaris Inc. – Refer to Notes 2, 3 and 5 to the financial statements
 
Critical Audit Matter Description
 
The Company acquired control of Aeterna Zentaris Inc. (“Aeterna”) and accounted for the business combination as a reverse acquisition. The consideration transferred for the acquisition involved an exchange of Ceapro Inc. shares for Aeterna shares. The Company recognized the assets acquired and the liabilities assumed at fair value, including intangible assets for patents (the “patents”) based on information available at the date of acquisition. The fair value of the patents was determined using the royalty relief method which required management to make significant estimates and assumptions related to forecasted sales, royalty rates and discount rates (“significant assumptions”).
 
Management made significant judgment to determine the accounting acquirer, the consideration transferred and the significant assumptions used in the evaluation of the patents. Performing audit procedures to evaluate the accounting acquirer, the consideration transferred and the reasonableness of the significant assumptions required a high degree of auditor judgment and an increased extent of audit effort, including the involvement of technical accounting and fair value specialists.
 
How the Critical Audit Matter Was Addressed in the Audit
 
Our audit procedures related to the determination of the accounting acquirer, assessment of the consideration transferred and the significant assumptions used to determine the fair value of the patents included the following, among others:

●   With the assistance of technical accounting specialists:
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○   Assessed management’s evaluation of the information in the arrangement agreement to evaluate whether
                               all relevant matters have been considered; and                           
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○   Evaluated management’s determination of the accounting acquirer and the methodology used to assess  
    the consideration transferred by analyzing specific facts against relevant accounting guidance.     

●   Evaluated the reasonableness of forecasted sales by considering, among others:
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○   inquiries with the Company’s medical research personnel, management and board of directors;
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○   Development and commercialization stage of the patents; and                                
○   Medical journals and studies.                                                              

●      With the assistance of fair value specialists, evaluated the reasonableness of the royalty and discount   
       rates by testing the source information underlying the determination of the royalty and discount rates.   
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●   Evaluated all information obtained through audit procedures to consider information that could be potentially
    contradictory to management’s assessment.                                                                    
 
Active ingredient cash-generating unit impairment assessment – Refer to Notes