# EDGAR Filing Document

**Accession Number:** 0001113423
**File Stem:** 0001493152-26-012703
**Filing Date:** 2026-3
**Character Count:** 627228
**Document Hash:** 5af1b0419ad85088d53ca498fd5fedc7
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-26-012703.hdr.sgml**: 20260325

**ACCESSION NUMBER**: 0001493152-26-012703

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 143

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260325

**DATE AS OF CHANGE**: 20260325

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COSCIENS Biopharma Inc.
- **CENTRAL INDEX KEY:** 0001113423
- **STANDARD INDUSTRIAL CLASSIFICATION:** PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844]
- **ORGANIZATION NAME:** 08 Industrial Applications and Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** A6
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38064
- **FILM NUMBER:** 26793401

**BUSINESS ADDRESS:**
- **STREET 1:** C/O NORTON ROSE FULBRIGHT CANADA LLP
- **STREET 2:** 222 BAY STREET, SUITE 3000, PO BOX 53
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5K 1E7
- **BUSINESS PHONE:** 843-900-3201

**MAIL ADDRESS:**
- **STREET 1:** C/O NORTON ROSE FULBRIGHT CANADA LLP
- **STREET 2:** 222 BAY STREET, SUITE 3000, PO BOX 53
- **CITY:** TORONTO
- **STATE:** A6
- **ZIP:** M5K 1E7

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Aeterna Zentaris Inc.
- **DATE OF NAME CHANGE:** 20040617

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** AETERNA LABORATORIES INC
- **DATE OF NAME CHANGE:** 20000503

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 20-F**

**☐ Registration Statement Pursuant to Section 12(b) or 12(g) of The Securities Exchange Act of 1934**

**OR**

**☒ Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 for the fiscal year ended December 31, 2025**

**OR**

**☐ Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934**

**OR**

**☐ Shell Company Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934**

**Commission file number 001-38064**

**COSCIENS Biopharma Inc.**

(Exact Name of Registrant as Specified in its Charter)

**Not Applicable**

(Translation of Registrant's Name into English)

**Canada**

(Jurisdiction of Incorporation)

**c/o Borden Ladner Gervais, LLP, 22 Adelaide Street West, Suite 3400, Toronto ON M5H 4E3**

(Address of Principal Executive Offices)

**Peter Puccetti**

**Interim CEO and Chairman of the Board**

COSCIENS Biopharma Inc.

**Telephone: (843) 900-3223**

**E-mail:** 

**c/o Borden Ladner Gervais, LLP, 22 Adelaide Street West, Suite 3400, Toronto ON M5H 4E3, Canada**

(Name, Telephone, E-mail and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act: **None**

Securities registered or to be registered pursuant to Section 12(g) of the Act: **Common Shares**

Securities for which there is a reporting obligation pursuant to Section 15(d) of the ACT: **NONE**

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as at the close of the period covered by the annual report: **3,183,330** Common Shares as at December 31, 2025.

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No : ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definitions of "accelerated filer," "large accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP ☐ International Financial Reporting Standards as issued by the Other ☐ <br> International Accounting Standards Board ☒

If "other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

**Basis of Presentation**

General

Except where the context otherwise requires, all references in this Annual Report on Form 20-F to the "Company", "COSCIENS", "we", "us", "our" or similar words or phrases are to COSCIENS Biopharma Inc. and its subsidiaries, taken together. In this Annual Report on Form 20-F, references to "$" and "U.S.$" are to United States ("**U.S.**") dollars, references to "CAN$" are to Canadian dollars and references to "EUR" and "€" are to euros. Unless otherwise indicated, all information contained in this Annual Report on Form 20-F are presented as of December 31, 2025.

This Annual Report on Form 20-F also contains certain information regarding products or product candidates that may potentially compete with our products and product candidates, and such information has been primarily derived from information made publicly available by the companies developing such potentially competing products and product candidates and has not been independently verified by COSCIENS.

**Special Note on Forward-Looking Statements**

This Annual Report on Form 20-F and the documents incorporated herein by reference constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended, and "forward-looking information" under the provisions of Canadian securities laws. All statements included in or incorporated by reference into this Annual Report on Form 20-F, other than statements of historical fact, that address circumstances, events, activities, or developments that could or may or will occur are forward-looking statements. When used in this Annual Report on Form 20-F and the documents incorporated herein by reference, words such as "anticipate", "assume", "believe", "could", "expect", "forecast", "future", "goal", "guidance", "intend", "likely", "may", "would" or the negative or comparable terminology as well as terms usually used in the future and the conditional are generally intended to identify forward-looking statements, although not all forward-looking statements include such words. Specific forward-looking statements in this Form 20-F and the documents incorporated herein by reference include, but are not limited to, statements relating to: the Company's patented technologies and value-driving products, and development thereof; the extraction, production and commercialization of active ingredients from natural sources and our ability to successfully market related products; the decision to wind-down the operations of Aeterna Zentaris GmbH and Zentaris IVF GmbH, the related insolvency filings, and the expected implications thereof, including any potential cost savings and accounting implications; the successful development and marketing of our oat-based pipeline products, including oat-beta glucan, avenanthramides and beta glucan from yeast, as well as the capability of such products to address unmet needs within the nutraceuticals market; the Company's business strategy; the Company's positioning in its target markets; the use and effects of tariffs to meet the presidential administration's policy goals in the United States; the Company's ability to accelerate the scale-up of PGX Technology towards commercial levels; the development and scale-up of new technologies; management's assumptions, estimates and judgements; liquidity and capital resources; adequacy of our financial resources to finance operations and expenditure requirements; our ability to maintain an effective system of internal controls; the ability of the Company to terminate or suspend its reporting obligations under applicable U.S. securities laws; and the plans, objectives, future outlook and financial position of the Company in general. All forward-looking statements are given pursuant to the "safe harbour" provisions of applicable securities legislation.

The forecasts and projections that make up the forward-looking statements contained herein are based on the Company's current expectations and assumptions, including factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, and including, but not limited to assumptions based on historical trends, current conditions, and expected future developments, and assumptions regarding: the ability of the Company to terminate or suspend its U.S. reporting obligations in a timely manner; the ability of the Company's to execute on its strategic plans and find new customers and partners in connection therewith; the successful development of technologies and value-driving products; the extraction, production and commercialization of active ingredients from natural sources and our ability to successfully market related products; the ability to source the raw materials required to develop our oat-based products; the successful development and marketing of our pipeline products as well as such products' capability to address unmet needs within new markets; the Company's business strategy; the Company's positioning in its target markets; the impact of tariffs and other trade barriers, on our costs and revenues, as well as on the macroeconomic framework in which we operate; the Company's plans for its PGX Technology; the adequacy of our financial resources to finance operations and expenditure requirements; our ability to seek additional financing to fund our business activities in the future; and the plans, objectives, future outlook and financial position of the Company in general. Neither the Company's independent auditors, nor any other independent accountants, have compiled, examined, or performed any procedures with respect to the forecasts and projections contained herein, nor have they expressed any opinion or any other form of assurance on such information or its achievability, and assume no responsibility for, and disclaim any association with, the forecasts and projections.

Forward-looking statements involve known and unknown risks and uncertainties, and other factors which may cause the actual results, performance or achievements stated herein to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include among others: the Company's present and future business strategies as described herein may not have the expected or desired results in the short-term or long-term; our revenues and expenses may fluctuate significantly, and we may fail to meet financial expectations; the Company's ability to continue as a going concern; operations and performance within expected ranges; anticipated future cash flows; local and global economic conditions and the environment in which the Company operates; the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments could have a material adverse effect on our business, financial condition and results of operations; anticipated capital and operating costs; uncertainty in our revenue generation from our marketed products; product development and related validation studies; results from our products under development may not be successful or may not support advancing the product; our now heavy dependence on sales by and revenue from our main distributor of active ingredients and its customers; the continued availability of funds and resources to successfully commercialize our products; the ability to secure strategic partners for late stage development, marketing, and distribution of our products; our ability to protect and enforce our patent portfolio and intellectual property; our ability to continue to list our common shares on the Toronto Stock Exchange (the "**TSX**"); and the continued trading and liquidity of our common shares on the OTCQB® Venture Market (the "**OTC Market**"); More detailed information about these and other factors is described under the caption "Key Information—Risk Factors", in other documents furnished to the U.S. Securities and Exchange Commission (the "**SEC**") and in our other public disclosure filed under our profile on SEDAR+ at <u>www.sedarplus.ca</u>.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Many of these factors are beyond our control. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, particularly in light of any resulting impacts on the global economy and on the Company's business. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements contained herein, except as required by applicable securities laws. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors, or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

**TABLE OF CONTENTS** 

**GENERAL INFORMATION**

---

| | | |
|:---|:---|:---|
| | | **Page<br> Responsibility** |
| **[PART I](#JA_001)** | **[PART I](#JA_001)** |  |
| &nbsp;&nbsp;&nbsp;Item 1. | [Identity of Directors, Senior Management and Advisers](#JA_002) | 6 |
|  | [A. Directors and senior management](#JA_005) | 6 |
|  | [B. Advisers](#JA_006) | 6 |
|  | [C. Auditors](#JA_007) | 6 |
| &nbsp;&nbsp;&nbsp;Item 2. | [Offer Statistics and Expected Timetable](#JA_003) | 6 |
|  | [A. Offer statistics](#JA_008) | 6 |
|  | [B. Method and expected timetable](#JA_009) | 6 |
| &nbsp;&nbsp;&nbsp;Item 3. | [Key Information](#JA_004) | 6 |
|  | [A. \[Reserved\]](#JA_010) | 6 |
|  | [B. Capitalization and indebtedness](#JA_011) | 6 |
|  | [C. Reasons for the offer and use of proceeds](#JA_012) | 6 |
|  | [D. Risk factors](#JA_013) | 6 |
| &nbsp;&nbsp;&nbsp;Item 4. | [Information on the Company](#JA_014) | 23 |
|  | [A. History and development of the Company](#JA_015) | 23 |
|  | [B. Business overview](#JA_016) | 24 |
|  | [C. Organizational structure](#JA_017) | 28 |
|  | [D. Property, plants and equipment](#JA_018) | 28 |
| &nbsp;&nbsp;&nbsp;Item 4A. | [Unresolved Staff Comments](#JA_019) | 28 |
| &nbsp;&nbsp;&nbsp;Item 5. | [Operating and Financial Review and Prospects](#JA_020) | 29 |
| &nbsp;&nbsp;&nbsp;Item 6. | [Directors, Senior Management and Employees](#JA_021) | 47 |
|  | [A. Directors and senior management](#JA_022) | 47 |
|  | [B. Compensation](#JA_023) | 49 |
|  | [C. Board practices](#sd_001) | 61 |
|  | [D. Employees](#sd_002) | 62 |
|  | [E. Share ownership](#sd_003) | 63 |
| &nbsp;&nbsp;&nbsp;Item 7. | [Major Shareholders and Related Party Transactions](#sd_004) | 63 |
|  | [A. Major shareholders](#sd_005) | 63 |
|  | [B. Related party transactions](#sd_006) | 64 |
|  | [C. Interests of experts and counsel](#sd_007) | 64 |
| &nbsp;&nbsp;&nbsp;Item 8. | [Financial Information](#sd_008) | 64 |
|  | [A. Consolidated statements and other financial information](#sd_009) | 64 |
|  | [B. Significant changes](#sd_010) | 64 |
| &nbsp;&nbsp;&nbsp;Item 9. | [The Offer and Listing](#sd_011) | 64 |
|  | [A. Offer and listing details](#sd_012) | 64 |
|  | [B. Plan of distribution](#sd_013) | 65 |
|  | [C. Markets](#sd_014) | 65 |
|  | [D. Selling shareholders](#sd_015) | 65 |
|  | [E. Dilution](#sd_016) | 65 |
|  | [F. Expenses of the issue](#sd_017) | 65 |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Item 10. | [Additional Information](#sd_018) | 65 |
|  | [A. Share capital](#sd_019) | 65 |
|  | [B. Memorandum and articles of association](#sd_020) | 65 |
|  | [C. Material contracts](#sd_021) | 75 |
|  | [D. Exchange controls](#sd_022) | 75 |
|  | [E. Taxation](#sd_023) | 75 |
|  | [F. Dividends and paying agents](#sd_024) | 83 |
|  | [G. Statement by experts](#sd_025) | 83 |
|  | [H. Documents on display](#sd_026) | 83 |
|  | [I. Subsidiary information](#sd_027) | 83 |
| &nbsp;&nbsp;&nbsp;Item 11. | [Quantitative and Qualitative Disclosures About Market Risk](#sd_028) | 84 |
| &nbsp;&nbsp;&nbsp;Item 12. | [Description of Securities Other than Equity Securities](#sd_029) | 85 |
|  | [A. Debt securities](#sd_030) | 85 |
|  | [B. Warrants and rights](#sd_031) | 85 |
|  | [C. Other securities](#sd_032) | 85 |
|  | [D. American depositary shares](#sd_033) | 85 |
| [**PART II**](#sd_034) | [**PART II**](#sd_034) |  |
| &nbsp;&nbsp;&nbsp;Item 13. | [Defaults, Dividend Arrearages and Delinquencies](#sd_035) | 85 |
| &nbsp;&nbsp;&nbsp;Item 14. | [Material Modifications to the Rights of Security Holders and Use of Proceeds](#sd_036) | 85 |
| &nbsp;&nbsp;&nbsp;Item 15. | [Controls and Procedures](#sd_037) | 85 |
| &nbsp;&nbsp;&nbsp;Item 16A. | [Audit Committee Financial Expert](#sd_038) | 88 |
| &nbsp;&nbsp;&nbsp;Item 16B. | [Code of Ethics](#sd_039) | 88 |
| &nbsp;&nbsp;&nbsp;Item 16C. | [Principal Accountant Fees and Services](#sd_040) | 88 |
| &nbsp;&nbsp;&nbsp;Item 16D. | [Exemptions from the Listing Standards for Audit Committees](#sd_041) | 89 |
| &nbsp;&nbsp;&nbsp;Item 16E. | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](#sd_042) | 89 |
| &nbsp;&nbsp;&nbsp;Item 16F. | [Change in Registrant's Certifying Accountant](#sd_043) | 89 |
| &nbsp;&nbsp;&nbsp;Item 16G. | [Corporate Governance](#sd_044) | 90 |
| &nbsp;&nbsp;&nbsp;Item 16H. | [Mine Safety Disclosure](#sd_045) | 90 |
| &nbsp;&nbsp;&nbsp;Item 16I. | [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](#sd_046) | 90 |
| &nbsp;&nbsp;&nbsp;Item 16J. | [Insider Trading Policy](#sd_047) | 90 |
| &nbsp;&nbsp;&nbsp;Item 16K. | [Cybersecurity](#sd_048) | 90 |
| [**PART III**](#sd_049) | [**PART III**](#sd_049) |  |
| &nbsp;&nbsp;&nbsp;Item 17. | [Financial Statements](#sd_050) | 91 |
| &nbsp;&nbsp;&nbsp;Item 18. | [Financial Statements](#sd_051) | 91 |
| &nbsp;&nbsp;&nbsp;Item 19. | [Exhibits](#VK_001) | 92 |

---

**PART I**

**Item 1.** **Identity of Directors, Senior Management and Advisers**

***A.***  ***Directors and senior management*** 

Not applicable.

***B.***  ***Advisers*** 

Not applicable.

***C.***  ***Auditors*** 

Not applicable.

**Item 2.** **Offer Statistics and Expected Timetable**

***A.***  ***Offer statistics*** 

Not applicable.

***B.***  ***Method and expected timetable*** 

Not applicable.

**Item 3.** **Key Information**

***A.***  ***(Reserved)*** 

***B.***  ***Capitalization and indebtedness*** 

Not applicable.

***C.***  ***Reasons for the offer and use of proceeds*** 

Not applicable.

***D.***  ***Risk factors*** 

*An investment in our securities involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information included in this Annual Report, before making an investment decision. If any of the following risks actually occur, our business, prospects, financial condition or results of operations could be materially, adversely affected by any of these risks. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. The trading price of our securities could decline due to any of these risks, and you may lose all or part of your investment. This Annual Report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks mentioned below. Forward-looking statements included in this Annual Report are based on information available to us on the date hereof, and all forward-looking statements in the documents incorporated by reference are based on information available to us as of the date of each such document. We undertake no obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, other than as required by applicable law.*

 

**Risks Relating to Us and Our Business** 

**Summary of Risk Factors** 

The following is a summary of the risk factors our business faces. The list below is not exhaustive and investors should read this "Risk Factors" section in full. Some of the risks we face include:

● our
 revenues and expenses may fluctuate significantly, and we may fail to meet financial expectations;

● our
 ability to continue as a going concern;

● we
 rely on one distribution partner for a large portion of our revenues;

● we
 may be unable to generate significant revenues if our products do not gain market acceptance or if we fail to obtain acceptable prices
 or adequate reimbursement for our products;

● competition
 in our targeted markets is intense, and development by other companies could render our products non-competitive;

● our
 share price is volatile, which may result from factors outside of our control;

● the
 delisting of our Common Shares from the TSX could impact their market price and liquidity;

● we
 are dependent on a stable and consistent supply of high-quality ingredients and raw materials for our operations, which are subject
 to potential adverse conditions;

● the
 failure to perform satisfactorily by third parties upon which we expect to rely to manufacture and supply products may lead to supply
 shortfalls;

● we
 may be unable to successfully commercialize our PGX Technology;

● we
 may require significant additional financing, and we may not have access to sufficient capital;

● the
 economic effects of a public health crisis may impact the market price of our Common Shares;

● we are subject to uncertainty regarding the ultimate outcome of the insolvency proceedings of our German subsidiaries;

● our
 net operating losses may be limited under U.S. tax laws;

● we
 may be deemed a passive foreign investment company, which could result in adverse tax consequences;

● investments
 in companies in our industries are generally considered to be speculative;

● the
 imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments
 could have a material adverse effect on our business, financial condition and results of operations;

● we
 may expend our limited resources to pursue a particular product or indication and fail to capitalize on other products or indications
 for which there may be a greater likelihood of success;

● we
 may not obtain adequate protection for our current or future products through our intellectual property and trademark registrations;

● we
 and our contract manufacturers are required to comply with applicable current Good Manufacturing Practice regulations;

● we
 may infringe the intellectual property rights of others;

● we
 may be subject to litigation in the future;

● our
 Rights Plan may prevent changes of control of the Company;

● we
 are subject to the risk of product liability claims for which we may not have adequate insurance coverage;

● claims
 of creditors of our subsidiaries will generally have priority as to the assets of such subsidiaries over our claims and those of
 our creditors and shareholders;

● it
 may be difficult for U.S. investors to obtain and enforce judgments against us because of our Canadian incorporation and corporate
 structure;

● we
 can provide no assurance that we will, at all times in the future, be able to report that our internal controls over financial reporting
 are effective and if we fail il to maintain an effective system of internal controls, we may not be able to accurately report our
 financial results or prevent fraud;

● we
 are subject to environmental laws and may be subject to environmental remediation obligations that may have a material adverse effect
 on our business;

● we
 may incur losses associated with foreign currency fluctuations;

● legislative
 actions, new accounting pronouncements and higher insurance costs may adversely impact our future financial position or results of
 operations;

● data
 security breaches and other cyber security risks may disrupt our operations and adversely affect our operating results;

● we
 do not intend to pay dividends in the near future;

● future
 issuances of securities and hedging activities may depress the trading price of our Common Shares;

● our
 articles of incorporation contain "blank check" preferred share provisions, which could delay or impede an acquisition
 of our company;

● our
 business could be negatively affected as a result of the actions of activist shareholders;

● we
are subject to intense competition for our skilled personnel, and the loss of key personnel or the inability to attract additional personnel
could impair our ability to conduct our operations; and

● in
 the event we were to lose our foreign private issuer status as of June 30 of a given financial year, we would be required to comply
 with the Securities Exchange Act of 1934 domestic reporting regime, which could cause us to incur additional legal, accounting and
 other expenses.

***Our revenues and expenses may fluctuate significantly, and any failure to meet financial expectations may disappoint securities analysts or investors and result in a decline in the price or the value of our Common Shares or other securities.***

We have a history of operating losses and are currently dependent on one distribution partner for over 84% of our revenues. Additionally, our revenues and expenses have fluctuated in the past and may continue to do so in the future. These fluctuations could cause our share price of Common Shares or the value of our other securities to decline. Some of the factors that could cause our revenues and expenses to fluctuate include, but are not limited to, the following:

● the addition of additional customers or distribution partners for our oat-based pipeline products, including oat-beta glucan, avenanthramides and beta glucan from yeast;

● fluctuations in the demand from Symrise AG or their underlying customers for our oat-based pipeline products;

● the development and successful commercialization for new oat-based products, including related marketing and launch costs;

● the outcome of future litigation; and

● foreign currency fluctuations.

Due to fluctuations in our revenues and expenses, we believe that period-to-period comparisons of our results of operations are not necessarily indicative of our future performance. It is possible that in some future periods, our revenues and expenses will be above or below the expectations of securities analysts or investors. In this case, the share price of our Common Shares and the value of our other securities could fluctuate significantly or decline.

 ****

***Our history of losses and negative cash flows from operations and the need for substantial capital raise substantial doubt about our ability to continue as a going concern.***

In Note 1 to our consolidated financial statements included in this Annual Report, we disclose that there is substantial doubt about our ability to continue as a going concern. The Company's ability to support its financial liabilities is dependent upon attaining profitable operations. While the Company believes that cash on hand and future cash flows from operations will be adequate to support the Company's financial liabilities, future cash flows are dependent on a number of factors outside the Company's control, including the potential direct and indirect impacts to its business of tariffs, retaliatory tariffs or other trade protectionist measures, and as such there is no assurance that it will be able to do so in the future. As such, there is no assurance that it will be able to realize its projected revenue and generate positive cashflows. If it is unable to do so, the Company may have to reduce or curtail operations and development activities, any of which could harm the business, financial condition and results of operations. The Company has the ability to scale its research and development activities, capital expenditures and restructure operations, and will do so as necessary, based on cash availability.

If necessary, we may also seek to obtain the capital needed to fund our operations through public or private equity offerings, debt financing transactions, refinancing or restructuring its current debt obligations, or by any other means. If we are unable to obtain sufficient funding, we could be forced to delay, reduce or eliminate all of our sales efforts or to reduce or curtail operations and development activities, and our financial condition and results of operations will be materially and adversely affected, and we may be unable to continue as a going concern. Future financial statements may disclose substantial doubt about our ability to continue as a going concern. If we seek additional financing to fund our business activities in the future and there remains substantial doubt about our ability to continue as a going concern, investors or other financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all. Additionally, even if we raise sufficient capital through additional equity or debt financings, strategic alternatives or otherwise, there can be no assurance that the revenue or capital infusion will be sufficient to enable us to develop our business to a level where it will be profitable or generate positive cash flow. Any equity securities issued may provide rights, preferences or privileges senior to those of our current holders of common shares. If we raise funds by issuing debt securities, these debt securities would have rights, preferences and privileges senior to those of holders of common shares and a substantial portion of our operating cash flow may be dedicated to the payment of principal and interest on such indebtedness, thus limiting funds available for our business activities. The terms of any debt securities issued could also impose significant restrictions on our operations.

***We rely on one distribution partner for a large portion of our revenues.***

Although we are continually seeking to expand our customer base and product offerings, we currently derive over 84% of its sales and related accounts receivable from one distribution partner, Symrise AG, a global supplier of fragrances, flavors, food nutrition, and cosmetic ingredients. Our future success in its base business cosmeceuticals market is dependent upon the continued demand by Symrise AG and their underlying customers, and the expansion of our customer base. Any decline in or loss of demand from Symrise AG or their underlying customers may have a negative impact on our revenues and an adverse impact on our business, financial condition, and results of operations, as was the case in 2023. The Company's current exclusive long-term supply and distribution agreement with Symrise AG expires on December 31, 2026, and there can be no assurance that it will be extended beyond that date.

***If our products do not gain broad market acceptance, we may be unable to generate significant revenues.***

Our revenues largely depend on sales of our oat-based pipeline products under our supply and distribution agreement with Symrise AG. Broad market acceptance of our products depend on a number of factors, including, but not limited to, the following:

● demonstration of clinical efficacy and safety of our products;

● the prevalence and severity of any adverse side effects related to our products;

● availability of alternative market offerings for our products;

● the advantages and disadvantages of our products relative to current or alternative market offerings;

● the classification and description of our products in relevant guidelines;

● our ability to diversify of customer base outside of the Symrise AG distribution arrangement;

● our ability to develop and effectively market new products;

● the availability of acceptable pricing for our products; and

● the effectiveness of marketing and distribution methods for our products.

If our products do not gain market acceptance outside of the Symrise AG distribution arrangement, our ability to generate significant revenues would be limited, and our financial condition could be materially, adversely affected. In addition, if we fail to further penetrate our core markets and existing geographic markets or to successfully expand our business into new markets, the growth in sales of our products, along with our operating results, could be negatively impacted.

Our ability to further penetrate our core markets and existing geographic markets in which we compete or to successfully expand our business into additional countries in Europe, Asia or elsewhere is subject to numerous factors, many of which are beyond our control. Our products may compete with a number of drugs, therapies, products and tests currently manufactured and marketed by major pharmaceutical and other biotechnology companies, as well as with new products currently under development by others or with products which may be less expensive than our products. There can be no assurance that our efforts to increase market penetration in our core markets and existing geographic markets will be successful. Our failure to do so could have an adverse effect on our operating results and would likely cause a drop in the share price of our Common Shares.

***Competition in our targeted markets is intense, and development by other companies could make our products non-competitive.***

The cosmeceutical, nutraceutical and biopharmaceutical fields are highly competitive. New products developed by other companies in the industry could make our current and future products uncompetitive or significantly less competitive. Competitors are developing and testing products and technologies that would compete with any of our current and future products. Some of these competitive products may be more effective or have an entirely different approach or means of accomplishing the desired effect than our current and future products. We expect competition from our competitors to continue to increase over time. Many of our competitors and potential competitors have substantially greater product development capabilities and financial, scientific, marketing and human resources than we do.

***In carrying out our operations, we are dependent on a stable and consistent supply of ingredients and raw materials.***

There can be no assurance that we, our contract manufacturers or our licensees, will be able, in the future, to continue to purchase products from our current suppliers or any other supplier on terms that are favorable or similar to current terms or at all. An interruption in the availability of certain raw materials or ingredients, or significant increases in the prices we pay for them, could have a material adverse effect on our business, financial condition, liquidity and operating results.

***The failure to perform satisfactorily by third parties upon which we expect to rely to manufacture and supply products may lead to supply shortfalls.***

Although the vast majority of our current manufacture of our oat-based pipeline products is undertaken in-house, our operational strategy may change. We also have or may have certain supply obligations *vis-à-vis* our existing and potential licensees, who are or will be responsible for our products. To be successful, our products must be manufactured in commercial quantities in compliance with quality controls and regulatory requirements. Even though it is our objective to minimize such risk by introducing alternative suppliers to ensure a constant supply at all times, there are a limited number of contract manufacturers or suppliers that are capable of manufacturing our products or the materials used in their manufacture. If we are unable to do so ourselves or to arrange for third-party manufacturing or supply our products, or to do so on commercially reasonable terms, we may not be able to commercialize our products. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured products ourselves, including reliance on the third party for regulatory compliance, the possibility of breach of the manufacturing agreement by the third party because of factors beyond our control, and the possibility of termination or non-renewal of the agreement by the third party, based on its own business priorities, at a time that is costly or inconvenient for us.

***Adverse weather conditions and natural disasters could impose costs on our business.***

We depend on high quality agricultural materials for our avenanthramide and beta glucan products, which materials are vulnerable to adverse weather conditions and natural disasters, including windstorms, hurricanes, earthquakes, floods, droughts, fires, and temperature and precipitation extremes, some of which are recurring but difficult to predict, as well as crop disease and infestation. For example, we source most of the oats that we use in the production of our products from the United States, which has experienced severe heat and drought conditions and significant wildfires from time to time, resulting in lost and damaged crops.

Severe weather conditions may occur with higher frequency or may be less predictable in the future due to the effects of climate change. Unfavorable growing and harvesting conditions could reduce both crop size and crop quality. In extreme cases, entire harvests may be lost in some geographic areas. Adverse weather conditions or natural disasters may adversely affect our supply of raw materials or prevent or impair our ability to ship products as planned. These factors may increase raw material acquisition and production costs, decrease our sales volumes and revenues, and lead to additional charges to earnings, which could have a material adverse effect on our business, financial condition, and results of operations.

***We may be unable to successfully commercialize our PGX Technology.***

The Company has a license for Pressurized Gas eXpanded (PGX) Technology. PGX is a patented, unique technology with several key advantages over conventional drying and purification technologies that can be used to process biopolymers into high-value and novel biocomposites. In 2023, the Company commenced a collaboration with Austria-based NATEX Prozesstechnologie GesmbH to accelerate the scale-up of PGX Technology at both its Edmonton facility and at the Natex Termitz facility in Austria. Construction and technical validation of both facilities is now complete. The Company believes there are several feasible commercial applications for the technology, and is in the process of soliciting interest from potential industry partners, with the capability to commercialize specialty materials, such as yeast beta glucan, who may be interested in licensing the technology for use in their own production operations. However, there is no assurance that the Company will be able to successfully find such commercial partners or otherwise successfully commercialize the technology.

***We may require significant additional financing, and we may not have access to sufficient capital.***

We may require significant additional capital to fund our commercialization efforts and may require additional capital to pursue planned activities, including the expansion of product offerings and related marketing and product launch costs. Although we believe that our existing cash on hand will be sufficient to fund our anticipated operating and capital expenditure requirements for the next 12 months, we currently have no committed sources of capital and do not currently expect to any significant new or additional sources of revenues from operations in the near future.

We may attempt to raise additional funds through public or private financings, collaborations with other pharmaceutical companies or from other sources, including, without limitation, through at-the-market offerings and issuances of securities. Additional funding may not be available on terms that are acceptable to us. If adequate funding is not available to us on reasonable terms, we may need to delay, reduce or eliminate our product development programs or obtain funds on terms less favorable than we would otherwise accept. To the extent that additional capital is raised through the sale of equity securities or securities convertible into or exchangeable or exercisable for equity securities, the issuance of those securities would result in dilution to our shareholders. Moreover, the incurrence of debt financing or the issuance of dividend-paying preferred shares, could result in a substantial portion of our future operating cash flow, if any, being dedicated to the payment of principal and interest on such indebtedness or the payment of dividends on such preferred shares and could impose restrictions on our operations and on our ability to make certain expenditures and/or to incur additional indebtedness, which could render us more vulnerable to competitive pressures and economic downturns.

Our future capital requirements are substantial and may increase beyond our current expectations depending on many factors, including, but not limited to, the following:

● the time and cost involved in preparing, filing, prosecuting, maintaining and enforcing patent claims;

● unexpected developments encountered in implementing our business development and commercialization strategies;

● the potential addition of commercialized products to our portfolio, including marketing and launch costs related to new product offerings;

● the outcome of future litigation; and

● further arrangements, if any, with collaborators.

In addition, global economic and market conditions, as well as future developments in the credit and capital markets, may make it even more difficult for us to raise additional financing in the future.

***The economic effects of a pandemic, epidemic or outbreak of an infectious disease or other public health crisis could adversely affect our operations or the market price of our Common Shares.***

Public health crises such as pandemics, epidemics or similar outbreaks could adversely impact our operations or the market price of our Common Shares. The extent to which such public health crises may impact our operations or the market price of our Common Shares will depend on future developments, which are highly uncertain and cannot be predicted with confidence, either internationally or within the U.S. or Canada, including the duration and severity of such an outbreak and the actions taken in response to contain the outbreak or treat its impact, among others.

The spread of a pandemic may impact our operations, including the potential interruption of our supply chain. The spread of an infectious disease or other health crisis may also result in the inability of our suppliers to deliver components or raw materials on a timely basis or at all. In addition, hospitals may reduce staffing and reduce or postpone certain treatments in response thereto. Such events may result in a period of business disruption and, in reduced operations, doctors or medical providers may be unwilling to participate in our clinical trials, any of which could materially affect our business, financial condition or results of operations.

***We are subject to uncertainty regarding the outcome of the insolvency proceedings of our German subsidiaries.***

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The orderly completion and ultimate outcome of the insolvency process for our German subsidiaries, Aeterna Zentaris GmbH and Zentaris IVF GmbH (collectively, the "**German Subsidiaries**"), are uncertain. The timing, conduct, and results of such proceedings are subject to the applicable legal frameworks, court supervision, and the determinations of insolvency officials, all of which are outside of our control.

The outcome of such proceedings may also have significant accounting and financial reporting implications, including on whether we may be required to recognize any impairment, disposals, or undertake any derecognition of assets and liabilities, or remeasurement of retained interests, if any, which could result in material non-cash charges, gains or losses. The assessment and timing of these accounting effects will depend on, among other things, the ultimate resolutions in the proceedings, which is uncertain at this time.

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Further, as a result of the insolvency process, we anticipate surrendering our rights to Macrilen (macimorelin). The final disposition of intellectual property, licences, distribution arrangements, data, inventory, and related contracts associated with Macrilen will depend on the conduct and outcome of the insolvency process, which could differ materially from our current expectations. We may also face disputes or claims regarding ownership, use, or transfer of assets, data, or know how developed or held by the German Subsidiaries. We cannot predict the duration, or outcome of the insolvency proceedings, including whether and to what extent any proceeds, recoveries, or remaining interests will be realized by us.

Any delays, adverse rulings, unfavourable bids or creditor outcomes, regulatory or court-imposed conditions, or other unexpected developments could exacerbate these risks. If the proceedings or their consequences are more protracted or adverse than expected, our ability to execute our strategic plans could be materially and adversely affected. See "Item 4. Information on the Company – Recent Developments".

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***Our net operating losses may be limited for U.S. federal income tax purposes under Section 382 of the Internal Revenue Code.***

If a corporation with net operating losses ("**NOLs**") undergoes an "ownership change" within the meaning of Section 382 of the United States Internal Revenue Code of 1986, as amended (the "**Code**"), then such corporation's use of such "pre-change" NOLs to offset income earned following such ownership change may be limited. Such limitation also may apply to certain losses or deductions that are "built-in" (i.e., attributable to periods prior to the ownership change, but not yet taken into account for tax purposes) as of the date of the ownership change that are subsequently recognized. An ownership change generally occurs when there is either (i) a shift in ownership involving one or more "5% shareholders," or (ii) an "equity structure shift" and, as a result, the percentage of stock of the corporation owned by one or more 5% shareholders (based on value) has increased by more than 50 percentage points over the lowest percentage of stock of the corporation owned by such shareholders during the "testing period" (generally the 3 years preceding the testing date). In general, if such change occurs, the corporation's ability to utilize its NOLs and certain other tax attributes would be subject to an annual limitation, as described below. The unused portion of any such NOLs or tax attributes each year is carried forward, subject to the same limitation in future years. The impact of an ownership change on state NOLs may vary from state to state. Due to previous ownership changes, or if we undergo an ownership change in the future, our ability to use our NOLs could be limited by Section 382 of the Code. Future changes to our stock ownership, some of which are outside of our control, could result in an ownership change under Section 382 of the Code. Recent legislation added several limitations to the ability to claim deductions for NOLs in future years. For these reasons, we may not be able to use a material portion of the NOLs, even if we attain profitability.

***It is possible that we may be a passive foreign investment company, which could result in adverse tax consequences to U.S. investors.***

Adverse U.S. federal income tax rules apply to "U.S. Holders" (as such term is defined below under the heading "Material U.S. Federal Income Tax Considerations") who directly or indirectly hold stock of a passive foreign investment company ("**PFIC**"). We would be classified as a PFIC for U.S. federal income tax purposes for a taxable year if (i) at least 75% of our gross income is "passive income" or (ii) at least 50% of the average value of our assets, including goodwill (based on annual quarterly average), is attributable to assets which produce passive income or are held for the production of passive income.

The determination of whether we are, or will be, a PFIC for a taxable year depends, in part, on the application of complex U.S. federal income tax rules, which are subject to various interpretations. Although the matter is not free from doubt, we believe that we were not a PFIC during our taxable year ended December 31, 2025, and will not likely be a PFIC during our taxable year ending December 31, 2026. Because PFIC status is based on our income, assets and activities for the entire taxable year, and our market capitalization, it is not possible to determine whether we will be characterized as a PFIC for the taxable year ending December 31, 2026, until after the close of the taxable year. The tests for determining PFIC status are subject to a number of uncertainties. These tests are applied annually, and it is difficult to accurately predict future income, assets and activities relevant to this determination. In addition, because the market price of our Common Shares is likely to fluctuate, the market price may affect the determination of whether we will be considered a PFIC. There can be no assurance that we will not be considered a PFIC for any taxable year (including our taxable year ending December 31, 2026).

If we are a PFIC for any taxable year during which a U.S. Holder holds Common Shares, we generally would continue to be treated as a PFIC with respect to that U.S. Holder for all succeeding years during which the U.S. Holder holds such Common Shares, even if we ceased to meet the requirements for PFIC status. Absent certain elections, a U.S. Holder would generally be subject to U.S. federal income tax at ordinary income tax rates, plus a possible interest charge, in respect of a gain derived from a disposition of our Common Shares, as well as certain distributions by us. If we are treated as a PFIC for any taxable year, a U.S. Holder may be able to make an election to "mark-to-market" Common Shares each taxable year and recognize ordinary income pursuant to such election based upon increases in the value of the Common Shares.

In addition, in certain cases U.S. Holders may mitigate the adverse tax consequences of the PFIC rules by making a "qualified electing fund" ("**QEF**") election. However, there can be no assurance that we will satisfy the record keeping requirements applicable to a QEF or that we will provide the information regarding our income that would be necessary for a U.S. Holder to make a QEF election. Therefore, there can be no assurance that a U.S. Holder will be able to make a successful QEF Election related to the Common Stock if we are or become a PFIC during the period when the U.S. Holder holds Common Stock.

If we are a PFIC, U.S. Holders will generally be required to file an annual information return with the IRS (on IRS Form 8621 *Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund*), with their annual U.S. federal income tax returns relating to their ownership of Common Shares. This filing requirement is in addition to any pre-existing reporting requirements that apply to a U.S. Holder's interest in a PFIC (which this requirement does not affect).

***Investments in companies in our industries are generally considered to be speculative in nature.***

The prospects for companies operating in the cosmeceutical, nutraceutical and biopharmaceutical industries are uncertain, given the very nature of the industry, in which companies often experience lengthy development time, extensive capital requirements, rapid technological developments and a high degree of competition based primarily on scientific and technological factors. These factors include the availability to obtain patent and other protection for technology and products, the ability to commercialize technological developments and the ability to obtain government approval for testing, manufacturing and marketing. Accordingly, investments in cosmeceutical, nutraceutical or biopharmaceutical companies should be considered to be speculative assets.

***The imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments could have a material adverse effect on our business, financial condition and results of operations.***

Recently there have been significant changes to U.S. trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, trade policies and tariffs affecting products from outside of the U.S., including from Canada. The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, and the availability and cost of alternative sources of supplies. For example, a majority of our revenue is generated in the United States under the supply and distribution agreement with Symrise AG and such revenue could become subject to tariffs for goods being imported from Canada. Additionally, our importation of raw materials, such as high-quality oats used in our avenanthramide products, could become subject to retaliatory tariffs imposed by Canadian authorities on goods imported from the United States. Additionally, it is possible that U.S. policy changes and uncertainty about such changes could increase market volatility and currency exchange rate fluctuations. As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.'s or other countries' trading relationships or the impact of new laws or regulations adopted by the U.S. or other countries.

***We may expend our limited resources to pursue a particular product or indication and fail to capitalize on other products or indications for which there may be a greater likelihood of success.***

We are currently focusing our efforts on development and testing of PGX materials, as well as developing new markets for our avenanthramide based products. As a result, we may forego or delay pursuit of opportunities for our other products, which there may be a greater likelihood of success or may prove to have greater commercial potential. Research programs to identify new product candidates or pursue alternative indications require substantial technical, financial and human resources. These activities, if pursued, may initially show promise in identifying potential product candidates or indications yet fail to yield product candidates or indications for further clinical development.

***We may not obtain adequate protection for our products through our intellectual property and trademark registrations.***

We rely heavily on our proprietary information in developing and manufacturing our oat-based pipeline products, including oat-beta glucan, avenanthramides and beta glucan from PGX. Our success depends, in large part, on our ability to protect our competitive position through patents, trade secrets, trademarks and other intellectual property rights. We have filed and are pursuing applications for patents and trademarks in many countries. Pending patent applications may not result in the issuance of patents, and we may not be able to obtain additional issued patents relating to our products.

The laws of some countries do not protect intellectual property rights to the same extent as the laws of the U.S. and Canada. Many companies have encountered significant problems in protecting and defending such rights in foreign jurisdictions. Many countries, including certain countries in Europe, have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of the patent. Moreover, the legal systems of certain countries, particularly certain developing countries, do not favor the aggressive enforcement of patent and other intellectual property protection, which makes it difficult to stop and prevent infringement.

Our patents may be challenged, narrowed, invalidated, held to be unenforceable or circumvented, which could limit our ability to stop competitors from marketing similar products or limit the length of term of patent protection we may have for our products. Changes in either patent laws or in interpretations of patent laws in the U.S. and other countries may diminish the value of our intellectual property or narrow the scope of our patent protection for our products. The patents issued or to be issued to us may not provide us with any competitive advantage or protect us against competitors with similar technology. In addition, it is possible that third parties with products that are very similar to ours will circumvent our patents by means of alternate designs or processes. We may have to rely on method-of-use, methods of manufacture and/or new-formulation protection for our compounds in development, and any resulting products, which may not confer the same protection as claims to compounds *per se*.

In addition, our patents may be challenged by third parties in patent litigation, which is becoming widespread in the cosmeceutical, nutraceutical and biopharmaceutical industries. There may be prior art of which we are not aware that may affect the validity or enforceability of a patent claim. There may also be prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim. No assurance can be given that our patents would, if challenged, be held by a court to be valid or enforceable, or that a competitor's technology or product would be found by a court to infringe our patents. Our granted patents could also be challenged and revoked in U.S. post-grant proceedings as well as in opposition or nullity proceedings in certain countries outside the U.S. In addition, we may be required to disclaim part of the term of certain patents. The costs of these proceedings could be substantial, and it is possible that our efforts could be unsuccessful, resulting in a loss of our U.S. patent position.

We also rely on trade secrets and proprietary know-how to protect our intellectual property. If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected. We seek to protect our unpatented proprietary information in part by requiring our employees, consultants, outside scientific collaborators, and sponsored researchers and other advisors to enter into confidentiality agreements. These agreements provide that all confidential information developed or made known to the individual during the course of the individual's relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of our employees, the agreements provide that all of the technology that is conceived by the individual during the course of employment is our exclusive property. These agreements may not provide meaningful protection or adequate remedies in the event of unauthorized use or disclosure of our proprietary information. In addition, it is possible that third parties could independently develop proprietary information and techniques substantially similar to ours or otherwise gain access to our trade secrets. If we are unable to protect the confidentiality of our proprietary information and know-how, competitors may be able to use this information to develop products that compete with our products and technologies, which could adversely impact our business.

We currently have the right to use certain patents and technologies under license agreements with third parties. Our failure to comply with the requirements of one or more of our license agreements could result in the termination of such agreements, which could cause us to terminate the related development program and cause a complete loss of our investment in that program or given market. Inventions claimed in certain in-licensed patents may have been made with funding from the U.S. government and may be subject to the rights of the U.S. government, and we may be subject to additional requirements in the event we seek to commercialize or manufacture product candidates incorporating such in-licensed technology.

As a result of the foregoing factors, we may not be able to rely on our intellectual property to protect our products in the marketplace.

***We may not obtain trademark registrations for our current or future products.***

We have filed applications for trademark registrations relating to avenanthramide, oat beta glucan and PGX products and applications in various jurisdictions, including the U.S. We may file applications for other possible trademarks for our current and future products. No assurance can be given that any of our trademarks will be registered elsewhere, or that the use of any registered or unregistered trademarks will confer a competitive advantage in the marketplace.

***We and our contract manufacturers are required to comply with applicable current Good Manufacturing Practice regulations.***

We and our contract manufacturers will be required to comply with applicable current Good Manufacturing Practice ("**GMP**") regulations for the manufacture of our current oat-based pipeline products or future products. These regulations include requirements relating to quality assurance, as well as the corresponding maintenance of rigorous records and documentation. Manufacturing facilities must be approved before we can use them in the commercial manufacturing of a product and are subject to subsequent periodic inspection by regulatory authorities. In addition, material changes in the methods of manufacturing or changes in the suppliers of raw materials are subject to further regulatory review and approval.

If we, or if any future marketing collaborators or contract manufacturers, fail to comply with applicable regulatory requirements, it may have adverse consequences, including subjecting us to fines, product recalls or seizures and related publicity requirements, injunctions, total or partial suspension of production, or civil penalties.

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***We may infringe the intellectual property rights of others.***

Our commercial success depends significantly on our ability to operate without infringing the patents and other intellectual property rights of third parties. There could be issued patents of which we are not aware that our products or methods may be found to infringe, or patents of which we are aware and believe we do not infringe, but which we may ultimately be found to infringe. Moreover, patent applications and their underlying discoveries are in some cases maintained in secrecy until patents are issued. Because patents can take many years to issue, there may be currently pending applications of which we are unaware that may later result in issued patents that our products or technologies are found to infringe. Moreover, there may be published pending applications that do not currently include a claim covering our products or technologies, but, which nonetheless, provide support for a later drafted claim that, if issued, our products or technologies could be found to infringe.

If we infringe or are alleged to infringe intellectual property rights of third parties, it will adversely affect our business. Third parties may own or control these patents or patent applications in the U.S. and abroad. These third parties could bring claims against us or our collaborators that would cause us to incur substantial expenses and, if successful against us, could cause us to pay substantial damages. Further, if a patent infringement suit were brought against us or our collaborators, we or they could be forced to stop or delay research, development, manufacturing or sales of the product or product candidate that is the subject of the suit.

The industries we operate in have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products. The coverage of patents is subject to interpretation by the courts, and the interpretation is not always uniform. In the event of infringement or violation of another party's patent or other intellectual property rights, we may not be able to enter into licensing arrangements or make other arrangements at a reasonable cost. Any inability to secure licenses or alternative technology could result in delays in the introduction of our products or lead to prohibition of the manufacture or sale of products by us or our partners and collaborators.

***We may be subject to litigation in the future.***

We may, from time to time, be a party to litigation in the normal course of business. Monitoring and defending against legal actions, whether meritorious, is time-consuming for our management and detracts from our ability to fully focus our internal resources on our business activities. In addition, legal fees and costs incurred in connection with such activities may be significant and we could, in the future, be subject to judgments or enter into settlements of claims for significant monetary damages. A decision adverse to our interests could result in the payment of substantial damages and could have a material adverse effect on our cash flow, results of operations and financial position.

With respect to any litigation, our insurance may not reimburse us, or may not be sufficient to reimburse us, for the expenses or losses we may suffer in contesting and concluding such lawsuit. Substantial litigation costs, including the substantial self-insured retention that we are required to satisfy before any insurance applies to a claim, unreimbursed legal fees or an adverse result in any litigation may adversely impact our business, operating results or financial condition.

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***Patent litigation is costly and time consuming and may subject us to liabilities.***

If we become involved in any patent litigation, interference, opposition, re-examination or other administrative proceedings, we will likely incur substantial expenses in connection therewith, and the efforts of our technical and management personnel will be significantly diverted. In addition, an adverse determination in litigation could subject us to significant liabilities.

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***Our Rights Plan May Prevent Transactions Resulting in a Change of Control of the Company***

Effective June 30, 2025, the shareholders re-approved our amended and restated shareholder rights plan (the "**Rights Plan**") that provides the Board and the Company's shareholders with additional time to assess any unsolicited take-over bid for the Company and, where appropriate, to pursue other alternatives for maximizing shareholder value. Under the Rights Plan, one right has been issued for each currently issued Common Share, and one right will be issued with each additional Common Share that may be issued from time to time. The Rights Plan may have a significant anti-takeover effect. The Rights Plan has the potential to significantly dilute the ownership interests of an acquiror of our shares, and therefore may have the effect of delaying, deterring or preventing a change in control of the Company.

***We are subject to the risk of product liability claims, for which we may not have or may not be able to obtain adequate insurance coverage.***

The sale and use of our cosmeceutical, nutraceutical and biopharmaceutical products will involve the risk of product liability claims and associated adverse publicity. Product liability claims might be made against us directly by patients, healthcare providers or pharmaceutical companies, or others selling, buying or using our products. We attempt to manage our liability risks by means of insurance. We maintain insurance covering our liability for our preclinical and clinical studies as well as products liability insurance. However, we may not have or be able to obtain or maintain sufficient and affordable insurance coverage, including coverage for potentially very significant legal expenses, and without sufficient coverage any claim brought against us could have a materially adverse effect on our business, financial condition or results of operations.

***We are a holding company, and claims of creditors of our subsidiaries will generally have priority as to the assets of such subsidiaries over our claims and those of our creditors and shareholders.***

COSCIENS is a holding company and a substantial portion of our non-cash assets is the share capital of our subsidiaries. Ceapro Inc. ("**Ceapro**"), our principal operating subsidiary, holds most of our intellectual property rights. Because COSCIENS is a holding company, our obligations to our creditors are structurally subordinated to all existing and future liabilities of our subsidiaries, which may incur additional or other liabilities and/or obligations. As a result, our rights and the rights of our creditors to participate in any distribution of the assets of any subsidiary in the event that such subsidiary were to be liquidated or reorganized or in the event of any bankruptcy or insolvency proceeding relating to or involving such subsidiary, and, therefore, the rights of the holders of our securities to participate in those assets, are subject to the prior claims of such subsidiary's creditors. To the extent that we may be a creditor with recognized claims against any such subsidiary, our claims would still be subject to the prior claims of our subsidiary's creditors to the extent that they are secured or senior to those held by us.

Holders of our securities are not creditors of our subsidiaries. Claims to the assets of our subsidiaries will derive from our own ownership interest in those operating subsidiaries. Claims of our subsidiaries' creditors will generally have priority as to the assets of such subsidiaries over our own ownership interest claims and, therefore, will have priority over the holders of our securities. Our subsidiaries' creditors may from time to time include general creditors, trade creditors, employees, secured creditors, taxing authorities and creditors holding guarantees. Accordingly, in the event of any foreclosure, dissolution, winding-up, liquidation or reorganization, or bankruptcy, insolvency or creditor protection proceedings relating to any subsidiary, there can be no assurance as to the value, if any, that would be available to holders of our securities. In addition, any distribution to us by our subsidiaries could be subject to monetary transfer restrictions in the jurisdictions in which our subsidiaries operate.

***It may be difficult for U.S. investors to obtain and enforce judgments against us because of our Canadian incorporation.***

We are a company existing under the laws of Canada. A number of our directors and officers are residents of Canada or otherwise reside outside the U.S., and all or a substantial portion of their assets, and a substantial portion of our assets, are located outside the U.S. Consequently, although we have appointed an agent for service of process in the U.S., it may be difficult for investors in the U.S. to bring an action against such directors or officers or to enforce against those persons or us a judgment obtained in a U.S. court predicated upon the civil liability provisions of federal securities laws or other laws of the U.S. Investors should not assume that foreign courts (i) would enforce judgments of U.S. courts obtained in actions against us or such directors, officers or experts predicated upon the civil liability provisions of the U.S. federal securities laws or the securities or "blue sky" laws of any state within the U.S. or (ii) would enforce, in original actions, liabilities against us or such directors, officers or experts predicated upon the U.S. federal securities laws or any such state securities or "blue sky" laws.

***We are subject to various internal control reporting requirements under applicable Canadian securities laws and the Sarbanes-Oxley Act in the U.S. We can provide no assurance that we will, at all times in the future, be able to report that our internal controls over financial reporting are effective.***

As a public company, we are required to comply with Section 404 of the U.S. *Sarbanes-Oxley Act of 2002* ("**Section 404**") and National Instrument 52-109 - *Certification of Disclosure in Issuers' Annual and Interim Filings* of the Canadian Securities Administrators. In any given year, we cannot be certain as to the time of completion of our internal control evaluation, testing and remediation actions or of their impact on our operations. Upon completion of this process, we may identify control deficiencies of varying degrees of severity under applicable SEC and Public Company Accounting Oversight Board (U.S.) rules and regulations. As a public company, we are required to report, among other things, control deficiencies that constitute material weaknesses or changes in internal controls that, or that are reasonably likely to, materially affect internal controls over financial reporting. A "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected on a timely basis. If we fail to comply with the requirements of Section 404 or similar Canadian requirements, or if we report a material weakness, we might be subject to regulatory sanction and investors may lose confidence in our consolidated financial statements, which may be inaccurate if we fail to remedy such material weakness.

***If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.***

We previously identified material weaknesses in our internal control over financial reporting for the year ending December 31, 2024, which were subsequently remediated during the year ended December 31, 2025. The previously identified material weaknesses in our internal control over financial reporting were as follows:

● the Company did not maintain an effective control environment based on the criteria established in the COSO framework and did not have sufficient competent personnel with the appropriate levels of knowledge, experience, and training in accounting and internal control over financial reporting;

● the Company did not maintain effective control activities based on the criteria established in the COSO framework;

● the Company had ineffective information and communication, which rendered management unable to generate or provide adequate quality supporting information and communication based on the criteria established in the COSO framework; and

● the Company did not maintain effective monitoring activities based on the criteria established in the COSO framework and did not have in place adequate processes for oversight, accountability for performance of internal control over financial reporting responsibilities, and timely implementation of corrective activities, and therefore could not perform sufficient ongoing evaluations to ascertain whether the components of internal control were present and functioning.

Although we have completed our remediation of the previously identified material weaknesses, if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain misstatements and we could be required to restate our financial results. In addition, if we are unable to produce accurate consolidated financial statements in the future, our stock price, liquidity and access to the capital markets may be adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements. Further, because of its inherent limitations, even our remediated and effective internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in our conditions, or that the degree of compliance with our policies or procedures may deteriorate.

***We are subject to a broad range of environmental laws and regulations and may be subject to environmental remediation obligations under such safety and related laws and regulations. The impact of these obligations and the Company's ability to respond effectively to them may have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our Common Shares to decline.***

We are subject to a broad range of federal, state, provincial and local environmental laws and regulations in the U.S. and Canada concerning the environment, safety matters, regulation of chemicals and product safety in the countries where we manufacture and sell our products or otherwise operate our business. These requirements include, among other matters, regulation of the handling, manufacture, transportation, storage, use and disposal of materials, including the discharge of pollutants, hazardous substances and waste into the environment. In the normal course of our business, such substances and waste may be released into the environment, which could cause environmental or property damage or personal injuries, and which could subject us to remediation obligations regarding contaminated soil and groundwater, potential liability for damage claims or to social or reputational harm and other similar adverse impacts. Under certain laws, we may be required to remediate contamination at certain of our properties regardless of whether the contamination was caused by us or by previous occupants of the property, or by others and at third-party sites where we send waste.

In recent years, the operations of all companies have become subject to increasingly stringent legislation and regulation related to environmental protection. Such legislation and regulations are complex and constantly changing. Future events, such as changes in existing laws or regulations or the enforcement thereof, or the discovery of contamination at our facilities may, among other things, require us to install additional controls for certain of our emission sources, undertake changes in our manufacturing processes, remediate soil or groundwater contamination at facilities where such cleanup is not currently required, or to take action to address social expectations or concerns arising from or relating to such changes and our response to such changes. The cost of such additional compliance or remediation obligations or responding to such social expectations or concerns may be significant and could have a material adverse effect on our business, financial condition, cash flows and results of operations and could cause the market value of our Common Shares and/or debt securities to decline.

***We may incur losses associated with foreign currency fluctuations.***

Our operations are, in many instances, conducted in currencies other than our functional currency or the functional currencies of our subsidiaries. Fluctuations in the value of currencies could cause us to incur currency exchange losses. We do not currently employ a hedging strategy against exchange rate risk. We cannot assert with any assurance that we will not suffer losses as a result of unfavorable fluctuations in the exchange rates between the U.S. dollar, the Canadian dollar and other currencies.

***Legislative actions, new accounting pronouncements and higher insurance costs may adversely impact our future financial position or results of operations.***

Changes in financial accounting standards or implementation of accounting standards may cause adverse, unexpected revenue or expense fluctuations and affect our financial position or results of operations. New pronouncements and varying interpretations of pronouncements have occurred with greater frequency and are expected to occur in the future, and we may make or be required to make changes in our accounting policies in the future. Compliance with changing regulations of corporate governance and public disclosure, notably with respect to internal controls over financial reporting, may result in additional expenses. Changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for companies such as ours, and insurance costs are increasing as a result of this uncertainty.

***Data security breaches and other cyber security risks may disrupt our operations and adversely affect our operating results.***

Attempts to gain unauthorized access to our information technology systems and those hosted by our third-party suppliers have become more sophisticated over time. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others. Our network security and data recovery measures and those of third parties with which we contract, may not be adequate to protect against computer viruses, cyber-attacks, breaches, and similar disruptions from unauthorized tampering with our computer systems. The misappropriation, theft, sabotage or any other type of security breach with respect to any of our proprietary and confidential information that is electronically stored, including research or clinical data, could cause interruptions in our operations, could result in a material disruption of our clinical activities and business operations and could expose us to third-party legal claims. Furthermore, we could be required to make substantial expenditures of resources to remedy the cause of cyber-attacks or break-ins. This disruption could have a material adverse impact on our business, operating results and financial condition. Additionally, any break-in or trespass of our facilities that results in the misappropriation, theft, sabotage or any other type of security breach with respect to our proprietary and confidential information, including research or clinical data, or that results in damage to our research and development equipment and assets could have a material adverse impact on our business, operating results and financial condition.

Our business processes personal information, and the use of this information is critical to our operations and innovation, including the development of our products, as well as management of our employees. New and evolving regulations could bring increased scrutiny of our data management in the future. Any cyber-attacks or other failure to protect critical and sensitive systems and information could damage our reputation, prompt litigation or lead to regulatory sanctions, all of which could materially affect our financial condition and results of operation.

We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases, we might be unaware of an incident or its magnitude and effects. The theft, unauthorized use, or publication of our intellectual property and/or confidential business information could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. In addition, the devotion of additional resources to the security of our information technology systems in the future could significantly increase the cost of doing business or otherwise adversely impact our financial results.

***We are subject to intense competition for our skilled personnel, and the loss of key personnel or the inability to attract additional personnel could impair our ability to conduct our operations.***

We are highly dependent on our management and our clinical, regulatory and scientific staff, the loss of whose services might adversely impact our ability to achieve our objectives. Recruiting and retaining qualified management and clinical, scientific and regulatory personnel is critical to our success. Reductions in our staffing levels have eliminated redundancies in key capabilities and skill sets among our full-time staff and required us to rely more heavily on outside consultants and third parties. We have been unable to increase the compensation of our associates to the extent required to remain fully competitive for their services, which increased our employee retention risk. The competition for qualified personnel is intense, and if we are not able to continue to retain qualified personnel and/or maintain positive relationships with our outside consultants, we may not be able to achieve our strategic and operational objectives or comply with regulatory requirements.

**Risks Relating to our Common Shares**

***Our share price is volatile, which may result from factors outside of our control.***

Our valuation and share price since the beginning of trading after our initial listings, first in Canada and then in the U.S., have had no meaningful relationship to current or historical financial results, asset values, book value or many other criteria based on conventional measures of the value of shares.

Between January 1, 2025 and December 31, 2025, the closing price of our Common Shares ranged from C$2.80 to C$5.98 per share on the TSX. From January 1, 2025 until September 3, 2025 the closing price of our Common Shares ranged from $2.43 to $4.35 per share on the NASDAQ Capital Market ("**NASDAQ**") and from September 4, 2025 until December 31, 2025, the closing price of our Common Share ranged from $2.02 to $2.70 per share on the "over-the-counter market". As of March 24, 2026, the price of our Common Shares on the TSX was C$1.27 and $0.92 on the OTC Market. Our share price may be affected by developments directly affecting our business and by developments out of our control or unrelated to us. The stock market generally, and the biopharmaceutical sector in particular, are vulnerable to abrupt changes in investor sentiment. Prices of shares and trading volume of companies in the life sciences industry can swing dramatically in ways unrelated to, or that bear a disproportionate relationship to, operating performance. Our share price and trading volume may fluctuate based on a number of factors including, but not limited to, the following:

● developments regarding current or future third-party suppliers and licensee(s);

● delays in our anticipated commercialization timelines;

● announcements by us regarding technological, regulatory or other matters;

● arrivals or departures of key personnel;

● governmental or regulatory action affecting our product candidates and our competitors' products in the U.S., Canada and other countries;

● the use and effects of tariffs could materially impact our costs and revenues, as well as the macroeconomic framework in which we operate;

● developments or disputes concerning patent or proprietary rights;

● actual or anticipated fluctuations in our revenues or expenses;

● general market conditions and fluctuations for the emerging growth and biopharmaceutical market sectors; and

● economic conditions in the U.S. or abroad, including the instability due to pandemics, armed conflicts or other events.

Our listing on the TSX may increase price volatility due to various factors, including different ability to buy or sell our Common Shares, different market conditions in different capital markets, and different trading volumes. In addition, low trading volume may increase the price volatility of our Common Shares. A thin trading market could cause the share price of our Common Shares to fluctuate significantly more than the stock market as a whole.

***Our Common Shares may be delisted from the TSX, which could affect their market price and liquidity. If our Common Shares were to be delisted, investors may have difficulty in disposing their Common Shares.***

 ****

Our Common Shares are listed on the TSX. In order to maintain that listing, we must satisfy minimum financial and other requirements. The Corporation may not be compliance with all ongoing listing requirements. If we fail to continue to meet all applicable continued listing requirements for the TSX in the future and the TSX determines to delist our Shares, the delisting could adversely affect the market liquidity of our Common Shares, our ability to obtain financing to repay debt and fund our operations.

***We do not intend to pay dividends in the near future.***

To date, we have not declared or paid any dividends on our Common Shares. As a result, the return on an investment in our Common Shares, or any of our other securities, will depend upon any future appreciation in value. There is no assurance that our Common Shares will appreciate in value or even maintain the price at which shareholders have purchased them.

***Future issuances of securities and hedging activities may depress the trading price of our Common Shares.***

Any additional or future issuance of securities or convertible securities, including the issuance of securities upon the exercise of stock options and upon the exercise of warrants or other convertible securities or securities pursuant to which Common Shares are issuable, could dilute the interests of our existing shareholders, and could substantially decrease the trading share price of our Common Shares.

We may issue equity securities in the future for a number of reasons, including to finance our operations and business strategy, to satisfy our obligations upon the exercise of options or warrants, or for other reasons. Our stock option plans generally permit us to have outstanding, at any given time, stock options that are exercisable for a maximum number of Common Shares equal to 11.4% of all then issued and outstanding Common Shares.

In addition, the share price of our Common Shares could also be affected by possible sales of securities by investors who view other investment vehicles as more attractive means of equity participation in us and by hedging or arbitrage trading activity that may develop involving our securities. This hedging or arbitrage could, in turn, affect the trading share price of our Common Shares.

***Our articles of incorporation contain "blank check" preferred share provisions, which could delay or impede an acquisition of our company.***

Our articles of incorporation, as amended, authorize the issuance of an unlimited number of "blank check" preferred shares, which could be issued by our Board without shareholder approval and which may contain liquidation, dividend and other rights equivalent or superior to our Common Shares. In addition, we have implemented in our constating documents an advance notice procedure for shareholder approvals to be brought before an annual meeting of our shareholders, including proposed nominations of persons for election to our Board. These provisions, among others, whether alone or together, could delay or impede hostile takeovers and changes in control or changes in our management. Any provision of our constating documents that has the effect of delaying or deterring a change in control could limit the opportunity for our shareholders to receive a premium for their Common Shares and could also affect the price that some investors are willing to pay for our Common Shares.

***Our business could be negatively affected as a result of the actions of activist shareholders.***

Proxy contests have been waged against many companies in our industry over the last few years. If faced with a proxy contest, we may not be able to successfully respond to the contest, which would be disruptive to our business. Even if we are successful, our business could be adversely affected by a proxy contest because:

● responding to proxy contests and other actions by activist shareholders may be costly and time-consuming, and may disrupt our operations and divert the attention of management and our employees;

● perceived uncertainties as to the potential outcome of any proxy contest may result in our inability to consummate potential acquisitions, collaborations or in-licensing opportunities and may make it more difficult to attract and retain qualified personnel and business partners; and

● if individuals that have a specific agenda different from that of our management, or other members of our board of directors (the "**Board**") are elected to our Board as a result of any proxy contest, such an election may adversely affect our ability to effectively and timely implement our strategic plan and to create value for our shareholders.

***In the event we were to lose our foreign private issuer status as of June 30 of a given financial year, we would be required to comply with the Securities Exchange Act of 1934 domestic reporting regime, which could cause us to incur additional legal, accounting and other expenses.***

In order to maintain our current status as a foreign private issuer, either (1) a majority of our Common Shares must not be either directly or indirectly owned of record by residents of the U.S. or (2) (a) a majority of our executive officers and of our directors must not be U.S. citizens or residents, (b) more than 50 percent of our assets cannot be located in the U.S. and (c) our business must be administered principally outside the U.S.

In 2025, our management conducted its annual assessment of the various facts and circumstances underlying the determination of our status as a foreign private issuer and based on the foregoing, our management has determined that, as of the date of such determination and as of June 30, 2025, we continued to be a foreign private issuer.

There can be no assurance, however, that we will remain a foreign private issuer either in 2026 or in future financial years.

If we were to lose our foreign private issuer status as of June 30 of any given financial year, we would be required to comply with the Securities Exchange Act of 1934 reporting and other requirements applicable to U.S. domestic issuers, which are more detailed and extensive than the requirements for foreign private issuers. We may also be required to make changes in our corporate governance practices in accordance with various SEC rules. The regulatory and compliance costs to us of complying with the reporting requirements applicable to a U.S. domestic issuer under U.S. securities laws may be higher than the cost we have historically incurred as a foreign private issuer. As a result, we would expect that a potential loss of foreign private issuer status at some future point in time could increase our legal, financial reporting and accounting compliance costs, and it is difficult at this time to estimate by how much our legal, financial reporting and accounting compliance costs may increase in such eventuality.

**Item 4.** **Information on the Company**

***A.***  ***History and development of the Company*** 

The Company was incorporated on September 12, 1990 under the *Canada Business Corporations Act* (the "**CBCA**") and continues to be governed by the CBCA. The Company, which previously operated under the name Aeterna Laboratories Inc., changed its name to Aeterna Zentaris Inc. ("**Aeterna**") in May 2004.

On November 17, 2015, we completed 100-to-1 share consolidation (i.e., reverse stock split), on July 18, 2022, we completed a 25-for-1 share consolidation and on June 3, 2024, in connection with the Arrangement (defined below) we completed a 4-for-1 share consolidation.

On June 3, 2024, Aeterna and Ceapro Inc. ("**Ceapro**"), closed an all-stock merger of equals transaction pursuant to a court-approved plan of arrangement under the CBCA (the "**Transaction**"). In connection with the Transaction, each outstanding Ceapro common share was exchanged for 0.02360 of an Aeterna common share, and Aeterna shareholders received 0.47698 of a share purchase warrant for each Aeterna common share held. Following closing of the Transaction, former shareholders of Ceapro owned approximately 50% of the Aeterna common shares and former shareholders of Aeterna owned approximately 50% of the Aeterna common shares, each on a fully diluted basis.

Our Common Shares commenced trading on a consolidated and adjusted basis on both the NASDAQ and the TSX on November 20, 2015 under the trading symbol "AEZS", and subsequently began trading on both the NASDAQ and the TSX under the trading symbol "CSCI" on August 9, 2024. The Company voluntarily delisted from NASDAQ effective as of September 5, 2025, while maintaining its listing on the TSX.

Following the NASDAQ delisting, FINRA's Department of Market Operations assigned the trading symbol "CSCIF" to the Company's Common Shares for quoting and trading on the informal over-the-counter market in the United States as of September 4, 2025, and on January 7, 2026 the Company's Common Shares became OTC quoted for trading on the OTC Market.

The Company is a holding company. Ceapro, a wholly-owned direct subsidiary, existing under the *Canada Business Corporations Act*, is our principal operating subsidiary. The Company's other operating subsidiary is

Aeterna Zentaris, Inc., a wholly-owned direct subsidiary incorporated in the state of Delaware.

On December 30, 2025, the Company effected the dissolution of Juvente DC Inc., a former subsidiary of Ceapro Inc., and on March 23, 2026, an application was filed by the German Subsidiaries in a German court to open insolvency proceedings in respect to the German Subsidiaries. For further information, see "– Recent Developments" (below).

Our registered address is located at 22 Adelaide Street West., Suite 3400, Toronto, Ontario, Canada M5H 4E3 c/o Borden Lander Gervais LLP; our telephone number is (843) 900-3223 and our website is <u>www.cosciensbio.com/</u>. Our agent for service of process and SEC matters in the U.S. is our wholly-owned subsidiary, Aeterna Zentaris, Inc., located at 315 Sigma Drive, Summerville, South Carolina 29486.

For additional information on the Company, the SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the Company, at <u>http://www.sec.gov</u>.

**Recent Developments**

***Wind Down of BioPharma Business*** 

On March 5, 2026, the Company announced that it had made the strategic decision to cease funding its German subsidiaries, each based in Frankfurt. As a result, the Company's subsidiary, AEZS Germany, and its wholly owned subsidiary Zentaris IVF GmbH, made insolvency filings in a German court on March 23, 2026.

The Company has historically pursued the development of its pharmaceutical therapeutic assets, including its main pharmaceutical asset, Macrilen® (macimorelin), via its German Subsidiaries (collectively, the "**Biopharmaceutical Business**"). Macrilen is an FDA and EMA approved oral test indicated for the diagnosis of adults with growth hormone deficiency and is commercially available in a number of countries, but the Biopharmaceutical Business has historically operated at a loss. The long-term viability of the business was always largely dependent on the Company's ability to expand the market for Macrilen, either by obtaining FDA approval for a pediatric indication in the U.S., or otherwise. In light of the previously announced disappointing results of Macrilen's Phase 3 DETECT trial and subsequent Type C meeting with the FDA (which represented a significant setback to the Company's hopes for a full pediatric approval in the U.S.), the Company undertook a strategic review of its options, including by exploring the viability of (i) alternative options for expansion of Macrilen into the U.S. market, (ii) a possible sale of the product and/or of the German Subsidiaries, and (iii) additional licensing and partnership opportunities.

As a result of the insolvency process, the Company anticipates surrendering its rights to Macrilen and significantly reducing its ongoing operating expenses and meaningfully extending its available cash resources. See Item 5. for information.

***B.***  ***Business overview*** 

COSCIENS is a life science company focused on the development and commercialization of natural, plant-based active ingredients derived from oats and other renewable plant resources, using proprietary manufacturing and extraction technologies. The Company's primary active ingredient business activities relate to the development and commercialization of natural products for the personal care, cosmetic, human and animal health industries using proprietary technology, natural, renewable resources and developing innovative products, technologies and delivery systems. The primary source of business stems from a commercial line of natural active ingredients including beta glucan, avenanthramides (colloidal oat extract), oat powder, oat oil, and oat peptides, which are marketed to the personal care, cosmetic, medical, and animal health industries through our distribution partners and direct sales. A small portion of current revenues represent veterinary therapeutic products, including an oat shampoo, an ear cleanser, and a dermal complex/conditioner, which are manufactured and marketed to veterinarians in Japan and other countries in Asia. The Company's primary marketing strategy is to sell principally through a distribution network instead of selling directly to end-users and as a result sales and marketing expenses are negligible.

Over the last decade, the Company's development projects in the active ingredients space have focused on its expertise in oats, which have a host of well-documented health care benefits, and on developing new innovative natural health care products or technologies. The Company also continues to explore opportunities for expansion into new product applications and categories, including as discussed below.

*Avenanthramides for Potential Applications in Inflammation Based Diseases*

In November 2023, the Company initiated a safety study evaluating avenanthramides, for potential applications in managing conditions related to inflammation. The Phase 1-2a study is a double-blind, placebo-controlled, randomized, adaptive, first-in-human study designed to assess safety, tolerability, and pharmacokinetics of single and multiple ascending oral doses of avenanthramide. 72 healthy subjects completed the Phase 1 portion of the trial which included 48 healthy subjects in a single ascending dose (SAD) arm and 24 healthy subjects in a multiple ascending dose (MAD) arm. Given that no significant adverse reactions have been observed during SAD and MAD phases, an independent data and safety monitoring board gave the green light to start the Phase 2a portion, with patients suffering from mild inflammation. A total of 20 patients were enrolled in the Phase 2a portion which is designed to gather initial insights into its potential efficacy. The Phase 2a study concluded in Q3 2025 and the complete study results will be available in the coming months.

 

*Technology*

The active ingredient product technology industry involves the development of proprietary extraction technologies and the application of these technologies to the production and development and commercialization of active ingredients derived from oats and other renewable plant resources for the healthcare and cosmetic industries. These and similar manufactured products are sold primarily through distribution networks.

The Company's core technologies used to extract and process bio actives include proprietary Ethanol Fractionation Processes (EFP) and Pressurized Gas eXpanded (PGX) Technology. EFP is currently used to produce the Company's Active ingredient formulations and mostly used to produce liquid formulations. The Company also has a license for the PGX Technology, which is a patented, unique technology which simultaneously purifies, micronizes, dries, and combines aqueous solutions of biopolymers into fine structured open porous materials with unique morphologies using carbon dioxide (CO2) and food grade ethanol at mild temperatures. PGX has several key advantages over conventional drying and purification technologies that can be used to process biopolymers into high-value and novel biocomposites. In a single step and using green solvents, it has the ability to generate purified highly porous polymer composites such as aerogels which cannot be made using conventional drying technologies. The moderate PGX processing conditions minimizes any potential degradation. The PGX drying process can also reduce the required carbon footprint, increase product shelf-life and lead to novel high value products including functional foods, nutraceuticals, cosmeceuticals and pharmaceuticals.

In 2023, the Company commenced a collaboration with Austria-based NATEX Prozesstechnologie GesmbH to accelerate the scale-up of PGX Technology at both its Edmonton facility and at the Natex Termitz facility in Austria. Construction and technical validation of both facilities is now complete. The Company is accelerating development and commercialization efforts for its patented PGX Technology. Although these commercialization efforts are still in the early stages, the Company has begun engaging potential industry partners to demonstrate both its ability to produce specialty materials directly and its capacity to provide PGX Technology for integration into its partners' own production operations.

The Company acknowledges that uncertainty remains regarding the ability of the Company to successfully commercialize PGX Technology, and that it is not yet generating revenue from this platform. Nevertheless, the Company remains firmly committed to advancing its development. The Company continues to engage with potential industry partners and government agencies to support the creation of new PGX applications and to drive the ongoing commercial progression of this unique technology.

The Company has also entered into limited life licence agreements for exclusive rights to new technologies. As part of the licence agreements, the Company works to develop and scale up the new technologies with the goal of commercializing the technologies or products derived from such technologies. The development of these new technologies is a costly, complex and time-consuming process, and the investment in this development often involves a prolonged time period until a return is achieved on the investment. The Company's ability to successfully develop and scale-up new technologies within the expiry periods of the licence agreements is dependent on a number of key factors such as hiring and retaining employees who have specialized knowledge and expertise pertaining to the development of the technologies, being able to access third party specialists, being able to source key equipment or supplies in a timely manner, and delays in research and development programs related to products derived from the technologies. Commercial success depends on many factors including the degree of innovation of the products developed, access to funding for scale-up opportunities, uncertainties inherent in the regulatory approval processes, delays in manufacturing or marketing arrangements, and sufficient support from strategic partners if applicable.

 

*Production*

The Company's dedicated production team successfully responded to the market demand for the cosmeceutical base business by producing over 144 metric tons of active ingredients in 2025. As part of its ordinary course of operations, the Company successfully passed audits conducted by customers at its Edmonton facility and continued to operate under its site license from the Health Canada Natural Product Directorate, which enables the Company to manufacture, package, label, release and distribute final products.

*Specialized Skill and Knowledge*

The Company has a broad range of expertise in natural product chemistry, microbiology, biochemistry, immunology and process engineering. These skills merge in the fields of active ingredients, biopharmaceuticals and drug-delivery solutions. The Company relies on its employee base whose skills and knowledge are critical to maintaining its success and always strives to identify and retain key employees in order to be competitive with compensation and working conditions.

*Competitive Conditions*

The Company's competitive success depends, in part, on its ability to obtain and maintain patents and trademarks and to secure and protect trade secrets, proprietary technology and manufacturing processes, and other intellectual property rights either developed internally or acquired, and to operate without infringing on the proprietary rights of others or have others infringe on its rights. Although the Company expends resources and efforts to patent its discoveries and innovations, there can be no assurance that patent applications will result in the issuance of patents, or that any patents issued to the Company will provide it with adequate protection or any competitive advantages, or that such patents will not be successfully challenged by third parties. As an intellectual property strategy, the Company intends to prepare and file "application patents" from the use of its products. However, the Company cannot be assured competitors will not independently develop products similar to the Company's products designed to circumvent exclusive rights granted to the Company.

**Principal Markets**

A description of the principal markets in which we compete, including a geographical and categorical breakdown of our revenues in the past three years, is presented in note 26 (Segment information) to our consolidated financial statements included in this Annual Report on Form 20-F at Item 18.

**Seasonality**

Demand for the Company's products varies from year to year and there is no seasonality or cyclical trend that can be specifically derived from the last decade.

**Raw Materials**

The Company adds further value to its extracts and "active ingredients" from oats and other renewable plant resources by supporting their use in cosmeceutical, nutraceutical and therapeutics products for humans and animals. The Company has historically been able to source the direct raw materials required for the specific formulation of its products, including grain and grain-derived materials, at varying prices which allowed it to produce finished goods. The raw materials that the Company purchases in the ordinary course may be subject to variation due to the season's output in grain quality.

An interruption in the availability of certain raw materials or ingredients, or significant increases in the prices paid by us for them, could have a material adverse effect on our business, financial condition, liquidity and operating results.

**Economic Dependence**

The Company derives over 84% of its sales and related accounts receivable from one distribution partner, Symrise AG, a global supplier of fragrances, flavors, food nutrition, and cosmetic ingredients, and the Company is continually seeking to expand its customer base. The Company's future success in its base business cosmeceuticals market is dependent upon the continued demand by this distributor and their underlying customers, and the expansion of the Company's customer base. Any decline in or loss of demand from this distributor or their underlying customers may have a negative impact on the Company's revenues and an adverse impact on its business, financial condition, and results of operations. The Company's current exclusive long-term supply and distribution agreement with Symrise AG expires on December 31, 2026.

The Company's business growth depends on its ability to access global markets through distribution partnerships. The Company's marketing strategy emphasizes providing technical support to its distributors and their customers to maximize the value of its technology and product utilization. The Company's vision and business strategy are supported by The Company's commitment to the following core values:

● adding value to all aspects of the Company's business;

● enhancing the health of humans and animals;

● discovering and commercializing new, therapeutic natural ingredients and bioprocessing technologies;

● producing the highest quality work possible in products, science and business; and

● developing personnel through guidance, opportunities and encouragement.

To support these objectives, the Company relies on strong intellectual and human capital resources and is developing a strong base of partnerships and strategic alliances to exploit the Company's technology. The current economic environment provides challenges in obtaining financial resources to fully exploit opportunities. To fund its operations, the Company relies upon revenues primarily generated from the sale of active ingredients, the proceeds of public and private offerings of equity securities and debentures, government grants and loans, and other investment offerings.

*Environmental Protection*

The operations of the Company are subject to a variety of federal, provincial and local laws, regulations and guidelines, including various environmental and health and safety regulations, regulating the conduct of its operations, the requirements for its products, the protection of the environment, the operation of its equipment and the handling and disposal of substances used in its operations. The Company believes that it is currently in compliance with such laws and regulations. Such laws or regulations are subject to change. Accordingly, it is impossible for the Company to predict the cost or impact of such laws and regulations on the Company's future operations.

**Intellectual Property – Patents** 

We seek to protect our compounds, manufacturing processes, compositions and methods for our lead products through a combination of patents, trade secrets and know-how. Our patent portfolio consists of two owned and in-licensed patent families issued, granted or pending in the U.S., Europe and other jurisdictions. The patent positions of companies in the biotechnology and pharmaceutical industries are highly uncertain and involve complex legal and factual questions. Therefore, we cannot predict the breadth of claims, if any, that may be allowed under any of our patent applications, or the enforceability of any of our allowed patents. See "Item 3.D. Risk Factors - We may not obtain adequate protection for our products through our intellectual property and trademark registrations."

Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in the various countries where patent protection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of its coverage and the availability of legal remedies in the country.

**<u>PGX Technology</u>**

During the year ended December 31, 2014, Ceapro became party to a licence agreement with the University of Alberta (the "**PGX Agreement**") for the rights to PGX. The PGX Agreement expires after a term of 20 years or after the expiration of the last patent obtained, whichever event shall occur first. For further information on PGX please see "Item 4.B. – Business Overview - Technology" (above).

**<u>Avenanthramides</u>**

During the year ended December 31, 2012, Ceapro entered into a licence agreement with the Canadian Government for a new technology to increase the concentration of avenanthramides in oats (the "**Avenanthramides Agreement**"). This unique technology represents a way to manage the risks related the availability and quality of raw material used in production and provides for the ability to produce higher concentrations of avenanthramides which should enable the production of larger quantities of product allowing Ceapro to grow its cosmeceutical sector while also allowing for the development of pharmaceutical-grade powder formulations. The Avenanthramides Agreement remains in force until the last patent has expired which will be in March of 2030, or until the patents have been abandoned.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***C.***  ***Organizational structure*** 

Our corporate structure, the jurisdiction of incorporation of our direct and indirect subsidiaries and the percentage of shares that we held in those subsidiaries as at December 31, 2025 as set forth under the caption "Item 4.A. History and development of the Company".

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;***D.***  ***Property, plants and equipment*** 

Our registered address is located in Toronto, Canada and our largest office is located in Edmonton, Canada. We do not own any real property. The following table sets forth information with respect to our main facilities as at December 31, 2025.

---

| | | | |
|:---|:---|:---|:---|
| **Location** | **Use of space** | **Square Footage** | **Type of interest** |
| Weismüllerstr. 50<br> D-60314<br> Frankfurt-am-Main, Germany | Occupied for management, R&D, business development and administration | 484 | Leasehold |
| 7824 51 Ave NW, Edmonton, AB T6E 6W2 | Occupied for management, manufacturing, R&D, business development and administration | 29764 | Leasehold |
| 8339 Roper Rd. Edmonton, AB T6E 6W2 | Occupied for management, manufacturing, R&D, business development and administration | 8272 | Leasehold |

---

The facility in Germany is now subject to insolvency proceedings. For further information, see "– Recent Developments" (above). We believe that the Edmonton facility is adequate to meet our ongoing needs.

---

| | |
|:---|:---|
| **Item 4A** | **Unresolved Staff Comments** |

---

Not applicable.

**Item 5.** **Operating and Financial Review and Prospects**

![](form20-f_001.jpg)

**Management's Discussion and Analysis of Financial Condition and Results of Operations**

**Introduction**

This Management's Discussion and Analysis ("MD&A") provides a review of the results of operations, financial condition and cash flows of COSCIENS Biopharma Inc. (formerly Aeterna Zentaris Inc.) for the year ended December 31, 2025. In this MD&A, "COSCIENS", the "Company", "we", "us" and "our" mean COSCIENS Biopharma Inc. and its subsidiaries. This discussion should be read in conjunction with the information contained in the Company's audited consolidated financial statements as of December 31, 2025, 2024 and 2023 (the "Annual Financial Statements"). Our Annual Financial Statements have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board ("IFRS"). This material, and additional information about the Company, is available on SEDAR+ at www.sedarplus.com, on EDGAR at www.sec.gov/edgar and on the Company's website at www.cosciensbio.com.

All amounts in this MD&A are presented in thousands of United States ("U.S.") dollars, except for share and per share data, or as otherwise noted. This MD&A was approved by the Company's Board of Directors (the "Board") on, and is dated, March 25, 2026.

**About Forward-Looking Statements**

Certain statements in this MD&A, referred to herein as "forward-looking statements", constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, as amended, and "forward-looking information" under the provisions of Canadian securities laws. All statements included in or incorporated by reference into this MD&A, other than statements of historical fact, that address circumstances, events, activities, or developments that could or may or will occur are forward-looking statements. When used in this MD&A, and the documents incorporated herein by reference, words such as "anticipate", "assume", "believe", "could", "expect", "forecast", "future", "goal", "guidance", "intend", "likely", "may", "would" or the negative or comparable terminology as well as terms usually used in the future and the conditional are generally intended to identify forward-looking statements, although not all forward-looking statements include such words. Specific forward-looking statements in this MD&A and the documents incorporated herein by reference include, but are not limited to, statements relating to: the Company's patented technologies and value-driving products, and development thereof; the extraction, production and commercialization of active ingredients from natural sources and our ability to successfully market related products; the decision to wind-down the operations of Aeterna Zentaris GmbH and Zentaris IVF GmbH, the related insolvency filings, and the expected implications thereof, including any potential cost savings and accounting implications; the successful development and marketing of our oat-based pipeline products, including oat-beta glucan, avenanthramides and beta glucan from yeast, as well as the capability of such products to address unmet needs within the nutraceuticals market; the Company's business strategy; the Company's positioning in its target markets; the use and effects of tariffs to meet the presidential administration's policy goals in the United States; the Company's ability to accelerate the scale-up of PGX Technology towards commercial levels; management's assumptions, estimates and judgements; liquidity and capital resources; adequacy of our financial resources to finance operations and expenditure requirements; our ability to maintain an effective system of internal controls; the ability of the Company to terminate or suspend its reporting obligations under applicable U.S. securities laws; and the plans, objectives, future outlook and financial position of the Company in general. All forward-looking statements are given pursuant to the "safe harbour" provisions of applicable securities legislation.

The forecasts and projections that make up the forward-looking statements contained herein are based on the Company's current expectations and assumptions, including factors or assumptions that were applied in drawing a conclusion or making a forecast or projection, and including, but not limited to assumptions based on historical trends, current conditions, and expected future developments, and assumptions regarding: the ability of the Company to terminate or suspend its U.S. reporting obligations in a timely manner; the ability of the Company's to execute on its strategic plans and find new customers and partners in connection therewith; the successful development of technologies and value-driving products; the extraction, production and commercialization of active ingredients from natural sources and our ability to successfully market related products; the ability to source the raw materials required to develop our oat-based products; the successful development and marketing of our pipeline products as well as such products' capability to address unmet needs within new markets; the Company's business strategy; the Company's positioning in its target markets; the impact of tariffs and other trade barriers, on our costs and revenues, as well as on the macroeconomic framework in which we operate; the Company's plans for its PGX Technology;; the adequacy of our financial resources to finance operations and expenditure requirements; our ability to seek additional financing to fund our business activities in the future; and the plans, objectives, future outlook and financial position of the Company in general.

Forward-looking statements involve known and unknown risks and uncertainties, and other factors which may cause the actual results, performance or achievements stated herein to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others: the Company's present and future business strategies as described herein may not have the expected or desired results in the short-term or long-term; our revenues and expenses may fluctuate significantly, and we may fail to meet financial expectations; the Company's ability to continue as a going concern; operations and performance within expected ranges; anticipated future cash flows; local and global economic conditions and the environment in which the Company operates the imposition of duties and tariffs and other trade barriers and retaliatory countermeasures implemented by the U.S. and other governments could have a material adverse effect on our business, financial condition and results of operations; anticipated capital and operating costs; uncertainty in our revenue generation from our marketed products; product development and related validation studies; results from our products under development may not be successful or may not support advancing the product; our now heavy dependence on sales by and revenue from our main distributor of active ingredients and its customers; the continued availability of funds and resources to successfully commercialize our products; the ability to secure strategic partners for late stage development, marketing, and distribution of our products; our ability to protect and enforce our patent portfolio and intellectual property; our ability to continue to list our common shares on the Toronto Stock Exchange (the "**TSX**"); the continued trading and liquidity of our common shares on the OTCQB® Venture Market (the "**OTC Market**"); and our ability to deregister from, and terminate our reporting obligations under, the Securities Exchange Act of 1934 ("**Exchange Act**"), and to realize any projected cost savings therefrom, as well as any impact on the trading of our common shares as a result thereof.

More detailed information about these and other factors is included under "Risk Factors" in the Annual Report on Form 20-F and in other documents furnished to the U.S. Securities and Exchange Commission (the "**SEC**") and in our other public disclosure filed under our profile on SEDAR+ at www.sedarplus.ca.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Many of these factors are beyond our control. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements, particularly in light of any resulting impacts on the global economy and on the Company's business. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward-looking statements contained herein, except as required by applicable securities laws. New factors emerge from time to time, and it is not possible for the Company to predict all of these factors, or to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

**Company Overview** 

COSCIENS is a life science company focused on the development and commercialization of natural, plant-based active ingredients derived from oats and other renewable plant resources, using proprietary manufacturing and extraction technologies. The Company's primary active ingredient business activities relate to the development and commercialization of natural products for the personal care, cosmetic, human and animal health industries using proprietary technology, natural, renewable resources and developing innovative products, technologies and delivery systems. Segmented information regarding the active ingredient business is available in the Notes to the Annual Financial Statements, in addition to segmented information regarding the Company's biopharmaceutical business. As discussed below under the heading "*Recent Developments*", the Company has recently announced the winding down of its existing biopharmaceutical operating segment.

The Company's common shares are listed on the TSX under the symbol "CSCI" and are listed and posted for trading on the OTC Market under the symbol "CSCI.F".

**Recent Developments**

***Wind-Down of Juvente Cosmeceuticals***

 ****

In 2025, the Company made the decision to suspended operations for the cosmeceutical line, Juvente<sup>DC</sup>, and as of December 30, 2025, the Company effected the dissolution of Juvente DC Inc.

***Wind Down of Biopharmaceutical Business***

 ****

On March 5, 2026, the Company announced that it had made the strategic decision to cease funding its German subsidiaries,(the "**German Subsidiaries**"), being Aeterna Zentaris GmbH (a wholly-owned direct subsidiary of the Company) and Zentaris IVF GmbH (a wholly-owned direct subsidiary of Aeterna Zentaris GmbH), each based in Frankfurt.

As a result of the Company's decision, management of the German Subsidiaries made an insolvency filing in a German Court on March 23, 2026 to open insolvency proceedings.

The Company has historically pursued the development of its pharmaceutical therapeutic assets, including its main pharmaceutical asset, Macrilen® (macimorelin) ("**Macrilen**"), via its German Subsidiaries (collectively, the "**Biopharmaceutical Business**"). Macrilen is an FDA and EMA approved oral test indicated for the diagnosis of adults with growth hormone deficiency and is commercially available in a number of countries, but the Biopharmaceutical Business has historically operated at a loss. The long-term viability of the business was always largely dependent on the Company's ability to expand the market for Macrilen, either by obtaining FDA approval for a pediatric indication in the U.S. or otherwise. In light of the previously announced disappointing results of Macrilen's Phase 3 DETECT trial and subsequent Type C meeting with the FDA (which represented a significant setback to the Company's hopes for a full pediatric approval in the U.S.), the Company undertook a strategic review of its options, including by exploring the viability of (i) alternative options for expansion of Macrilen into the U.S. market, (ii) a possible sale of the product and/or of the German Subsidiaries, and (iii) additional licensing and partnership opportunities.

As a result of the insolvency process, the Company anticipates surrendering its rights to Macrilen and significantly reducing its ongoing operating expenses and meaningfully extending its available cash resources.

Specifically, it is currently anticipated that the Company's decision to walk away from the Biopharmaceutical Business will generate approximately $1.9 million in annualized cost savings by eliminating ongoing operating losses at the subsidiary level and reducing related administrative costs at the corporate level. As part of the insolvency proceedings and the court appointment of a (preliminary) insolvency administrator, the Company is expected to lose control of the German Subsidiaries and will no longer consolidate the entities in future financial statements. Notably, this includes derecognition of the liability for Employee future benefits resulting from unfunded pension liability associated with the German subsidiaries, which as of December 31, 2025 was $11.0 million.

**Active Ingredients Business**

The Company's primary source of business stems from a commercial line of natural active ingredients including beta glucan, avenanthramides (colloidal oat extract), oat powder, oat oil, and oat peptides, which are marketed to the personal care, cosmetic, medical, and animal health industries through our distribution partners and direct sales. A small portion of current revenues represent veterinary therapeutic products, including an oat shampoo, an ear cleanser, and a dermal complex/conditioner, which are manufactured and marketed to veterinarians in Japan and other countries in Asia. The Company's primary marketing strategy is to sell principally through a distribution network instead of selling directly to end-users and as a result sales and marketing expenses are negligible.

Over the last decade, the Company's development projects in the active ingredients space have focused on its expertise in oats, which have a host of well-documented health care benefits, and on developing new innovative natural health care products or technologies. The Company also continues to explore opportunities for expansion into new product applications and categories, including as discussed below.

***Technology***

 ****

The active ingredient product technology industry involves the development of proprietary extraction technologies and the application of these technologies to the production and development and commercialization of active ingredients derived from oats and other renewable plant resources for the healthcare and cosmetic industries. These and similar manufactured products are sold primarily through distribution networks.

The Company's core technologies used to extract and process bio actives include proprietary Ethanol Fractionation Processes (EFP) and Pressurized Gas eXpanded (PGX) Technology. EFP is currently used to produce the Company's active ingredient formulations and mostly used to produce liquid formulations. The Company also has a license for the PGX Technology, which is a patented, unique technology which simultaneously purifies, micronizes, dries, and combines aqueous solutions of biopolymers into fine structured open porous materials with unique morphologies using carbon dioxide (CO2) and food grade ethanol at mild temperatures. PGX has several key advantages over conventional drying and purification technologies that can be used to process biopolymers into high-value and novel biocomposites. In a single step and using green solvents, it has the ability to generate purified highly porous polymer composites such as aerogels which cannot be made using conventional drying technologies. The moderate PGX processing conditions minimizes any potential degradation. The PGX drying process can also reduce the required carbon footprint, increase product shelf-life and lead to novel high value products including functional foods, nutraceuticals, cosmeceuticals and pharmaceuticals.

In 2023, the Company commenced a collaboration with Austria-based NATEX Prozesstechnologie GesmbH to accelerate the scale-up of PGX Technology at both its Edmonton facility and at the Natex Termitz facility in Austria. Construction and technical validation of both facilities is now complete.

The Company is accelerating development and commercialization efforts for its patented PGX Technology. Although these commercialization efforts are still in the early stages, the Company has begun engaging potential industry partners to demonstrate both its ability to produce specialty materials directly and its capacity to provide PGX Technology for integration into its partners' own production operations.

The Company acknowledges that uncertainty remains regarding the ability of the Company to successfully commercialize PGX Technology, and that it is not yet generating revenue from this platform. Nevertheless, the Company remains firmly committed to advancing its development. The Company continues to engage with potential industry partners and government agencies to support the creation of new PGX applications and to drive the ongoing commercial progression of this unique technology.

***Further Potential Cost Savings - Plan to Suspend SEC Reporting Obligations***

 ****

As previously disclosed, the Company voluntarily delisted from the Nasdaq Capital Market effective September 5, 2025, as the first step in a broader strategy to seek to cease its public reporting obligations under the Exchange Act, as part of the Company's overall cost savings agenda. The Company intends to take additional steps towards that goal during 2026, including by filing a Rule 13e-3 Transaction Statement on Schedule 13E-3 with the Securities and Exchange Commission ("**SEC**") in connection with a proposed transaction which would, if approved by regulators and ultimately by Company shareholders, enable the Company to file a Form 15-F with the SEC with the intention of suspending the Company's public reporting obligations under the Exchange Act, including the Corporation's obligations to file and submit annual reports on Form 20-F and reports on Form 6-K with the SEC.

For greater certainty, the Company intends to remain listed on the TSX, continue to have its Common Shares posted for trading on the OTC Market, and continue to meet its public reporting obligations as a "reporting issuer" under applicable Canadian securities laws, including by filing its continuous disclosure documents on its profile on SEDAR+ at <u>www.sedarplus.ca</u>. Further information regarding the Company's plans to suspend its public reporting obligations under the Exchange Act, and the expected cost savings, will be disclosed by the Company in due course.

**Consolidated Statements of Loss and Comprehensive Loss Data**

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except loss per share)* | **Three months ended** | **Three months ended** | **Twelve months ended** | **Twelve months ended** | **Twelve months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **2025** | **2024** | **2023** |
|  | **$** | **$** | **$** | **$** |  |
| **Revenues** |  |  |  |  | 7143 |
| Cost of sales |  |  |  |  | (4205) |
| **Gross profit** |  |  |  |  | 2938 |
| Research and development |  |  |  |  | (2040) |
| Selling, general and administrative |  |  |  |  | (5527) |
| Impairment of intangible assets |  |  |  |  |  |
| Impairment of property and equipment |  |  |  |  |  |
| Impairment of inventory |  |  |  |  | **-** |
| **Loss from operations** |  |  |  |  | (4629) |
| **Other income** |  |  |  |  | 259 |
| **Loss before income taxes** |  |  |  |  | (4370) |
| Income tax recovery (expense) |  |  |  |  | 885 |
| **Net loss** |  |  |  |  | (3485) |
| **Other comprehensive loss:** |  |  |  |  |  |
| Items that may be reclassified subsequently to profit or loss: |  |  |  |  |  |
| Foreign currency translation adjustments |  |  |  |  | 492 |
| Items that will not be reclassified subsequently to profit or loss: |  |  |  |  |  |
| Actuarial gain (loss) on defined benefit plans |  |  |  |  | - |
| **Comprehensive loss** |  |  |  |  | (2993) |
| **Basic loss per share** |  |  |  |  | (1.89) |
| **Weighted average number of shares outstanding (basic)** |  |  |  |  | 1847233 |

---

**<u>Revenue and cost of sales</u>**

The following table summarizes our gross margin earned during the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **$** | **$** | **$** | % |
| **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active ingredients | **1757** | 2394 |  | (27%) |
| &nbsp;&nbsp;&nbsp;Pharmaceutical | **9** | 928 |  | (99%) |
| **Total revenue** | **1766** | 3322 |  | (47%) |
| **Cost of sales** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active ingredients | **1099** | 1200 |  | (8%) |
| &nbsp;&nbsp;&nbsp;Pharmaceutical | **58** | 73 |  | (21%) |
| **Total cost of sales** | **1157** | 1273 |  | (9%) |
| **Gross Margin** | **609** | 2049 |  | (70%) |
| **Gross Margin %** | **34%** | 62% |  |  |

---

Our total revenue for the three-month period ended December 31, 2025, was $1.8 million (effectively all of which was generated by the active ingredients business) as compared to $3.3 million for the same period in 2024, a decrease of $1.5 million. This decrease is primarily due to a $0.9 million decrease in pharmaceutical revenue (primarily as a result of the recognized breakage revenue in 2024 following the unexpected results of the pediatric trial of $0.7 million) as well as a decrease of $0.6 million in sales of active ingredients from prior period due to the timing of shipments. Cost of sales for the three-month period ended December 31, 2025, decreased by $0.1 million, primarily due to the lower sales volumes in the active ingredients business during the period. The gross margin for the three-month period ended December 31, 2025, was $0.6 million as compared to $2 million for the same period in 2024, a decrease of $1.4 million, or 70%, which was primarily a result of lower pharmaceutical deferred revenues recognized, which typically carry higher margins, as well as production overruns for the active ingredients business during Q4 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **$** | **$** | **$** | % |
| **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active ingredients | **7037** | 8492 |  | (17%) |
| &nbsp;&nbsp;&nbsp;Pharmaceutical | **461** | 1095 |  | (58%) |
| **Total revenue** | **7498** | 9587 |  | (22%) |
| **Cost of sales** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active ingredients | **4634** | 4706 |  | (2%) |
| &nbsp;&nbsp;&nbsp;Pharmaceutical | **217** | 152 |  | 43% |
| **Total cost of sales** | **4851** | 4858 |  | 0% |
| **Gross Margin** | **2647** | 4729 |  | (44%) |
| **Gross Margin %** | **35%** | 49% |  |  |

---

Our total revenue for the twelve-month period ended December 31, 2025, was $7.5 million ($7.0 million of which was generated by the active ingredients business) as compared to $9.6 million for the same period in 2024, a decrease of $2.1 million. This decrease is primarily due to a decrease of $1.5 million in sales of active ingredients from prior period due to timing of shipments, as well as a $0.6 million decrease in pharmaceutical revenue (primarily as a result of the recognized breakage revenue in 2024 following the unexpected results of the pediatric trial of $0.7 million). Cost of sales for the twelve-month period ended December 31, 2025 stayed consistent year over year. The gross margin for the twelve-month period ended December 31, 2025, was $2.6 million as compared to $4.7 million for the same period in 2024, a decrease of $2.1 million or 44%, which was primarily a result of lower revenues during the year, as well as production overruns throughout the year for the active ingredients business.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** |
|  | **2024** | **2023** | **Change** | **Change** |
|  | **$** | **$** | $% | % |
| **Revenue** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active ingredients | **8492** | 7143 |  | 19% |
| &nbsp;&nbsp;&nbsp;Pharmaceutical | **1095** | - |  | 100% |
| **Total revenue** | **9587** | 7143 |  | 34% |
| **Cost of sales** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Active ingredients | **4706** | 4205 |  | 12% |
| &nbsp;&nbsp;&nbsp;Pharmaceutical | **152** | - |  | 100% |
| **Total cost of sales** | **4858** | 4205 |  | 16% |
| **Gross Margin** | **4729** | 2938 |  | 61% |
| **Gross Margin %** | **49%** | 41% |  |  |

---

Our total revenue for the twelve-month period ended December 31, 2024, was $9.6 million ($8.5 million of which was generated by the active ingredients business) as compared to $7.1 million for the same period in 2023, an increase of $2.4 million. This increase was primarily due to a $1.3 million increase in sales of active ingredients from the prior period as well as a $1.1 million in pharamaceutical revenue due to the merger completed in 2024. Cost of sales for the twelve-month period ended December 31, 2024, increased by $0.7 million, primarily due to the higher sales volumes during the period. The gross margin for the twelve-month period ended December 31, 2024, was $4.7 million as compared to $2.9 million for the same period in 2023, an increase of $1.8 million. This increase is in line with the movements in revenue and cost of sales and is primarily due to the high gross margin on pharmaceutical sales.

**<u>Research and development expenses</u>**

The following table summarizes our research and development expenses incurred during the periods indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **$** | **$** | **$** | % |
| **Direct research and development expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Avenanthramides for inflammation-based diseases | **64** | 548 |  | (88%) |
| &nbsp;&nbsp;&nbsp;Macimorelin pediatric DETECT-trial | **2** | 694 |  | (100%) |
| &nbsp;&nbsp;&nbsp;Investment tax credits | **-** | 737 |  | (100%) |
| &nbsp;&nbsp;&nbsp;Other programs | **58** | 201 |  | (71%) |
| &nbsp;&nbsp;&nbsp;**Sub total** | **124** | 2180 |  | (94%) |
| &nbsp;&nbsp;&nbsp;Employee-related expenses | **475** | 670 |  | (29%) |
| &nbsp;&nbsp;&nbsp;Facilities, depreciation, and other expenses | **-** | 63 |  | (100%) |
| &nbsp;&nbsp;&nbsp;**Total** | **599** | 2913 |  | (79%) |

---

Our total research and development expenses for the three-month period ended December 31, 2025, were $0.6 million as compared to $2.9 million for the same period in 2024, a decrease of $2.3 million. This decrease was primarily due to:

● Decreased spending on the DETECT trial of $0.7 million and on other pharmaceutical projects of $0.1 million;

● A prior year de-recognition for the active ingredients business of non-refundable Canadian Federal investment tax credits of $0.7 million in accordance with the Company's accounting policies;

● Decreased spending on phase 1-2a clinical study on avenanthramides for inflammation-based diseases under the active ingredients business of $0.5 million; and

● Decreased employee and facility related costs (most of which relate to the pharmaceutical business) of $0.3 million, primarily attributable to the restructuring during the period.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **$** | **$** | **$** | % |
| **Direct research and development expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Avenanthramides for inflammation-based diseases | **731** | 2149 |  | (66%) |
| &nbsp;&nbsp;&nbsp;Macimorelin pediatric DETECT-trial | **274** | 2376 |  | (88%) |
| &nbsp;&nbsp;&nbsp;Investment tax credits | **-** | 737 |  | (100%) |
| &nbsp;&nbsp;&nbsp;Other programs | **443** | 1239 |  | (64%) |
| &nbsp;&nbsp;&nbsp;**Sub total** | **1448** | 6501 |  | (78%) |
| &nbsp;&nbsp;&nbsp;Employee-related expenses | **1438** | 1666 |  | (14%) |
| &nbsp;&nbsp;&nbsp;Facilities, depreciation, and other expenses | **64** | 137 |  | (53%) |
| &nbsp;&nbsp;&nbsp;**Total** | **2950** | 8304 |  | (64%) |

---

Our total research and development expenses for the twelve-month period ended December 31, 2025, were $3.0 million as compared to $8.3 million for the same period in 2024, a decrease of $5.3 million. This decrease was primarily due to:

● Decreased spending on the DETECT trial of $2.1 million and on other pharmaceutical projects of $0.8 million;

● Decreased spending on phase 1-2a clinical study on avenanthramides for inflammation-based diseases under the active ingredients business of $1.4 million;

● A prior year de-recognition for the active ingredients business of non-refundable Canadian Federal investment tax credits of $0.7 million in accordance with the Company's accounting policies; and

● Decreased employee and facility related costs (most of which relate to the pharmaceutical business) of $0.3 million, primarily attributable to the restructuring during the period.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** |
|  | **2024** | **2023** | **Change** | **Change** |
|  | **$** | **$** | $% | % |
| **Direct research and development expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Avenanthramides for inflammation-based diseases | **2149** | 575 |  | 274% |
| &nbsp;&nbsp;&nbsp;Macimorelin pediatric DETECT-trial | **2376** |  |  | 100% |
| &nbsp;&nbsp;&nbsp;Investment tax credits | **737** |  |  | 100% |
| &nbsp;&nbsp;&nbsp;Other programs | **1239** | 545 |  | 127% |
| &nbsp;&nbsp;&nbsp;**Sub total** | **6501** | 1120 |  | 480% |
| &nbsp;&nbsp;&nbsp;Employee-related expenses | **1666** | 892 |  | 87% |
| &nbsp;&nbsp;&nbsp;Facilities, depreciation, and other expenses | **137** | 28 |  | 389% |
| &nbsp;&nbsp;&nbsp;**Total** | **8304** | 2040 |  | 307% |

---

Our total research and development expenses for the twelve-month period ended December 31, 2024, were $8.3 million as compared to $2.0 million for the same period in 2023, an increase of $6.3 million. This increase was primarily due to:

● Increased spending on phase 1-2a clinical study on avenanthramides for inflammation-based diseases under the active ingredients business of $1.6 million;

● Increased trial costs associated with the DETECT trial of $2.4 million and $0.7 million costs related to other pharmaceutical projects, attributable to the merger completed in 2024;

● A de-recognition for the active ingredients business of non-refundable Canadian Federal investment tax credits of $0.7 million in accordance with the Company's accounting policies; and

● Increases in employee and facility related costs of $0.9 million.

**<u>Selling, general and administrative expenses</u>**

The following table summarizes our selling, general and administrative expenses incurred during the period indicated:

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **$** | **$** | **$** | % |
| **Selling, general and administrative expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries & benefits | **894** | 1011 |  | (12%) |
| &nbsp;&nbsp;&nbsp;Insurance | **231** | 291 |  | (21%) |
| &nbsp;&nbsp;&nbsp;Professional fees | **862** | 427 |  | 102% |
| &nbsp;&nbsp;&nbsp;Other office & general expenses | **411** | 1017 |  | (60%) |
| **Total selling, general and administrative expenses** | **2398** | 2746 |  | (13%) |

---

 

Our total selling, general and administrative expenses for the three-month period ended December 31, 2025, were $2.4 million (including $0.6 million related to restructuring costs) as compared to $2.7 million for the same period in 2024, a decrease of $0.3 million. This decrease was primarily attributable to the merger completed in 2024 and management's cost cutting measures beginning in the third quarter of 2025 and the impact on the respective costs such as:

● A decrease in salaries & benefits of $0.1 million;

● A decrease in other office & general expenses of $0.6 million due to downsizing of the German office space in 2025; offset by

● An increase in professional fees of $0.4 million due to legal fees incurred associated with restructuring matters.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** |
|  | **2025** | **2024** | **Change** | **Change** |
|  | **$** | **$** | **$** | % |
| **Selling, general and administrative expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries & benefits | **4272** | 3079 |  | 39% |
| &nbsp;&nbsp;&nbsp;Insurance | **962** | 732 |  | 31% |
| &nbsp;&nbsp;&nbsp;Professional fees | **2533** | 3098 |  | (18%) |
| &nbsp;&nbsp;&nbsp;Other office & general expenses | **2295** | 3539 |  | (35%) |
| **Total selling, general and administrative expenses** | **10062** | 10448 |  | (4%) |

---

 

 

Our total selling, general and administrative expenses for the twelve-month period ended December 31, 2025, were $10.0 million (including $1.6 million related to restructuring costs) as compared to $10.4 million for the same period in 2024, a decrease of $0.4 million. This decrease was primarily attributable to the merger completed in 2024 and was offset by one-time costs related to management's cost cutting measures beginning in the third quarter of 2025:

● An increase in salaries & benefits of $1.2 million due to severance and termination benefits paid during the period in addition to 7 months of Aeterna salaries being presented in 2024 versus 12 months in 2025 offset by a reduction in overall headcount during the second half of 2025;

● An increase in insurance costs of $0.2 million related to the merger transactions; offset by

● A decrease in professional fees of $0.6 million primarily due to lower legal fees in 2025 compared to 2024, as the prior year included merger related services. This was offset by legal costs in 2025 related to restructuring matters; and

● A decrease in other office & general expenses of $1.2 million due to downsizing of the German office space in 2025.

---

| | | | | |
|:---|:---|:---|:---|:---|
| *(in thousands of US dollars, except percentages)* | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** | **Twelve months ended December 31,** |
|  | **2024** | **2023** | **Change** | **Change** |
|  | **$** | **$** | $% | % |
| **Selling, general and administrative expenses:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Salaries & benefits | **3079** | 1850 |  | 66% |
| &nbsp;&nbsp;&nbsp;Insurance | **732** | 170 |  | 331% |
| &nbsp;&nbsp;&nbsp;Professional fees | **3098** | 2074 |  | 49% |
| &nbsp;&nbsp;&nbsp;Other office & general expenses | **3539** | 1433 |  | 147% |
| **Total selling, general and administrative expenses** | **10448** | 5527 |  | 89% |

---

Our total selling, general and administrative expenses for the twelve-month period ended December 31, 2024, were $10.4 million as compared to $5.5 million for the same period in 2023, an increase of $4.9 million. This was primarily attributable due to the merger completed in 2024 and resulted with:

● An increase in salaries & benefits of $1.2 million;

● An increase in insurance costs $0.6 million;

● An increase in professional fees of $1.0 million; and

● An increase in office & general expenses of $2.1 million.

**<u>Impairment of intangible assets</u>**

On June 3, 2024, the Company acquired intangible assets of $3,352 through the merger. On August 27, 2024, the Company announced that the Phase 3 DETECT-trial evaluating Macrilen for the diagnosis of CGHD had failed to meet its primary endpoints according to the definitions in the study protocol and recorded a partial impairment of the patent intangible assets as of September 30, 2024. Based on the results of the study and further strategic evaluation of the Company's product portfolio as of December 31, 2024, the Company decided to cease any future investments in Macrilen for the diagnosis of CGHD and is investigating all strategic options for the Macrilen assets.

Consequently, management carried out an impairment test. The recoverable amount of the Macrilen patent intangible assets was estimated based on the present value of the future cash flows expected to be derived from the Macrilen patent intangible assets (value in use), assuming that the regulatory approval is delayed indefinitely. Accordingly, the recoverable amount of both the Macrilen adult and child patent intangible assets were estimated to be nil and a $3,196 impairment was recorded during the year ended December 31, 2024.

Due to the insolvency process, described under "Recent Developments", the Company thereby anticipates surrendering its rights to Macrilen.

**<u>Impairment of property and equipment</u>**

During the year ended December 31, 2024, the Company tested certain manufacturing equipment and leasehold improvements not in use for impairment. Due to the equipment being idle and a subsequent change in plans for its commissioning, the Company performed an impairment test. The Company recognized an impairment loss of $1,061 as a result of a significant decline in the market value of the equipment. The recoverable amount of the equipment was determined to be $430 based on its fair value less costs to sell using comparables and market data.

During the year ended December 31, 2025, the Company performed an impairment test on certain equipment not in use due to its underutilization and subsequent change in plans for its commissioning. The Company recognized impairment losses of $182 and $58 on the Ethanol Recovery System (ERS) and heating, ventilation, and air conditioning (HVAC) system, respectively. Based on fair value less costs to sell using comparable market data, the recoverable amounts of the ERS and HVAC were determined to be $252 and $36, respectively. The ERS, on which an impairment loss of $547 was recognized during the year ended December 31, 2024, was sold for proceeds of $250 during the year ended December 31, 2025. Management is actively searching for a buyer for the HVAC system.

**<u>Other income (costs)</u>**

For the three-month period ended December 31, 2025, our net other income was $0.2 million as compared to $0.8 million for the three-month period ended December 31, 2024, a decrease of $0.6 million. This was primarily attributable to the decrease to the change in fair value of warrant and DSU liabilities in the amount of $0.4 million, a decrease of $0.1 million in interest income received, and a decrease in gains due to changes in foreign currency of $0.1 million.

For the twelve-month period ended December 31, 2025, our net other income was $0.3 million as compared to $3.1 million for the same period in 2024, an decrease of $2.8 million. This was primarily attributable to the decrease to the change in fair value of warrant and DSU liabilities in the amount of $2.2 million, a decrease of $0.2 million in interest income received, and an increase of $0.4 million in other income and gains due to changes in foreign currency.

For the twelve-month period ended December 31, 2024, our net income was $3.1 million as compared to $0.3 million for the same period in 2023, an increase of $2.8 million. This was primarily attributable to the change in fair value of warrant and DSU liabilities in the amount of $2.6 million and an increase of $0.2 million in other income and gains due to changes in foreign currency.

**<u>Net loss</u>**

For the three-month period ended December 31, 2025, we reported a consolidated net loss of $2.2 million, or $0.69 loss per common share, as compared with a consolidated net loss of $6.7 million, or $2.15 loss per common share for the same period in 2024. The $4.5 million decrease in net loss is attributable to the movements described above and a recognition of impairment expense on intangible assets in the amount of $1.5 million in 2024, offset by a recognition of impairment expense on property and equipment in the amount of $0.2 million in 2025 and a write-down of inventory in the amount of $0.1 million in 2025.

For the twelve-month period ended December 31, 2025, we reported a consolidated net loss of $10.4 million, or $3.27 loss per common share, as compared with a consolidated net loss of $15.3 million, or $5.93 loss per common share for the same period in 2024. The $4.9 million decrease in net loss is attributable to the movements described above and a recognition of impairment expense on intangible assets in the amount of $1.5 million in 2024, offset by a recognition of impairment expense on property and equipment in the amount of $0.2 million in 2025 and a write-down of inventory in the amount of $0.1 million in 2025.

For the twelve-month period ended December 31, 2024, we reported a consolidated net loss of $15.3 million, or $5.93 loss per common share, as compared with a consolidated net loss of $3.5 million, or $1.89 loss per common share for the same period in 2023. The $11.8 million increase in net loss is attributable to the movements described above as well as a $3.2 million impairment of intangible assets and a $1.1 million impairment of property & equipment and a $0.9 million decrease in income tax recovery.

**<u>Selected quarterly financial data</u>**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
| *(in thousands of US dollars, except for per share data)* | **December 31,** <br> **2025** | **September 30,<br> 2025** | **June 30,<br> 2025** | **March 31,<br> 2025** |
|  | **$** |  |  |  |
| Revenues |  | **1483** | **2749** | **1500** |
| Net loss |  | **(1819)** | **(2701)** | **(3655)** |
| Net loss per share (basic and diluted) <sup>(1)</sup> |  | **(0.57)** | **(0.85)** | **(1.16)** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Three months ended** | **Three months ended** |
| *(in thousands of US dollars, except for per share data)* | **December 31,** <br> **2024** | **September 30,** <br> **2024** | **June 30,** <br> **2024** | **March 31,** <br> **2024** |
|  | **$** | **$** | **$** | **$** |
| Revenues |  |  |  |  |
| Net (loss) / profit |  |  |  |  |
| Net (loss) / profit per share (basic and diluted) <sup>(1)</sup> |  |  |  |  |

---

(1) Net
 loss per share is based on the weighted average number of shares outstanding during each reporting period, which may differ on a
 quarter-to-quarter basis. As such, the sum of the quarterly net loss per share amounts may not equal full-year net loss per share.

Historical quarterly results of operations and net loss cannot be taken as reflective of recurring revenue or expenditure patterns of predictable trends, largely given the non-recurring nature of certain components of our revenues, unpredictable quarterly variations in net finance income and of foreign exchange gains and losses. Historical quarterly sales and results primarily fluctuate due to variations in the timing of customer orders of different product mixes, and changes in the optimal use of our capacity to manufacture products.

**Consolidated Statements of Financial Position Data**

---

| | | | |
|:---|:---|:---|:---|
| *(in thousands of US dollars)* | **December 31,** <br> **2025** | **December 31,<br> 2024** | **December 31,<br> 2023** |
|  | **$** | **$** | **$** |
| Cash and cash equivalents | **7307** | 16393 | 6678 |
| Trade and other receivables and other assets | **2886** | 4897 | 1398 |
| Inventory | **1307** | 2691 | 4009 |
| Restricted cash equivalents | **125** | 123 | 8 |
| Property, equipment and intangible assets | **9806** | 10966 | 11652 |
| **Total assets** | **21431** | 35070 | 23745 |
| Payables, accrued liabilities and income taxes payable | **2005** | 4835 | 1012 |
| Current portion of provisions | **269** | 385 |  |
| Current portion of deferred revenues | **-** | 120 |  |
| Lease liabilities | **2149** | 2310 | 1698 |
| Warrant and DSU liabilities | **1124** | 1611 |  |
| Non-financial non-current liabilities <sup>(1)</sup> | **12042** | 12648 | - |
| **Total liabilities** | **17589** | 21909 | 2710 |
| **Shareholders' equity** | **3842** | 13161 | 21035 |
| **Total liabilities and shareholders' equity** | **21431** | 35070 | 23745 |

---

(1) Comprised
 mainly of employee future benefits and non-current portion of deferred revenues associated with the German subsidiaries.

**<u>Liquidity and capital resources</u>**

The Company's objective in managing capital, consisting of shareholders' equity, with cash and cash equivalents and restricted cash equivalents being its primary components, is to ensure sufficient liquidity to finance its manufacturing operations, R&D costs, selling, general and administrative expenses and working capital requirements. Historically, the Company has raised capital via public and private equity offerings and issuances as its primary source of liquidity. The capital management objective of the Company remains the same as that in previous periods. The policy on dividends is to retain cash to keep funds available to finance the activities required to advance the Company's product development portfolio and to pursue appropriate commercial opportunities as they may arise. The Company is not subject to any capital requirements imposed by any regulators or by any other external source.

**Cash flows**

The following table shows a summary of our consolidated cash flows for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| *(in thousands of US dollars)* | **Three months ended** | **Three months ended** | **Three months ended** | **Twelve months ended** | **Twelve months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **2025** | **2024** | **2023** |
|  | **$** | **$** | **$** | **$** | **$** |
| **Cash and cash equivalents – Beginning of period** |  |  |  |  |  |
| Net cash provided by (used in) operating activities |  |  |  |  |  |
| Net cash used in financing activities |  |  |  |  |  |
| Net cash provided by (used in) investing activities |  |  |  |  |  |
| Effect of exchange rate changes on cash & cash equivalents |  |  |  |  |  |
| **Cash and cash equivalents – End of period** |  |  |  |  |  |

---

 

*Operating Activities*

Cash used by operating activities was $1.5 million for the three-month period ended December 31, 2025, as compared to $3.0 million in the same period in 2024. This $1.5 million decrease in operating cash outflows is attributed primarily to:

● A decrease in net loss (excluding non-cash items) of $1.8 million; offset by

● A $0.3 million increase in net working capital change in operating assets and liabilities from the previous period.

Cash used by operating activities was $8.5 million for the twelve-month period ended December 31, 2025, as compared to $14.6 million in the same period in 2024. This $6.1 million decrease in operating cash outflows is attributed primarily to:

● A decrease in net loss (excluding non-cash items) of $3.3 million; and

● A$2.8 million decrease in net working capital change in operating assets and liabilities from the previous period due primarily to the merger and the associated professional service fees which were not repeated in 2025 as well as management's cost cutting measures in 2025 and the impact of the respective costs.

Cash used by operating activities was $14.6 million for the twelve-month period ended December 31, 2024, as compared to $2.6 million in the same period in 2023. This $12.0 million increase in operating cash outflows is attributed primarily to:

● An increase in R&D costs of $6.2 million due primarily to increase in costs associated with the avenanthramides and DETECT clinical trials; and

● An increase in SG&A costs of $4.9 million and a decrease in operating assets and liabilities of $3.6 million; offset by

● An increase in gross margin of $1.8 million; and

● A decrease in tax recovery of $0.9 million.

*Financing activities* 

Cash used in financing activities totaled $0.1 million for the three-month period ended December 31, 2025, as compared to $0.2 million for the three-month period ended December 31, 2024, resulting in a $0.1 million decrease in cash outflows. Cash used in financing activities totaled $0.4 million for the year ended December 31, 2025, as compared to $0.6 million for the year ended December 31, 2024 resulting in a $0.2 million decrease in cash outflows. Cash used in financing activities totaled $0.6 million for the year ended December 31, 2024, as compared to $0.4 million for the year ended December 31, 2023 resulting in a $0.2 million increase in cash outflows. In each respective year, the movements are related to the payments of DSU's.

 

*Investing activities*

 

Cash provided by investing activities totaled $0.2 million for the three-month period ended December 31, 2025, as compared to cash used of $0.3 million in the same period in 2024. This $0.5 million increase in investing cash inflows is primarily due to a decrease of $0.3 million in purchases of property and equipment, and an increase in proceeds on disposals of property and equipment and restricted cash equivalents of $0.2 million.

Cash used in investing activities totaled $0.4 million for the year ended December 31, 2025, as compared to cash provided of $25.1 million in the same period in 2024. This $25.5 million decrease in cash flows from investing activities is primarily related to the cash acquired as part of the Transaction in the prior period of $26.0 million and a $0.2 million decrease in restricted cash equivalents, offset by a decrease of $0.5 million in purchases of property and equipment and an increase of $0.2 million in proceeds on disposals of property and equipment.

Cash provided by investing activities totaled $25.2 million for the year ended December 31, 2024, as compared to cash used of $0.7 million in the same period in 2023. This $25.9 million increase in cash flows provided by investing activities is primarily related to the cash acquired as part of the Transaction of $26.0 million and a $0.1 million reduction in purchases of property and equipment.

 

*Capital Stock*

As of March 24, 2026, we had 3,184,155 common shares issued and outstanding, as well as, 48,181 stock options, 27,500 deferred share units and 548,448 warrants outstanding. Each stock option, deferred share unit and warrant is exercisable for one common share.

***Adequacy of financial resources***

As of December 31, 2025, the Company had an accumulated deficit of $20.5 million and a net loss of $10.4 million resulting in negative cash flows from operations of $8.4 million for the twelve-month period ended December 31, 2025. We believe that our existing cash on hand will be sufficient to fund our anticipated operating and capital expenditure requirements for at least the next 12 months. We plan to finance our future operations and capital expenditures primarily through products sales and cash on hand. We also believe that our existing cash on hand will be sufficient to fund our anticipated operating and capital expenditure requirements beyond the next 12 months and through to 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our capital resources sooner than we expect. We may also require additional capital to pursue in-licenses or acquisitions of other product candidates.

Our forecast of the period through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially as a result of a number of factors. Our future capital requirements are difficult to forecast and will depend on many factors, including:

● the terms and timing of any other collaboration, licensing, and other arrangements that we may establish;

● the number and characteristics of product candidates that we pursue;

● delays that may be caused by changing regulatory requirements;

● the cost and timing of hiring new employees to support our continued growth and potential expense associated with any loss of key personnel;

● the costs involved in filing and prosecuting patent applications and enforcing and defending patent claims;

● the costs of filing and prosecuting intellectual property rights and enforcing and defending any intellectual property-related claims;

● the costs associated with any potential late receipt or non-receipt of trade and other receivables;

● the potential costs associated with foreign currency fluctuations or changing interest rates;

● our ability to expand our customer base and related demand fluctuations;

● the costs associated with any potential interruption or quality impacts on raw material supplies;

● the use and effects of tariffs could materially impact our costs and revenues, as well as the macroeconomic framework in which we operate;

● the costs of responding to and defending ourselves against complaints and potential litigation;

● the costs and timing of procuring clinical and commercial supplies for our product candidates;

● the extent to which we acquire or in-license other product candidates and technologies;

● the terms and timing of any PGX manufacturing or licensing arrangement that we may establish; and

● the costs associated with commercialization and development of PGX.

**Contractual obligations and commitments as of December 31, 2025**

Significant expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows:

---

| | |
|:---|:---|
| *(in thousands of US dollars)* | **TOTAL** |
|  | **$** |
| Less than 1 year | 162 |
| 1 - 5 years | 19 |
|  | **181** |

---

The Company previously entered into license agreements with Agriculture Canada (AG) for a technology to increase the concentration of avenanthramides in selected oat and with University of Alberta for a Pressurized Gas expanded Technology (PGX) for the processing of various polymers. The royalty percentage rate would be 2% strictly for sales made from avenanthramides produced from the AG technology while royalty percentage rates would range between 1.0% to 3.5% for sales made from products manufactured using the PGX Technology, the rate being according to the classification of the resulting product (cosmeceutical, nutraceutical, pharmaceutical).

**Contingencies**

From time to time, the Company may be a party to litigation and subject to claims incidental to its business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these matters will not have a material adverse effect on its business. At each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable, requiring recognition of a loss accrual, or whether the potential loss is reasonably possible, requiring potential disclosure.

**Critical Accounting Estimates and Judgments**

Critical accounting estimates and judgements are described in Note 3 to our audited consolidated financial statements as of December 31, 2025, and 2024 and for the years ended December 31, 2025, 2024 and 2023.

**Financial Risk Factors and Other Financial Instruments**

The nature and extent of our exposure to risks arising from financial instruments, including credit risk, liquidity risk and market risk and how we manage those risks are described in note 24 to our audited consolidated financial statements as of December 31, 2025, and 2024 and for the years ended December 31, 2025, 2024 and 2023.

**Related Party Transactions**

During the year ended December 31, 2025, the Company made payments for research and development expenditures to Angiogenesis Foundation for which a former Director of the Company is the CEO of the Foundation of $nil (2024 - $50 and 2023 - $201). Other than employment agreements and indemnification agreements with our management, there are no further related party transactions.

**Off-Balance Sheet Arrangements**

As of December 31, 2025, we did not have any interests in special purpose entities or any other off-balance sheet arrangements.

**Risk Factors and Uncertainties**

An investment in our securities involves a high degree of risk. In addition to the other information included in this MD&A and in the related consolidated financial statements, investors are urged to carefully consider the risks described under the heading **"Risk Factors"** in this Annual Report on Form 20-F for the year ended December 31, 2025 and under the heading "Risks and Uncertainties", for a discussion of the various risks that may materially affect our business. The risks and uncertainties not presently known to us or that we currently deem immaterial may also materially harm our business, operating results and financial condition and could result in a complete loss of your investment.

**Our most recent Annual Report on Form 20-F was filed with the relevant Canadian securities' regulatory authorities at <u>www.sedarplus.ca</u> and with the SEC at <u>www.sec.gov</u>, and investors are urged to consult such risk factors.** 

**Disclosure Controls and Procedures**

Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding our required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving management's control objective.

As required by Rules 13a-15 and 15d-15 promulgated under the Exchange Act, our management, including our Interim Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of December 31, 2025, the end of the period covered by this MD&A. Based on the results of that evaluation, our management, including our Interim Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2025, the Company's disclosure controls and procedures were effective as of December 31, 2025.

**Management's Annual Report on Internal Control Over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting ("ICFR") is a process designed under the supervision and with the participation of management, including our Interim Chief Executive Officer and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even systems determined to be effective can provide only reasonable assurance regarding the preparation and presentation of financial statements. Because of these inherent limitations, ICFR may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to risks that controls may become inadequate due to changes in conditions or that compliance with policies or procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria established in *Internal Control – Integrated Framework: 2013* issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO framework"). Based on the results of that evaluation, our management concluded that, as of December 31, 2025, the Company's internal control over financial reporting was effective.

***Remediation of Previously Identified Material Weaknesses***

 ****

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statements may not be prevented or detected on a timely basis.

Our management concluded that material weaknesses existed as of the year ended December 31, 2024. Specifically, based on the criteria established by the COSO framework, our management identified deficiencies in the COSO framework principles associated with the control environment, control activities, information and communication and monitoring components of internal control, that constitute material weaknesses, either individually or in the aggregate.

As part of the integration of Aeterna Zentaris Inc. and Ceapro Inc. pursuant to the plan of arrangement completed in June 2024, our management put in place a process to standardize policies and procedures and harmonize controls across the Company in order to develop and operate effective internal control over financial reporting. During this process, the following material weaknesses were identified by management as of December 31, 2024:

● the Company did not maintain an effective control environment based on the criteria established in the COSO framework and did not have sufficient competent personnel with the appropriate levels of knowledge, experience, and training in accounting and internal control over financial reporting;

● the Company did not maintain effective control activities based on the criteria established in the COSO framework;

● the Company had ineffective information and communication, which rendered management unable to generate or provide adequate quality supporting information and communication based on the criteria established in the COSO framework; and

● the Company did not maintain effective monitoring activities based on the criteria established in the COSO framework and did not have in place adequate processes for oversight, accountability for performance of internal control over financial reporting responsibilities, and timely implementation of corrective activities, and therefore could not perform sufficient ongoing evaluations to ascertain whether the components of internal control were present and functioning.

We have undertaken and completed measures to remediate the underlying cause of the material weaknesses noted above. The remediation was completed during the year ended December 31, 2025 whereby management undertook a comprehensive remediation plan to redesign, strengthen and fully operationalize internal controls over financial reporting across all entities, including:

 ****

Control Environment

Management executed a restructuring of the finance leadership team, including hiring a new Controller and Assistant Controller with CPA designations and extensive experience in IFRS and ICFR. Enhanced onboarding procedures, targeted technical training, and the implementation of a monthly financial close process were introduced to strengthen execution, oversight, and the overall effectiveness of financial reporting controls.

Control Activities

Management redesigned and harmonized control activities across all entities, updated risk control matrices, reassigned roles to restore segregation of duties, and implemented enhanced review controls over complex accounting transactions including areas such as revenue recognition, inventory, fixed assets and impairment of assets, consolidation, accounting estimates, cash flow preparation, intercompany eliminations, and top-side entries.

Information and Communication

Management strengthened information flow through standardized monthly reporting packages, reconciliations, structured review protocols, and improved corporate-subsidiary communication. A comprehensive information technology general controls risk control matrix was implemented, with testing confirming effectiveness across core domains.

Monitoring Activities

Management implemented a strengthened monitoring framework aligned with the COSO framework, enhancing ongoing and separate evaluations, deficiency escalation, Audit Committee reporting, and monthly close-based monitoring. These enhancements established a sustainable governance and feedback model to support long-term control integrity.

The above measures have been implemented for a sufficient period, and management has concluded, based on testing, that the enhanced controls are operating effectively. Management concluded that the deficiencies that previously contributed to the material weaknesses were remediated as of December 31, 2025.

Although we have completed the remediation of the material weaknesses, if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain misstatements, and we could be required to restate our financial results. In addition, if we are unable to produce accurate consolidated financial statements in the future, our stock price, liquidity and access to the capital markets may be adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements. Further, because of its inherent limitations, even our remediated and effective internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in our conditions, or that the degree of compliance with our policies or procedures may deteriorate.

**Changes in Internal Control Over Financial Reporting**

Other than the changes to its internal control over financial reporting implemented as part of the remediation efforts and described herein and in the Company's Form 20-F for the year ended December 31, 2025, there were no other changes during the year ended December 31, 2025 in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Item 6.** **Directors, Senior Management and Employees**

***A.***  ***Directors and senior management*** 

The following table sets forth information about our directors and our senior corporate officers as at December 31, 2025:

---

| | |
|:---|:---|
| **Name and Place of Residence** | **Position with COSCIENS Biopharma** |
| Gerlach, Matthias<br> Hessen, Germany | Senior Vice President, Managing Director, GmbH |
| Giovinazzo, Anthony J.<br> Ontario, Canada | Director |
| Kosciessa, Ulrich<br> Vineberg, Germany | Director |
| La Fratta, Giuliano<br> Quebec, Canada | Chief Financial Officer |
| Miller, Ronald W.<br> Quebec, Canada | Director |
| Puccetti, Peter H.<br> Toronto, Canada | Interim Chief Executive Officer; Director, Chair of the Board |
| Regnier, Michel<br> Edmonton, Canada | Senior Vice President, Managing Director, Edmonton |
| Seager, Robert A.<br> Ontario, Canada | Director |
| Spear, David<br> Ontario, Canada | Director |
| Teifel, Michael<br> Hessen, Germany | Senior Vice President, Chief Scientific Officer |

---

The following is a brief biography of each of the directors and executive officers listed above.

**Matthias Gerlach** was appointed as Managing Director of Aeterna Zentaris GmbH in February 2024 and as Senior Vice President, Manufacturing and Supply Chain in January 2021 and continued to serve in that role as of December 31, 2025. From December 2011 through May 2014, he was our Vice President, Medicinal Chemistry. Dr. Gerlach, who is based in the Frankfurt office of AEZS Germany, began his career in the pharmaceutical industry in 1997. He joined our Company in January 2001, assuming roles of increasing responsibility in areas of medicinal chemistry and preclinical development through product commercialization during his career. He possesses numerous scientific and business skills and has a long record of successful innovation, drug development and management, and contributed significantly to the successful U.S.- and EU/UK-commercialization of macimorelin in the adult indication. Dr. Gerlach obtained a diploma in Chemistry from the Johann Wolfgang Goethe University in Frankfurt in 1994 and was awarded his doctorate diploma in synthetic organic chemistry by the Johann Wolfgang Goethe University in 1997.

**Anthony J. Giovinazzo** serves as a director on our Board. Mr. Giovinazzo has over 45 years of experience, is an internationally recognized expert in intellectual property, drug development and commercialization including numerous licensing agreements, with more than 25 years of experience in Central Nervous System diseases. For the last five years, he has had extensive board level experience in robotic surgery and interventional cardiology fields. From 2009 until 2017, Mr. Giovinazzo served as the President and Chief Executive Officer of NASDAQ-listed Cynapsus Therapeutics Inc., a specialty pharmaceutical company that developed the first successful sublingual apomorphine thin film strip for Parkinson's disease. The drug, co-invented by Mr. Giovinazzo, was approved for commercialization by the FDA in 2020. From April 2006 to November 2009, Mr. Giovinazzo served as the Chief Executive Officer of Cervelo Pharmaceuticals Inc., a biopharmaceutical company. From 2002 to 2006, he served as Chief Executive Officer of Cita NeuroPharmaceuticals Inc., a biopharmaceutical company. Mr. Giovinazzo is currently a director of TSXV-listed Conavi Medical Inc., a commercial stage medical device company focused on designing, manufacturing and marketing imaging technologies to guide common minimally invasive cardiovascular procedures. He is also currently the Chair of the Board of TSXV-listed Xortx Therapeutics Inc., a Phase 3 kidney and NDA pending Gout disease company. Mr. Giovinazzo has completed the Leadership and Strategy in Pharmaceuticals and Biotech from Harvard Business School. Mr. Giovinazzo also holds a Masters of Business Administration from IMD, Geneva Switzerland, a Graduate Certificate Studies in Canadian Law from Osgoode Hall Law School at York University, and a Bachelor of Arts in Economics and Accounting from McMaster University.

**Dr. Ulrich Kosciessa** serves as a director on our Board. Dr. Kosciessa currently serves as the Chief Executive Officer of Germany-based Photonamic GmbH & Co. KG and as the Chief Operating Officer of Tokyo-based SBI Pharmaceuticals Co. LTD. He has worked for 20 years for Medac GmbH, a global pharmaceutical company with operations in 70 countries where he served as a member of the Executive Management Board, as Managing Director of Medac International and as Chairman of the Board of Medac Pharma Inc., a U.S.-based subsidiary of Medac GmbH focused on specialty pharmaceuticals for autoimmune diseases and cancer. Since 2006 Dr. Kosciessa has also served as Chief Executive Officer of Photonamic, a subsidiary of Medac GmbH focused on research and development of photodynamic therapy and diagnostics. He has successfully developed two Photonamic products currently marketed in Europe, North America, South America, the Asian Pacific region and Australia. From 2006 to 2008, Dr. Kosciessa served as Chief Executive Officer at Immune Laboratory of Hannover, a research-based organization focused on autologous dendritic cell-based tumor vaccines. Prior to joining Medac GmbH, Dr. Kosciessa was a postdoctoral researcher at the neuroscience/neurodegenerative diseases division of Schering AG, a multinational pharmaceutical company. He received a B.Sc. in Biology and a Ph.D. in Molecular Biology from Georg-August University of Göttingen, Germany.

**Giuliano La Fratta** was appointed as our Senior Vice President, Chief Financial Officer in January 2022. He is a senior financial professional with over 20 years of professional experience in the pharmaceutical, biopharma and financial services sector. During his career, he has served in both the public and private sectors where he has gained significant experience in leading and managing broad financial activities, including M&A transactions, corporate development, auditing, accounting and administrative functions. Prior to joining the Company, Mr. La Fratta served as the Vice President of Finance at CellCarta (formerly Caprion Biosciences), a private equity-owned specialty Clinical Research and Development Organization laboratory with global operations headquartered in Montreal, Canada. Prior to CellCarta, Mr. La Fratta served in various functions at IMS Canada Health (now Iqvia) and Cato Research. He began his career at Deloitte Touche as a Senior Auditor for both Canadian and American companies across various industries, including the pharmaceutical sector. Mr. La Fratta holds a bachelor's degree in accounting from Concordia University and holds a CPA designation.

**Ronald W. Miller** serves as a director on our Board. Ronnie Miller was President and CEO of Hoffmann-La Roche Limited (Roche Canada) for 22 years (until 2022). In this role, he was responsible for the growth and success of the Canadian Pharmaceuticals Division, particularly as it relates to Roche's mandate of developing and delivering innovative healthcare solutions for Canadians. Ronnie has more than 43 years of extensive and varied experience in the pharmaceutical industry. Born in Scotland, Ronnie completed his Bachelor of Science in Economics and Geography at the University of Glasgow, then moved to Leeds, England to accept a job as a pharmaceutical sales representative. Ronnie advanced through a series of successive sales and management positions across the industry to become the National Sales Manager for Roche in the United Kingdom in 1988 and continued to move globally as a Product Manager in Switzerland and Deputy Divisional Director of the Pharmaceutical Division in Japan. He moved back to Switzerland to head up a global product launch before returning to the UK as Pharmaceuticals Director. Ronnie was appointed President and CEO of Roche Pharmaceuticals in Canada in May 2000 and became a Canadian citizen in 2008. Ronnie was re-elected as Chairman of the Board of Directors of Innovative Medicines Canada (IMC), the national association representing Canada's research-based pharmaceutical companies, from 2019 to 2022. He served as Chairman of the IMC Board in 2007 and has since fulfilled two subsequent terms as Past Chair. Prior to this, Ronnie was the Chair of the IMC Prairies Core Team and sat as Co-Chair of the Health Research Foundation. He also served on several committees including the IMC Public Affairs, Stakeholder Relations, the British Columbia Sub-Committee, and was Chair of the Federal Affairs/FPT Relations Standing Committee.

**Peter H. Puccetti** serves as the Interim Chief Executive Officer of COSCIENS and Chair of the Board of Directors. Peter Puccetti is the founder, and former Chairman and Chief Investment Officer of Goodwood Inc., a Canadian independent investment management firm that has provided institutional and high-net-worth clients with alternative investment strategies for over 29 years. Mr. Puccetti has managed the flagship Goodwood Fund since its inception up until its recent sale in 2026 and has over 30 years of investment experience with a focus on special situations of value investing. Mr. Puccetti has served on a number of public and private boards of directors. Mr. Puccetti and Goodwood Inc. have become well-known in Canada for leading a variety of activist campaigns to implement positive change and unlock shareholder value with the trust and support of many of Canada's top institutional investment organizations. Prior to founding Goodwood Inc., Mr. Puccetti was an analyst, investment banker and partner of Sprott Securities Limited. Mr. Puccetti holds a Bachelor of Arts in Economics from Dalhousie University. Mr. Puccetti is also a CFA Charter holder.

**Michel Regnier** has served as Senior Vice President, Managing Director, Edmonton of the Company since 2023. He is an experienced and respected Operations Executive and Professional Engineer with 20+ years of progressive technical and leadership experience in the medical device, pharmaceutical and aerospace materials manufacturing industries. Prior to joining the Company, Mr. Regnier served in several roles at Oerlikon Metco (Canada) Inc., a subsidiary of OC Oerlikon AG, a global provider of industrial technology.

**Robert A. Seager** serves as a director on our Board. He is a leading special situations advisor and has been centrally involved in directing high profile shareholder disputes, proxy contests, M&A transactions, special committee mandates, internal and independent corporate investigations and complex restructurings. Mr. Seager is a Partner of Voorheis & Co. LLP and Executive Vice President of Seacombe Partners Inc. In 2023, Mr. Seager was appointed to the Securities Advisory Committee of the Ontario Securities Commission. Prior to joining Voorheis & Co. LLP Mr. Seager practiced securities law at Blake, Cassels & Graydon LLP. Mr. Seager received his J.D. from the Schulich School of Law at Dalhousie University with a specialization in corporate law, his International Business Law Certification from the Global Law Program at the Bader International Study Centre, and his Bachelor of Commerce from the Sauder School of Business at the University of British Columbia. Rob has also completed Levels 1 and II of the CFA Program.

**David Spear** serves as a director on our Board. He is an accomplished entrepreneur and executive with more than 35 years of experience in the healthcare industry, with a particular focus on the eyecare sector. Mr. Spear is currently the President and Chief Strategy Officer of Advancing Eyecare, a partnership of leaders in the eyecare instrumentation marketplace, where he also previously served as a director from 2017 to 2023. Mr. Spear was also previously a director and co-founder of Innova Medical Ophthalmic, a supplier to the Canadian ophthalmic community. Mr. Spear holds a Bachelor of Commerce from the University of Windsor and a Bachelor of Science in Biology from Western University.

**Michael Teifel** served as Senior Vice-President, Chief Scientific Officer as of December 31, 2025. He is a leading industry executive with a career spanning over 20 years in various therapeutic areas, including endocrinology and oncology. Dr. Teifel started with the Company in 2004 where he held several positions in the field of pre-clinical development and translational research. Dr. Teifel left the Company to pursue non-clinical research and development at Cleara Biotech before re-joining the Company in 2021 as Dr. Teifel holds a degree in biology and his Ph.D. from the Technical University of Darmstadt, Germany.

There are no family relationships between any of the persons named above and no arrangement with any customers, major shareholders, suppliers or others pursuant to which any person above was selected as a director or executive officer. Each director holds office until the Company's next annual general meeting or until a successor is duly elected or appointed.

***B.***  ***Compensation*** 

Our directors and executive officers are generally paid in their home country's currency. Unless otherwise indicated, all compensation information included in this document is presented in U.S. dollars and, to the extent a director or officer has been paid in a currency other than U.S. dollars, the amounts have been converted from such person's home country currency to U.S. dollars based on the following annual average exchange rates: for the financial year ended December 31, 2025: €1.000 = U.S.$1.129 and CAN$1.000 = U.S.$0.716; for the financial year ended December 31, 2024; €1.000 = U.S.$1.082 and CAN$1.000 = U.S.$0.730; and for the financial year ended December 31, 2023: €1.000 = U.S$1.081 and CAN$1.000 = U.S.$0.741.

**Compensation of Outside Directors**

The compensation paid to members of our Board who are not our employees (our "**Outside Directors**") is designed to (i) attract and retain the most qualified people to serve on the Board and its committees, (ii) align the interests of the Outside Directors with those of our shareholders, and (iii) provide appropriate compensation for the risks and responsibilities related to being an effective Outside Director. This compensation is recommended to the Board by the Human Resources, Nominating and Governance Committee ("**HRNG**"). The HRNG is currently composed of three Outside Directors, each of whom is independent, namely Mr. Robert A. Seager (Chair), Mr. Ronald W. Miller, and Mr. David Spear.

The Board has adopted a formal mandate for the HRNG, which is available on our website at *<u>www.cosciensbio.com</u>*. The mandate of the HRNG provides that it is responsible for, among other matters, assisting the Board in developing our approach to corporate governance issues, proposing new Board nominees, overseeing the assessment of the effectiveness of the Board and its committees, their respective chairs and individual directors, making recommendations to the Board with respect to directors' compensation and generally serving in a leadership role for our corporate governance practices.

**Retainers**

Our Outside Directors are paid an annual retainer, the amount of which depends on the position held on the Board. Annual retainers are paid on a quarterly basis to our Outside Directors. Each Outside Director is paid the equivalent value of the payment in his or her home currency, net of any withholdings or deductions required by applicable law.

---

| | | |
|:---|:---|:---|
| **Type of Compensation** | **Monthly Retainer<br> for the year 2025** | **Annual Retainer <br> for the year 2025** |
| Board Member Retainer | 4167 | 50000 |
| Audit Committee Chair Retainer | 2500 | 30000 |
| Audit Committee Member Retainer | 625 | 7500 |
| HRNG Chair Retainer | 1250 | 15000 |
| HRNG Member Retainer | 417 | 5000 |
| Lead Director Retainer<sup>(1)</sup> | 2083 | 25000 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Effective
 November 14, 2025, concurrently with the appointment of Peter Puccetti as Interim CEO, in
 addition to his role as Chairman of the Board, the Company created the position of lead director
 and appointed David Spear to the role.

All Directors are reimbursed for travel and other out-of-pocket expenses incurred in attending Board or committee meetings. Retainers are prorated when an Outside Director joins the Board during a financial year.

**Outstanding Awards**

The following table shows all awards outstanding to each Outside Director as at December 31, 2025:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | **Option-based Awards** | **Option-based Awards** | **Option-based Awards** | **Share-based Awards** | **Share-based Awards** | **Share-based Awards** |
| <br>**Issuance<br> Date** | <br>**Issuance<br> Date** | **Number of<br> Shares<br> Underlying<br> Unexercised<br> Options** | **Option<br> Exercise<br> Price** | **Option<br> Expiration<br> Date** | **Number of<br> Shares or<br> Units of<br> Shares that<br> have vested** | **Market or payout<br> value of vested<br> share-based<br> awards not paid<br> out or<br> distributed<sup>(1)</sup>** | **Market or<br> Payout<br> Value of<br> Share-based<br> Awards that<br> have not<br> vested** |
|  |  | **(#)** | **($)** |  | **(#)** | **($)** | **($)** |
| Giovinazzo, Anthony | N/A |  |  |  |  |  |  |
| Kosciessa, Ulrich | 01/03/2023 | 1416 | 19.27 | 01/03/2028 |  |  |  |
|  | 07/12/2024 |  |  |  | 12500 | 25750 |  |
| Miller, Ronnie | 03/01/2022 | 3540 | 13.67 | 04/19/2027 |  |  |  |
|  | 01/03/2023 | 1416 | 19.27 | 01/03/2028 |  |  |  |
|  | 07/12/2024 |  |  |  | 15000 | 30900 |  |
| Puccetti, Peter | N/A |  |  |  |  |  |  |
| Seager, Robert | N/A |  |  |  |  |  |  |
| Spear, David | N/A |  |  |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company used the closing price of its Common Shares on the over-the-counter market as at the last trading day of the fiscal year (December 31, 2025) of $2.06**.**

See "Summary of Long-Term Incentive Plan" for more details on the Company's long-term incentive plan adopted by the Board on March 27, 2018, and ratified by the shareholders on May 8, 2018 ("**Long-Term Incentive Plan**").

**Total Compensation of Outside Directors**

The table below summarizes the total compensation paid to our Outside Directors during the financial year ended December 31, 2025 (all amounts are in U.S. dollars). Our Outside Directors are generally paid in their home currency. Ms. Foster, Mr. Giovinazzo, Mr. Labbé, Mr. Miller, and Mr. Seager were paid in Canadian dollars. Mr. Spear was paid in U.S. dollars. Mr. Kosciessa was paid in Euro.

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Name** | **Fees<br> earned<sup>(1)</sup>**<br> **($)** | **Share-<br> based**<br> **Awards**<br> **($)** | **Option-based Awards**<br> **($)** | **Non-Equity<br> Incentive Plan<br> Compensation**<br> **($)** | **Pension Value**<br> **($)** | **All Other Compensation**<br> **($)** | **Total**<br> **($)**  |
| Foster, Geneviève<sup>(2)</sup> | 37189 | – |  | – |  | – | 37189 |
| Giovinazzo, Anthony J. <sup>(3)</sup> | 28634 | – |  | – |  | – | 28634 |
| Kosciessa, Ulrich | 56237 | – |  | – |  | – | 56237 |
| Labbé, Pierre<sup>(4)</sup> | 40995 | – |  | – |  | – | 40995 |
| Li, William<sup>(5)</sup> | 27500 | – |  | – |  | – | 27500 |
| Miller, Ronald W. | 65517 | – |  | – |  | – | 65517 |
| Seager, Robert A. <sup>(6)</sup> | 32778 | – |  | – |  | – | 32778 |
| Spear, David<sup>(7)</sup> | 29103 | – |  | – |  | – | 29103 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) In
 respect of our financial year ended December 31, 2025, we paid an aggregate amount of $373,114 in fees to all of our Outside Directors
 for services rendered in their capacity as directors, excluding reimbursement of out-of-pocket expenses.

(2) Ms.
 Geneviève Foster left the Board on May 30, 2025.

(3) Mr.
 Anthony J. Giovinazzo joined the Board on May 30, 2025.

(4) Mr.
 Pierre Labbé left the Board on May 30, 2025.

(5) Mr.
 William Li left the Board on May 30, 2025.

(6) Mr.
 Robert A. Seager joined the Board on May 30, 2025.

(7) Mr.
 David Spear joined the Board on May 30, 2025.

**Compensation of Executive Officers**

The following is disclosure of information related to the compensation that we paid to our most highly compensated executive officers (i.e., our "Named Executive Officers") during 2025. For the 2025 year, our "Named Executive Officers" were as follows:

● Gilles Gagnon, President of Chief Executive Officer until May 5, 2025

● Anna Biehn, Chief Executive Officer from May 5, 2025 until November 14, 2025

● Peter Puccetti, Interim Chief Executive Officer since November 14, 2025

● Giuliano La Fratta, Chief Financial Officer

● Michel Regnier, Senior Vice President, Managing Director, Edmonton

● Matthias Gerlach, Senior Vice President, Managing Director, GmbH;

● Michael Teifel, Senior Vice President, Chief Scientific Officer

**Compensation Discussion & Analysis**

***Compensation Philosophy and Objectives***

Our Board, through the HRNG, establishes our executive compensation program that is market-based and at a competitive percentile grouping for both total cash and total direct compensation. The HRNG has established a compensation program that is designed to attract, motivate and retain high-performing senior executives, encourage and reward superior performance and align the executives' interests with those of our shareholders by:

● providing the opportunity for an executive to earn compensation that is competitive with the compensation received by executives serving in the same or measurably similar positions within comparable companies;

● providing the opportunity for executives to participate in equity-based incentive compensation plans;

● aligning executive compensation with our corporate objectives; and

● attracting and retaining highly qualified individuals in key positions.

***Compensation Elements***

Our executive compensation is targeted at the 50th percentile for small cap biopharmaceutical companies within both the local and national markets and is comprised of both fixed and variable components. The variable components include equity and non-equity incentive plans. Each compensation component is intended to serve a different function, but all elements are intended to work in concert to maximize both corporate and individual performance by establishing specific, competitive operational and corporate goals and by providing financial incentives to employees based on their level of attainment of these goals.

Our current executive compensation program is comprised of the following four basic components: (i) base salary; (ii) an annual discretionary bonus linked to both individual and corporate performance; (iii) equity incentives, including stock options, granted under the Long-Term Incentive Plan; and (iv) other elements of compensation, consisting of benefits, perquisites and retirement benefits.

*Base Salary.* Base salaries are intended to provide a steady income to our executive officers regardless of share price. In determining individual base salaries, the HRNG takes into consideration individual circumstances that may include the scope of an executive's position, the executive's relevant competencies or experience and retention risk. The HRNG also takes into consideration the fulfillment of our corporate objectives, as well as the individual performance of the executive.

 

*Short-Term, Non-Equity Incentive Compensation.* Our short-term, non-equity incentive compensation consist of a discretionary cash bonus The award of any cash bonus requires the approval of both the HRNG and the Board and, the amount of any such award is based upon an assessment of each individual's performance, as well as our overall performance at a corporate level. The determination of individual performance does not involve quantitative measures using a mathematical calculation in which each individual performance objective is given a numerical weight. Instead, the determination of individual performance is a subjective determination as to whether a particular executive officer substantially achieved any stated objectives or over-performed or under-performed with respect to objectives that were deemed to be important to our success. No cash bonuses were awarded to executive officers in respect of the 2025 financial year.

*Long-Term Equity Compensation Plan of Executive Officers.* The long-term component of the compensation of our officers is based exclusively on the Long-Term Incentive Plan, which permits the issuance of a number of equity-based awards based on the contribution of the officers and their responsibilities. The Company adopted a policy regarding stock option grants in December 2014, which provides that officers of the Corporation are eligible to receive options to acquire our Common Shares having a value, based on the Black-Scholes option pricing model, equal to a specified multiple of his or her salary. The specified multiple for the President and Chief Executive Officer (or equivalent position) is 1.5. The specified multiple for each other officer is 0.75. To encourage retention and focus management on developing and successfully implementing our continuing growth strategy, stock options vest over a period of three years, with the first third vesting on the first anniversary of the date of grant. Since the adoption of the Long-Term Incentive Plan in 2018, we have broadened the types of equity-based awards which we may issue beyond stock options (to include, among other types, restricted stock units ("**RSUs**"), DSUs and others). Notwithstanding the foregoing, no equity-based awards were granted in 2025.

*Other Forms of Compensation.* Our executive employee benefits program also includes life, medical, dental and disability insurance to the same extent and in the same manner as all other employees as either enrollment in the payroll system benefits program or by additional percentage compensation to self-enroll in private insurance policies. These benefits and perquisites are designed to be competitive overall with equivalent positions in comparable North American organizations in the life sciences industry. We also contribute to our North American employees' retirement plans up to an annual maximum amount of $**12,525** for employees in the United States and Canada. The contribution amounts for our United States and Canadian employees are subject to limitations imposed by the United States Internal Revenue Service and the Canadian Revenue Agency respectively, on contributions to our most highly compensated employees. Employees based in Frankfurt; Germany have also historically benefitted from certain employer contributions into the employees' pension funds. Our executive officers, including the Named Executive Officers, are eligible to participate in such employer-contribution plans to the same extent and in the same manner as all other employees.

***Positioning***

The HRNG is authorized to engage its own independent consultant to advise it with respect to executive compensation matters. While the HRNG may rely on external information and advice, all of the decisions with respect to executive compensation are made by the Board upon the recommendation of the HRNG and may reflect factors and considerations other than, or that may differ from, the information and recommendations provided by any external compensation consultants that may be retained from time to time.

In late 2024, the Corporation retained compensation consultant, Bowers Consulting LLC, to conduct a limited review of our director compensation plan, which had undergone a more comprehensive review (also by Bowers) in 2022, resulting in certain changes at that time. Fees for the arrangement were $4,800 and no changes were made as a result of the 2024 engagement. No compensation consultant or advisor was retained by the Corporation during 2025.

 ****

***Risk Assessment of Executive Compensation Program***

The Board, through the HRNG, oversees the implementation of compensation methods that tie a portion of executive compensation to our short-term and long-term performance and that of each executive officer and that take into account the advantages and risks associated with such compensation methods. In addition, the Board oversees the creation of compensation policies that are intended to reward the creation of shareholder value while reflecting a balance between our short-term and long-term performance and that of each executive officer. The HRNG has considered in general terms the concept of risk as it relates to our executive compensation program.

Base salaries are fixed in amount to provide a steady income to the executive officers regardless of share price and thus do not encourage or reward risk-taking to the detriment of other important business, operational, commercial or clinical metrics or milestones. The variable compensation elements (annual bonuses and equity-based awards) are designed to reward each of short-term, mid-term and long-term performance. For short-term performance, a discretionary annual bonus may be awarded based on the timing and level of attainment of specific operational and corporate goals that the HRNG believes to be challenging yet does not encourage unnecessary or excessive risk-taking. While our bonus payments are generally based on annual performance, a maximum bonus payment is pre-fixed for each senior executive officer and represents only a portion of each individual's overall total compensation opportunities. In exceptional circumstances, a particular executive officer may be awarded a bonus that exceeds his or her maximum pre-fixed or target bonus amount. Finally, a portion of executive compensation may be provided in the form of equity-based awards, to further align the interests of executives with those of shareholders. The HRNG believes that these awards do not encourage unnecessary or excessive risk-taking since the ultimate value of the awards is tied to our share price, and in the case of grants under the long-term incentive compensation plan, are generally subject to mid-term and long-term vesting schedules to help ensure that executives generally have significant value tied to long-term share price performance.

The HRNG believes that the variable compensation elements (annual bonuses and equity-based awards) represent a percentage of overall compensation that is sufficient to motivate our executive officers to produce superior short-term, mid-term and long-term corporate results, while the fixed compensation element (base salary) is also sufficient to discourage executive officers from taking unnecessary or excessive risks. The HRNG and the Board also generally have the discretion to adjust annual bonuses and equity-based awards based on individual performance and any other factors they may determine to be appropriate in the circumstances. Such factors may include, where necessary or appropriate, the level of risk-taking a particular executive officer may have engaged in during the preceding year.

Based on the foregoing, the HRNG has not identified any specific risks associated with our executive compensation program that are reasonably likely to have a material adverse effect on us. The HRNG believes that our executive compensation program does not encourage or reward any unnecessary or excessive risk-taking behavior.

Our directors, executive officers and employees are prohibited from purchasing, selling or otherwise trading in derivative securities relating to our Common Shares. Derivative securities are securities whose value varies in relation to the price of our securities. Examples of derivative securities include warrants to purchase our Common Shares, and put or call options written on our Common Shares, as well as individually arranged derivative transactions, such as financial instruments, including, for greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, which are designed to hedge or offset a decrease in market value of our equity securities granted as executive compensation or directors' remuneration. Options to acquire our Common Shares and other equity-based awards issued pursuant to the Long-Term Incentive Plan are not derivative securities for this purpose.

***2025 Compensation***

*Base Salary.* The primary element of our compensation program is base salary. Our view is that a competitive base salary is a necessary element for retaining qualified executive officers. In determining individual base salaries, the HRNG takes into consideration individual circumstances that may include the scope of an executive's position, the executive's relevant competencies or experience and retention risk. The HRNG also takes into consideration the fulfillment of our corporate objectives, as well as the individual performance of the executive.

***Short-Term, Non-Equity Incentive Compensation.***

For the financial year ended December 31, 2025, the Board did not approve any short-term, non-equity incentive compensation to any of the Named Executive Officers.

 ****

***Long-Term Equity Compensation***

For the financial year ended December 31, 2025, the Board did not approve any issuance of stock option awards to any of the Named Executive Officers, other than the issuance of 62,927 stock options to Anna Biehn in connection with her initial appointment as CEO in May 2025, which options expired unvested in connection with her departure from the Company in November 2025.

***The Legacy Stock Option Plan***

On March 29, 2016 the Board adopted a second amended and restated stock option plan, which was ratified by the shareholders on May 10, 2016 ("**Legacy Option Plan**"). As there were no options remaining outstanding under the Legacy Option Plan, it has been terminated by the Board.

***Summary of the Long-Term Incentive Plan***

The purpose of the Long-Term Incentive Plan is to (i) promote our long-term financial interests and growth by attracting and retaining management and other personnel and key service providers with the training, experience and ability to enable them to make a substantial contribution to the success of our business; (ii) motivate management personnel by means of growth-related incentives to achieve long-range goals; and (iii) further the alignment of interests of participants with those of our shareholders through opportunities for increased share ownership in the Corporation.

The HRNG is the administrator of the Long-Term Incentive Plan (the "**Administrator**"). At any time, the Board may serve as the Administrator of the Long-Term Incentive Plan, in lieu of, or in addition, to the HRNG. Except as provided otherwise under the Long-Term Incentive Plan, the Administrator has plenary authority to grant awards pursuant to the terms of the Long-Term Incentive Plan to eligible individuals, determine the types of awards and the number of shares to be covered by the awards, establish the terms and conditions for awards, including the exercise price and term of awards, and take all other actions necessary or desirable to carry out the purpose and intent of the Long-Term Incentive Plan.

Participation in the Long-Term Incentive Plan is generally open to all officers, employees and other individuals, including Outside Directors. However, any individual whose services to the Corporation or any of its subsidiaries are limited to capital-raising transactions, or the promotion and maintenance of a market for the Corporation securities, are ineligible to participate in the Long-Term Incentive Plan. Prospective officers, employees and other service providers who have accepted offers to provide services to the Corporation may also participate in the Long-Term Incentive Plan.

The Long-Term Incentive Plan enables the grant of stock options, stock appreciation rights ("**SARs**"), stock awards, stock unit awards, performance shares, cash-based performance units, deferred share units and other stock-based awards, each of which may be granted separately or in tandem with other awards.

The maximum number of Common Shares issuable pursuant to awards under the Long-Term Incentive Plan is 11.4% of the issued and outstanding Common Shares at any given time. There were 75,681 awards outstanding under the Long-Term Incentive Plan representing approximately **2.4%** of all issued and outstanding Common Shares as of December 31, 2025. As of December 31, 2025, there were 287,219 Common Shares unallocated and available for future grants of awards that are settled in Common Shares under the Long-Term Incentive Plan.

The burn rate for the LTIP for the most recently completed fiscal year is set out below:

---

| | | | |
|:---|:---|:---|:---|
| **LTIP** | **LTIP** | **LTIP** | **LTIP** |
| **Year End** | **Awards Granted** | **Weighted Average<br> Shares Outstanding** | **Burn Rate<sup>(1)</sup>** |
| December 31, 2025 | **-** | 3165300 | 0.0% |
| December 31, 2024 | 77949 | 2581308 | 3.0% |
| December 31, 2023 | 21712 | 1847233 | 1.2% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Annual
 burn rate is expressed as a percentage and is calculated by dividing the number of securities granted under the LTIP by the weighted
 average number of securities outstanding for the applicable fiscal year.

The number of securities issuable to insiders, at any time, or issued within any one-year period, under all of our security-based compensation arrangements, cannot exceed 10% of our issued and outstanding securities and no single participant may hold options to purchase, from time to time, more than 5% of our issued and outstanding Common Shares.

The aggregate fair value of options granted under all of our security-based compensation arrangements to any one of our Outside Directors entitled to receive a benefit under the Long-Term Incentive Plan, within any one-year period, cannot exceed $100,000 valued on a Black-Scholes basis and as determined by the HRNG; and the aggregate number of securities issuable to all of our Outside Directors entitled to receive a benefit under the Long-Term Incentive Plan, within any one-year period, under all of our security-based compensation arrangements, cannot exceed 1% of its issued and outstanding securities.

Except as provided below or within an award agreement, each award granted under the Long-Term Incentive Plan (other than a performance unit that cannot be paid in shares) will be subject to a minimum vesting period or minimum restriction period as follows: (i) each stock option or SAR will be subject to a minimum vesting period of 12 months from the date of grant, (ii) each award of stock, stock units, performance shares, performance units payable in shares and other stock- based awards ("**Full Value Awards**") granted to non-employee directors will be subject to a minimum restriction period of 12 months from the date of grant, and (iii) each Full Value Award granted to a participant other than a non-employee director will be subject to a minimum restriction period of 12 months from the date of grant if vesting of or lapse of restrictions on such award is based on the satisfaction of performance goals and a minimum restriction period of 36 months from the date of grant, applied in either pro rata installments or a single installment, if vesting of or lapse of restrictions on such award is based solely on the participant's satisfaction of specified service requirements with us (provided that no such Full Value Awards will vest or have its restrictions lapse during the first 12 months following the date of grant). If the grant of a performance award is conditioned on satisfaction of performance goals, the performance period must not be less than 12 months' duration, but no additional minimum restriction period need apply to such award. The minimum vesting period or minimum restriction period will not apply in the case of death or disability of a participant or in the event of a change in control. Awards that result in the issuance of an aggregate of up to 5% of the share pool under the Long-Term Incentive Plan may be granted without regard to such minimum vesting period or minimum restriction period.

A SAR is the right to receive a payment equal to the excess of the Fair Market Value (as defined below) of a specified number of shares on the date the SAR is exercised over the base price per share specified in the award agreement. The base price for each SAR cannot be less than 100% of the Fair Market Value of Common Shares on the grant date and the term of a SAR cannot be more than 10 years from the grant date, unless required otherwise by applicable law. At the discretion of the Administrator, the payment upon a SAR exercise may be in cash, shares or a combination of the two. The "Fair Market Value" means the official closing price per Common Share for the regular market session on the day of determination.

Awards granted under the Long-Term Incentive Plan shall not be subject in any manner to alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance, except as otherwise determined by the Administrator; provided, however, that this restriction shall not apply to the Common Shares received in connection with an award after the date that the restrictions on transferability of such shares set forth in the applicable award agreement have lapsed.

Except as provided in the applicable award agreement or otherwise determined by the Administrator, and subject to the minimum vesting period or minimum restriction period described above, upon termination of service (as defined in the Long-Term Incentive Plan):

● Stock options or stock appreciation rights shall be forfeited, to the extent stock options or stock appreciation rights are not vested and exercisable;

● During the applicable restriction period, restricted stock and any accrued but unpaid dividends that are at that time subject to restrictions shall be forfeited; and

● During the applicable deferral period or portion thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent to the delivery of Common Shares or cash to which RSUs, performance shares or performance units relate, all performance shares, performance units and RSUs and any other accrued but unpaid dividend equivalents with respect to such RSUs that are then subject to deferral or restriction shall be forfeited.

In the event of a change in control (as defined in the Long-Term Incentive Plan) of the Corporation, outstanding awards will terminate upon the effective time of the change in control unless provision is made for the continuation, assumption or substitution of awards by the surviving or successor entity or its parent. Unless an award agreement says otherwise, the following will occur with respect to awards that terminate in connection with a change in control of the Corporation:

● stock options and SARs, whether vested or unvested, will become fully exercisable and holders of these awards will be permitted immediately before the change in control to exercise them;

● restricted stock and RSUs with time-based vesting (i.e., not subject to achievement of performance goals) will become fully vested immediately before the change in control, and RSUs will be settled as promptly as is practicable in accordance with applicable law; and

● restricted stock, RSUs, performance shares, and performance units that vest based on the achievement of performance goals will become fully vested and earned based on the target performance level as to the performance goals, such that 100% of the target award is earned as of the date of the change of control; and the RSUs and performance units will be settled as promptly as is practicable in accordance with applicable law. The Long-Term Incentive Plan will terminate on the earlier of (i) the earliest date as of which all awards granted under the Long-Term Incentive Plan have been satisfied in full or terminated and no shares approved for issuance under the Long-Term Incentive Plan remain available to be granted under new awards, or (ii) the tenth anniversary of date the Long-Term Incentive Plan, as amended and restated, is approved by our shareholders.

The Administrator may amend, alter or discontinue the Long-Term Incentive Plan, but no amendment, alteration or discontinuation will be made that would materially impair the rights of a participant with respect to a previously granted award without his or her consent, except such an amendment made to comply with applicable law or rule of any securities exchange or market on which our Common Shares are listed or admitted for trading or to prevent adverse tax or accounting consequences to the Corporation or the participant. In no event, however, will an amendment be made without the approval of our shareholders to the extent such amendment would (i) materially increase the benefits accruing to participants under the Long-Term Incentive Plan, (ii) increase the number of shares that may be issued under the Long-Term Incentive Plan or to a participant, (iii) materially expand the eligibility for participation in the Long-Term Incentive Plan, (iv) eliminate or modify the prohibition on repricing of stock options and SARs, (v) lengthen the maximum term or lower the minimum exercise price or base price permitted for stock options and SARs, (vi) modify the prohibition on the issuance of reload or replenishment options, (vii) amend the amendment provisions in the Long-Term Incentive Plan, or (viii) amend the Long-Term Incentive Plan to remove or exceed the 10% insider participation limit.

***Outstanding Option-Based Awards and Share-Based Awards***

The following table shows, for each Named Executive Officer, all awards outstanding as of December 31, 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Option-based Awards** | **Option-based Awards** | **Option-based Awards** | **Option-based Awards** | **Option-based Awards** | **Share-based Awards** | **Share-based Awards** | **Share-based Awards** |
| <br>**Name** | **Issuance<br> Date<br> (mm/dd/yyyy)** | **Number of<br> Securities<br> Underlying<br> Unexercised<br> Options<sup>(1)</sup> (#)** | **Option<br> Exercise<br> Price<br> ($)** | **Option<br> Expiration<br> Date**<br> **(mm/dd/yyyy)** | **Value of<br> Unexercised<br> In-the- <br> money<br> Options<br> ($)** | **Number of Shares<br> or Units of shares<br> that have Not<br> Vested <br> (#)** | **Market or Payout<br> Value of<br> Share-based Awards<br> that have Not <br> Vested <br> ($)** | **Market or payout<br> value of vested<br> share-based awards<br> not paid out or<br> distributed<br> ($)** |
| Gagnon, Gilles | N/A |  |  |  |  |  |  |  |
| Biehn, Anna | N/A |  |  |  |  |  |  |  |
| Puccetti, Peter | N/A |  |  |  |  |  |  |  |
| La Fratta, Giuliano | 01/10/2022 | 500 | 35.52 | 01/10/2029 |  |  |  |  |
| Regnier, Michel | 05/01/2023 | 3540 | 18.02 | 05/01/2028 |  |  |  |  |
| Gerlach, Matthias | 12/04/2019 | 200 | 87.00 | 12/04/2026 |  |  |  |  |
|  | 12/14/2020 | 250 | 36.60 | 12/14/2027 |  |  |  |  |
|  | 12/17/2021 | 500 | 42.05 | 12/17/2028 |  |  |  |  |
| Teifel, Michael | 12/17/2021 | 500 | 42.05 | 12/17/2028 |  |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 number of securities underlying unexercised options represents all awards outstanding as at December 31, 2025.

For the financial year ended December 31, 2025, the Board did not approve any issuance of stock option awards to any of the Named Executive Officers, other than the issuance of 62,927 stock options to Anna Biehn in connection with her initial appointment as CEO in May 2025, which options expired unvested in connection with her departure from the Company in November 2025.

**Incentive Plan Awards - Value Vested or Earned During the Year** 

The following table shows the incentive plan awards value vested or earned for each Named Executive Officer for the financial year ended December 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Option-based<br> awards —<br> Value vested<br> during**<br> **the year** | **Share-based<br> awards —<br> Value<br> vested during<br> the year** | **Non-equity<br> incentive plan<br> compensation<br> — Value earned<br> during the year** |
|  | **$** | **$** | **$** |
| Gagnon, Gilles |  |  |  |
| Biehn, Anna |  |  |  |
| Puccetti, Peter |  |  |  |
| La Fratta, Giuliano<sup>(1)</sup> |  |  |  |
| Regnier, Michel |  |  |  |
| Gerlach, Matthias |  |  |  |
| Teifel, Michael |  |  |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Mr.
 Giuliano La Fratta had 167 options vest on January 10<sup>th</sup>, 2025 which had an exercise
 price higher than the stock price of $3.40, therefore, the value vested during the period
 was $nil.

***Summary Compensation Table***

The Summary Compensation Table set forth below shows compensation information for each of the Named Executive Officers for services rendered in all capacities during each of the financial years ended December 31, 2025, 2024 and 2023. All amounts in the table below are in U.S. dollars. Mr. Puccetti, Mr. Gagnon, Mr. La Fratta, and Mr. Regnier's cash payments were made in Canadian dollars. All cash amounts paid to Dr. Gerlach and Dr. Teifel were made in Euros.

**SUMMARY COMPENSATION TABLE**

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | |  | **Non-equity incentive plan compensation** | **Non-equity incentive plan compensation** | | | | |
| <br>**Name** |<br>**Years** |<br>**Salary**<br> **($)<sup>(4)</sup>** |<br>**Share<br> based<br> awards**<br> **($)** |<br>**Option<br> based<br> awards**<br> **($)** |  | **Annual<br> incentive<br> plan**<br> **($)** | **Long-<br> term<br> incentive<br> plans**<br> **($)** |<br>**Pension**<br> **Value**<br> **($)** |<br>**Contributions<br> to Registered<br> Retirement<br> Saving Plan /<br> 401K account<br> ($)** |<br>**All other<br> compensation** |<br>**Total<br> compensation<br> ($)** |
| Biehn, Anna<sup>(1)</sup> | 2025 | 248636 |  | 230313 | (5) |  |  |  | 5112 | 335721 | 819782 |
| Gagnon, Gilles <sup>(2)</sup> | 2025 | 431490 |  |  |  |  |  |  | 3221 | 441865 | 876576 |
|  | 2024 | 401610 |  |  |  |  |  |  |  |  | 401610 |
|  | 2023 | 414960 |  |  |  |  | 100400 |  |  |  | 414960 |
| Puccetti, Peter <sup>(3)</sup> | 2025 | 74128 |  |  |  |  |  |  |  |  | 74128 |
| La Fratta, Giuliano | 2025 | 250495 |  |  |  |  |  |  | 12525 | 28628 | 291648 |
|  | 2024 | 168556 |  |  |  |  |  |  | 8428 |  | 176984 |
| Regnier, Michel | 2025 | 193239 |  |  |  |  |  |  | 12525 |  | 205764 |
|  | 2024 | 213977 |  |  |  |  |  |  |  |  | 213977 |
| Gerlach, Matthias | 2025 | 225702 |  |  |  |  |  | 15201 |  |  | 240903 |
|  | 2024 | 129431 |  |  |  |  |  | 8937 |  |  | 138367 |
| Teifel, Michael | 2025 | 195264 |  |  |  |  |  | (5888) |  |  | 189376 |
|  | 2024 | 117777 |  |  |  |  |  | 8937 |  |  | 127079 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Ms.
 Anna Biehn was Chief Executive Officer from May 5, 2025 until November 14, 2025.

(2) Mr.
 Gilles Gagnon was Chief Executive Officer from January 1, 2025 until May 5, 2025, at which
 time he stepped down as Chief Executive Officer but remained with the Corporation as a strategic
 advisor and a director (being appointed to the Board as of May 5, 2025). Mr. Gagnon resigned
 from the Board effective May 30, 2025 but remained in his role as strategic advisor until
 December 31, 2025

(3) Mr.
 Peter Puccetti, was Interim Chief Executive Officer from November 14, 2025 through December
 31, 2025.

(4) Reflects
 base salary earned during the year, and, in the case of Mr. Puccetti, also includes fees
 earned as an independent director, prior to his appointment as Interim Chief Executive Officer
 from November 14. Upon Mr. Puccetti's appointment as a director and Chair of the Board
 in May 2025, his compensation was initially set at a rate of $97,500 per annum (being $90,000
 per annum for this role as Chair and an additional $7,500 for serving on the Audit Committee).
 Following Mr. Puccetti's transition to the role of director and Interim CEO, his total
 compensation was reset at a rate of $250,000 per annum.

(5) The
 value is based on the Black-Scholes valuation model and the closing price of the Common Shares
 on the NASDAQ on the last trading day preceding the date of grant; all such 62,927 options
 expired unvested in connection with Ms. Biehn's departure from the Company in November
 2025.

***Compensation of the Chief Executive Officer(s)***

The compensation of our Chief Executive Officer is governed by our executive compensation policy described in the section titled "Compensation of Executive Officers", and the President and Chief Executive Officer participates, together with the other Named Executive Officers, in all our incentive plans.

During fiscal year 2025, we had three individuals serving as Chief Executive Officer. Mr. Gagnon served in this role January 1, 2025 until May 5, 2025, Ms. Biehn served from May 5, 2025 until November 14, 2025, and Mr. Puccetti served as (interim) Chief Executive Officer from November 14, 2025 through year-end.

Pursuant to an arrangement entered into on September 13, 2024, the Corporation and Mr. Gagnon had agreed that Mr. Gagnon would: (i) receive an annual salary of C$550,000, (ii) upon the appointment of a new CEO (which occurred on May 5, 2025) transition to the role of strategic advisor until September 30, 2025 (the "**Termination Date**"), and (iii) at the Termination Date, receive a lump sum payment of C$670,000 (the "**Termination Payment**"). On September 29, 2025, parties mutually agreed to extend the Termination Date by 3 months (to December 31, 2025) and reduce the Termination Payment by the amount of remuneration received by Mr. Gagnon during those 3 months. Accordingly, for the year ended December 31, 2025, Mr. Gagnon received total compensation of $876,576, consisting of (i) $420,474 in base salary, (ii) $11,016 in director fees, (iii) $30,186 in settlement of DSUs upon his ceasing to be a director, (iv) $42,942 in bonus payment (related to 2024), (v) $3,221 in contributions to Registered Retirement Saving Plan, and (vi) a severance payment of $368,737 (paid in January 2026).

For the year ended December 31, 2025, Ms. Biehn received total compensation of $589,486, consisting of (i) base salary of $248,636 for service through November 14, 2025, (ii) a signing bonus of $35,000, (iii) $75,721 in the form of a benefits stipend, (iv) $5,112 in 401K contributions, and (v) a lump-sum severance payment of $225,000 (equivalent to 6 months of base salary). Pursuant to the terms of her separation, all unvested equity awards were forfeited as of her termination date.

Mr. Puccetti's total earnings during the financial year ended December 31, 2025 was $74,128, all consisting of base fees and/or salary earned in his roles as director and interim CEO. Mr. Puccetti did not receive any bonus for the year ended December 31, 2025.

For the financial year ended December 31, 2025, the Board did not approve any issuance of stock option awards to any of the Chief Executive Officers, other than the issuance of 62,927 stock options to Anna Biehn in connection with her initial appointment as Chief Executive Officer in May 2025, which options expired unvested in connection with her departure from the Company in November 2025.

See "Long-Term Equity Compensation Plan of Executive Officers - Summary of the Long-Term Incentive Plan", for a complete description of the Long-Term Incentive Plan.

***Pension, retirement or similar benefits***

Each of our Named Executive Officers who were employed with Aeterna Zentaris GmbH ("**AEZS Germany**") as of December 31, 2025 participated in defined-contribution pension plans. The terms of those pension plans are described below.

**Rückgedeckte Unterstützungskasse 1** ("**RUK 1**")

Dr. Gerlach participates in RUK 1, a defined-contribution pension plan maintained by Unterstützungskasse Degussa e.V. Under RUK 1, AEZS Germany contributes 2.4% of Dr. Gerlach's monthly gross salary and Dr. Gerlach contributes 2% of his monthly gross salary. The contributions are limited to the social security contribution assessment ceiling. However, AEZS Germany also provided an additional contribution of 18% of Dr. Gerlach's monthly pensionable salary for the part of his salary that exceeds the social security contribution assessment ceiling. In 2025, the social security contribution assessment ceiling is $9,450 (€8,050) per month. Accordingly, during 2025, AEZS Germany's maximum contributions were $2,047.55 (€1,744.20) (which includes the additional contribution of 18%) monthly and Dr. Gerlach would have contributed at most $189.00 (€161.00) monthly. Both contributions are calculated with the monthly salary accounting and transferred to the relief fund monthly. We are liable to Dr. Gerlach for the pension benefits that have been promised if the private pension provider does not, or cannot, pay the promised pension payments. Dr. Gerlach will receive a pension payment based on the contributions that were made during his employment after he has reached the statutory retirement age, independent of whether he works with AEZS Germany until such age.

**Rückgedeckte Unterstützungskasse 2** ("**RUK 2**")

Dr. Teifel participates in RUK 2, a defined-contribution pension plan maintained by Unterstützungskasse Degussa e.V. Under RUK 2, AEZS Germany contributes 2.4% of Dr. Teifel's monthly gross salary and Dr. Teifel contributes 3% of his monthly gross salary. The contributions are limited to the social security contribution assessment ceiling. In 2025, the social security contribution assessment ceiling is $7,905 (€7,550) per month. Accordingly, AEZS Germany's maximum contributions were $226.80 (€193.20) monthly and Dr. Teifel would have contributed at most $283.50 (€241.50) monthly. Both contributions are calculated with the monthly salary accounting and transferred to the relief fund monthly. We are liable to Dr. Teifel for the pension benefits that have been promised if the private pension provider does not, or cannot, pay the promised pension payments. Dr. Teifel will receive a pension payment based on the contributions that were made during his employment after he has reached the statutory retirement age, independent of whether he works with AEZS Germany until such age.

The table below includes amounts from AEZS Germany's defined contribution plans. Any difference between (i) the sum of the "accumulated value at start of year" column plus the "compensatory" column and (ii) the "accumulated value at end of year" column is attributable to the employee's contributions to the pension plan during the year ended December 31, 2025, as well as changes in the foreign exchange rate, each employee's contributions being made in Euros.

---

| | | | |
|:---|:---|:---|:---|
| **Name** | **Accumulated value at<br> start of year <br> ($)** | **Compensatory <br> ($)** | **Accumulated value at<br> year end <br> ($)** |
| Gerlach, Matthias | 242779 | 15201 | 257980 |
| Teifel, Michael | 249531 | (5888) | 243643 |

---

***C.***  ***Board practices*** 

Our Articles provide that our Board shall be composed of a minimum of five (5) and a maximum of fifteen (15) directors. Directors are elected annually by our shareholders, but the directors may from time to time appoint one or more directors, provided that the total number of directors so appointed does not exceed one-third of the number of directors elected at the last annual meeting of shareholders. Each elected director will remain in office until termination of the next annual meeting of the shareholders or until his or her successor is duly elected or appointed, unless his or her post is vacated earlier. We do not have service agreements with our independent directors.

See Item 6A. for information about the period of service of each of our directors and senior corporate officers.

**Standing Committees of the Board of Directors**

Our Board has established an Audit Committee and the HRNG.

Audit Committee

The Audit Committee assists the Board in fulfilling its oversight responsibilities. The Audit Committee reviews the financial reporting process, the system of internal control, the audit process, and our process for monitoring compliance with laws and regulations and with our Code of Ethical Conduct. In performing its duties, the Audit Committee will maintain effective working relationships with the Board, management, and the external auditors. To effectively perform his or her role, each committee member will obtain an understanding of the detailed responsibilities of committee membership as well as our business, operations and risks.

The function of the Audit Committee is oversight and while it has the responsibilities and powers set forth in its charter (incorporated by reference to Exhibit 11.3 to this Annual Report on Form 20-F), it is neither the duty of the committee to plan or to conduct audits or to determine that our financial statements are complete, accurate and in accordance with generally accepted accounting principles, nor to maintain internal controls and procedures.

The current members of the Audit Committee are Mr. Anthony J. Giovinazzo (Chair), Mr. Robert A. Seager, and Mr. Ulrich Kosciessa. In accordance with rules applicable to foreign private issuers, all members of the Audit Committee satisfy the independence standards under Rule 10A-3 of the Securities Exchange Act of 1934, as amended. Our Board has determined that Mr. Anthony J. Giovinazzo is the financial expert (as defined in paragraph (b) of Item 16A to Form 20-F).

HRNG

The compensation of executive officers of the Corporation and its subsidiaries is recommended to the Board by the HRNG. The HRNG is responsible for, among other matters, (i) assisting the Board in developing our approach to corporate governance issues, (ii) proposing new Board nominees, (iii) overseeing the assessment of the effectiveness of the Board and its committees, their respective chairs and individual directors and (iv) making recommendations to the Board with respect to Board member nominees and directors' compensation, as well as serving in a leadership role for our corporate governance practices. It is also responsible for taking all reasonable actions to ensure that appropriate human resources policies, procedures and systems, e.g., recruitment and retention policies, competency and performance metrics and measurements, training and development programs, and market-based, competitive compensation and benefits structures, are in place so that we can attract, motivate and retain the quality of personnel required to achieve our business objectives. The HRNG also assists the Board in discharging its responsibilities relating to the recruitment, retention, development, assessment, compensation and succession planning for our executive and senior management members.

Thus, the HRNG recommends the appointment of senior officers, including the terms and conditions of their appointment and termination, and reviews the evaluation of the performance of our senior officers, including recommending their compensation and overseeing risk identification and management in relation to executive compensation policies and practices. The Board, which includes the members of the HRNG, reviews the Chief Executive Officer's corporate strategy, goals and performance objectives and evaluates and measures his or her performance and compensation against the achievement of such goals and objectives.

The HRNG recognizes that the industry, regulatory and competitive environment in which we operate requires a balanced level of risk-taking to promote and achieve the performance expectations of executives of a specialty biopharmaceutical company. The HRNG is of the view that our executive compensation program should not encourage senior executives to take inappropriate or unreasonable risk. In this regard, the HRNG recommends the implementation of compensation methods that appropriately connect a portion of senior executive compensation with our short-term and longer-term performance, as well as that of each individual executive officer and that take into account the advantages and risks associated with such compensation methods. The HRNG is also responsible for establishing compensation policies that are intended to reward the creation of shareholder value while reflecting a balance between our short-term and longer-term performance and that of each executive officer.

The HRNG is currently composed of Mr. Robert A. Seager (Chair), Mr. Ronald W. Miller, and Mr. David Spear, each of whom is independent. The Board believes that the members of the HRNG collectively have the knowledge, experience and background required to fulfill its mandate.

***D.***  ***Employees*** 

As at December 31, 2025, we had a total of 28 active employees, of which 23 were based in Canada, 4 were based in Frankfurt, Germany and 1 was based in the U.S.

Those employees were engaged in the following activities: (i) 9 were engaged in research and development, regulatory affairs and quality assurance; (ii) 9 were involved in commercial operations; and (iii) 10 were involved in various administrative functions, including corporate development, finance and accounting. None of our employees are represented by labor unions or covered by collective bargaining agreements. We did not employ any sales representatives.

We have agreements with our employees covering confidentiality, loyalty, non-competition and assignment of all intellectual property rights developed during the employment period.

***E.***  ***Share ownership*** 

The table below sets forth information as of March 24, 2026 provided to us by our directors and named executive officers as of December 31, 2025 concerning their ownership of Common Shares, stock options, and DSUs of the Company:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name** | **No. of<br> Common<br> Shares owned<br> or held** | **Percent<sup>(1)</sup>** | **No. of <br> stock <br> options<br> held<sup>(2)</sup>** | **No. of<br> currently<br> exercisable<br> options** | **No. of<br> DSUs Held** |
| Gerlach, Matthias |  |  | 950 | 950 |  |
| Giovinazzo, Anthony J. |  |  |  |  |  |
| Kosciessa, Ulrich | 1848 | 0.06 | 4956 | 4956 | 12500 |
| La Fratta, Giuliano |  |  | 500 | 500 |  |
| Miller, Ronald W. |  |  | 4956 | 4956 | 15000 |
| Puccetti, Peter H. | 15687 | 0.49 |  |  |  |
| Regnier, Michel |  |  | 3540 | 3540 |  |
| Seager, Robert A. |  |  |  |  |  |
| Spear, David |  |  |  |  |  |
| Teifel, Michael |  |  | 500 | 500 |  |
| **Total** | **17535** | **0.55** | **15402** | **11862** | **27500** |

---

\* Less than 1%

&nbsp;&nbsp;&nbsp;&nbsp;(1) Based
on 3,184,155 Common Shares outstanding as at March 24, 2026

(2) For
 information regarding option expiration dates and exercise price refer to the tables included under the caption "Outstanding
 Option-Based Awards and Share-Based Awards".

***F.***  ***Disclosure of Registrant's Action to Recover Erroneously Awarded Compensation*** 

There was no erroneously awarded compensation that was required to be recovered pursuant to the COSCIENS Executive Compensation Clawback Policy during the fiscal year ended December 31, 2025.

**Item 7.** **Major Shareholders and Related Party Transactions**

***A.***  ***Major shareholders*** 

We are not directly or indirectly owned or controlled by another corporation or by any foreign government. Based on filings with the SEC and the Canadian securities regulatory authorities, as at March 24, 2026, no individual or entity, other than as set out below, beneficially owned, directly or indirectly, or exercised control or direction over our Common Shares carrying more than 5% of the voting rights attached to all our Common Shares (to whom we refer as our major shareholders).

All of our shareholders, including the shareholders listed below, will have the same voting rights attached to their Common Shares, and neither our principal shareholders nor our directors and executive officers will have different or special voting rights with respect to their Common Shares. A description of any material relationship that our principal shareholders have had with us or any of our predecessors or affiliates within the past three years is included under "Item 7.B. Related Party Transactions."

***Changes in Percentage Ownership by Major Shareholders***

As of the close of business on June 5, 2024, Goodwood Fund, together Peter Puccetti (who became a director on May 30, 2025 and interim Chief Executive Officer on November 14, 2025), who exercised control and direction over securities through Goodwood Inc. (the investment fund manager), reported beneficial ownership of 225,150 Common Shares of the Company (then operating as Aeterna Zentaris Inc.), or approximately 7.2% of our outstanding Common Shares at that time, consisting of 178,680 Common Shares and warrants to purchase an 46,470 additional Common Shares, in each case held directly by Goodwood Fund. On June 11, 2025, Goodwood Fund, together with Goodwood Inc. and Peter Puccetti, reported holding 257,257 Common Shares, representing approximately 8.2% of our outstanding Common Shares, as of June 11, 2025. Effective March 1, 2026, Goodwood Inc., formerly controlled by Peter Puccetti, was sold to a third party, Nour Private Management Inc., and as a result of the transaction, Mr. Puccetti ceased to have beneficial ownership or control over the securities held in the Goodwood Fund (a mutual fund trust managed by Goodwood Inc.), which included 241,570 Common Shares. Following the transaction, and as of March 24, 2026, Mr. Puccetti has beneficial ownership or control over a total of 15,687 Common Shares.

**United States Shareholders**

Based on a review of the information provided to us by our transfer agent, as at March 10, 2026, there were 278 holders of record of our Common Shares, of which 25 were registered with an address in the U.S., holding in the aggregate approximately 1.14% of our outstanding Common Shares. We believe that the number of beneficial owners of our Common Shares in the United States is substantially greater than the number of record holders, because the overwhelming majority of our Common Shares are held in broker "street names".

The Company is not controlled by another corporation, by any foreign government or by any natural or legal persons except as set forth herein, and there are no arrangements known to the Company which would result in a change in control of the Company at a subsequent date.

***B.***  ***Related party transactions*** 

During the year ended December 31, 2025, the Company made payments for research and development expenditures to Angiogenesis Foundation for which a former Director of the Company, Dr. William W. Li, was the CEO, of $nil (2024 - $50 and 2023 - $201). Other than employment arrangements and indemnification agreements with our management as described under "Item 10. – Additional Information," there are no further related party transactions.

***C.***  ***Interests of experts and counsel*** 

Not required.

**Item 8.** **Financial Information**

***A.***  ***Consolidated statements and other financial information*** 

The consolidated financial statements filed as part of this Annual Report on Form 20-F are presented under "Item 18. – Financial Statements".

***B.***  ***Significant changes*** 

No significant changes occurred since the date of our annual consolidated financial statements which are not included elsewhere in this Annual Report on Form 20-F.

**Item 9.** **The Offer and Listing**

***A.***  ***Offer and listing details*** 

Our Common Shares are listed on the OTC Market under the symbol "CSCIF" and the TSX under the symbol "CSCI". From August 10, 2024 until September 5, 2025, our Common Shares were listed on NASDAQ under the symbol "CSCI". From November 20, 2015 until August 9, 2024, our ticker symbol was "AEZS" on NASDAQ and the TSX.

The following table indicates, for the relevant periods, the high and low closing prices of our Common Shares on the NASDAQ/over-the-counter market and on the TSX as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | NASDAQ/OTC Market (US$) | NASDAQ/OTC Market (US$) | TSX (CAN$) | TSX (CAN$) |
|  | High | Low | High | Low |
| 2025 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fourth quarter | 2.70 | 2.02 | 3.80 | 2.80 |
| &nbsp;&nbsp;&nbsp;Third quarter | 4.33 | 2.40 | 5.81 | 3.41 |
| &nbsp;&nbsp;&nbsp;Second quarter | 3.90 | 2.43 | 5.30 | 3.51 |
| &nbsp;&nbsp;&nbsp;First quarter | 4.35 | 2.60 | 5.98 | 3.50 |
| 2024 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fourth quarter | 3.90 | 2.50 | 5.20 | 3.72 |
| &nbsp;&nbsp;&nbsp;Third quarter | 6.91 | 3.75 | 9.55 | 4.84 |
| &nbsp;&nbsp;&nbsp;Second quarter | 10.25 | 4.42 | 13.90 | 5.90 |
| &nbsp;&nbsp;&nbsp;First quarter | 8.80 | 6.80 | 11.72 | 9.16 |
| 2023 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Fourth quarter | 2.46 | 1.42 | 3.36 | 1.91 |
| &nbsp;&nbsp;&nbsp;Third quarter | 3.19 | 2.44 | 4.21 | 3.25 |
| &nbsp;&nbsp;&nbsp;Second quarter | 3.23 | 2.45 | 4.38 | 3.34 |
| &nbsp;&nbsp;&nbsp;First quarter | 3.89 | 2.61 | 5.30 | 3.36 |

---

***B.***  ***Plan of distribution*** 

Not applicable.

***C.***  ***Markets*** 

Our Common Shares are listed and posted for trading on OTC Market under the symbol "CSCIF" and on the TSX under the symbol "CSCI". From August 10, 2024 until September 5, 2025, our Common Shares were listed on NASDAQ under the symbol "CSCI". From November 20, 2015 until August 9, 2024, our ticker symbol was "AEZS" on NASDAQ and the TSX.

***D.***  ***Selling shareholders*** 

Not applicable.

***E.***  ***Dilution*** 

Not applicable.

***F.***  ***Expenses of the issue*** 

Not applicable.

**Item 10.** **Additional Information**

***A.***  ***Share capital*** 

Not required.

***B.***  ***Memorandum and articles of association*** 

We are governed by our restated articles of incorporation (the "**Restated Articles of Incorporation**") under the CBCA and by articles of amendment dated October 2, 2012, November 17, 2015, May 9, 2019, July 18, 2022, April 30, 2024 and August 6, 2024 (together with the Restated Articles of Incorporation, the "**Articles**") and by our bylaws, as amended and restated on March 21, 2013 (the "**bylaws**"). Our Articles are on file with Corporations Canada under Corporation Number 264271-9. The Articles do not include a stated purpose and do not place any restrictions on the business that we may carry on.

**Inspection Rights of Shareholders**

Under the CBCA, shareholders are entitled to be provided with a copy of the list of our registered shareholders. In order to obtain the shareholder list, a shareholder must provide to us an affidavit including, among other things, a statement that the list will only be used for the purposes permitted by the CBCA. These permitted purposes include an effort to influence the voting of our shareholders, an offer to acquire our securities and any other matter relating to our affairs. We are entitled to charge a reasonable fee for the provision of the shareholder list and must deliver that list no more than ten days after receipt of the affidavit described above.

Under the CBCA, shareholders have the right to inspect certain corporate records, including our Articles and bylaws and minutes of meetings and resolutions of the shareholders. Shareholders have no statutory right to inspect minutes of meetings and resolutions of our directors. Our shareholders have the right to certain financial information respecting us. In addition to the annual and quarterly financial statements required to be filed under applicable securities laws, we are required by the CBCA to place before every annual meeting of shareholders our audited comparative annual financial statements. In addition, shareholders have the right to examine the financial statements of each of our subsidiaries and any other corporate entity whose accounts are consolidated in our financial statements.

**Directors**

The minimum number of directors we must have is five (5) and the maximum number is fifteen (15). In accordance with the CBCA, at least 25% of our directors must be residents of Canada. In order to serve as a director, a person must be a natural person at least 18 years of age, of sound mind, not bankrupt, and must not be prohibited by any court from holding the office of director. None of the Articles, the bylaws and the CBCA impose any mandatory retirement requirements for directors.

The directors are elected by a majority of the votes cast at the annual meeting at which an election of directors is required, to hold office until the election of their successors, except in the case of resignations or if their offices become vacant by death or otherwise. Subject to the provisions of our bylaws, all directors may, if still qualified to serve as directors, stand for re-election. The Board is not replaced at staggered intervals but is elected annually.

There is no provision in our bylaws or Articles that requires that a director must be a shareholder.

The directors are entitled to remuneration as shall from time to time be determined by the Board or by a committee to which the Board may delegate the power to do so. Under the mandate of the HRNG, such committee, comprised of at least a majority of independent directors, is tasked with making recommendations to the Board concerning director remuneration. The directors are allowed to vote on and approve their own remuneration in the absence of an independent quorum of directors.

The CBCA provides that a director who is a party to, or who is a director or officer of, or has a material interest in, any person who is a party to a material contract or transaction or proposed material contract or transaction with us must disclose to us the nature and extent of his or her interest at the time and in the manner provided by the CBCA, or request that same be entered in the minutes of the meetings of the Board, even if such contract, in connection with our normal business activity, does not require the approval of either the directors or the shareholders. At the request of the president or any director, the director placed in a situation of conflict of interest must leave the meeting while the Board discusses the matter. The CBCA prohibits such a director from voting on any resolution to approve the contract or transaction unless the contract or transaction:

● relates primarily to his or her remuneration as our director, officer, employee or agent or as a director, officer, employee or agent of an affiliate of us;

● is for indemnity or insurance for director's liability as permitted by the CBCA; or

● is with our affiliate.

The CBCA provides that the Board may, on our behalf and without authorization of our shareholders:

● borrow money upon our credit;

● issue, reissue, sell or pledge our debt obligations;

● give a guarantee on our behalf to secure performance of an obligation of any person; and

● mortgage, hypothecate, pledge or otherwise create a security interest in all or any of our property, owned or subsequently acquired, to secure any of our obligations.

The shareholders have the ability to restrict such powers through our Articles or bylaws (or through a unanimous shareholder agreement), but no such restrictions are in place.

The CBCA prohibits the giving of a guarantee to any of our shareholders, directors, officers or employees or of an affiliated corporation or to an associate of any such person for any purpose or to any person for the purpose of or in connection with a purchase of a share issued or to be issued by us or our affiliates, where there are reasonable grounds for believing that we are or, after giving the guarantee, would be unable to pay our liabilities as they become due, or the realizable value of our assets in the form of assets pledged or encumbered to secure a guarantee, after giving the guarantee, would be less than the aggregate of our liabilities and stated capital of all classes. These borrowing powers may be varied by our bylaws or Articles. However, our bylaws and Articles do not contain any restrictions on or variations of these borrowing powers.

Pursuant to the CBCA, our directors manage and administer our business and affairs and exercise all such powers and authority as we are authorized to exercise pursuant to the CBCA, the Articles and the bylaws. The general duties of our directors and officers under the CBCA are to act honestly and in good faith with a view to our best interests and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Any breach of these duties may lead to liability to us and our shareholders for breach of fiduciary duty. In addition, a breach of certain provisions of the CBCA, including the improper payment of dividends or the improper purchase or redemption of shares, will render the directors who authorized such action liable to account to us for any amounts improperly paid or distributed.

Our bylaws provide that the Board may, from time to time, appoint from amongst their number committees of the Board, and delegate to any such committee any of the powers of the Board except those which pursuant to the CBCA a committee of the Board has no authority to exercise. As such, the Board has two standing committees: the Audit Committee and the HRNG.

Subject to the limitations provided by the CBCA, our bylaws provide that we shall, to the full extent provided by law, indemnify a director or an officer, a former director or officer or a person who acts or acted at our request as a director or officer of a body corporate of which we are or were a shareholder or creditor, and his or her heirs and legal representatives, against all costs, losses, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of having been our director or officer or such body corporate, provided: (a) he or she acted in good faith in our best interests and (b) in the case of a criminal or an administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds to believe that his or her conduct was lawful.

Our directors are authorized to indemnify from time to time any director or other person who has assumed or is about to assume in the normal course of business any liability for us or for any corporation controlled by us and to secure such director or other person against any loss by the pledge of all or part of our movable or immovable property through the creation of a hypothec or any other real right in all or part of such property or in any other manner.

We have also agreed to indemnify and save harmless our directors and senior corporate officers as well as the managing directors of our German Subsidiaries pursuant to various Director and Officer Indemnification Agreements against certain charges, damages, awards, settlements, liabilities, interest, judgments, fines, penalties, statutory obligations, professional fees and retainers and other expenses of whatever nature or kind, provided that any such costs, charges, professional fees and other expenses are reasonable (collectively, "**Expenses**") and from and against all Expenses sustained or incurred by the indemnified party as a result of serving as a director, officer or employee of the Company (or its subsidiary) in respect of any act, matter, deed or thing whatsoever made, done, committed, permitted, omitted or acquiesced in by the indemnified party as a director, officer or employee of the Company (or its subsidiary).

**Share Capitalization**

Our authorized share capital structure consists of an unlimited number of shares of the following classes (all classes are without nominal or par value): Common Shares; and first preferred shares (the "**First Preferred Shares**") and second preferred shares (the "**Second Preferred Shares**" and, together with the First Preferred Shares, the "**Preferred Shares**"), both issuable in series. As of March 24, 2026, we had 3,184,155 Common Shares issued and outstanding, as well as 48,181 stock options, 27,500 deferred share units and 548,448 warrants outstanding. Each stock option, deferred share unit and warrant is exercisable for one common share. No Preferred Shares have been issued to date.

**Common Shares**

The holders of the Common Shares are entitled to one vote for each Common Share held by them at all meetings of shareholders, except meetings at which only shareholders of a specified class of shares are entitled to vote. In addition, the holders are entitled to receive dividends if, as and when declared by our Board on the Common Shares. Finally, the holders of the Common Shares are entitled to receive our remaining property upon any liquidation, dissolution or winding-up of our affairs, whether voluntary or involuntary. Shareholders have no liability to further capital calls as all shares issued and outstanding are fully paid and non-assessable.

**Preferred Shares**

The First and Second Preferred Shares are issuable in series with rights and privileges specific to each class. The holders of Preferred Shares are generally not entitled to receive notice of or to attend or vote at meetings of shareholders. The holders of First Preferred Shares are entitled to preference and priority to any participation of holders of Second Preferred Shares, Common Shares or shares of any other class of shares of our share capital ranking junior to the First Preferred Shares with respect to dividends and, in the event of our liquidation, the distribution of our property upon our dissolution or winding-up, or the distribution of all or part of our assets among the shareholders, to an amount equal to the value of the consideration paid in respect of such shares outstanding, as credited to our issued and paid-up share capital, on an equal basis, in proportion to the amount of their respective claims in regard to such shares held by them. The holders of Second Preferred Shares are entitled to preference and priority to any participation of holders of Common Shares or shares of any other class of shares of our share capital ranking junior to the Second Preferred Shares with respect to dividends and, in the event of our liquidation, the distribution of our property upon our dissolution or winding-up, or the distribution of all or part of our assets among the shareholders, to an amount equal to the value of the consideration paid in respect of such shares outstanding, as credited to our issued and paid-up share capital, on an equal basis, in proportion to the amount of their respective claims in regard to such shares held by them.

Our Board may, from time to time, provide for additional series of Preferred Shares to be created and issued, but the issuance of any Preferred Shares is subject to the general duties of the directors under the CBCA to act honestly and in good faith with a view to our best interests and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

**Warrants**

For a description of our Warrants, see note 17 – Warrants to the consolidated financial statements included in Item 18 of this Annual Report on Form 20-F.

**Shareholder Actions**

The CBCA provides that our shareholders may, with leave of a court, bring an action in our name and on our behalf for the purpose of prosecuting, defending or discontinuing an action on our behalf. In order to grant leave to permit such an action, the CBCA provides that the court must be satisfied that our directors were given adequate notice of the application, the shareholder is acting in good faith and that it appears to be in our best interests that the action be brought.

**Shareholder Rights Plan**

The Board of the Company approved an amended and restated shareholder rights plan of the Company on March 29, 2019, which was approved, ratified and confirmed by the shareholders at the annual and special meeting of shareholders of the Company on May 8, 2019 (the "**Rights Plan**"). Shareholders of the Company reconfirmed the Rights Plan on June 21, 2022 and on June 30, 2025. The Rights Plan was originally implemented in 2016 and was implemented to ensure, to the extent possible, that all shareholders of the Company are treated fairly in connection with any take-over offer or other acquisition of control of the Company.

*Objectives and Background of the Rights Plan*

The fundamental objectives of the Rights Plan are to provide adequate time for our Board and shareholders to assess an unsolicited take-over bid for us, to provide the Board with sufficient time to explore and develop alternatives for maximizing shareholder value if a take-over bid is made, and to provide shareholders with an equal opportunity to participate in a take-over bid.

The Rights Plan encourages a potential acquiror who makes a take-over bid to proceed either by way of a "Permitted Bid", as described below, which requires a take-over bid to satisfy certain minimum standards designed to promote fairness, or with the concurrence of our Board. If a take-over bid fails to meet these minimum standards and the Rights Plan is not waived by the Board, the Rights Plan provides that holders of Common Shares, other than the acquiror, will be able to purchase additional Common Shares at a significant discount to market, thus exposing the person acquiring Common Shares to substantial dilution of its holdings.

 

*Summary of the Rights Plan*

The following is a summary of the principal terms of the Rights Plan, which summary is qualified in its entirety by reference to the terms thereof. Capitalized terms not otherwise defined in this summary shall have the meaning ascribed to such terms in the Rights Plan. A draft of the Rights Plan is available at the following websites: www.sedarplus.ca and www.sec.gov.

For the purposes of this summary and as set out in the Rights Plan, the term "NI 62-104" refers to National Instrument 62-104-*Take-Over Bids and Issuer Bids* adopted by the Canadian securities regulatory authorities, as now in effect or as the same may from time to time be amended, re-enacted or replaced and including for greater certainty any successor instrument thereto.

*Operation of the Rights Plan*

Pursuant to the terms of the Rights Plan, one right was issued in respect of each common share outstanding at 5:01 p.m. on March 29, 2016 (the "**Record Time**"). In addition, we will issue one right for each additional Common Share issued after the Record Time and prior to the earlier of the Separation Time (as defined below) and the Expiration Time (as defined below). The rights have an initial exercise price equal to the Market Price (as defined below) of the Common Shares as determined at the Separation Time, multiplied by five, subject to certain anti-dilution adjustments (the "**Exercise Price**"), and they are not exercisable until the Separation Time. Upon the occurrence of a Flip-in Event (as defined below), each right will entitle the holder thereof, other than an Acquiring Person or any other person whose rights are or become void pursuant to the provisions of the Rights Plan, to purchase from us, effective at the close of business on the eighth trading day after the Stock Acquisition Date (as defined below), upon payment to us of the Exercise Price, Common Shares having an aggregate Market Price equal to twice the Exercise Price on the date of consummation or occurrence of such Flip-in Event, subject to certain anti-dilution adjustments.

*Definition of Market Price*

Market Price is generally defined in the Rights Plan, on any given day on which a determination must be made, as the volume weighted average trading price of the Common Shares for the 20 consecutive trading days (i.e. days on which the TSX or another stock exchange or national securities quotation system on which the Common Shares are traded is open for the transaction of business, subject to certain exceptions), through and including the trading day immediately preceding such date of determination, subject to certain exceptions.

*Trading of Rights*

Until the Separation Time (or the earlier termination or expiration of the rights), the rights trade together with the Common Shares and are represented by the same share certificates as the Common Shares or an entry in our securities register in respect of any outstanding Common Shares. From and after the Separation Time and prior to the Expiration Time, the rights are evidenced by rights certificates and trade separately from the Common Shares. The rights do not carry any of the rights attaching to the Common Shares such as voting or dividend rights.

*Separation Time*

The rights will separate from the Common Shares to which they are attached and become exercisable at the time (the "**Separation Time**") of the close of business on the eighth business day after the earliest to occur of:

&nbsp;&nbsp;&nbsp;&nbsp;(1) the
 first date (the "**Stock Acquisition Date**") of a public announcement of facts indicating that a person has become
 an Acquiring Person; and

(2) the
 date of the commencement of, or first public announcement of the intention of any person (other than us or any of our subsidiaries)
 to commence a take-over bid or a share exchange bid for more than 20% of our outstanding Common Shares other than a Permitted Bid
 or a Competing Permitted Bid (as defined below), so long as such take-over bid continues to satisfy the requirements of a Permitted
 Bid or a Competing Permitted Bid, as the case may be.

The Separation Time can also be such later time as may from time to time be determined by the Board, provided that if any such take-over bid expires, or is canceled, terminated or otherwise withdrawn prior to the Separation Time, without securities deposited thereunder being taken up and paid for, it shall be deemed never to have been made and if the Board determines to waive the application of the Rights Plan to a particular Flip-in Event, the Separation Time in respect of such Flip-in Event shall be deemed never to have occurred.

From and after the Separation Time and prior to the Expiration Time, each right entitles the holder thereof to purchase one Common Share upon payment of the Exercise Price to us.

*Flip-in Event*

The acquisition by a person (an "**Acquiring Person**"), including others acting jointly or in concert with such person, of more than 20% of the outstanding Common Shares, other than by way of a Permitted Bid, a Competing Permitted Bid or in certain other limited circumstances described in the Rights Plan, is referred to as a "Flip-in Event".

In the event that, prior to the Expiration Time, a Flip-in Event that has not been waived occurs (see "Waiver and Redemption" below), each right (other than those held by or deemed to be held by the Acquiring Person) will thereafter entitle the holder thereof, effective as at the close of business on the eighth trading day after the Stock Acquisition Date, to purchase from us, upon payment of the Exercise Price and otherwise exercising such right in accordance with the terms of the Rights Plan, that number of Common Shares having an aggregate Market Price on the date of consummation or occurrence of the Flip-in Event equal to twice the Exercise Price, for an amount in cash equal to the Exercise Price (subject to certain anti-dilution adjustments described in the Rights Plan).

A bidder may enter into Permitted Lock-up Agreements with our shareholders ("**Locked-up Persons**") who are not affiliates or associates of the bidder and who are not, other than by virtue of entering into such agreement, acting jointly or in concert with the bidder, whereby such shareholders agree to tender their Common Shares to the take-over bid (the "**Lock-up Bid**") without the bidder being deemed to beneficially own the Common Shares deposited pursuant to the Lock-up Bid. Any such agreement must include a provision that permits the Locked-up Person to withdraw the Common Shares to tender to another take-over bid or to support another transaction that will either provide greater consideration to the shareholder than the Lock-up Bid or provide for a right to sell a greater number of shares than the Lock-up Bid contemplates (provided that the Permitted Lock-up Agreement may require that such greater number exceed the number of shares under the Locked-up Bid by a specified percentage not to exceed 7%).

A Permitted Lock-up Agreement may require that the consideration under the other transaction exceed the consideration under the Lock-up Bid by a specified amount. The specified amount may not be greater than 7%. For greater certainty, a Permitted Lock-up Agreement may contain a right of first refusal or require a period of delay (or other similar limitation) to give a bidder an opportunity to match a higher price in another transaction as long as the limitation does not preclude the exercise by the Locked-up Person of the right to withdraw the Common Shares during the period of the other take-over bid or transaction.

The Rights Plan requires that any Permitted Lock-up Agreement be made available to us and the public. The definition of Permitted Lock-up Agreement also provides that under a Permitted Lock-up Agreement, no "break up" fees, "topping" fees, penalties, expenses or other amounts that exceed in aggregate the greater of (i) 2.5% of the price or value of the aggregate consideration payable under the Lock-up Bid, and (ii) 50% of the amount by which the price or value of the consideration received by a Locked-up Person under another take-over bid or transaction exceeds what such Locked-up Person would have received under the Lock-up Bid, can be payable by such Locked-up Person if the Locked-up Person fails to deposit or tender Common Shares to the Lock-up Bid or withdraws Common Shares previously tendered thereto in order to deposit such Common Shares to another take-over bid or support another transaction.

 

*Permitted Bid Requirements*

The requirements of a Permitted Bid include the following:

&nbsp;&nbsp;&nbsp;&nbsp;1. the
 take-over bid must be made by means of a take-over bid circular;

2. the
 take-over bid must be made to all holders of Common Shares wherever resident, on identical terms and conditions, other than the bidder;

3. the
 take-over bid must not permit Common Shares tendered pursuant to the bid to be taken up or paid for:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) prior
 to the close of business on a date that is not less than 105 days following the date of the relevant take-over bid or such shorter
 minimum period that a take-over bid (that is not exempt from any of the requirements of Division 5 (Bid Mechanics of NI 62-104))
 must remain open for deposits of securities thereunder, in the applicable circumstances at such time, pursuant to NI 62-104;

b) then
 only if at the close of business on the date Common Shares (and/or "Convertible Securities", as defined in the Rights
 Plan) are first taken up or paid for under such take-over bid, outstanding Common Shares and Convertible Securities held by shareholders
 other than any other Acquiring Person, the bidder, the bidder's affiliates or associates, persons acting jointly or in concert
 with the bidder and any employee benefit plan, deferred profit-sharing plan, stock participation plan or trust for the benefit of
 our employees or the employees of any of our subsidiaries, unless the beneficiaries of such plan or trust direct the manner in which
 the Common Shares are to be voted or direct whether the Common Shares are to be tendered to a take-over bid (collectively, "Independent
 Shareholders") that represent more than 50% of the aggregate of (I) then outstanding Common Shares and (II) Common Shares issuable
 upon the exercise of Convertible Securities, have been deposited or tendered pursuant to the take-over bid and not withdrawn;

&nbsp;&nbsp;&nbsp;&nbsp;4. the
 take-over bid must allow Common Shares and/or Convertible Securities to be deposited or tendered pursuant to such take-over bid,
 unless such take-over bid is withdrawn, at any time prior to the close of business on the date Common Shares and/or Convertible Securities
 are first taken up or paid for under the take-over bid;

5. the
 take-over bid must allow Common Shares and/or Convertible Securities to be withdrawn until taken up and paid for; and

6. in
 the event the requirement set forth in clause 3.b) above is satisfied, the bidder must make a public announcement of that fact and
 the take-over bid must remain open for deposits and tenders of Common Shares for not less than ten days from the date of such public
 announcement.

A Permitted Bid need not be a bid for all outstanding Common Shares not held by the bidder, i.e., a Permitted Bid may be a partial bid. The Rights Plan also allows a competing Permitted Bid (a "**Competing Permitted Bid**") to be made while a Permitted Bid is in existence. A Competing Permitted Bid must satisfy all the requirements of a Permitted Bid other than the requirement set out in clause 3.a) above and must not permit Common Shares tendered or deposited pursuant to the bid to be taken up or paid for prior to the close of business on the last day of the minimum initial deposit period that such take-over bid must remain open for deposits of securities thereunder pursuant to NI 62-104 after the date of the take-over bid constituting the Competing Permitted Bid; provided, however, that a take-over bid that has qualified as a Competing Permitted Bid shall cease to be a Competing Permitted Bid at any time and as soon as such time as when such take-over bid ceases to meet any or all of the foregoing provisions of the definition of "Competing Permitted Bid" and any acquisition of Common Shares and/or Convertible Securities made pursuant to such take-over bid that qualified as a Competing Permitted Bid, including any acquisition of Common Shares and/or Convertible Securities made before such take-over bid ceased to be a Competing Permitted Bid, will not be a "Permitted Bid Acquisition" (as defined in the Rights Plan).

*Waiver and Redemption*

The Board may, prior to the occurrence of a Flip-in Event, waive the dilutive effects of the Rights Plan in respect of, among other things, a particular Flip-in Event resulting from a take-over bid made by way of a take-over bid circular to all holders of our Common Shares. In such an event, such waiver shall also be deemed to be a waiver in respect of any other Flip-in Event occurring under a take-over bid made by way of a take-over bid circular to all holders of Common Shares prior to the expiry of the first mentioned take-over bid.

The Board may, with the approval of a majority of Independent Shareholders (or, after the Separation Time has occurred, holders of rights, other than rights which are void pursuant to the provisions of the Rights Plan or which, prior to the Separation Time, are held otherwise than by Independent Shareholders), at any time prior to the occurrence of a Flip-in Event which has not been waived, elect to redeem all, but not less than all, of the then outstanding rights at a price of CAN$0.00001 each, appropriately adjusted as provided in the Rights Plan (the "**Redemption Price**").

Where a take-over bid that is not a Permitted Bid or Competing Permitted Bid is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board may elect to redeem all the outstanding rights at the Redemption Price without the consent of the holders of the Common Shares or the rights and reissue rights under the Rights Plan to holders of record of Common Shares immediately following such redemption. Upon the rights being so redeemed and reissued, all the provisions of the Rights Plan will continue to apply as if the Separation Time had not occurred, and the Separation Time will be deemed not to have occurred and we shall be deemed to have issued replacement rights to the holders of its then outstanding Common Shares.

*Amendment to the Rights Plan*

The Rights Plan may be amended to correct any clerical or typographical error or to make such changes as are required to maintain the validity of the Rights Plan as a result of any change in any applicable legislation, regulations or rules thereunder, without the approval of the holders of the Common Shares or rights. Prior to the Separation Time, we may, with the prior consent of the holders of Common Shares, amend, vary or delete any of the provisions of the Rights Plan in order to effect any changes which the Board, acting in good faith, considers necessary or desirable. We may, with the prior consent of the holders of rights, at any time after the Separation Time and before the Expiration Time, amend, vary or delete any of the provisions of the Rights Plan.

*Protection Against Dilution*

The Exercise Price, the number and nature of securities which may be purchased upon the exercise of rights and the number of rights outstanding are subject to adjustment from time to time to prevent dilution in the event of stock dividends, subdivisions, consolidations, reclassifications or other changes in the outstanding Common Shares, pro rata distributions to holders of Common Shares and other circumstances where adjustments are required to appropriately protect the interests of the holders of rights.

*Fiduciary Duty of Board*

The Rights Plan will not detract from or lessen the duty of the Board to act honestly and in good faith with a view to our best interests and the best interests of our shareholders. The Board will continue to have the duty and power to take such actions and make such recommendations to our shareholders as are considered appropriate.

*Exemptions for Investment Advisors*

Fund managers, investment advisors (for fully-managed accounts), trust companies (acting in their capacities as trustees and administrators), statutory bodies whose business includes the management of funds, and administrators of registered pension plans are exempt from triggering a Flip-in Event, provided that they are not making, or are not part of a group making, a take-over bid.

*Term*

The Rights Plan will expire on the earlier of (i) the Termination Time; and (ii) the Close of Business on the date of every third annual meeting of the Company following the annual meeting of the Company to held in 2025 (each such annual meeting being a "**Reconfirmation Meeting**") occurs and at which the Rights Plan is not reconfirmed or presented for reconfirmation as contemplated in the Rights Plan (the "**Expiration Time**").

**Action Necessary to Change Rights of Shareholders**

In order to change the rights of our shareholders, we would need to amend our Articles to effect the change. Such an amendment would require the approval of holders of two-thirds of the issued and outstanding shares cast at a duly called special meeting. For certain amendments, a shareholder is entitled under the CBCA to dissent in respect of such a resolution amending the Articles and, if the resolution is adopted and we implement such changes, demand payment of the fair value of its shares.

**Disclosure of Share Ownership**

In general, under applicable securities regulation in Canada, a person or company who beneficially owns, or who directly or indirectly exercises control or direction over voting securities of a reporting issuer, voting securities of an issuer or a combination of both, carrying more than ten percent of the voting rights attached to all the issuer's outstanding voting securities is an insider and must, within ten days of becoming an insider, file a report in the required form effective the date on which the person became an insider, disclosing any direct or indirect beneficial ownership of, or control or direction over, securities of the reporting issuer.

Additionally, securities regulation in Canada provides for the filing of a report by an insider of a reporting issuer whose holdings change, which report must be filed within five days from the day on which the change takes place.

Section 13 of the Exchange Act imposes reporting requirements on persons who acquire beneficial ownership (as such term is defined in the Rule 13d-3 under the Exchange Act) of more than five percent of a class of an equity security registered under Section 12 of the Exchange Act. Our Common Shares are so registered. In general, such persons must file, within ten days after such acquisition, a report of beneficial ownership with the SEC containing the information prescribed by the regulations under Section 13 of the Exchange Act. This information is also required to be sent to the issuer of the securities and to each exchange where the securities are traded.

The bylaws of the Company do not require disclosure of share ownership.

**Meeting of Shareholders**

An annual meeting of shareholders is held each year for the purpose of considering the financial statements and reports, electing directors, appointing auditors and fixing or authorizing the Board to fix their remuneration and for the transaction of other business as may properly come before a meeting of shareholders. Any annual meeting may also constitute a special meeting to take cognizance and dispose of any matter of which a special meeting may take cognizance and dispose. Under the bylaws, our Chief Executive Officer or our President has the power to call a meeting of shareholders.

The CBCA provides that the holders of not less than 5% of our outstanding voting shares may requisition our directors to call a meeting of shareholders for the purpose stated in the requisition. Except in limited circumstances, including where a meeting of shareholders has already been called and a notice of meeting already given or where it is clear that the primary purpose of the requisition is to redress a personal grievance against us or our directors, officers or shareholders, our directors, on receipt of such requisition, must call a meeting of shareholders. If the directors fail to call a meeting of shareholders within twenty-one days after receiving the requisition, any shareholder who signed the requisition may call the meeting of shareholders and, unless the shareholders resolve otherwise at the meeting, we shall reimburse the shareholders for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting of shareholders.

The CBCA also provides that, except in limited circumstances, a resolution in writing signed by all of the shareholders entitled to vote on that resolution at a meeting of shareholders is as valid as if it had been passed at a meeting of shareholders.

A quorum of shareholders is present at an annual or special meeting of shareholders, regardless of the number of persons present in person at the meeting, if the holder(s) of shares representing at least 10% of the outstanding voting shares at such meeting are present in person or represented in accordance with our bylaws. In the case where the CBCA, our Articles or our bylaws require or permit the vote by class of holders of a given class of shares of our share capital, the quorum at any meeting will be one or more persons representing 10% of the outstanding shares of such class.

Notice of the time and place of each annual or special meeting of shareholders must be given not less than 21 days, nor more than 50 days, before the date of each meeting to each director, to the auditor and to each shareholder entitled to vote thereat. If the address of any shareholder, director or auditor does not appear in our books, the notice may be sent to such address as the person sending the notice may consider to be most likely to reach such shareholder, director or auditor promptly. Every person who, by operation of the CBCA, transfers or by any other means whatsoever, becomes entitled to any share, shall be bound by every notice given in respect of such share which, prior to the entry of his or her name and address on our register, is given to the person whose name appears on the register at the time such notice is sent. Notice of meeting of shareholders called for any other purpose other than consideration of the financial statements and auditor's report, election of directors and reappointment of the incumbent auditor, must state the nature of the business in sufficient detail to permit the shareholder to form a reasoned judgment on and must state the text of any special resolution or bylaw to be submitted to the meeting.

Our bylaws include an advance notice provision (the "**Advance Notice Requirement**"). The Advance Notice Requirement applies in certain circumstances where nominations of persons for election to the Board are made by our shareholders other than pursuant to: (a) a requisition of a meeting made pursuant to the provisions of the CBCA; or (b) a shareholder proposal made pursuant to the provisions of the CBCA.

Among other things, the Advance Notice Requirement fixes a deadline by which shareholders must submit a notice of director nominations to us prior to any annual or special meeting of shareholders where directors are to be elected and sets forth the information that a shareholder must include in the notice for it to be valid. In the case of an annual meeting of shareholders, we must be given not less than 30 nor more than 65 days' notice prior to the date of the annual meeting; provided, however, that in the event that the annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of the date of the annual meeting was made, notice may be made not later than the close of business on the 10<sup>th</sup> day following such public announcement. In the case of a special meeting of shareholders (which is not also an annual meeting), we must be given notice not later than the close of business on the 15<sup>th</sup> day following the day on which the first public announcement of the date of the special meeting was made.

The Board may, in its sole discretion, waive any requirement of the Advance Notice Requirement.

**Limitations on Right to Own Securities** 

Neither Canadian law nor our Articles or bylaws limit the right of a non-resident to hold or vote our Common Shares, other than as provided in the *Investment Canada Act* (the "**Investment Act**").

The Investment Act requires any person that is a "non-Canadian" (as defined in the Investment Act) who acquires "control" (as defined in the Investment Act) of an existing Canadian business to file either a pre-closing application for review or a post-closing notification with Innovation, Science and Economic Development Canada.

As of the date hereof, the threshold for review of a direct acquisition of control of a non-cultural Canadian business by a World Trade Organization member country investor that is not a state-owned enterprise is an enterprise value of assets that exceeds CAN$1.452 billion. For "trade agreement investors" that are not state-owned enterprises (as defined in the Investment Act), the threshold for review of a direct acquisition of control of a non-cultural Canadian business is an enterprise value of assets that exceeds CAN$2.179 billion. The enterprise value review thresholds for both World Trade Organization member countries and trade agreement investors are indexed to annual GDP growth and are adjusted accordingly each year. For purposes of a publicly traded company, the "enterprise value" of the assets of the Canadian business is equal to the market capitalization of the entity, plus its liabilities (excluding its operating liabilities), minus its cash and cash equivalents.

As such, under the Investment Act, the acquisition of control of us (either through the acquisition of our Common Shares or all or substantially all our assets) by a non-Canadian who is a World Trade Organization member country investor or a trade agreement investor, including a U.S. investor, would be reviewable only if the enterprise value of our assets exceeds the specified threshold for review.

Where the acquisition of control is a reviewable transaction, the Investment Act generally prohibits the implementation of the reviewable transaction unless, after review, the relevant Minister is satisfied or deemed to be satisfied that the acquisition is likely to be of net benefit to Canada.

The acquisition of a majority of the voting interests of an entity is deemed to be acquisition of "control" of that entity. The acquisition of less than a majority but one-third or more of the total number of votes attached to all of the voting shares of a corporation or of an equivalent undivided ownership interest in the total number of votes attached to all of the voting shares of the corporation is presumed to be an acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquiror through the ownership of voting shares. The acquisition of less than one-third of the total number of votes attached to all of the voting shares of a corporation is deemed not to be acquisition of control of that corporation subject to certain discretionary rights relative to investments involving state-owned enterprises. Other than in connection with a "national security" review, discussed below, certain transactions in relation to our Common Shares would be exempt from the Investment Act including:

● the acquisition of our Common Shares by a person in the ordinary course of that person's business as a trader or dealer in securities;

● the acquisition or control of us in connection with the realization of security granted for a loan or other financial assistance and not for any purpose related to the provisions of the Investment Act, if the acquisition is subject to approval under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act or the Trust and Loan Companies Act; and

● the acquisition or control of us by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of us, through the ownership of our voting interests, remains unchanged.

Under the national security regime in the Investment Act, review on a discretionary basis may also be undertaken by the federal government in respect of a much broader range of investments by a non-Canadian to "acquire, in whole or in part, or to establish an entity carrying on all or any part of its operations in Canada". The relevant test is whether such an investment by a non-Canadian could be "injurious to national security". The Minister of Innovation, Science and Economic Development has broad discretion to determine whether an investor is a non-Canadian and therefore may be subject to national security review. Review on national security grounds is at the discretion of the federal government and may occur on a pre- or post-closing basis.

There is no law, governmental decree or regulation in Canada that restricts the export or import of capital, or which would affect the remittance of dividends or other payments by us to non-resident holders of our Common Shares, other than withholding tax requirements.

***C.***  ***Material contracts*** 

The following is a material agreement of the Company that is in effect as of the date hereof (other than certain agreements entered into in the ordinary course of business):

The Symrise Agreement is a supply and distribution agreement with Symrise AG with respect to the distribution and commercialization of Ceapro's high-value active ingredients to key international players in the cosmetics industry, effective from January 1, 2022 until December 31, 2026. Under the Symrise Agreement, Symrise AG is obligated to purchase minimum annual volumes of Ceapro's products unless (i) there is a force majeure event, or (ii) there is a decrease or cessation of any customer's purchase of the products from Symrise due to a formulation change by such customers, as more particularly set forth in the Symrise Agreement.

***D.***  ***Exchange controls*** 

Canada has no system of exchange controls. There are no exchange restrictions on borrowing from foreign countries or on the remittance of dividends, interest, royalties and similar payments, management fees, loan repayments, settlement of trade debts or the repatriation of capital.

***E.***  ***Taxation*** 

THE FOLLOWING SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER. CONSEQUENTLY, HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS FOR ADVICE AS TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE COMMON SHARES HAVING REGARD TO THEIR PARTICULAR CIRCUMSTANCES.

**Material Canadian Income Tax Considerations** 

The following summary describes the principal Canadian federal income tax considerations applicable to a holder of Common Shares and who, for the purposes of the Canadian federal *Income Tax Act*, R.S.C. 1985, as amended (the "**Tax Act**"), and at all relevant times, deals at arm's length with, and is not affiliated with, the Company and holds their Common Shares as capital property (a "**holder**"). Common Shares will generally be considered to be capital property to a holder for purposes of the Tax Act unless either the holder holds such Common Shares in the course of carrying on a business of trading or dealing in securities, or the holder has held or acquired such Common Shares in a transaction or transactions considered to be an adventure in the nature of trade.

This summary is not applicable to a holder (i) that is a "financial institution", as defined in the Tax Act for purposes of the mark-to- market rules, (ii) that is a "specified financial institution", as defined in the Tax Act, (iii) an interest in which would be a "tax shelter investment" as defined in the Tax Act, (iv) that has made a functional currency reporting election for purposes of the Tax Act, (v) that has entered or will enter into a "derivative forward agreement", as defined in the Tax Act, in respect of Common Shares, or (vi) that receives dividends on Common Shares under or as part of a dividend rental arrangement as defined in the Tax Act. Such holders should consult their own tax advisors.

Additional considerations, not discussed herein, may be applicable to a holder that is a corporation resident in Canada, and is, or becomes, or does not deal at arm's length for purposes of the Tax Act with a corporation resident in Canada that is or becomes, as part of a transaction or series of transactions or events that includes the acquisition of the Common Shares, controlled by a non-resident person or a group of non-resident persons not dealing with each other at arm's length for the purposes of the "foreign affiliate dumping" rules in section 212.3 of the Tax Act. Such holders should consult their tax advisors with respect to the consequences of acquiring Common Shares.

This summary is based upon the current provisions of the Tax Act and the regulations promulgated thereunder (the "**Regulations**") and the Company's understanding of the current published administrative policies and assessing practices of the Canada Revenue Agency ("**CRA**"). It also takes into account all proposed amendments to the Tax Act and the Regulations publicly released by the Minister of Finance (Canada) prior to the date hereof ("**Tax Proposals**"), and assumes that all such Tax Proposals will be enacted as currently proposed. No assurance can be given that the Tax Proposals will be enacted in the form proposed or at all. This summary does not otherwise take into account or anticipate any changes in law or administrative or assessing practice or policy of the CRA, whether by legislative, regulatory, judicial or administrative action or interpretation, nor does it address any provincial, local, territorial or foreign tax considerations.

For purposes of the Tax Act, all amounts, including dividends, adjusted cost base and proceeds of disposition, must generally be determined in Canadian dollars. Amounts denominated in a foreign currency must be converted to Canadian currency using exchange rates determined in accordance with the Tax Act. The amount of any capital gain or any capital loss to a holder with respect to the Common Shares may be affected by fluctuations in Canadian dollar exchange rates.

***Holders Not Resident in Canada***

The following discussion applies to a holder who, at all relevant times, for purposes of the Tax Act, is neither resident nor deemed to be resident in Canada and does not, and is not deemed to, use or hold Common Shares in carrying on a business or part of a business in Canada (a "**Non-Resident holder**"). In addition, this discussion does not apply to an insurer who carries or is deemed to carry on, an insurance business in Canada and elsewhere, or to an authorized foreign bank.

*Disposition of Common Shares*

A Non-Resident holder generally will not be subject to tax under the Tax Act in respect of any capital gain realized by such Non- Resident holder on a disposition or deemed disposition of Common Shares unless such shares constitute "taxable Canadian property" (as defined in the Tax Act) of the Non-Resident holder at the time of disposition and the gain is not exempt from tax pursuant to the terms of an applicable income tax treaty or convention. As long as the Common Shares are listed on a designated stock exchange (which currently includes the TSX) at the time of their disposition, the Common Shares generally will not constitute taxable Canadian property of a Non-Resident holder, unless (a) at any time during the 60-month period immediately preceding the disposition (i) one or any combination of (A) the Non-Resident holder, (B) persons with whom the Non-Resident holder did not deal at arm's length, and (C) partnerships in which the Non-Resident holder or a person described in (B) holds a membership interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of shares of the Company; and (ii) more than 50% of the fair market value of the shares of the Company was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, "Canadian resource properties" (as defined in the Tax Act), "timber resource properties" (as defined in the Tax Act) or options in respect of, or interests in, or for civil law rights in, any such property whether or not such property exists or (b) the Common Shares are otherwise deemed to be taxable Canadian property to the Non-Resident holder.

A Non-Resident holder's capital gain (or capital loss) in respect of Common Shares that constitute or are deemed to constitute taxable Canadian property (and are not "treaty-protected property" as defined in the Tax Act) will generally be computed in the manner described below under the heading "Holders Resident in Canada - Disposition of Common Shares". If the Common Shares were to cease being listed on the TSX or another "recognized stock exchange" (as defined in the Tax Act), a Non-Resident holder who disposes of Common Shares that are taxable Canadian property may be required to fulfill the requirements of section 116 of the Tax Act, unless the Common Shares are "treaty-protected property" (as defined in the Tax Act) of the disposing Non-Resident holder.

Non-Resident holders whose Common Shares are taxable Canadian property should consult their own tax advisors.

*Taxation of Dividends on Common Shares*

Dividends paid or credited or deemed to be paid or credited to a Non-Resident holder by the Company are subject to Canadian withholding tax at the rate of 25% unless reduced by the terms of an applicable tax treaty or convention. Under the Canada - United States Tax Convention (1980) (the "**Convention**") as amended, the rate of withholding tax on dividends paid or credited to a Non-Resident holder who is the beneficial owner of the dividends, is resident in the U.S. for purposes of the Convention and entitled to the benefits of the Convention (a "**U.S. holder**") is generally limited to 15% of the gross amount of the dividend (or 5% in the case of a U.S. holder that is a company beneficially owning at least 10% of the Company's voting shares). Non-Resident holders should consult their own tax advisors.

***Holders Resident in Canada***

The following discussion applies to a holder of Common Shares who, at all relevant times, for purposes of the Tax Act, is or is deemed to be resident in Canada (a "**Canadian holder**"). Certain Canadian holders whose Common Shares might not otherwise qualify as capital property may, in certain circumstances, treat the Common Shares and every other "Canadian security" (as defined in the Tax Act) owned by the Canadian holder as capital property by making an irrevocable election provided by subsection 39(4) of the Tax Act. Canadian holders should consult their own tax advisors for advice as to whether an election under subsection 39(4) of the Tax Act is available and/or advisable in their particular circumstances.

*Taxation of Dividends on Common Shares*

Dividends received or deemed to have been received on the Common Shares will be included in a Canadian holder's income for purposes of the Tax Act. Such dividends received or deemed to have been received by a Canadian holder that is an individual (other than certain trusts) will be subject to the gross-up and dividend tax credit rules generally applicable under the Tax Act in respect of dividends received on shares of taxable Canadian corporations. Generally, a dividend will be eligible for the enhanced gross-up and dividend tax credit if the Company designates the dividend as an "eligible dividend" (within the meaning of the Tax Act) in accordance with the provisions of the Tax Act. There may be limitations on the ability of the Company to designate dividends as eligible dividends. A Canadian holder that is a corporation will be required to include such dividends in computing its income and will generally be entitled to deduct the amount of such dividends in computing its taxable income. In certain circumstances, subsection 55(2) of the Tax Act may treat a taxable dividend received by a Canadian holder that is a corporation as proceeds of disposition or a capital gain. A Canadian holder that is a "private corporation" or a "subject corporation" (as such terms are defined in the Tax Act), may be liable under Part IV of the Tax Act to pay a refundable tax on dividends received or deemed to have been received on the Common Shares to the extent such dividends are deductible in computing the holder's taxable income.

 

*Disposition of Common Shares*

A disposition, or a deemed disposition, of a Common Share by a Canadian holder will generally give rise to a capital gain (or a capital loss) equal to the amount by which the proceeds of disposition of the share, net of any reasonable costs of disposition, exceed (or are less than) the adjusted cost base of the share to the holder. Such capital gain (or capital loss) will be subject to the treatment described below under "Taxation of Capital Gains and Capital Losses".

*Additional Refundable Tax*

A Canadian holder that is throughout the relevant taxation year a "Canadian-controlled private corporation" as defined in the Tax Act, or, that is at any time in the relevant taxation year a "substantive CCPC" as defined in the Tax Act, may be liable to pay an additional tax (refundable under certain circumstances) on its "aggregate investment income" as defined in the Tax Act, including certain dividends and taxable capital gains. Any such Canadian Holder should consult with their own advisors in this regard.

*Taxation of Capital Gains and Capital Losses*

In general, one half of any capital gain (a "**Taxable Capital Gain**") realized by a Canadian holder in a taxation year will be included in the holder's income in the year. Subject to and in accordance with the provisions of the Tax Act, one half of any capital loss (an "**Allowable Capital Loss**") realized by a Canadian holder in a taxation year must be deducted from Taxable Capital Gains realized by the holder in the year and Allowable Capital Losses in excess of Taxable Capital Gains may be carried back and deducted in any of the three preceding taxation years or carried forward and deducted in any subsequent taxation year against net Taxable Capital Gains realized in such years. The amount of any capital loss realized by a Canadian holder that is a corporation on the disposition or deemed disposition of a Common Share may be reduced by the amount of dividends received or deemed to have been received by it on such Common Share (or on a share for which the Common Share has been substituted) to the extent and under the circumstances prescribed by the Tax Act. Similar rules may apply where a corporation is a member of a partnership or a beneficiary of a trust that owns Common Shares, directly or indirectly, through a partnership or a trust.

*Alternative Minimum Tax*

A Taxable Capital Gain realized and taxable dividends received or deemed to have been received by a Canadian holder who is an individual (including a trust, other than certain specified trusts) may give rise to liability for alternative minimum tax.

**Material U.S. Federal Income Tax Considerations**

The following discussion is a summary of the material U.S. federal income tax consequences applicable to the purchase, ownership and disposition of Common Shares by a U.S. Holder (as defined below), but does not purport to be a complete analysis of all potential U.S. federal income tax considerations for any particular U.S. Holder. This summary is based on the Code, U.S. Treasury regulations promulgated thereunder, published rulings of the U.S. Internal Revenue Service (the "**IRS**") and judicial decisions in effect on the date hereof. All of these are subject to change, possibly with retroactive effect, or different interpretations. This summary does not discuss the potential effects, whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive basis. This summary is not binding on the IRS, and the IRS is not precluded from taking a position that is different from, and contrary to, the positions taken in this summary. If the IRS were to take such a position, no assurance can be given that a court would not sustain the IRS' position.

This summary does not address all aspects of U.S. federal income taxation that may be relevant to particular U.S. Holders in light of their specific circumstances (for example, U.S. Holders subject to the alternative minimum tax or the Medicare contribution tax on net investment income under the Code) or to U.S. Holders that may be subject to special rules under U.S. federal income tax law, including:

● dealers in stocks, securities or currencies;

● securities traders that use a mark-to-market accounting method;

● banks and financial institutions;

● insurance companies;

● regulated investment companies;

● real estate investment trusts;

● tax-exempt organizations;

● retirement plans, individual retirement accounts and tax-deferred accounts;

● partnerships or other pass-through entities for U.S. federal income tax purposes and their partners or members;

● persons holding Common Shares as part of a hedging or conversion transaction straddle or other integrated or risk reduction transaction;

● Former U.S. citizens or long term U.S. residents;

● persons whose functional currency is not the U.S. dollar; and

● direct, indirect or constructive owners of 10% or more of the total combined voting power of all classes of our voting stock or 10% or more of the total value of shares of all classes of our stock.

This summary also does not address the tax consequences of holding, exercising or disposing of warrants in the Company. If the Company is a PFIC, as described below, U.S. Holders of its warrants will be subject to adverse tax rules and will not be able to make the mark-to-market or the QEF election described below with respect to such warrants. U.S. Holders of warrants should consult their own tax advisors with regard to the U.S. federal income tax consequences of holding, exercising or disposing of warrants in the Company, including in the situation in which the Company is classified as a PFIC.

This summary also does not discuss any aspect of state, local or non-U.S. law, or estate or gift tax law as applicable to U.S. Holders. In addition, this discussion is limited to U.S. Holders holding Common Shares as capital assets (generally, property held for investment). For purposes of this summary, "U.S. Holder" means a beneficial holder of Common Shares who or that for U.S. federal income tax purposes is:

● an individual citizen or resident of the U.S.;

● a corporation or other entity classified as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;

● an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

● a trust, if (a) a court within the U.S. is able to exercise primary supervision over the administration of such trust and one or more "U.S. persons" (within the meaning of the Code) have the authority to control all substantial decisions of the trust, or (b) a valid election is in effect to be treated as a U.S. person for U.S. federal income tax purposes.

If a partnership or other entity or arrangement classified as a partnership for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax treatment of a partner generally will depend on the status of the partner and the activities of the partnership. This summary does not address the tax consequences to any such partnership or partner. Such a partnership or partner should consult its own tax advisor as to the tax consequences of the partnership purchasing, owning and disposing of Common Shares.

U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH REGARD TO THE APPLICATION OF THE TAX CONSEQUENCES DESCRIBED BELOW TO THEIR PARTICULAR SITUATIONS AS WELL AS THE APPLICATION OF ANY STATE, LOCAL, NON-U.S. OR OTHER TAX LAWS, INCLUDING GIFT AND ESTATE TAX LAWS.

*Tax Consequences if we are a Passive Foreign Investment Company ("**PFIC**")*

A foreign corporation will be classified as a PFIC for any taxable year in which, after taking into account the income and assets of the corporation and certain subsidiaries pursuant to applicable "look-through rules", either (i) at least 75% of its gross income is "passive income" or (ii) at least 50% of the average quarterly value of its assets is attributable to assets which produce passive income or are held for the production of passive income. Passive income generally includes dividends, interest, rents and royalties (other than certain rents and royalties derived in the active conduct of a trade or business), annuities and gains from assets that produce passive income. If a non-U.S. corporation owns at least 25% by value of the stock of another corporation, the non-U.S. corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation's income.

The Company believes that it was a PFIC for its 2015 taxable year, but not for any taxable year thereafter. However, the fair market value of the Company's assets may be determined in large part by the market price of the Common Shares, which is likely to fluctuate, and the composition of the Company's income and assets will be affected by how, and how quickly, the Company spends any cash that is raised in any financing transaction. Thus, no assurance can be provided that the Company will not be classified as a PFIC for the 2026 taxable year or any future taxable year. U.S. Holders should consult their own tax advisors regarding the Company's PFIC status.

If the Company is classified as a PFIC for any taxable year during which a U.S. Holder owns Common Shares, the U.S. Holder, absent certain elections (including the mark-to-market and QEF elections described below), will generally be subject to adverse rules (regardless of whether the Company continues to be classified as a PFIC) with respect to (i) any "excess distributions" (generally, any distributions received by the U.S. Holder on the Common Shares in a taxable year that are greater than 125% of the average annual distributions received by the U.S. Holder in the three preceding taxable years or, if shorter, the U.S. Holder's holding period for the Common Shares) and (ii) any gain realized on the sale or other disposition of the Common Shares.

Under these adverse rules (a) the excess distribution or gain will be allocated ratably over the U.S. Holder's holding period, (b) the amount allocated to the current taxable year and any taxable year prior to the first taxable year in which the Company is classified as a PFIC will be taxed as ordinary income and (c) the amount allocated to each of the other taxable years during which the Company was classified as a PFIC will be subject to tax at the highest rate of tax in effect for the applicable category of taxpayer for that year and an interest charge will be imposed with respect to the resulting tax attributable to each such other taxable year. A U.S. Holder that is not a corporation will be required to treat any such interest paid as "personal interest", which is not deductible.

U.S. Holders can avoid the adverse rules described above in part by making a mark-to-market election with respect to the Common Shares, provided that the Common Shares are "marketable". The Common Shares will be marketable if they are "regularly traded" on a "qualified exchange" or other market within the meaning of applicable U.S. Treasury regulations. For this purpose, the Common Shares generally will be considered to be regularly traded during any calendar year during which they are traded, other than in de minimis quantities, on at least 15 days during each calendar quarter. The Common Shares are currently listed on the TSX, which we believe constitutes a qualified exchange; however, there can be no assurance that the Common Shares will be treated as regularly traded for purposes of the mark-to-market election on a qualified exchange. If the Common Shares were not regularly traded on the TSX or were delisted from the TSX and were not traded on another qualified exchange for the requisite time period described above, the mark-to-market election would not be available.

A U.S. Holder that makes a mark-to-market election must include in gross income, as ordinary income, for each taxable year an amount equal to the excess, if any, of the fair market value of the U.S. Holder's Common Shares at the close of the taxable year over the U.S. Holder's adjusted tax basis in the Common Shares. An electing U.S. Holder may also claim an ordinary loss deduction for the excess, if any, of the U.S. Holder's adjusted tax basis in the Common Shares over the fair market value of the Common Shares at the close of the taxable year, but this deduction is allowable only to the extent of any net mark-to-market gains previously included in income. A U.S. Holder that makes a mark-to-market election generally will adjust such U.S. Holder's tax basis in the Common Shares to reflect the amount included in gross income or allowed as a deduction because of such mark-to-market election. Gains from an actual sale or other disposition of the Common Shares will be treated as ordinary income, and any losses incurred on a sale or other disposition of the Common Shares will be treated as ordinary losses to the extent of any net mark-to-market gains previously included in income.

If the Company is classified as a PFIC for any taxable year in which a U.S. Holder owns Common Shares but before a mark-to-market election is made, the adverse PFIC rules described above will apply to any mark-to-market gain recognized in the year the election is made. Otherwise, a mark-to-market election will be effective for the taxable year for which the election is made and all subsequent taxable years. The election cannot be revoked without the consent of the IRS unless the Common Shares cease to be marketable, in which case the election is automatically terminated.

If the Company is classified as a PFIC, a U.S. Holder of Common Shares will generally be treated as owning stock owned by the Company in any direct or indirect subsidiaries that are also PFICs and will be subject to similar adverse rules with respect to distributions to the Company by, and dispositions by the Company of, the stock of such subsidiaries. A mark-to-market election is not permitted for the shares of any subsidiary of the Company that is also classified as a PFIC. U.S. Holders should consult their own tax advisors regarding the availability of, and procedure for making, a mark-to-market election.

In some cases, a shareholder of a PFIC can avoid the interest charge and the other adverse PFIC consequences described above by making a QEF election to be taxed currently on its share of the PFIC's undistributed income. We will endeavor to satisfy the record keeping requirements that apply to a QEF and to supply requesting U.S. Holders with the information that such U.S. Holders are required to report under the QEF rules. However, there can be no assurance that the Company will satisfy the record keeping requirements or provide the information required to be reported by U.S. Holders. Therefore, no assurance can be given that a U.S. Holder will be able to make a QEF election with respect to its Common Shares.

A U.S. Holder that makes a timely and effective QEF election for the first tax year in which its holding period of its Common Shares begins generally will not be subject to the adverse PFIC consequences described above with respect to its Common Shares. Rather, a U.S. Holder that makes a timely and effective QEF election will be subject to U.S. federal income tax on such U.S. Holder's pro rata share of (a) the Company's net capital gain, which will be taxed as long-term capital gain to such U.S. Holder, and (b) the Company's ordinary earnings, which will be taxed as ordinary income to such U.S. Holder, in each case regardless of which such amounts are actually distributed to the U.S. Holder by the Company. Generally, "net capital gain" is the excess of (i) net long-term capital gain over (ii) net short-term capital loss, and "ordinary earnings" are the excess of (A) "earnings and profits" over (B) net capital gain.

A U.S. Holder that makes a timely and effective QEF election with respect to the Company generally (a) may receive a tax-free distribution from us to the extent that such distribution represents "earnings and profits" that were previously included in income by the U.S. Holder because of such QEF election and (b) will adjust such U.S. Holder's tax basis in the Common Shares to reflect the amount included in income or allowed as a tax-free distribution because of such QEF election. In addition, a U.S. Holder that makes a QEF election generally will recognize capital gain or loss on the sale or other taxable disposition of Common Shares.

The QEF election is made on a shareholder-by-shareholder basis. Once made, a QEF election will apply to the tax year for which the QEF election is made and to all subsequent tax years, unless the QEF election is invalidated or terminated or the IRS consents to revocation of the QEF election. In addition, if a U.S. Holder makes a QEF election, the QEF election will remain in effect (although it will not be applicable) during those tax years in which the Company is not a PFIC.

If the Company is classified as a PFIC and then ceases to be so classified, a U.S. Holder may make an election (a "**deemed sale election**") to be treated for U.S. federal income tax purposes as having sold such U.S. Holder's Common Shares on the last day of the taxable year of the Company during which it was a PFIC. A U.S. Holder that made a deemed sale election would then cease to be treated as owning stock in a PFIC by reason of ownership of Common Shares in the Company. However, gain recognized as a result of making the deemed sale election would be subject to the adverse rules described above and loss would not be recognized.

If the Company is a PFIC in any year with respect to a U.S. Holder, the U.S. Holder will be required to file an annual information return on IRS Form 8621 regarding distributions received on Common Shares and any gain realized on the disposition of Common Shares.

In addition, if the Company is a PFIC, U.S. Holders will generally be required to file an annual information return with the IRS (also on IRS Form 8621) with their U.S. federal income tax returns relating to their ownership of Common Shares.

U.S. Holders should consult their on tax advisors regarding the potential application of the PFIC regime and any reporting obligations to which they may be subject under that regime in light of their own circumstances.

*Dividends*

Subject to the PFIC rules discussed above, any distributions paid by the Company out of current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), before reduction for any Canadian withholding tax paid with respect thereto, will generally be taxable to a U.S. Holder as foreign source dividend income, and generally will not be eligible for the dividends received deduction generally allowed to corporations.

Distributions in excess of current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S. Holder's adjusted tax basis in the Common Shares and thereafter as capital gain. The Company does not, however, intend to calculate its earnings and profits under U.S. federal income tax principles. Therefore, U.S. Holders should expect that any distribution from the Company generally will be treated for U.S. federal income tax purposes as a dividend. U.S. Holders should consult their own tax advisors with respect to the appropriate U.S. federal income tax treatment of any distribution received from the Company.

Dividends paid to non-corporate U.S. Holders by the Company in a taxable year in which it is treated as a PFIC, or in the immediately following taxable year, will not be eligible for the special reduced rates normally applicable to long-term capital gains. In all other taxable years, dividends paid by the Company should be taxable to a non-corporate U.S. Holder at the special reduced rates normally applicable to long-term capital gains, provided that certain conditions are satisfied. (including a minimum holding period requirement). The Company believes it was not a PFIC for the 2025 taxable year. However, no assurance can be provided that the Company will not be classified as a PFIC for 2026 and, therefore, no assurance can be provided that a U.S. Holder will be able to claim a reduced rate for dividends paid in 2026 or in any future year (if any).

Under current law, payments of dividends by the Company to non-Canadian investors are generally subject to a 25% Canadian withholding tax. The rate of withholding tax applicable to U.S. Holders that are eligible for benefits under the Canada-United States income tax treaty (the "**Convention**") is reduced to a maximum of 15% (or 5% in the case of a U.S. holder that is a company that beneficially owns at least 10% of the Company's voting shares). This reduced rate of withholding will not apply if the dividends received by a U.S. Holder are effectively connected with a permanent establishment of the U.S. Holder in Canada. For U.S. federal income tax purposes, U.S. Holders will be treated as having received the amount of Canadian taxes withheld by the Company, and as then having paid over the withheld taxes to the Canadian taxing authorities. As a result of this rule, the amount of dividend income included in gross income for U.S. federal income tax purposes by a U.S. Holder with respect to a payment of dividends may be greater than the amount of cash actually received (or receivable) by the U.S. Holder from the Company with respect to the payment.

Subject to certain limitations, a U.S. Holder will generally be entitled, at the election of the U.S. Holder, to a credit against its U.S. federal income tax liability, or a deduction in computing its U.S. federal taxable income, for Canadian taxes withheld on distributions by the Company. This election is made on a year-by-year basis and applies to all foreign taxes paid (whether directly or through withholding) by a U.S. Holder during a year. For purposes of the foreign tax credit limitation, dividends paid by the Company generally will constitute foreign source income in the "passive category income" basket. The foreign tax credit rules are complex and U.S. Holders should consult their own tax advisors concerning the availability of the foreign tax credit in light of their own particular circumstances.

Dividends paid in Canadian dollars will be included in the gross income of a U.S. Holder in a U.S. dollar amount calculated by reference to the exchange rate in effect on the date the U.S. Holder (actually or constructively) receives the dividend, regardless of whether such Canadian dollars are actually converted into U.S. dollars at that time. If the Canadian dollars received are not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the Canadian dollars equal to their U.S. dollar value on the date of receipt. Gain or loss, if any, realized on a sale or other disposition of the Canadian dollars will generally be U.S. source ordinary income or loss to a U.S. Holder.

The Company generally does not pay any dividends and does not anticipate paying any dividends in the foreseeable future.

*Sale, Exchange or Other Taxable Disposition of Common Shares*

Subject to the PFIC rules discussed above, upon a sale, exchange or other taxable disposition of Common Shares, a U.S. Holder generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference, if any, between the amount realized on the sale, exchange or other taxable disposition and the U.S. Holder's adjusted tax basis in the Common Shares.

This capital gain or loss will be long-term capital gain or loss if the U.S. Holder's holding period in the Common Shares exceeds one year. The deductibility of capital losses is subject to limitations. Any gain or loss will generally be U.S. source for U.S. foreign tax credit purposes.

 

*Information Reporting and Backup Withholding*

Payments made within the U.S., or by a U.S. payor or U.S. middleman, of dividends on, and proceeds arising from sales or other dispositions of Common Shares, generally will be reported to the IRS and to the U.S. Holder as required under applicable regulations. Backup withholding may apply to these payments if the U.S. Holder fails to timely provide in the appropriate manner an accurate taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding requirements. Certain U.S. Holders are not subject to the information reporting or backup withholding requirements described herein. U.S. Holders should consult their own tax advisors as to their qualification for exemption from backup withholding and the procedure for establishing an exemption.

Backup withholding is not an additional tax. U.S. Holders generally will be allowed a refund or credit against their U.S. federal income tax liability for amounts withheld, provided the required information is timely furnished to the IRS.

Subject to certain exceptions and future guidance, a U.S. Holder that is a "specified individual" or a "specified domestic entity" (as defined in the instructions to IRS Form 8938) must report annually to the IRS on IRS Form 8938 such U.S. Holder's interests in stock or securities issued by a non-U.S. person (such as the Company). U.S. Holders should consult their own tax advisors regarding the information reporting obligations that may arise from their acquisition, ownership or disposition of Common Shares.

***F.***  ***Dividends and paying agents*** 

We have never declared nor paid dividends on our securities and do not have paying agents therefor. We currently expect to retain future earnings, if any, for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay dividends on our securities is subject to the discretion of our Board of Directors and will depend upon various factors, including, without limitation, our results of operations and financial condition.

***G.***  ***Statement by experts*** 

Not required.

***H.***  ***Documents on display*** 

In addition to placing our audited consolidated annual financial statements before every annual meeting of shareholders as described above, we are subject to the information requirements of the Securities Exchange Act of 1934, as amended. In accordance with these requirements, we file and furnish reports and other information with the SEC. These materials, including this Annual Report on Form 20-F and the exhibits hereto, may be inspected and copied at the SEC's Public Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. The public may obtain information on the operation of the SEC's Public Reference Room by calling the SEC in the U.S. at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding registrants that file electronically with the SEC. Our annual reports and some of the other information we submitted to the SEC may be accessed through this website. In addition, material we filed can be inspected on the CSA's electronic filing system, SEDAR+, accessible at the website www.sedarplus.ca. This material includes our Management Information Circular for our annual meeting of shareholders to be held in 2026 to be furnished to the SEC on Form 6-K, which provides information including directors' and officers' remuneration and indebtedness and principal holders of securities. Additional financial information is provided in our audited annual financial statements for the year ended December 31, 2025 and our MD&A relating to these statements included elsewhere in this Annual Report on Form 20-F. These documents are also accessible on SEDAR+ (www.sedarplus.ca) and on EDGAR (www.sec.gov).

***I.***  ***Subsidiary information*** 

Not required.

**Item 11.** **Quantitative and Qualitative Disclosures About Market Risk**

**Fair value**

The Company classifies its financial instruments in the following categories: "Financial assets at amortized cost"; "Financial liabilities at amortized cost"; and "Fair value through the profit or loss".

● The Company's financial assets at amortized cost are comprised of cash and cash equivalents, trade and other receivables and restricted cash equivalents.

● Financial liabilities at amortized cost include payables and accrued liabilities, and lease liability.

The carrying values of all of the aforementioned financial instruments approximate their fair values due to their short-term maturity or to the prevailing interest rates of these instruments which are comparable to those of the market.

The Black-Scholes valuation methodology uses inputs in calculating fair value, as defined in IFRS 13, which establishes a hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

**Financial risk factors**

The following provides disclosures relating to the nature and extent of the Company's exposure to risks arising from financial instruments, including credit risk, liquidity risk and foreign exchange risk and how the Company manages those risks.

(a) Credit
 risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of this exposure resulting in losses. The Company's exposure to credit risk currently relates to the financial assets at amortized cost in the table above. The Company holds its available cash in amounts that are readily convertible to known amounts of cash and deposits its cash balances with financial institutions that have an investment grade rating of at least "P-2" or the equivalent. This information is supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial information to ensure that it invests its cash in creditworthy and reputable financial institutions. Once there are indicators that there is no reasonable expectation of recovery, such financial assets are written off but are still subject to enforcement activity.

As of December 31, 2025, one counterparty included in trade and other receivables comprised 45% of total receivables (2024 – one counterparty for 75%) of which $nil (2024 - $nil) was past due, considered to be impaired and fully provided for.

Generally, the Company does not require collateral or other security from customers for trade accounts receivable; however, credit is extended following an evaluation of creditworthiness. In addition, the Company performs ongoing credit reviews of all of its customers and determines expected credit losses. On this basis, as of December 31, 2025, the Company has provided for all outstanding and unpaid amounts relating to its operations.

The maximum exposure to credit risk approximates the amount recognized in the Company's consolidated statement of financial position.

(b) Liquidity
 risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages this risk through the management of its capital structure by monitoring rolling forecasts of the Company's cash and cash equivalents on the basis of expected cash flows.

All of the Company's financial liabilities except lease liabilities are current liabilities with expected settlement dates within one year. The maturity analysis for lease liabilities is disclosed in note 15.

While the Company has $7,307,028 in cash and cash equivalents at December 31, 2025, the Company has noted the existence of a material uncertainty that raises substantial doubt about the Company's ability to continue as a going concern.

(c) Foreign
 exchange risk

The Company is exposed to foreign exchange risk due to its investments in foreign operations whose functional currency is the Canadian Dollar. A table summarizing the impact of a 10% change in the foreign exchange rates of the Canadian dollar against the US dollar on the financial assets and liabilities of the Company is presented in note 24 to our consolidated financial statements included in this Annual Report on Form 20-F at Item 18.

**Item 12.** **Description of Securities Other than Equity Securities**

***A.***  ***Debt securities*** 

Not required.

***B.***  ***Warrants and rights*** 

Not required.

***C.***  ***Other securities*** 

Not required.

***D.***  ***American depositary shares*** 

Not applicable.

**PART II**

**Item 13.** **Defaults, Dividend Arrearages and Delinquencies**

None.

**Item 14.** **Material Modifications to the Rights of Security Holders and Use of Proceeds**

None.

**Item 15.** **Controls and Procedures**

***(a)***  ***Disclosure Controls and Procedures*** 

Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding our required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overring of the controls and procedures. Accordingly, any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving management's control objective.

As required by Rules 13a-15 and 15d-15 promulgated under the Exchange Act, our management, including our Interim Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act, as of December 31, 2025, the end of the period covered by this Annual Report. Based on the results of that evaluation, our management, including our Interim Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2025, the Company's disclosure controls and procedures were effective. This conclusion follows the remediation of material weaknesses in the Company's internal control over financial reporting discussed in Item 15(b) below.

***(b)***  ***Management's Annual Report on Internal Control Over Financial Reporting*** 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act. The Company's internal control over financial reporting is a process designed under the supervision and with the participation of management, including our Interim Chief Executive Officer and our Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentations. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria established in *Internal Control – Integrated Framework: 2013* issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO framework"). Based on the results of that evaluation, our management concluded that, as of December 31, 2025, the Company's internal control over financial reporting was effective.

***Remediation of Previously Identified Material Weaknesses***

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statements may not be prevented or detected on a timely basis.

Our management concluded that material weaknesses existed as of the year ended December 31, 2024. Specifically, based on the criteria established by the COSO framework, our management identified deficiencies in the COSO framework principles associated with the control environment, control activities, information and communication and monitoring components of internal control, that constitute material weaknesses, either individually or in the aggregate.

As part of the integration of Aeterna and Ceapro pursuant to the Transaction, our management put in place a process to standardize policies and procedures and harmonize controls across the Company in order to develop and operate effective internal control over financial reporting. During this process, the following material weaknesses were identified by management as of December 31, 2024:

● the Company did not maintain an effective control environment based on the criteria established in the COSO framework and did not have sufficient competent personnel with the appropriate levels of knowledge, experience, and training in accounting and internal control over financial reporting;

● the Company did not maintain effective control activities based on the criteria established in the COSO framework;

● the Company had ineffective information and communication, which rendered management unable to generate or provide adequate quality supporting information and communication based on the criteria established in the COSO framework; and

● the Company did not maintain effective monitoring activities based on the criteria established in the COSO framework and did not have in place adequate processes for oversight, accountability for performance of internal control over financial reporting responsibilities, and timely implementation of corrective activities, and therefore could not perform sufficient ongoing evaluations to ascertain whether the components of internal control were present and functioning.

We have undertaken and completed measures to remediate the underlying cause of the material weaknesses noted above. The remediation was completed during the year ended December 31, 2025 whereby management undertook a comprehensive remediation plan to redesign, strengthen and fully operationalize internal controls over financial reporting across all entities, including:

Control Environment

Management executed a restructuring of the finance leadership team, including hiring a new Controller and Assistant Controller with CPA designations and extensive experience in IFRS and ICFR. Enhanced onboarding procedures, targeted technical training, and the implementation of a monthly financial close process were introduced to strengthen execution, oversight, and the overall effectiveness of financial reporting controls.

Control Activities

Management redesigned and harmonized control activities across all entities, updated risk control matrices, reassigned roles to restore segregation of duties, and implemented enhanced review controls over complex accounting transactions including areas such as revenue recognition, inventory, fixed assets and impairment of assets, consolidation, accounting estimates, cash flow preparation, intercompany eliminations, and top-side entries.

Information and Communication

Management strengthened information flow through standardized monthly reporting packages, reconciliations, structured review protocols, and improved corporate-subsidiary communication. A comprehensive information technology general controls risk control matrix was implemented, with testing confirming effectiveness across core domains.

Monitoring Activities

Management implemented a strengthened monitoring framework aligned with the COSO framework, enhancing ongoing and separate evaluations, deficiency escalation, Audit Committee reporting, and monthly close-based monitoring. These enhancements established a sustainable governance and feedback model to support long-term control integrity.

The above measures have been implemented for a sufficient period, and management has concluded, based on testing, that the enhanced controls are operating effectively. Management concluded that the deficiencies that previously contributed to the material weaknesses were remediated as of December 31, 2025.

Although we have completed the remediation of the material weaknesses, if additional material weaknesses or significant deficiencies in our internal control over financial reporting are discovered or occur in the future, our consolidated financial statements may contain misstatements, and we could be required to restate our financial results. In addition, if we are unable to produce accurate consolidated financial statements in the future, our stock price, liquidity and access to the capital markets may be adversely affected and we may be unable to maintain compliance with applicable stock exchange listing requirements. Further, because of its inherent limitations, even our remediated and effective internal control over financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in our conditions, or that the degree of compliance with our policies or procedures may deteriorate.

***(c)***  ***Attestation Report of the Company's Registered Public Accounting Firm.*** 

We did not include an attestation report of the Company's registered public accounting firm in this Annual Report due to rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, are not required to provide the auditor attestation report.

***(d)***  ***Changes in Internal Control Over Financial Reporting.*** 

During the period covered by this Annual Report, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except for the material weaknesses and remediation activities described in Item 15(b) above.

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| | |
|:---|:---|
| **Item 16A.** | **Audit Committee Financial Expert** |

---

Our Board has determined that we have at least one audit committee financial expert (as defined in paragraph (b) of Item 16A to Form 20-F). The audit committee financial expert is Mr. Anthony J. Giovinazzo, the Audit Committee's Chairman, who is independent as that term is defined in Rule 10A-3 under the Securities Exchange Act of 1934, as amended.

In accordance with Item 16A, paragraph (d) of Form 20-F, the designation of Mr. Giovinazzo as our audit committee financial expert does not: (i) make Mr. Giovinazzo an "expert" for any purpose, including without limitation for purposes of Section 11 of the Securities Act of 1933, as amended, as a result of this designation; (ii) impose any duties, obligations or liability on Mr. Giovinazzo that are greater than those imposed on him as a member of the Audit Committee and the Board in the absence of such designation; or (iii) affect the duties, obligations or liability of any other member of the Audit Committee or the Board.

The other current members of the Audit Committee are Mr. Robert A. Seager, and Mr. Ulrich Kosciessa each of whom is independent, as that term is defined in Rule 10A-3 under the Securities Exchange Act of 1934, as amended. For a description of their respective education and experience, please refer to "Item 6. – Directors, Senior Management and Employees".

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| | |
|:---|:---|
| **Item 16B.** | **Code of Ethics** |

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On February 2, 2023, we adopted a Code of Ethics for all directors, officers and employees that complies with the definition of a "code of ethics" set forth in Section 406(c) of the Sarbanes-Oxley Act of 2002, as amended. Our Code of Ethics is incorporated by reference as Exhibit 11.1 to this Annual Report on Form 20-F. A copy of our Code of Ethics is posted on the "Corporate Governance" page of our website at https://www.cosciensbio.com/governance/. We expect that any amendment to our Code of Ethics, or any waivers of its requirements, will be disclosed on our website. We will also provide a copy of our Code of Ethics without charge to any person or company upon request to our Corporate Secretary, at our principal executive offices at c/o Borden Ladner Gervais, LLP, 22 Adelaide Street West, Suite 3400, Toronto ON M5H 4E3.

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| | |
|:---|:---|
| **Item 16C.** | **Principal Accountant Fees and Services** |

---

*(All amounts are in U.S. dollars)*

The current auditors of the Company are Deloitte LLP. Deloitte LLP was appointed as the Company's (formerly Aeterna Zentaris Inc.) auditor on June 14, 2023.

***(a)***  ***Audit Fees*** 

During the financial year ended December 31, 2025, the Company's principal accountant, Deloitte LLP, billed $1,076,243 for the audit of the Company's annual consolidated financial statements and for services rendered in connection with statutory and regulatory filings. During the financial year ended December 31, 2024, the Company's principal accountant, Deloitte LLP, billed $668,481 for the audit of the Company's annual consolidated financial statements and for services rendered in connection with statutory and regulatory filings.

***(b)***  ***Audit-related Fees*** 

During the financial year ended December 31, 2025, the Company's principal accountant, Deloitte LLP, billed $12,051. During the financial year ended December 31, 2024, the Company's principal accountant, Deloitte LLP, billed $217,046 (this amount includes $212,306 for services rendered to Aeterna prior to the Transaction).

***(c)***  ***Tax Fees*** 

During the financial year ended December 31, 2025, the Company's principal accountants, Deloitte LLP, billed $nil, for services related to tax compliance, tax planning and tax advice. During the financial year ended December 31, 2024, the Company's principal accountants, Deloitte LLP, billed $nil, for services related to tax compliance, tax planning and tax advice.

***(d)***  ***All Other Fees*** 

During the financial year ended December 31, 2025, the Company's principal accountant, Deloitte LLP, billed us $nil for services not included in audit fees, audit-related fees and tax fees. During the financial year ended December 31, 2024, the Company's principal accountant, Deloitte LLP, billed us $nil for services not included in audit fees, audit-related fees and tax fees.

***(e)***  ***Audit Committee Pre-Approval Policies and Procedures*** 

Under applicable Canadian securities regulations, we are required to disclose whether our Audit Committee has adopted specific policies and procedures for the engagement of non-audit services and to prepare a summary of these policies and procedures. None of the audit-related, tax, or other services described in paragraphs (b) through (d) above were approved pursuant to the de minimis exception set forth in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. The Audit Committee Charter (incorporated by reference as Exhibit 11.3 to this Annual Report on Form 20-F) provides that it is such committee's responsibility to approve all audit engagement fees and terms as well as reviewing policies for the provision of non-audit services by the external auditors and, when required, the framework for pre-approval of such services. The Audit Committee delegates to its Chairman the pre-approval of such non-audit fees. The pre-approval by the Chairman is then presented to the Audit Committee at its first scheduled meeting following such pre-approval.

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| | |
|:---|:---|
| **Item 16D.** | **Exemptions from the Listing Standards for Audit Committees** |

---

None.

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| | |
|:---|:---|
| **Item 16E.** | **Purchases of Equity Securities by the Issuer and Affiliated Purchasers** |

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None.

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| | |
|:---|:---|
| **Item 16F.** | **Change in Registrant's Certifying Accountant** |

---

There were no changes in our certifying accountant during the fiscal year ended December 31, 2025 or the subsequent interim period through the date of this Annual Report.

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| | |
|:---|:---|
| **Item 16G.** | **Corporate Governance** |

---

Our Common Shares are not currently listed on a U.S. securities exchange. Accordingly, the Item 16G comparison disclosure is not required.

Our Common Shares are listed on the TSX and trade on the OTC Market. We are subject to, and generally in compliance with, the corporate governance requirements of the TSX, except as described in the risk factor entitled "Our Common Shares may be delisted from the TSX, which could affect their market price and liquidity. If our Common Shares were to be delisted, investors may have difficulty in disposing of their Common Shares" in Item 3.D above.

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| | |
|:---|:---|
| **Item 16H.** | **Mine Safety Disclosure** |

---

None.

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| | |
|:---|:---|
| **Item 16I.** | **Disclosure Regarding Foreign Jurisdictions that Prevent Inspections** |

---

Not applicable.

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| | |
|:---|:---|
| **Item 16J.** | **Insider Trading Policies** |

---

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, senior management, and employees that are reasonably designed to promote compliance with applicable insider trading laws, rules and regulations, and listing standards applicable to us. Our Insider Trading Policy is part of our Code of Conduct and Business Ethics (incorporated by reference as Exhibit 11.1 to this Annual Report on Form 20-F).

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| | |
|:---|:---|
| **Item 16K.** | **Cybersecurity** |

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We recognize the critical importance of maintaining the trust and confidence of all of our stakeholders. Our business depends on the efficient and uninterrupted operation of our information technology systems and those of our third-party vendors. Our Board is actively involved in oversight of our risk management program, and cybersecurity represents an important component of our risk management and compliance program.

Our cybersecurity policies, standards, processes and practices are fully integrated into the Company's enterprise-wide risk management and compliance program and overseen by the Audit Committee and our CFO. In general, we seek to address cybersecurity risks through a comprehensive, cross-functional approach that is focused on preserving the confidentiality, security and availability of the information that we collect and store by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

 

*Risk Management and Strategy*

As one of the critical elements of the Company's overall risk management and compliance approach, the Company's cybersecurity program is focused on the following key areas:

**Governance**: The Board's oversight of cybersecurity risk management is led by the Audit Committee of the Board, which regularly interacts with our CFO, our information technology partners and other members of management.

**Collaborative Approach**: We have implemented a comprehensive, cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.

**Technical Safeguards**: We deploy technical safeguards that are designed to protect our information systems from cybersecurity threats, including firewalls, intrusion prevention and detection systems, Security Information and Event Management systems, Extended Detection and Response with 24/7 Security Operations Center**,** anti-malware functionality and access controls, which are evaluated and improved through vulnerability assessments and cybersecurity threat intelligence.

**Incident Response and Recovery Planning**: We have established and maintain comprehensive incident response and recovery plans to address our response to a cybersecurity incident, and such plans are tested and evaluated on a regular basis.

**Third-Party Risk Management**: We maintain a risk-based approach to identifying and overseeing cybersecurity risks presented by third parties, including vendors, service providers and other external users of our systems, as well as the systems of third parties that could adversely impact our business in the event of a cybersecurity incident affecting those third-party systems.

**Education and Awareness**: We provide regular training for personnel regarding cybersecurity threats as a means to equip our employees with effective tools to address cybersecurity threats, and to communicate our evolving information security policies, standards, processes and practices.

**PART III**

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| | |
|:---|:---|
| **Item 17** | **Financial Statements** |

---

We have elected to provide financial statements and related information pursuant to Item 18.7

**Item 18.** **Financial Statements**

The financial statements and related notes required by this Item 18 are included in this Annual Report beginning on page F-1.

**COSCIENS Biopharma Inc.**

Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

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| | |
|:---|:---|
| [Report of Independent Registered Public Accounting Firm](#FIN_001) (PCAOB ID:1208) | F-2 |
| [Report of Predecessor Independent Registered Public Accounting Firm](#J_001) (PCAOB ID:1263) | F-5 |
| [Consolidated Statements of Financial Position](#FIN_003) | F-6 |
| [Consolidated Statements of Changes in Shareholders' Equity](#FIN_004) | F-7 |
| [Consolidated Statements of Loss and Comprehensive Loss](#FIN_005) | F-8 |
| [Consolidated Statements of Cash Flows](#FIN_006) | F-9 |
| [Notes to Consolidated Financial Statements](#FIN_007) | F-10 |

---

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of COSCIENS Biopharma Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statement of financial position of COSCIENS Biopharma Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related changes in shareholders' equity, consolidated statements of loss and comprehensive loss, and cash flows, for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flow for each of the two years in the period ended December 31, 2025, in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred a net loss of $10.358 million and had negative cash flows from operating activities of $8.473 million during the year ended December 31, 2025, and, as of that date, the Company had an accumulated deficit of $20.508 million. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Going concern is also communicated as a critical audit matter below.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

***Active ingredient cash-generating unit impairment assessment – Refer to Notes 2, 3 and 12 to the financial statements***

***Critical Audit Matter Description***

 **

The Company reviews property, plant and equipment at the end of each reporting period to determine whether there is any indication of impairment. An impairment indicator was identified for one of the Company's cash-generating units ("the CGU"), and the Company estimated the recoverable amount for the CGU based on value in use, using a discounted cash flow model. As at December 31, 2025, the recoverable amount exceeded the carrying amount of the CGU.

While there are several inputs required to determine the recoverable amount of the CGU, the inputs with the highest degree of subjectivity and estimation uncertainty are the forecasted revenues, forecasted costs and discount rate. Consequently, auditing these inputs required a high degree of auditor judgement and an increased extent of audit effort, including the involvement of fair value specialists.

 

***How the Critical Audit Matter was Addressed in the Audit***

 ****

Our audit procedures related to forecasted revenues, forecasted costs, and the discount rate used to determine the recoverable amount of the CGU included the following, among others:

● Evaluated the reasonableness of management's forecasted revenues by considering historical results and management's underlying growth plans.

● Evaluated the reasonableness of management's forecasted costs by considering:

○ Actual results of the CGU;

○ Industry data where applicable; and

○ Management's plans corroborated through inquiry with the Company's operational personnel.

● With the assistance of fair value specialists, we evaluated the reasonableness of the discount rate by testing the underlying source information.

 ****

 **

***Going Concern – Refer to Notes 1 and 3 to the financial statements***

 

***Critical Audit Matter Description***

 ****

The financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company had net losses and negative cash flows from operating activities during the year ended December 31, 2025, and an accumulated deficit as of December 31, 2025. These conditions, along with other matters discussed in Note 1 to the financial statements, raise substantial doubt about the Company's ability to continue as a going concern. Management's assessment of the Company's ability to continue as a going concern involved significant judgment based on detailed financial forecasts, including future sales, operating costs, research and development expenses and capital expenditures.

Auditing management's evaluation of whether their plans would alleviate substantial doubt regarding the Company's ability to continue as a going concern is complex and involves subjective auditor judgment when assessing (i) the reasonableness of the financial forecasts and the impact of macroeconomic conditions on those forecasts, including the potential direct and indirect impacts of tariffs, retaliatory tariffs or other trade protectionist measures to its business, (ii) whether it was probable that management's plans would be effectively implemented and alleviate substantial doubt and (iii) the adequacy of the financial statements disclosures related to going concern. This resulted in an increased extent of audit effort.

***How the Critical Audit Matter Was Addressed in the Audit***

Our audit procedures related to the evaluation of going concern included the following, among others:

● Evaluated management's assessment of the Company's ability to continue as a going concern by analyzing the specific facts and circumstances and considering audit evidence obtained during the audit to determine whether it supported or contradicted the conclusion reached by management.

● Evaluated the financial forecasts by:

○ Assessing the key assumptions underlying management's forecasted operating cash flows by inquiring of senior management to gain an understanding of the Company's operations, strategy, and research and development activities;

○ Comparing forecasted sales, operating costs, research and development expenses and capital expenditures to recent historical financial information; and

○ Assessing and evaluating the probability that management will effectively implement its mitigating actions and achieve the financial forecasts in light of the macroeconomic conditions and potential impact from tariffs.

● Evaluated whether the disclosures were consistent with management's assessment of the Company's ability to continue as a going concern.

/s/ Deloitte LLP

Chartered Professional Accountants

Montreal, Canada

March 25, 2026

We have served as the Company's auditor since 2024.

**Report of Independent Registered Public Accounting Firm**

Board of Directors and Shareholders

COSCIENS Biopharma Inc.

**Opinion on the financial statements** 

We have audited the consolidated statement of financial position of COSCIENS Biopharma Inc. (formerly Aeterna Zentaris Inc.) (the "Company") as of December 31, 2023 (not presented herein) and the related consolidated statements of changes in shareholders' equity, loss and comprehensive loss, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (hereafter ''IFRS Accounting Standards'').

**Going concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has continued to incur losses and negative cash flows from operating activities subsequent to December 31, 2023 that raise substantial doubt about the Company's ability to continue operating as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

We served as the Company's auditor from 2022 to 2023.

/s/ Raymond Chabot Grant Thornton LLP

Montreal, Canada

April 9, 2025

**COSCIENS Biopharma Inc.**

Consolidated Statements of Financial Position

As of December 31, 2025 and 2024

(in thousands of US dollars)

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| |
|:---|
| **ASSETS** |
| **Current assets** |
| Cash and cash equivalents (note 7) |
| Trade and other receivables (note 8) |
| Inventories (note 9) |
| Income taxes receivable |
| Prepaid expenses and other assets (note 10) |
| Assets held for sale (note 11) |
| **Total current assets** |
| **Non-current assets** |
| Restricted cash and cash equivalents (note 7) |
| Property and equipment (note 12) |
| **Total non-current assets** |
| **Total assets** |
| **LIABILITIES** |
| **Current liabilities** |
| Payables and accrued liabilities (note 14) |
| Provisions |
| Income taxes payable |
| Current portion of deferred revenues (note 6) |
| Current portion of lease liabilities (note 15) |
| Warrant liability (note 17) |
| DSU liability (note 18) |
| **Total current liabilities** |
| **Non-current liabilities** |
| Deferred revenues (note 6) |
| Lease liabilities (note 15) |
| Employee future benefits (note 16) |
| **Total non-current liabilities** |
| **Total liabilities** |
| **Shareholders' equity** |
| Share capital (note 19) |
| Contributed surplus (note 19) |
| Retained earnings (accumulated deficit)**)** |
| Accumulated other comprehensive loss |
| **Total shareholders' equity** |
| **Total liabilities and shareholders' equity** |

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Commitments (note 27)

Subsequent event (note 29)

The accompanying notes are an integral part of these consolidated financial statements.

**Approved by the Board of Directors**

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| | | |
|:---|:---|:---|
| */s/ Peter Puccetti* | | */s/ Anthony J. Giovinazzo* |
| Peter Puccetti, Chair of the Board and Interim CEO |  | Anthony J. Giovinazzo, Director |

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**COSCIENS Biopharma Inc.**

Consolidated Statements of Changes in Shareholders' Equity

For the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars)

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| | |
|:---|:---|
|  | **Share**<br> **capital** |
|  | **$** |
| **Balance - January 1, 2023** | **13496** |
| Net income | **-**) |
| Other comprehensive loss: |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | **-** |
| **Comprehensive (loss) income** |  |
| Stock options exercised | 21) |
| Share-based compensation costs | **-** |
| **Balance - December 31, 2023** | **13517** |
| Net loss | **-))** |
| Other comprehensive loss: |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | -) |
| &nbsp;&nbsp;&nbsp;Actuarial loss on defined benefit plans and remeasurement of the net defined benefit liability (note 16) | - |
| **Comprehensive (loss) income** |  |
| Acquisition of Aeterna Zentaris (note 5) | 8485 |
| Share-based compensation costs |  |
| Exercise of warrants (note 17) | 405 |
| Exercise of DSUs (note 18) | 79 |
| **Balance – December 31, 2024** | **22486** |
| Net loss | **-))** |
| Other comprehensive loss: |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments | **-))** |
| &nbsp;&nbsp;&nbsp;Actuarial gain on defined benefit plans and remeasurement of the net defined benefit liability (note 16) | **-** |
| **Comprehensive loss** |  |
| Share-based compensation costs | **-))** |
| Exercise of warrants (note 17) | **54** |
| Exercise of DSUs (note 18) | **84** |
| **Balance – December 31, 2025** | **22624** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**COSCIENS Biopharma Inc.**

Consolidated Statements of Loss and Comprehensive Loss

For the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except per share data)

---

| |
|:---|
| **Revenues (note 6)** |
| Cost of sales |
| **Gross profit** |
| Research and development**)** |
| Selling, general and administrative**)** |
| Impairment of property and equipment (note 12)**)** |
| Write-down of inventory (note 9)**)** |
| Impairment of intangible assets (note 13) |
| **Total expenses** |
| **Loss from operations** |
| Foreign exchange gain (loss)**)** |
| Finance costs**)** |
| Interest income |
| Other income |
| Change in fair value of warrant and DSU liabilities |
| **Other income** |
| **Loss before income taxes)** |
| Income tax recovery (expense) (note 22) |
| **Net loss)** |
| **Other comprehensive loss:** |
| Items that may be reclassified subsequently to profit or loss: |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustments**)** |
| Items that will not be reclassified to profit or loss: |
| &nbsp;&nbsp;&nbsp;Actuarial gain (loss) on defined benefit plans (note 16) |
| **Comprehensive loss** |
| **Loss per share – Basic & Diluted (note 25)** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**COSCIENS Biopharma Inc.**

Consolidated Statements of Cash Flows

For the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars)

---

| |
|:---|
| **Cash flows from operating activities** |
| Net loss**)** |
| Items not affecting cash and cash equivalents: |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization |
| &nbsp;&nbsp;&nbsp;Share-based compensation costs**)** |
| &nbsp;&nbsp;&nbsp;Impairment of intangible assets (note 13) |
| &nbsp;&nbsp;&nbsp;Impairment of property and equipment (note 12) |
| &nbsp;&nbsp;&nbsp;Write-down of inventory |
| &nbsp;&nbsp;&nbsp;Employee future benefits |
| &nbsp;&nbsp;&nbsp;Amortization of deferred revenues**)** |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant and DSU liabilities**)** |
| &nbsp;&nbsp;&nbsp;Other non-cash items |
| &nbsp;&nbsp;&nbsp;Income tax (recovery) expense |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities (note 21) |
| **Net cash used in operating activities** |
| **Cash flows from financing activities** |
| Exercise of stock options |
| Payments on exercise of DSUs**)** |
| Payments on lease liabilities |
| **Net cash used in financing activities** |
| **Cash flows from investing activities** |
| Cash acquired on acquisition of Aeterna Zentaris Inc. (note 5) |
| Purchase of property and equipment**)** |
| Proceeds on disposal of property and equipment |
| Changes in restricted cash equivalents |
| **Net cash provided by (used in) investing activities** |
| Effect of exchange rate changes on cash and cash equivalents) |
| **Net change in cash and cash equivalents)** |
| Cash and cash equivalents – beginning of year |
| **Cash and cash equivalents – end of year** |

---

The accompanying notes are an integral part of these consolidated financial statements.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**1.** **Business overview** 

**Summary of business**

COSCIENS Biopharma Inc. and its subsidiaries (the "Company"), formerly Aeterna Zentaris Inc., is a Life Science company developing and commercializing a diversified portfolio of products for the cosmeceutical, nutraceutical and pharmaceutical markets. These products are produced using the Company's proprietary technologies. The Company's patented technologies include the Pressurized Gas eXpanded (PGX) technology, which is a unique technology that generates high-value yields of active ingredients from natural based resources for use in novel cosmeceutical, nutraceutical and pharmaceutical products. The Company's two value-driving products, oat beta glucan and avenanthramides, are found in many household name cosmetic and personal care brands. These products are manufactured from the Company's proprietary oat extraction manufacturing technology and are known for their well-documented health benefits.

These consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which presumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future.

During the year ended December 31, 2025, the Company incurred a net loss and had negative cash flow from operating activities of $10,358 and $8,473, respectively. As at December 31, 2025, the Company had an accumulated deficit of $20,508. Subsequent to year end, on March 5, 2026, the Company announced the strategic decision to cease funding its German subsidiaries, Aeterna Zentaris GmbH ("AEZS Germany"), and its wholly-owned subsidiary Zentaris IVF GmbH. As a result, the Company's subsidiary, AEZS Germany, and its wholly owned subsidiary Zentaris IVF GmbH filed for insolvency as further described in note 29.

Assessing the Company's ability to continue as a going concern necessitates significant judgment, relying on detailed financial forecasts with inherent estimates related to future sales, operating costs, research and development expenses, and capital expenditures. While the Company currently anticipates that its cash on hand and projected future cash flows from operations will be sufficient to cover its financial liabilities as they become due for at least the next twelve months from the issuance date of these consolidated financial statements, these future cash flows are subject to several factors beyond the Company's control.

As discussed in Note 12, the Company has experienced a sustained decline in revenues and has incurred continuous operating losses during the current and prior fiscal period, raising substantial doubt about the Company's ability to continue as a going concern. In addition, a significant portion of the Company's revenue is derived from a single customer primarily located in the United States (Note 26), exposing the Company to potential volatility in cash flows. Furthermore, on August 1st, 2025, the President of the United States issued executive orders imposing 35% tariffs on imports from Canada, up from the previous 25%, with an exemption for The Canada-United States-Mexico Agreement ("CUSMA")-compliant goods. Although the Company's product sales to the US are CUSMA compliant, the Company is monitoring the potential direct and indirect impacts of tariffs, retaliatory tariffs, or other trade protectionist measures. As a result, the Company is exposed to uncertainty in cash flows from operations and consequently, there is no assurance that projected revenue and positive cash flows will be realized. Failure to achieve these projections could require the Company to reduce or curtail operations and development activities, harming the business, financial condition, and results of operations. The Company has implemented a comprehensive strategic plan that focuses on initiatives to conserve cash. As part of this plan, management is actively evaluating its overall manufacturing process and procurement strategy to identify potential areas for future margin improvement and cost reduction. Actions taken to date included reduced spending on research and development activities, lowering capital expenditures and the restructuring of operations. The Company has begun executing the strategic plan and will continue to do so as necessary, based on cash availability. There is no assurance on the availability of future funding which could impact the Company's ability to continue as a going concern.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

As such, there is material uncertainty that raises substantial doubt about the Company's ability to continue as a going concern for a period of at least 12 months from the date of issuance of these consolidated financial statements.

The consolidated financial statements have been prepared on a going concern basis and do not include any adjustments that might be necessary if the going concern assumption was not appropriate. If the going concern assumption was not appropriate for these financial statements, then adjustments would be necessary to the carrying value of assets and liabilities, and the classification of items in the consolidated statements of financial position. Such adjustments could be material.

**Transaction**

On December 14, 2023, Aeterna Zentaris Inc. ("Aeterna") and Ceapro Inc. ("Ceapro") entered into a binding arrangement agreement pursuant to which Aeterna would acquire all of the issued and outstanding common shares of Ceapro (the "Transaction") by way of a plan of arrangement pursuant to which, at closing, each outstanding Ceapro common share would be exchanged for 0.02360 of a Aeterna common share (the "Plan of Arrangement"). Additionally, as part of the Transaction, Aeterna would issue to its shareholders immediately prior to the closing of the Transaction, 0.47698 of a share purchase warrant ("New Warrant") for each Aeterna common share or warrant held. On March 12, 2024, the shareholders of both Ceapro and Aeterna approved the Plan of Arrangement at their respective special meetings. On March 28, 2024, the Court of Kings Bench of Alberta approved the Plan of Arrangement. On May 3, 2024, Aeterna effected a 4:1 share consolidation of its then existing shares. The underlying share and warrants of Aeterna that survived the Transaction have been retrospectively adjusted to reflect such consolidation. The Transaction was consummated on June 3, 2024.

In conjunction with the Transaction, at the annual general meeting on July 16, 2024, the shareholders approved a special resolution authorizing the Board to change the Company name from "Aeterna Zentaris Inc." to "COSCIENS Biopharma Inc." On August 6, 2024, the company filed articles of amendment pursuant to the Canada Business Corporations Act to effect this name change.

Following the closing of the Transaction, former shareholders of Ceapro owned approximately 50% of the Aeterna common shares on a fully diluted basis and former shareholders of Aeterna owned approximately 50% of the Aeterna common shares on a fully diluted basis. For financial reporting and accounting purposes, Ceapro is the acquirer of Aeterna in Transaction. The consolidated financial statements of COSCIENS Biopharma Inc. as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 reflect the results of operations and financial position of Ceapro for the periods presented and includes the results of operations of Aeterna subsequent to the Transaction, which was completed on June 3, 2024. Refer to Note 5 for additional information.

**Reporting entity**

The accompanying consolidated financial statements include the accounts of COSCIENS Biopharma Inc., an entity incorporated under the Canada *Business Corporations Act*, and its wholly owned subsidiaries (the "Group"). COSCIENS Biopharma Inc. is the ultimate parent company of the Group. The Company currently has five wholly-owned direct and indirect subsidiaries, Ceapro Inc. and its wholly-owned subsidiary Ceapro (P.E.I.), based in Canada, Aeterna Zentaris GmbH ("AEZS Germany") and its wholly-owned subsidiary Zentaris IVF GmbH, based in Frankfurt, Germany, and Aeterna Zentaris, Inc., an entity incorporated in the state of Delaware and with offices in Summerville, South Carolina, in the US.

The registered office of the Company is located at 22 Adelaide Street West, Suite 3400, Bay Adelaide Centre, Est Tower, Toronto, Ontario M5H 4E3, Canada.

The Company's common shares are listed on both the Toronto Stock Exchange under the symbol CSCI (previously AEZS) and on the OTC Market under the symbol CSCIF (previously listed on NASDAQ under CSCI and AEZS).

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**2.** **Basis of presentation** 

*Statement of compliance*

These consolidated financial statements as of December 31, 2025, and 2024 and for the years ended December 31, 2025, 2024 and 2023 have been prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

The Board of Directors authorized these consolidated financial statements for issue on March 25, 2026.

The preparation of financial statements in accordance with IFRS Accounting Standards requires the use of certain critical accounting estimates and the exercise of management's judgement in applying the Company's accounting policies. Areas involving a high degree of judgement or complexity and areas where assumptions and estimates are significant to the Company's consolidated financial statements are discussed in note 3 - Critical accounting estimates and judgements.

*Basis of measurement*

The consolidated financial statements have been prepared under a historical cost convention, except for certain financial instruments measured at fair value.

*Principles of consolidation*

 

These consolidated financial statements include any entity for which the Company has power over, through existing rights providing the current ability to direct the relevant activities. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. An entity is included in the consolidation from the date that control is transferred to the Company, while any entities that are sold are excluded from the consolidation from the date that control ceases. All inter-company balances and transactions are eliminated on consolidation.

 

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

*Foreign currency*

 

Items included in the financial statements of the Group's entities are measured using the currency of the primary economic environment in which the entities operate (the "functional currency"), which is the US dollar for the Company and its US subsidiary, Aeterna Zentaris, Inc., the Euro ("EUR" or "€") for its German subsidiaries and the Canadian Dollar for its Canadian subsidiary, Ceapro Inc.

Assets and liabilities of the subsidiaries are translated at the period-end exchange rates, and the results of operations are translated at average rates of exchange for the period. The resulting translation adjustments are included in accumulated other comprehensive loss within shareholders' equity.

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the underlying transaction. Foreign exchange gains and losses from settling transactions and translating non-functional currency monetary assets and liabilities are recognized in the consolidated statements of loss and comprehensive loss.

**Summary of material accounting policies**

The accounting policies set out below have been applied consistently to all years presented in these consolidated financial statements and have been applied consistently by all Group entities.

*Business combination*

 

Business combinations are accounted for using the acquisition method as at the acquisition date when control is transferred. The consideration transferred for the acquisition of a business is the fair value of the assets transferred, and any liability and equity interests issued by the Company to the former owners of the acquired business on the acquisition date. Identifiable assets acquired and liabilities assumed in a business combination are generally measured initially at their fair values at the acquisition date. Acquisition-related costs other than those associated with the issue of debt or equity securities, and other direct costs of a business combination are not considered part of the business acquisition transaction and are expensed as incurred.

*Cash and cash equivalents*

Cash and cash equivalents consist of unrestricted cash on hand and balances with banks, as well as short-term interest-bearing deposits, such as money market accounts, that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value, with a maturity of three months or less from the date of acquisition.

*Inventories*

 

Inventories are valued at the lower of cost and net realizable value.

Costs of inventory include costs of purchase, costs of conversion, and any other costs incurred in bringing the inventories to their present location and condition. Costs of conversion include direct costs (materials and labor) and indirect costs (fixed and variable production overheads). Fixed overheads are allocated based on normal capacity. Raw materials are assigned costs by using a first-in-first-out cost formula and work-in-progress, and finished goods are assigned costs by using a weighted average cost formula.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

 

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

*Property and equipment*

 

Property and equipment are recorded at cost less accumulated depreciation and any accumulated impairment losses. Depreciation methods and rates are calculated as follows:

---

| | |
|:---|:---|
| Manufacturing equipment | 5 - 25 years straight-line |
| Office equipment | 20% declining balance |
| Computer equipment | 30% declining balance |
| Leasehold improvements | over the lesser of the term of the lease and the useful life of the underlying asset |
| Right-of-use asset – buildings | over the lesser of the term of the lease and the useful life of the underlying asset |

---

Cost for property and equipment includes the purchase price, import duties, non-refundable taxes, and any other costs directly attributable to bringing the asset into the location and condition to be capable of operating. Significant parts of an item of property and equipment with different useful lives are recognized and depreciated separately. Depreciation commences when the asset is available for use. The asset's residual values, useful lives, and method of depreciation are reviewed at each financial year-end and adjustments are accounted for prospectively if appropriate. An item of property and equipment is derecognized on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of an asset is included in profit or loss in the period the asset is derecognized.

*Intangible assets*

 

Intangible assets, consisting of patents, that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses. Patents are amortized on their respective remaining patent life and are expiring between 2027 and 2041.

*Impairment of non-financial assets*

Items of property and equipment and identifiable intangible assets with finite lives that are subject to depreciation or amortization, respectively, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be recoverable. For impairment assessment purposes, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units or "CGU").

Impairment is determined by assessing whether the carrying value of the CGU exceeds the recoverable amount, which is the higher of fair value less costs of disposal and the value in use. Fair value less costs of disposal is determined based on a market approach and also derived from market data, including, information from market participants regarding the price that the Company could receive in a sale of the asset. Value in use is determined based on cash flow projections from financial budgets approved by senior management covering a five-year period. The estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In the event that the carrying amount of the asset exceeds its recoverable amount, an impairment loss is recognized in an amount equal to the excess. Impairment losses related to property and equipment and identifiable intangible assets with finite lives, which are recorded in the consolidated statement of loss and comprehensive loss, can be subsequently reversed.

*Leases*

 

At inception, the Company considers whether a contract is, or contains, a lease. A lease is defined as a contract, or part of a contract, that conveys the right to use an asset for a period of time in exchange for consideration.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is measured at an amount equal to the initial measurement of the lease liability, any initial direct costs incurred by the Company, an estimate of any costs to dismantle and remove the asset at the end of the lease, and any lease payments made in advance of the lease commencement date, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease if that rate is readily available or the Company's incremental borrowing rate.

Lease payments included in the measurement of the lease liability are made up of fixed payments (including in-substance fixed payments), variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee, and payments arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero.

The Company has elected not to recognize right-of-use assets or lease liabilities for short-term leases and leases of low-value assets. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these leases are recognized as an expense in profit or loss on a straight-line basis over the lease term.

On the balance sheet, right-of-use assets have been included in property and equipment.

*Employee future benefits*

 

The Company has partially funded and unfunded defined benefit multi-employer pension plans, namely the DUPK pension plan and the RUK 1990 and 2006 pension plans, (the "Pension Benefit Plans") and unfunded employee future benefit plans in Germany. Provisions for pension obligations are established for benefits payable in the form of retirement, disability and surviving dependent pensions. The Company also provides defined contribution plans to some of its employees.

For defined benefit pension plans and other employee future benefits, net periodic pension expense is actuarially determined on a quarterly basis using the projected unit credit method. The cost of pension and other benefits earned by employees is determined by applying certain assumptions, including discount rates, rate of pension benefit increases, the projected age of employees upon retirement and the expected rate of future compensation.

The employee future benefits liability is recognized at its present value, which is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related future benefit liability. Actuarial gains and losses that arise in calculating the present value of the defined benefit obligation are recognized in other comprehensive loss, net of tax, and simultaneously reclassified in the deficit in the consolidated statement of financial position in the year in which the actuarial gains and losses arise and without recycling to the consolidated statement of loss and comprehensive loss in subsequent periods.

*Warrant liabilities*

 

Warrant liabilities are derivative financial instruments. They are initially measured at fair value. Subsequent to initial recognition, they are measured at fair value, and changes therein are recognized in profit or loss.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

*Revenue recognition*

 

Supply agreements and licensing agreements

The Company generates revenue from supply agreements and licensing agreements with customers for the sale of certain finished goods, semi-finished goods and active pharmaceutical ingredients. The license is generally combined with other promises to supply goods to the customer, and revenue from the combined performance obligation is satisfied at a point in time, which occurs upon shipment. The transaction price for the combined performance obligation includes the license non-refundable non-creditable upfront payment, regulatory milestones, royalties and the selling price of each good supplied. Milestone payments, which are oftentimes payable upon the successful achievement of development or regulatory events, and royalties are included in the transaction price using the most likely amount method only if the milestones are considered probable of being reached and the Company concludes it is highly probable that a significant revenue reversal will not occur. Milestone payments and royalties that are not within the control of the Company or the licensee, such as regulatory approvals, are generally not considered probable of being achieved until those approvals or subsequent sales are received. The Company allocates the transaction price to the projected units that the Company expects to supply pursuant to the contract, estimated based on current projections and anticipated market demand. If the Company expects to be entitled to a breakage amount for upfront and milestone payments, it recognizes the expected breakage amount as revenue in proportion to the pattern of rights exercised by the customer.

Product sales

The Company also generates revenues from product sales. Each sale is considered a single performance obligation and revenue for the sale of product is recognized at the point in time when control or ownership of the product is transferred to the customer, generally when the products are shipped, when collectability is probable, and the Company has satisfied its performance obligation.

Product revenues are derived primarily from standard product sales contracts. Contracts with customers do not provide for refunds or any other rights of return. The Company does not have any revenue contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As such, the Company does not adjust any of the transaction prices for the time value of money.

When an amount is received as an advance or a deposit from a customer, prior to the recognition of revenue, it results in a contract liability.

*Research and development expenses*

Research costs are expensed as incurred. Development costs are expensed as incurred, except for those that meet the criteria for deferral, in which case the costs are capitalized and amortized to operations over the estimated period of benefit. No development costs have been capitalized during any of the periods presented.

*Income taxes*

 

Income tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case the tax expense is also recognized directly in equity.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates and laws enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax assets and liabilities are provided for using the liability method on temporary differences between the tax bases and carrying amounts of assets and liabilities. Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the year in which temporary differences are expected to be recovered or settled. Changes to these balances, including changes due to changes in income tax rates, are recognized in profit or loss in the period in which they occur.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023.

(in thousands of US dollars, except share and per share data and where otherwise noted)

Deferred tax assets are recognized to the extent future recovery is probable. Deferred tax assets are reduced to the extent it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

*Investment tax credits*

 

Investment tax credits relating to qualifying scientific research and experimental development expenditures are accrued provided it is probable that the credits will be realized. When recorded, the investment tax credits are accounted for as a reduction of the related expenditures.

*Earnings per share*

 

Basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the year.

Diluted net income (loss) per share is calculated based on the weighted average number of common shares outstanding during the year, plus the effects of dilutive common share equivalents, such as stock options, warrants and similar instruments. The number of shares included with respect to options, warrants and similar instruments is computed using the treasury stock method. Diluted net loss per share is equal to the basic net loss per share as the Company is in a loss position and all securities, comprised of options and warrants, would be anti-dilutive.

**3.** **Critical accounting estimates and judgements** 

The preparation of consolidated financial statements in accordance with IFRS Accounting Standards requires management to make critical judgements, estimates, and assumptions that affect the reported amounts of certain assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses recorded during the reporting period. In making estimates and judgements, management relies on historical experience, expectations, current trends and other factors that management believes to be relevant at the time at which the Company's consolidated financial statements are prepared. Actual results may differ from those estimates.

Management reviews, on a regular basis, the Company's accounting policies, assumptions, estimates and judgements in order to ensure that the consolidated financial statements are presented fairly and in accordance with IFRS Accounting Standards. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Critical accounting estimates and assumptions are those that have a significant risk of causing material adjustment and are often applied to matters or outcomes that are inherently uncertain and subject to change. As such, management cautions that future events often vary from forecasts and expectations and that estimates routinely require adjustment.

The following discusses the most significant accounting estimates and assumptions that the Company has made in the preparation of the consolidated financial statements.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

*Basis of preparation of the consolidated financial statements*

 

These consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Assessing the Company's ability to continue as a going concern requires significant judgment, and is based on detailed financial forecasts, which incorporate significant estimates related to future sales, operating costs, research and development expenses, and capital expenditures. The Company believes that cash on hand and future cash flows from operations will be adequate to satisfy the Company's financial liabilities, however no assurance can be provided. See note 1 and "liquidity risk" in note 24.

*Business combinations*

The accounting for business combinations necessitates significant estimates and judgements, particularly in identifying the acquirer, valuing consideration transferred, and measuring acquired assets and liabilities. These processes require assumptions regarding control, future cash flows and discount rates. Due to the inherent uncertainty in these assumptions, actual outcomes may differ from estimates, impacting intangibles, asset valuations, and overall financial reporting. Detailed information on valuation techniques and assumptions is provided in note 5.

*Impairment of property and equipment*

The Company is required to make judgments in assessing at the end of each reporting period whether there is any indication that an asset may be impaired. In making this assessment, the Company uses various indicators including, but not limited to, the Company's market capitalization and sustained decreases in revenue and profitability. When such an indication exists, the Company makes a number of estimates when determining the recoverable amount of an asset or a cash-generating unit, see note 12.

*Impairment of intangible assets*

 

The impairment assessment related to intangibles assets requires management to estimate the recoverable amount, which is the higher of an asset's fair value less costs of disposal and value in use. Based on this assessment, management determined that the intangible assets were impaired in the year ended December 31, 2024, see note 13.

*License and collaboration arrangements with multiple elements*

The Company enters into licensing and supply agreements related to the licensing, development, supply and distribution for macimorelin in various territories. Each agreement may contain specific terms or clauses that require careful analysis by management under IFRS 15 in order to ensure the appropriate accounting treatment is reached. The agreements may include non-refundable upfront payments and licensing fees, the provision of development services, pre- and post-commercialization milestone payments, royalties on future product sales derived from such license agreements, and supply arrangements. Management analyzes each agreement and applies significant judgement to determine whether contracts entered into at or near the same time should be accounted for as a single arrangement, whether all parts of the contract are scoped into IFRS 15, to identify all performance obligations, determine whether a performance obligation is distinct or should be combined with other promised goods and services, determine and allocate the transaction price on a relative stand-alone selling price basis, determine whether a combined performance obligation is satisfied at a point in time or over time, and, for performance obligations satisfied over time, in concluding upon the appropriate method of measuring progress to be applied for purposes of recognizing revenue. Breakage is an estimate of the reduction in forecasted product sales that will no longer be made. If the Company expects to be entitled to a breakage amount it recognizes the expected breakage amount as revenue in proportion to the pattern of rights exercised by the Customer. The breakage rate is reviewed on an ongoing basis and is estimated based on forecasted product sales. Any changes in the judgements or assumptions applied can give rise to a significant impact on the Company's revenues and deferred revenues.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

*Employee future benefits*

The determination of expenses, obligations and the Company's share of the multi-employer plan assets associated with employee future benefits requires the use of assumptions, such as the discount rate to measure obligations, rate of pension benefit increases, the projected age of employees upon retirement and the expected rate of future compensation. Because the determination of the costs, obligations and the Company's share of the multi-employer plan assets associated with employee future benefits requires the use of various assumptions, there is measurement uncertainty inherent in the actuarial valuation process. Actual results will differ from results that are estimated based on the aforementioned assumptions. Additional information is included in note 15 - Employee future benefits.

 

*Research and development accruals*

As part of the process of preparing our financial statements, management is required to estimate accrued expenses including those pertaining to the Company's research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel to identify services that have been performed on the Company's behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. If the actual timing of the performance of services or the level of effort varies from management's estimate, the Company adjusts the accrued or prepaid expense balance accordingly. Although the Company does not expect estimates to be materially different from amounts actually incurred, if those estimates of the status and timing of services performed differ from the actual status and timing of services performed, the Company may report amounts that are too high or too low in any particular period.

*Investment tax credits*

 

The recognition of investment tax credits relating to the Company's qualifying scientific research and experimental development expenditures requires management to estimate the amount and timing of recovery.

*Taxation* 

 

The Company makes estimates in respect of recognition of the extent of deferred tax liabilities and tax assets. Full provision is made for future and current taxation at the rates of tax prevailing at the year-end unless future rates have been substantively enacted. These calculations represent our best estimate of the costs that will be incurred and recovered, but actual experience may differ from the estimates made and therefore affect future financial results. The effects would be recognized in profit or loss.

The Company recognizes the deferred tax benefit related to deferred tax assets to the amount that is probable to be realized. Assessing the recoverability of a portion or all of deferred tax assets requires management to make significant estimates of future taxable profit. In addition, future changes in tax laws could limit the ability of the Company to obtain tax deductions from deferred tax assets. Management considers projected future taxable income, the scheduled reversal of deferred tax assets, and tax planning strategies in making this assessment. The amount of the deferred tax asset considered realizable could change materially in future periods.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**4.** **Recent accounting pronouncements** 

**Standards and amendments issued but not yet effective**

A number of new accounting standards are effective for annual reporting periods beginning after January 1, 2025 and earlier application is permitted. However, the Company has not early adopted the following new or amended accounting standards in preparing these consolidated financial statements. Management is currently assessing the detailed implications of applying the new standard on the Company's consolidated financial statements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● *IFRS 18 Presentation and Disclosure in Financial Statements* (effective for annual reporting periods beginning on or after January
 1, 2027)

 

○ IFRS 18 will replace IAS 1 Presentation of Financial Statements and requires entities to classify all income and expenses into five categories in the statement of profit or loss, namely the operating, investing, financing, discontinued operations and income tax categories. Entities are also required to present a newly-defined operating profit subtotal. Entities' net profit will not change. Management-defined performance measures are disclosed in a single note in the financial statements. In addition, all entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;● *Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7* (effective for annual periods beginning on or
 after January 1, 2026)

 

**5.** **Acquisition of Aeterna Zentaris Inc.** 

As discussed in Note 1, Business Overview, as a result of the Transaction, Ceapro acquired control of Aeterna Zentaris Inc. on June 3, 2024. Aeterna is a specialty biopharmaceutical company commercializing and developing therapeutics and diagnostic tests. Aeterna's lead product, Macrilen® (macimorelin), is the first and only U.S. FDA and EMA approved oral test indicated for the diagnosis of patients with adult growth hormone deficiency ("AGHD"). Macimorelin is currently marketed under the tradename Ghryvelin™ in the European Economic Area and the United Kingdom through an exclusive licensing agreement with Pharmanovia.

The Transaction was accounted for as a reverse acquisition under the acquisition method of accounting for business combinations. Ceapro was considered to be the accounting acquirer, and Aeterna was considered the legal acquirer. Under the acquisition method of accounting, total consideration exchanged and allocation of the purchase price to the fair values of assets acquired and liabilities assumed in the Transaction were as follows:

**Final Purchase Price Allocation**

---

| | |
|:---|:---|
|  | **Number** |
|  | **#** |
| **Purchase price** |  |
| Shares deemed issued to Aeterna shareholders<sup>(1)</sup> | 1213967 |
| Warrants issued to Aeterna shareholders<sup>(2)</sup> | 633543 |
| Replacement share-based payment awards: |  |
| &nbsp;&nbsp;&nbsp;Equity-settled options<sup>(3)</sup> | 12949 |
| &nbsp;&nbsp;&nbsp;Cash-settled DSUs<sup>(3)</sup> | 49230 |
| &nbsp;&nbsp;&nbsp;Warrants deemed issued<sup>(4)</sup> | 114405 |
|  | **2024094** |
| **Recognized amounts of identifiable assets acquired and liabilities assumed** |  |
| Cash and cash equivalents |  |
| Trade and other receivables |  |
| Inventories |  |
| Income tax receivables |  |
| Prepaid expenses and deposits |  |
| Restricted cash equivalents |  |
| Property and equipment |  |
| Intangible assets<sup>(5)</sup> |  |
| Accounts payable and accrued liabilities) |  |
| Provisions) |  |
| Income tax payable) |  |
| Deferred revenues) |  |
| Lease liabilities) |  |
| Employee future benefits |  |
| **Total identifiable net assets (liabilities)** |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 fair value of the 1,213,967 common shares deemed issued to Aeterna shareholders of $6.99 per share was based on the listed share
 price of Ceapro as at June 3, 2024 (CA$0.225), after giving effect to the exchange of each outstanding Ceapro common share for 0.02360 of a Aeterna common share and the foreign currency exchange rate.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

&nbsp;&nbsp;&nbsp;&nbsp;(2) The
 fair value of the 633,543 New Warrants ("New Warrants") issued to Aeterna shareholders was based on the listed share
 price of Ceapro as at June 3, 2024 of $6.99 (CA$0.225) less the exercise price of $0.01 , after giving effect to the exchange of each
 outstanding Ceapro Common Share for 0.02360 of a Aeterna Zentaris Common Share and the foreign currency exchange rate.

(3) In
 accordance with the terms of the Plan of Arrangement, Aeterna's share-based payment awards held by employees of Aeterna continued
 with no modifications and are deemed to be replacement awards issued.

The fair value of the replacement awards is $356, after taking into account an estimated forfeiture rate of nil. The consideration for the business combination includes $9 for equity-settled options and $344 for cash-settled DSUs transferred to employees of Aeterna when the acquiree's awards were substituted by the replacement awards, which relates to past service. The balance of $3 will be recognized as post-acquisition compensation cost.

The fair value at acquisition date was estimated using a Black-Scholes option pricing model, considering the terms and conditions upon which the options were granted, using the following assumptions:

---

| | |
|:---|:---|
|  | **Options** |
| Expected dividend yield | $0.0 |
| Weighted average expected volatility | 65% |
| Weighted average risk-free rate | 4.01% |
| Weighted average expected life (years) | 2.87 |
| Share price | $6.99 |
| Weighted average exercise price | $50.15 |
| Weighted average fair value | $0.90 |

---

The expected volatility of these options was determined using historical volatility rates and the expected life was determined using the weighted average life of past options issued.

The fair value of the replacement DSUs of $6.99 per DSU was based on the listed share price of Ceapro as at June 3, 2024 (CA$0.225), after giving effect to the exchange of each outstanding Ceapro common share for 0.02360 of a Aeterna common share and the foreign currency exchange rate.

&nbsp;&nbsp;&nbsp;&nbsp;(4) The
 fair value of the 114,405 warrants deemed issued to Aeterna warrant holders was estimated using a Black-Scholes option pricing model,
 considering the terms and conditions upon which the warrants were issued, using the following assumptions:

---

| | |
|:---|:---|
|  | **Warrants** |
| Expected dividend yield | $0.00 |
| Weighted average expected volatility | 65% |
| Weighted average risk-free rate | 4.47% |
| Weighted average expected life (years) | 1.19 |
| Share price | $6.99 |
| Weighted average exercise price | $87.04 |
| Weighted average fair value | $0.02 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(5) The
 identifiable intangible assets consist of patents expiring between 2027 and 2041 which will be amortized on their respective remaining
 patent life. To estimate the fair value of the intangible assets, management uses the royalty relief method to value patents using
 discounted cash flow models. Management developed assumptions related to revenue, royalty rates and discount rates.

For the period subsequent to the Transaction, Aeterna contributed revenue of $1,095 and net loss of $5,607 to the Company's results. If the acquisition had occurred on January 1, 2024, management estimates that revenue would have been $9,593 and consolidated net loss for the year would have been $24,972. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2024.

The Company incurred acquisition-related costs of $4,081 on legal fees and due diligence costs. These costs have been included in Selling, general and administrative expenses as incurred.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**6.** **Revenue** 

**Disaggregation of revenue** 

The Company derives revenue from the transfer of goods and services at a point in time in the following categories and regions:

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2025** | **Year ended December 31, 2025** | **Year ended December 31, 2025** |
|  | **Active Ingredients** | **Biopharmaceutical** | **Total** |
|  | **$** | **$** | **$** |
| United States | 4604 |  | **4604** |
| Germany | 2378 |  | **2378** |
| United Kingdom |  | 457 | **457** |
| Other | 55 | 4 | **59** |
|  | **7037** | **461** | **7498** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2024** | **Year ended December 31, 2024** | **Year ended December 31, 2024** |
|  | **Active Ingredients** | **Biopharmaceutical** | **Total** |
|  | **$** | **$** | **$** |
| United States | 6691 |  | **6691** |
| Germany | 1360 |  | **1360** |
| Colombia | 300 |  | **300** |
| United Kingdom |  | 976 | **976** |
| Other | 141 | 119 | **260** |
|  | **8492** | **1095** | **9587** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Year ended December 31, 2023** | **Year ended December 31, 2023** | **Year ended December 31, 2023** |
|  | **Active Ingredients** | **Biopharmaceutical** | **Total** |
|  | **$** | **$** | **$** |
| United States | 3416 |  | **3416** |
| Germany | 3563 |  | **3563** |
| Other | 164 |  | **164** |
|  | **7143** |  | **7143** |

---

Revenues of approximately $6,302 (2024 – $7,593 and 2023 - $6,337) are derived from a single customer.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

*Deferred revenue*

The deferred revenue balance primarily relates to the advance consideration received in the form of non-refundable non-creditable upfront payment and milestone payments relating to list price approvals of Ghryvelin™ in the United Kingdom, Spain and Germany as per an exclusive licensing agreement for the commercialization of macimorelin (the "Licensed Product") in the European Economic Area and the United Kingdom and an exclusive supply agreement for a period of ten years, subject to renewal, to supply such Licensed Product.

Revenue for this contract will be recognized based on units of Licensed Product supplied. The total units that the Company expects to supply pursuant to the Pharmanovia Agreement is an estimate, based on current projections and anticipated market demand, and therefore will be a significant judgement that will be relied upon when using the outputs method to recognize revenue. The Company expects to recognize the balance of the deferred revenue over the remaining period of eight years, subject to extension based on the outcome of the ongoing clinical development related to the Pediatric Indication and related patent application initiatives.

During the year ended December 31, 2024, the Company deferred indefinitely future material investments in the development of macimorelin for the diagnosis of CGHD. This decision resulted in a reduction of future product sales to Pharmanovia, and consequently, the Company recognized expected breakage of $715 in proportion to the pattern of sales.

For the year ended December 31, 2025, the Company recognized $15 (2024 - $845) respectively as revenue, from the deferred revenue balance.

 

**Liabilities related to contracts with customers** 

The Company has recognized the following deferred revenue balances related to contracts with customers:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|  | **Non-Current** | **Total** | **Total** |
|  | $— | $— | **$** |
| Pharmanovia |  |  | **999** |
| NK Meditech Limited |  |  | **50** |
| Davimed GmbH |  |  | **9** |
|  |  |  | **1058** |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Non-Current** | **Total** | **Total** |
|  | $— | $— | **$** |
| Pharmanovia |  |  | **990** |
| NK Meditech Limited |  |  | **44** |
|  |  |  | **1034** |

---

**7.** **Cash and cash equivalents** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Cash on hand and balances with banks | **7307** | 16393 |
|  | **7307** | 16393 |

---

The Company had restricted cash equivalents amounting to $125 at December 31, 2025 (2024 - $123). These balances consist of certificates of deposit that are used as collateral for corporate credit cards and leases.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**8.** **Trade and other receivables** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Trade accounts receivable, net | **1081** | 1884 |
| Value added tax | **71** | 383 |
| Other receivables | **109** | 90 |
|  | **1261** | 2357 |

---

**9.** **Inventories** 

The Company had the following inventories at the end of each reporting period:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Raw materials | **585** | 737 |
| Work in progress | **620** | 1655 |
| Finished goods | **102** | 299 |
|  | **1307** | 2691 |

---

Inventories expensed to cost of goods sold during the year ended December 31, 2025, are $3,531 (2024 - $4,432 and 2023 - $3,472).

During the year ended December 31, 2025, the Company wrote down the carrying value of inventory by $98 (2024 - $7 and 2023 - $3) primarily due to damaged or obsolete inventory. $22 of the write-down is included in cost of goods sold and $76 of the write-down is presented as a separate line item in the statement of loss and comprehensive loss as it related to the decision to suspend operations for the cosmeceutical product line.

**10.** **Prepaid expenses and other current assets** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Prepaid insurance | **1403** | 1700 |
| Prepaid research and development | **1** | 516 |
| Other | **184** | 210 |
|  | **1588** | 2426 |

---

**11.** **Assets held for sale** 

During the year ended December 31, 2025, management made the decision to sell a heating, ventilation, and air conditioning (HVAC) system and an Ethanol Recovery System (ERS) by December 31, 2025 due to underutilization. The ERS was sold for proceeds of $250 during the year ended December 31, 2025 and management is actively searching for a buyer for the HVAC system. The sale of the HVAC system is expected to take place during the year ended December 31, 2026.

Refer to note 12 for information about assets that were classified as held for sale as at December 31, 2025.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**12.** **Property and equipment** 

Components of the Company's property and equipment are summarized below.

---

| |
|:---|
| **At January 1, 2024** |
| Acquisition of Aeterna (note 5) |
| Additions |
| Impairment) |
| Disposals) |
| Impact of foreign exchange rate changes |
| **At December 31, 2024** |
| Additions |
| Impairment) |
| Disposals) |
| Impact of foreign exchange rate changes |
| **At December 31, 2025** |

---

---

| | |
|:---|:---|
|  | **Accumulated Depreciation** |
|  | **Equipment**<br> **Not**<br> **Available**<br> **for Use** |
|  | **$** |
| **At January 1, 2024** | - |
| Amortization |  |
| Disposals | -) |
| Impact of foreign exchange rate changes | - |
| **At December 31, 2024** |  |
| Amortization |  |
| Disposals | -) |
| Impact of foreign exchange rate changes | - |
| **At December 31, 2025** | **-** |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Carrying amount** | **Carrying amount** | **Carrying amount** | **Carrying amount** | **Carrying amount** | **Carrying amount** |
|  | **Equipment**<br> **Not**<br> **Available**<br> **for Use** | **Equipment** | **Office and**<br> **Computer**<br> **Equipment** | **Buildings** | **Leasehold**<br> **Improvements** | **Total** |
|  | **$** | **$** | **$** | **$** | **$** | **$** |
| At December 31, 2024 | 2805 | 3350 | 95 | 2017 | 2699 | 10966 |
| **At December 31, 2025** | **2420** | **2848** | **74** | **1854** | **2609** | **9806** |

---

Additions of property and equipment amounting to $nil as at December 31, 2025 (2024 - $263) are included in accounts payable and accrued liabilities.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

Included in the net carrying amount of property and equipment at December 31, 2025, are right-of-use assets relating to buildings, in the amount of $1,854 (2024 - $1,990).

During the year ended December 31, 2025, the Company retired fully depreciated assets no longer in use of $470 (2024 - $1,241).

Disposals during the year ended December 31, 2025 include equipment reclassified to assets held for sale in the amount of $285 after impairment (note 11).

Assets classified as held for sale during the reporting period as described in note 11 were measured at the lower of carrying value and fair value less costs to sell at the time of the reclassification, resulting in the recognition of an impairment loss of $240 in the consolidated financial statements. The fair value of the equipment was determined using the market approach, which is a level 3 measurement under the fair value hierarchy.

During the year ended December 31, 2025, the Company performed an impairment test on certain equipment not in use due to its underutilization and subsequent change in plans for its commissioning, as described in note 6. The Company recognized impairment losses of $182 and $58 on the ERS and HVAC, respectively. Based on fair value less costs to sell using comparable market data, the recoverable amounts of the ERS and HVAC were determined to be $252 and $36, respectively.

The Company considers sustained fluctuations in revenue and operating losses, among other factors, as indicators of impairment. As of December 31, 2025, the Active Ingredient CGU has experienced decline in revenues and continued to incur operating losses for a sustained period of time, suggesting potential impairment. As a result, the Company tested the Active Ingredient CGU for impairment and the recoverable amount was estimated based on its value in use, using a discounted cash flow model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The significant estimates used in the determination of value in use included forecasted revenues, costs, growth rate and discount rate. As at December 31, 2025, the value in use of the CGU tested for impairment was determined using a pre-tax discount rate of 11.4%, based on historical industry average weighted-average cost of capital, gross margin of 40% based on management's estimated cost of sales, and a terminal value growth of 2%, based on management's estimate of the long-term compound annual growth rate. The recoverable amount of the CGU tested was estimated to be higher than its carrying amount and no impairment was required. No reasonable change in the discount rate or the terminal value growth could cause the carrying amount to exceed the recoverable amount. However, a decrease in the gross margin of 5% could cause the carrying amount to exceed the recoverable amount.

gross margin of 40% based on management's estimated cost of sales, However, a decrease in the gross margin of 5% could cause the carrying amount to exceed the recoverable amount.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**13.** **Intangible assets** 

Changes in the carrying value of the Company's identifiable intangible assets, consisting of patents, are summarized below.

---

| | |
|:---|:---|
|  | **Accumulated**<br> **amortization** |
| **At January 1, 2024** | **(27)** |
| Acquisition of Aeterna (note 5) |  |
| Amortization | (162) |
| Impairment of intangible assets) | -) |
| Impact of foreign exchange rate changes | - |
| **At December 31, 2024** | **(189)** |
| Amortization |  |
| Impairment of intangible assets |  |
| Impact of foreign exchange rate changes | - |
| **At December 31, 2025** | - |

---

On June 3, 2024, the Company acquired intangible assets of $3,352 through the Transaction (see Note 5). On August 27, 2024, the Company announced that the Phase 3 DETECT-trial evaluating macimorelin for the diagnosis of CGHD had failed to meet its primary endpoints according to the definitions in the study protocol and recorded a partial impairment of the patent intangible assets as of September 30, 2024. Based on the results of the study and further strategic evaluation of the Company's product portfolio, the Company made the decision in 2024 to cease any future investments in macimorelin for the diagnosis of CGHD.

Consequently, management carried out an impairment test for the year ended December 31, 2024. The recoverable amount of the macimorelin patent intangible assets was estimated based on the present value of the future cash flows expected to be derived from the macimorelin patent intangible assets (value in use), assuming that the regulatory approval is delayed indefinitely. Accordingly, the recoverable amount of both the macimorelin adult and child patent intangible assets were estimated to be nil and a $3,196 impairment was recorded during the year ended December 31, 2024.

Due to the insolvency process described in note 29, the Company anticipates surrendering its rights to macimorelin.

**14.** **Payables and accrued liabilities** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Trade accounts payable |  | 2407 |
| Accrued research and development costs |  | 1344 |
| Accrued employee benefits |  | 607 |
| Payroll tax and other statutory liabilities**)** |  | 25 |
| Other accrued liabilities |  | 347 |
|  |  | 4730 |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**15.** **Lease liabilities** 

The Company has leases for manufacturing facilities, office space, and warehouse. The lease liabilities consist of leases of buildings. The leases have been discounted using interest rates between 5.57% - 7.59%.

---

| | |
|:---|:---|
|  | **December 31,** |
|  | **2025** |
|  | **$** |
| Balance – Beginning of year |  |
| Acquisition of Aeterna (note 5) |  |
| Additions |  |
| Interest paid as charged to net loss as other finance costs |  |
| Payment against lease liabilities**)** |  |
| Modification of lease liability**)** |  |
| Impact of foreign exchange rate changes |  |
| **Balances – End of the year** |  |
| Current lease liabilities |  |
| Non-current lease liabilities |  |

---

Future lease payments as of December 31, 2025, are as follows:

---

| | |
|:---|:---|
|  | **Amount** |
|  | **$** |
| Less than 1 year | 335 |
| 1 – 3 years | 957 |
| 4 – 5 years | 571 |
|  | **1863** |

---

In November 2024, the Company exercised extension options on two facility leases, extending each for five years. This resulted in a $992 increase to both the lease liability and a corresponding increase in the right-of-use asset for buildings (Note 11). This non-cash transaction is excluded from the Statement of Cash Flows. No lease extension occurred in 2025.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**16.** **Employee future benefits** 

The change in the Company's employee future benefit obligations is summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Twelve months ended December 31, 2025** | **Twelve months ended December 31, 2025** | **Twelve months ended December 31, 2025** |
|  | **Pension**<br>**benefit plans** | **Other**<br>**benefit plans** |<br>**Total** |
|  | **$** | **$** | **$** |
| **Change in plan liabilities** |  |  |  |
| Balances – Beginning of the period |  |  |  |
| Current service cost) |  |  |  |
| Interest cost |  |  |  |
| Actuarial gain from changes in financial assumptions) |  |  |  |
| Benefits paid) |  |  |  |
| Impact of foreign exchange rate changes |  |  |  |
| **Balances – End of the period** |  |  |  |
| **Change in plan assets** |  |  |  |
| Balances – Beginning of the period |  |  |  |
| Interest income from plan assets |  |  |  |
| Employer contributions |  |  |  |
| Employee contributions |  |  |  |
| Benefits paid) |  |  |  |
| Remeasurement of plan assets |  |  |  |
| Unrecognized Asset due to Asset Ceiling) |  |  |  |
| Impact of foreign exchange rate changes |  |  |  |
| **Balances – End of the period** |  |  |  |
| Net liability of the unfunded plans |  |  |  |
| Net liability of the funded plans |  |  |  |
| **Net amount recognized as Employee future benefits** |  |  |  |
| Amounts recognized: |  |  |  |
| &nbsp;&nbsp;&nbsp;In net loss**)** |  |  |  |
| &nbsp;&nbsp;&nbsp;Actuarial gain on defined benefit plans in other comprehensive loss |  |  |  |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

---

| |
|:---|
| **Change in plan liabilities** |
| Balances – Beginning of the period |
| Acquisition of Aeterna (note 5) |
| Current service cost) |
| Interest cost |
| Actuarial loss from changes in financial assumptions |
| Benefits paid) |
| Impact of foreign exchange rate changes |
| **Balances – End of the period** |
| **Change in plan assets** |
| Balances – Beginning of the period |
| Acquisition of Aeterna (note 5) |
| Interest income from plan assets |
| Employer contributions |
| Employee contributions |
| Benefits paid) |
| Remeasurement of plan assets |
| Impact of foreign exchange rate changes |
| **Balances – End of the period** |
| Net liability of the unfunded plans |
| Net liability of the funded plans |
| **Net amount recognized as Employee future benefits** |
| Amounts recognized: |
| &nbsp;&nbsp;&nbsp;In net loss**)** |
| &nbsp;&nbsp;&nbsp;Actuarial loss on defined benefit plans in other comprehensive loss**))** |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

The fair values of each major class of the Company's proportionate share of the multi-employer pension plan assets are as follows:

---

| | |
|:---|:---|
|  | **December 31,** |
|  | **2025** |
|  | **$** |
| Cash and cash equivalents (level 1) | **113** |
| Debt instruments (level 1) | **7001** |
| Equity instruments (level 1) | **1062** |
| Real estate (level 3) | **2216** |
| Other (level 3) | **859** |
|  | **11251** |

---

---

| | |
|:---|:---|
|  | **December 31,** |
|  | **2024** |
|  | **$** |
| Cash and cash equivalents (level 1) | **30** |
| Debt instruments (level 1) | **6664** |
| Equity instruments (level 1) | **1022** |
| Real estate (level 3) | **2256** |
| Other (level 3) | **697** |
|  | **10669** |

---

The significant actuarial assumptions applied to determine the Company's accrued benefit obligations are as follows:

---

| | | |
|:---|:---|:---|
|  | **Pension Benefit Plans**<br>**Years ended December 31,** | **Other benefit plans**<br>**Years ended December 31,** |
| **Actuarial assumptions** | **2025** | **2025** |
|  | **%** | **%** |
| Discount rate | **4.20%** | **4.20%** |
| Pension benefits increase | **2.00%** | **-** |
| Rate of compensation increase | **2.50%** | **2.50%** |

---

---

| | |
|:---|:---|
|  | **Years ended December 31,** |
| **Actuarial assumptions** | **2024** |
|  | **%** |
| Discount rate | **3.40%** |
| Pension benefits increase | **2.00%** |
| Rate of compensation increase | **2.50%** |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in Germany. These assumptions translate into an average remaining life expectancy in years for a pensioner retiring at age 65:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2025** |
|  | **Years** | **Years** |
| Retiring at the end of the reporting period: |  |  |
| &nbsp;&nbsp;&nbsp;Male |  | **21** |
| &nbsp;&nbsp;&nbsp;Female |  | **24** |

---

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2024** | **2024** |
|  | **Years** | **Years** |
| Retiring at the end of the reporting period: |  |  |
| &nbsp;&nbsp;&nbsp;Male |  | **21** |
| &nbsp;&nbsp;&nbsp;Female |  | **24** |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

In accordance with the assumptions used as of December 31, 2025, undiscounted defined pension benefits expected to be paid are as follows:

---

| | |
|:---|:---|
|  | **Amount** |
|  | **$** |
| 2026 | 944 |
| 2027 | 1047 |
| 2028 | 1079 |
| 2029 | 1317 |
| 2030 | 1319 |
| Thereafter | 35504 |
|  | **41210** |

---

The weighted average duration of the defined benefit obligation is 13.0 years.

If variations in the following assumptions had occurred during 2025, the impact on the Company's pension benefit obligation of $22,236 as of December 31, 2025, would have been as follows:

---

| | | |
|:---|:---|:---|
| **Assumption** | **Increase** | **Decrease** |
|  | **$** | **$** |
| Change in discount rate of 0.25% |  |  |
| Change in salary rate of 0.25% |  |  |
| Change in pension rate assumption by 0.25% |  |  |
| Change mortality by one year |  |  |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**17.** **Warrants** 

Warrant activity for the years ended December 31, 2025, 2024 and 2023, was as follows:

---

| | | |
|:---|:---|:---|
|  | **Number** | **Weighted**<br> **average**<br> **exercise price** |
|  | **#** | **$** |
| **Balance at December 31, 2023** | **-** | **-** |
| Warrants either issued or assumed as part of the acquisition of Aeterna (note 5) | 747948 | 13.32 |
| Exercised | (66561) | 0.01) |
| Expired | (13249) | 165.00 |
| Change in fair value of warrants | - | - |
| **Balance at December 31, 2024** | **668138** | **2.35** |
| Exercised | (17709) | 0.01) |
| Expired | (67339) | 58.90 |
| Change in fair value of warrants | - | - |
| **Balance at December 31, 2025** | **583090** | **1.93** |

---

The method and inputs used in estimating the fair value of warrants on the acquisition date are described in Note 5. The fair values of warrants as at December 31, 2025 are estimated using the Black-Scholes option pricing model. The weighted average assumptions used in the Black-Scholes valuation model for the period presented were as follows:

---

| | |
|:---|:---|
|  | **December 31, 2025** |
| Expected dividend yield | $0.00 |
| Expected volatility | 65.00% |
| Risk-free annual interest rate | 4.16% |
| Expected life (years) | 1.35 |
| Weighted average share price | $2.76 |
| Weighted average exercise price | $1.93 |

---

The expected volatility of these warrants was determined using historical volatility rates and the expected life was determined based on time to expiry from the issuance date.

At December 31, 2025, the following warrants were outstanding:

---

| | | |
|:---|:---|:---|
| **Warrant issuance** | **Number** | **Weighted**<br> **average**<br> **exercise price** |
|  | **#** | **$** |
| August 2020 | 17310 | 47.00 |
| February 2021 | 16507 | 181.25 |
| June 2024 | 549273 | 0.01 |
| **Balance – December 31, 2025** | **583090** | **1.93** |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**18.** **Deferred share units** 

The Company grants deferred share units ("DSUs") to members of its Board of Directors and DSUs cannot be redeemed until the holder is no longer a director of the Company. Under the terms of the Long-Term Incentive Plan ("LTIP"), DSUs vest immediately and can either be settled via equity issuance or a cash payment, which is determined by the Board of Directors on the date of issuance for each grant. Each DSU settled by the issuance of one common share of the Company, net of applicable withholding taxes, is classified as equity-settled, while the DSUs settled by cash payment are classified as cash-settled.

**Cash-settled deferred share units**

Cash-settled DSU activity for the year ended December 31, 2025, was as follows:

---

| | |
|:---|:---|
|  | **Units** |
|  | **#** |
| **Balance – January 1, 2025** | **12250** |
| Exercised | **(12250)** |
| Change in fair value of cash-settled DSUs | **-** |
| **Balance – December 31, 2025** | **-** |

---

The method and inputs used in estimating the fair value of DSUs on the acquisition date are described in Note 5. The fair value of the liability, classified as DSU liability, is subsequently remeasured at each reporting date and at settlement date, with changes in fair value recognized in profit or loss.

**Equity-settled deferred share units**

The compensation expense for the year ended December 31, 2025, was $nil (2024 - $411) and is presented in selling, general and administrative expenses. Equity-settled DSU activity for the years ended December 31, 2025, 2024 and 2023, was as follows:

---

| | |
|:---|:---|
|  | **2025** |
|  | **#** |
| **Balance – December 31, 2023** | **-** |
| Granted | 65000 |
| Exercised | (12500) |
| **Balance – December 31, 2024** | **52500** |
| Exercised | **(25000)** |
| **Balance – December 31, 2025** | **27500** |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**19.** **Shareholders' equity** 

**Share capital**

The Company has authorized an unlimited number of common shares (being voting and participating shares) with no par value, as well as an unlimited number of preferred, first and second ranking shares, issuable in series, with rights and privileges specific to each class, with no par value.

---

| | | |
|:---|:---|:---|
|  | **Common shares** | **Amount** |
|  | **#** | **$** |
| **Balance – January 1, 2023** | 1846177 | 13496 |
| Stock options exercised | 1416 | 21 |
| **Balance – December 31, 2023** | 1847593 | 13517 |
| Deemed issuance of shares to Aeterna shareholders (note 5) | 1213967 | 8485 |
| Granted | 79061 | 484 |
| **Balance – December 31, 2024** | 3140621 | 22486 |
| Issued | **42709** | **138** |
| **Balance – December 31, 2025** | **3183330** | **22624** |

---

As discussed in Note 1, Business Overview, on June 3, 2024, each outstanding Ceapro common share was exchanged for 0.02360 of an Aeterna common share. Accordingly, all common shares, stock options and per share amounts in these consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the share exchange.

**Share-based compensation**

The Company grants stock options to eligible employees, directors and officers under stock option plans. During the year ended December 31, 2025, the Company granted nil (2024 – nil and 2023 – 21,712) new stock options. The stock options have a term of seven years and will vest over a period of three years. The compensation expense for the year ended December 31, 2025, was $(14) (2024 – $53 and 2023 – $192) recognized over the vesting period. Option activity for the year ended December 31, 2025, 2024, and 2023 was as follows:

---

| | |
|:---|:---|
|  | **Stock options** |
|  | **#** |
| **Balance – January 1, 2023** | **64735** |
| Granted | 21712 |
| Exercised | (1416) |
| Cancelled / Forfeited | (10660) |
| **Balance –December 31, 2023** | **74371** |
| Granted - Replacement options (note 5) | 12949 |
| Cancelled / Forfeited | (11296) |
| **Balance – December 31, 2024** | **76024** |
| Cancelled / Forfeited | (27843) |
| **Balance – December 31, 2025** | **48181** |

---

Concurrent with the Transaction described in Note 1, Business Overview, on June 3, 2024, each outstanding stock option was reissued to reflect the exchange rate of the Company's common shares. Accordingly, all quantities and prices in these consolidated financial statements have been retroactively adjusted for all periods presented to give effect to the share exchange and related adjustments.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**20.** **Expenses by nature** 

**** 

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Inventory expensed during the year | **3531** | 4432 |
| Employee benefits expense | **6366** | 5207 |
| Depreciation and amortization | **1188** | 1607 |
| Professional and consulting fees | **3332** | 4649 |
| Third-party research and development | **1602** | 5507 |
| Impairment of property and equipment | **240** | 1061 |
| Impairment of intangible assets | **-** | 3196 |
| Write-down of inventory | **76** |  |
| Other | **1844** | 2208 |
|  | **18179** | 27867 |

---

**21.** **Supplemental disclosure of cash flow information** 

---

| | |
|:---|:---|
|  | **December 31,** |
|  | **2023** |
|  | **$** |
| Changes in operating assets and liabilities: |  |
| Trade and other receivables) |  |
| Inventories) |  |
| Prepaid expenses and other current assets) |  |
| Investment tax credit receivable) |  |
| Payables and accrued liabilities**)** |  |
| Deferred revenues |  |
| Provisions**)** |  |
| Employee future benefits |  |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**22.** **Income taxes** 

Significant components of the current and deferred income tax recovery for the years ended December 31, 2025, 2024 and 2023 are as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Current income tax expense |  |  |
| **Deferred tax:** |  |  |
| Origination and reversal of temporary differences**)** |  |  |
| Tax rate changes and tax rate differences |  |  |
| Change in unrecognized deductible temporary differences |  |  |
| Prior period adjustments |  |  |
| **Income tax (benefit) expense** |  |  |

---

The reconciliation of the combined Canadian federal and provincial corporate income tax rate to the income tax expense for the years ended December 31, 2025, 2024 and 2023 is provided below:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **2023** |
|  | **$** | **$** | **$** |
| (Loss) Profit before tax | **(10348)** | (15225) | (4370) |
| Combined Canadian federal and provincial statutory income tax rate | **26.50%** | 26.50% | 23.00% |
| Expected tax expense at the Canadian combined federal and statutory tax rate | **(2742)** | (4035) | (1006) |
| Non-deductible expenses | **396** | 215 | 45 |
| Change in unrecognized deductible temporary differences | **2977** | 3998 | 28 |
| Change in tax rates and rate differences | **29** | (328) | 70 |
| Expiration of tax attributes | **(38)** | 214 |  |
| Prior period adjustments | **(103)** | 15 | (22) |
| Other | **(509)** | 5 | - |
| **Income tax (benefit) expense** | **10** | 84 | (885) |

---

 

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

Loss before income taxes is attributable to the Company's tax jurisdictions for the years ended December 31, 2025, 2024 and 2023 are as follows:

---

| |
|:---|
| Canada**)** |
| Germany**)** |
| United States |

---

Significant components of deferred tax assets and liabilities are as follows:

---

| |
|:---|
| **Deferred tax assets are attributable to the following:** |
| Patents |
| Intangibles |
| Other |
| SRED pool |
| Lease liabilities |
| Non-capital losses |
| **Deferred tax assets** |
| Offset by deferred tax liabilities |
| **Net deferred tax asset** |
| **Deferred tax liabilities are attributable to the following:** |
| Property and equipment**)** |
| Other |
| **Deferred tax liabilities)** |
| Offset by deferred tax assets |
| **Net deferred tax liability** |

---

Deferred income tax assets are recognized to the extent that the realization of the related tax benefit through reversal of temporary differences and future taxable profits is probable. Based on the current forecasted future taxable profits and reversal of temporary differences, the company does not believe it will have sufficient future earnings to offset the deferred tax assets and has an unrecognized deferred tax asset balance of $107,933 (2024 - $111,120).

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

The amount of deductible temporary differences and unused tax losses for which no deferred tax asset is recognized in the balance sheet is as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| **Canada** | **144226** | 142926 |
| **Germany** | **258243** | 225050 |
| **United States** | **6020** | 5634 |
|  | **408489** | 373610 |

---

The non-capital loss carryforwards in Canada expire between 2028 and 2045, the United States expire between 2030 and 2045, and there is no expiry date on the losses in Germany. As of December 31, 2025, the Company also has unrecognized non-refundable Canadian Federal income tax credits of $1,571 (2024 - $1,818), which expire between 2026 and 2043. Deferred tax assets and non-refundable investment tax credits have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company and its subsidiaries can utilize the benefits.

**23.** **Capital disclosures** 

The Company's objective in managing capital, consisting of shareholders' equity, with cash and cash equivalents and restricted cash equivalents being its primary components, is to ensure sufficient liquidity to finance its manufacturing operations, research and development costs, selling, general and administrative expenses and working capital requirements. Historically, the Company has raised capital via public and private equity offerings and issuances as its primary source of liquidity, as discussed in note 24. The capital management objective of the Company remains the same as that in previous periods. The policy on dividends is to retain cash to keep funds available to finance the activities required to advance the Company's product development portfolio and to pursue appropriate commercial opportunities as they may arise.

The Company is not subject to any capital requirements imposed by any regulators or by any other external source.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**24.** **Financial instruments and financial risk management** 

Financial assets and liabilities as of December 31, 2025, and 2024 are presented below.

---

| | | |
|:---|:---|:---|
| **December 31, 2025** | **Financial assets**<br> **at amortized cost** | **Financial liabilities**<br> **at amortized cost** |
|  | **$** | **$** |
| Cash and cash equivalents | **7307** | - |
| Trade and other receivables | **1261** |  |
| Restricted cash equivalents | **125** |  |
| Payables and accrued liabilities | **-** | **1879** |
|  | **8693** | **1879** |

---

---

| | | |
|:---|:---|:---|
| **December 31, 2024** | **Financial assets**<br> **at amortized cost** | **Financial liabilities**<br> **at amortized cost** |
|  | **$** | **$** |
| Cash and cash equivalents | 16393 | - |
| Trade and other receivables | 2144 |  |
| Restricted cash equivalents | 123 |  |
| Payables and accrued liabilities | - | 4712 |
|  | **18660** | **4712** |

---

The Company assessed that the fair values of cash and cash equivalents, trade receivables and other receivables, restricted cash equivalents, and payables and accrued liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.

Assets and liabilities, such as value added taxes, that are not contractual and that arise as a result of statutory requirements imposed by governments, do not meet the definition of financial assets or financial liabilities and are, therefore, excluded from trade and other receivables and payables and accrued liabilities.

**Financial risk factors**

The following provides disclosures relating to the nature and extent of the Company's exposure to risks arising from financial instruments, including credit risk, liquidity risk and foreign exchange risk and how the Company manages those risks.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Credit risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company regularly monitors credit risk exposure and takes steps to mitigate the likelihood of this exposure resulting in losses. The Company's exposure to credit risk currently relates to the financial assets at amortized cost in the table above. The Company holds its available cash in amounts that are readily convertible to known amounts of cash and deposits its cash balances with financial institutions that have an investment grade rating of at least "P-2" or the equivalent. This information is supplied by independent rating agencies where available and, if not available, the Company uses publicly available financial information to ensure that it invests its cash in creditworthy and reputable financial institutions. Once there are indicators that there is no reasonable expectation of recovery, such financial assets are written off but are still subject to enforcement activity.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

As of December 31, 2025, one counterparty included in trade and other receivables comprised 45% of total receivables (2024 – one counterparty for 75%) of which $nil (2024 - $nil) was past due. Generally, the Company does not require collateral or other security from customers for trade accounts receivable; however, credit is extended following an evaluation of creditworthiness. In addition, the Company performs ongoing credit reviews of all of its customers and determines expected credit losses. On this basis, as of December 31, 2025 and December 31, 2024, the Company has provided for all outstanding and unpaid amounts relating to its operations.

Based on historical data and management's assessment of current credit risk, which remains low, no expected credit loss allowance is deemed necessary under IFRS 9. The Company continuously monitors customer creditworthiness and maintains strict credit policies. The Company considers the credit risk associated with these financial assets to be minimal. The maximum exposure to credit risk approximates the amount recognized in the Company's consolidated statement of financial position.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages this risk through the management of its capital structure by monitoring rolling forecasts of the Company's cash and cash equivalents on the basis of expected cash flows.

All of the Company's financial liabilities except lease liabilities are current liabilities with expected settlement dates within one year. The maturity analysis for lease liabilities is disclosed in note 15.

While the Company has $7,307 in cash and cash equivalents at December 31, 2025, the Company has noted the existence of a material uncertainty that raises substantial doubt about the Company's ability to continue as a going concern (refer to note 1).

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Foreign exchange risk

*Entities using the Canadian dollar as their functional currency*

The Company is exposed to foreign exchange risk due to its investments in foreign operations whose functional currency is the Canadian Dollar. The following table summarizes the impact of a 10% change in the foreign exchange rates of the Canadian dollar against the US dollar on the financial assets and liabilities of the Company. The amounts have been translated based on the exchange rate at December 31, 2025, 2024 and 2023.

---

| | | | |
|:---|:---|:---|:---|
| December 31, 2025 |  | **Foreign Exchange Risk (US$)** | **Foreign Exchange Risk (US$)** |
|  | **Carrying**<br> **Amount (US$)** | **-10% Net**<br> **Income and**<br> **Equity** | **+10% Net**<br> **Income and**<br> **Equity** |
| **Financial assets** |  |  |  |
| Trade receivables | 673 | 67 | (67) |
| **Financial liabilities** |  |  |  |
| Accounts payable and accrued liabilities | 88 | (8) | 8 |
| **Total increase (decrease)** |  | 59 | (59) |

---

---

| | | | |
|:---|:---|:---|:---|
| December 31, 2024 |  | **Foreign Exchange Risk (US$)** | **Foreign Exchange Risk (US$)** |
|  | **Carrying**<br> **Amount (US$)** | **-10% Net**<br> **Income and**<br> **Equity** | **+10% Net**<br> **Income and**<br> **Equity** |
| **Financial assets** |  |  |  |
| Trade receivables | 1847 | 185 | (185) |
| **Financial liabilities** |  |  |  |
| Accounts payable and accrued liabilities | 90 | (9) | 9 |
| **Total increase (decrease)** |  | 176 | (176) |

---

---

| | | | |
|:---|:---|:---|:---|
| December 31, 2023 |  | **Foreign Exchange Risk (US$)** | **Foreign Exchange Risk (US$)** |
|  | **Carrying**<br> **Amount (US$)** | **-10%**<br> **Net Income and**<br> **Equity** | **+10% Net**<br> **Income and**<br> **Equity** |
| **Financial assets** |  |  |  |
| Trade receivables | 95 | 10 | (10) |
| **Financial liabilities** |  |  |  |
| Accounts payable and accrued liabilities | 42 | (4) | 4 |
| **Total increase (decrease)** |  | 6 | (6) |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**25.** **Net loss per share** 

The following table sets forth pertinent data relating to the computation of basic and diluted net loss per share attributable to common shareholders.

---

| |
|:---|
| **Net (loss) income** |
| Basic weighted-average number of shares outstanding |
| Dilutive weighted-average number of shares outstanding |
| Basic (loss) income per share**)** |
| Dilutive (loss) income per share**)** |
| Items excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: |
| &nbsp;&nbsp;&nbsp;Stock options and DSUs |
| &nbsp;&nbsp;&nbsp;Share purchase warrants |

---

**26.** **Segment information** 

As of December 31, 2025 and a result of the Transaction, the Company has two reportable and operating segments: Active ingredient and Biopharmaceutical. The Company's chief operating decision maker (the Chief Executive Officer) assesses the performance of the reportable segments based on revenues and operating losses before selling, general & administrative expenses, other income and tax by segment. Selling, general and administrative expenses are expenses and salaries related to centralized functions, such as corporate finance, legal, human resources and technology teams, which are not allocated to segments. Accounting policies applied for the Active ingredient and the Biopharmaceutical segments are identical to those used for the purposes of the consolidated financial statements as described in Note 3.

*Active ingredient*

 

The Active ingredient segment involves the development of proprietary extraction technologies and the application of these technologies to the production and development and commercialization of active ingredients derived from oats and other renewable plant resources for healthcare and cosmetic industries. Active ingredients produced include oat beta glucan, oat oil and avenanthramides. These and similar manufactured products are sold primarily through distribution networks.

*Biopharmaceutical*

 

The Biopharmaceutical segment includes the results of Aeterna Zentaris from its acquisition on June 3, 2024 (Note 5). The segment involves the commercializing and developing pharmaceutical therapeutics and diagnostic tests, including the Company's lead product, Macrilen<sup>®</sup> (macimorelin). The segment also includes costs associated with the development of our pre-clinical pipeline to potentially address unmet medical needs across several indications with a focus on rare or orphan indications.

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

The table below summarizes the relevant financial information by operating segment:

---

| |
|:---|
| Revenue |
| Cost of sales |
| **Gross margin** |
| Research and development) |
| Impairment of property and equipment) |
| Write-down of inventories |
| **Income (loss) from operations before SG&A and other income (expenses)** |
| Selling, general & administrative) |
| Corporate costs |
| **Loss from operations** |
| Net other income |
| **Loss before income taxes** |

---

---

| |
|:---|
| Revenue |
| Cost of sales |
| **Gross margin** |
| Research and development) |
| Impairment of intangible assets) |
| Impairment of property and equipment |
| **Loss from operations before SG&A and other income (expenses))** **))** |
| Selling, general & administrative) |
| Corporate costs |
| **Loss from operations** |
| Net other income |
| **Loss before income taxes** |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

---

| | |
|:---|:---|
|  | **Year ended December 31, 2023** |
|  | **Biopharmaceutical** |
|  | **$** |
| Revenue |  |
| Cost of sales |  |
| **Gross margin** |  |
| Research and development |  |
| **Income from operations before SG&A and other income (expenses)** |  |
| Selling, general & administrative) |  |
| **Income from operations** |  |
| Net other income |  |
| **Income before income taxes** |  |

---

 

*Major Customer*

 

During the year ended December 31, 2025, the Company had sales to one major customer representing 84% of total revenue (2024 - 79% of total revenue, 2023 – 89% of total revenue). As at December 31, 2025, one customer represented 45% of total trade and other receivables (2024 – one customer amounted to 75%).

Non-current assets include restricted cash equivalents and property and equipment, and are detailed by geographical area as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2025** | **2024** |
|  | **$** | **$** |
| Germany | **106** | 205 |
| Canada | **8180** | 9320 |
| United States | **73** | 71 |
| Austria | **1572** | 1493 |
|  | **9931** | 11089 |

---

**COSCIENS Biopharma Inc.**

Notes to Consolidated Financial Statements

As of December 31, 2025 and 2024 and for the years ended December 31, 2025, 2024 and 2023

(in thousands of US dollars, except share and per share data and where otherwise noted)

**27.** **Commitments and Contingencies** 

Significant expenditure contracted for at the end of the reporting period but not recognized as liabilities is as follows:

---

| | |
|:---|:---|
|  | **TOTAL** |
|  | **$** |
| Less than 1 year | 162 |
| 1 - 3 years | 19 |
| 4 - 5 years |  |
| More than 5 years | - |
|  | **181** |

---

The Company previously entered into license agreements with Agriculture Canada (AG) for a technology to increase the concentration of avenanthramides in selected oat and with University of Alberta for a Pressurized Gaz expanded Technology (PGX) for the processing of various polymers. The royalty percentage rate would be 2% strictly for sales made from avenanthramides produced from the AG technology while royalty percentage rates would range between 1.0% to 3.5% for sales made from products manufactured using the PGX Technology, the rate being according to the classification of the resulting product (cosmeceutical, nutraceutical, pharmaceutical).

**28.** **Related party disclosures** 

*Compensation of key management*

 

Key management includes the Company's Directors, Chief Executive Officer, Chief Financial Officer, Managing Director of GmbH, Managing Director of Edmonton, and Chief Scientific Officer. Compensation awarded to key management is summarized as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **December 31,** |
|  | **2025** | **2024** | **2023** |
|  | **$** | **$** | **$** |
| Salaries and short-term benefits | **2437** | 1587 | 1344 |
| Post-retirement benefits | **28** | 20 |  |
| Stock-based compensation | - | 411 | 121 |
|  | **2465** | 2018 | 1465 |

---

Most of the employment agreements entered into between the Company and its executive officers include termination provisions, whereby the executive officers would be entitled to receive benefits that would be payable if the Company were to terminate the executive officers' employment without cause or if their employment is terminated following a change of control. Separation benefits generally are calculated based on an agreed-upon multiple of applicable base salary and incentive compensation and, in certain cases, other benefit amounts.

During the year ended December 31, 2025, the Company made payments for research and development expenditures to Angiogenesis Foundation, for which a former Director of the Company is the CEO of the Foundation, of $nil (2024 - $50 and 2023 - $201). These transactions are in the normal course of operations and are measured at the amount of consideration established and agreed to by the related parties.

**29.** **Subsequent event** 

*Aeterna Zentaris GmbH Insolvency*

 

On March 5, 2026, the Company announced the strategic decision to cease funding its German subsidiaries, AEZS Germany, and its wholly-owned subsidiary Zentaris IVF GmbH. As a result, AEZS Germany, and its wholly owned subsidiary Zentaris IVF GmbH filed an insolvency petition on March 23, 2026 at a German Court to open insolvency proceedings. The Biopharmaceutical segment includes the results of AEZS Germany and Zentaris IVF GmbH as further described in note 26, segment information. The Company thereby anticipates through the insolvency process surrendering its rights to Macrilen® (macimorelin) and relinquish its control and deconsolidate its wholly-owned subsidiary, thereby significantly reducing its ongoing operating expenses.

**Item 19.** **Exhibits**

**Exhibit Index**

---

| | |
|:---|:---|
| 1.1 | [Restated Certificate of Incorporation and Restated Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 99.2 to the Registrant's report on Form 6-K furnished to the Commission on May 25, 2011)](https://www.sec.gov/Archives/edgar/data/1113423/000110465911031387/a11-12856_1ex99d2.htm) |
| 1.2 | [Certificate of Amendment and Articles of Amendment of the Registrant (incorporated by reference to Exhibit 99.2 to the Registrant's report on Form 6-K furnished to the Commission on October 3, 2012)](https://www.sec.gov/Archives/edgar/data/1113423/000119312512413759/d419369dex992.htm) |
| 1.3 | [Certificate of Amendment and Articles of Amendment of the Registrant (incorporated by reference to Exhibit 99.1 to the Registrant's report on Form 6-K furnished to the Commission on November 17, 2015)](https://www.sec.gov/Archives/edgar/data/1113423/000111342315000026/certificateexhibit991.htm) |
| 1.4 | [Certificate of Amendment and Articles of Amendment of the Registrant (incorporated by reference to Exhibit 1.4 to the Registrant's report on Form 20-F furnished to the Commission on March 26, 2024)](https://www.sec.gov/Archives/edgar/data/1113423/000149315224011401/ex1-4.htm) |
| 1.5\* | [Certificate of Amendment and Articles of Amendment of the Registrant](https://www.sec.gov/Archives/edgar/data/1113423/000149315224028055/ex1-4.htm) |
| 1.6 | [Amended and Restated By-Law One of the Registrant (incorporated by reference to Exhibit 1.3 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2012 filed with the Commission on March 22, 2013)](https://www.sec.gov/Archives/edgar/data/1113423/000111342313000012/exhibit13.htm) |
| 2.1 | [Amended and Restated Shareholder Rights Plan Agreement between the Registrant and Computershare Trust Company of Canada, as Rights Agent, dated as of May 8, 2019 (incorporated by reference to Exhibit 99.2 to the Registrant's report on Form 6-K furnished to the Commission on May 9. 2019)](https://www.sec.gov/Archives/edgar/data/1113423/000110465919028191/a19-9643_1ex99d2.htm) |
| 2.2 | [Description of Securities Registered Under Section 12 of The Exchange](ex2-2.htm) |
| 4.1 | [2018 Long-Term Incentive Plan of the Registrant](ex4-1.htm) |
| 8.1 | [Subsidiaries of the Registrant](ex8-1.htm) |
| 11.1\* | [Code of Conduct and Business Ethics of the Registrant (incorporated by reference to Exhibit 11.1 of the Registrant's Annual Report of Form 20-F/A for the financial year ended December 31, 2024 filed with the Commission on July 17, 2024)](https://www.sec.gov/Archives/edgar/data/1113423/000149315224028055/ex11-1.htm) |
| 11.2\* | [Code of Business Conduct and Ethics for Members of the Board of Directors (incorporated by reference to Exhibit 11.2 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2014 filed with the Commission on March 17, 2015)](https://www.sec.gov/Archives/edgar/data/1113423/000111342315000004/exhibit112-20xfx2014.htm) |
| 11.3\* | [Audit Committee Charter of the Registrant (incorporated by reference to Exhibit 11.3 of the Registrant's Annual Report on Form 20-F for the financial year ended December 31, 2014 filed with the Commission on March 17, 2015)](https://www.sec.gov/Archives/edgar/data/1113423/000111342315000004/exhibit113-20xfx2014.htm) |
| 12.1\*\* | [Certification of the Principal Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002](ex12-1.htm) |
| 12.2\*\* | [Certification of the Principal Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002](ex12-2.htm) |
| 13.1\*\* | [Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13-1.htm) |
| 13.2\*\* | [Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex13-2.htm) |
| 97.1\* | [COSCIENS Executive Compensation Clawback Policy (incorporated by reference to Exhibit 97.1 of the Registrant's Annual Report of Form 20-F/A for the financial year ended December 31, 2024 filed with the Commission on July 17, 2024)](https://www.sec.gov/Archives/edgar/data/1113423/000149315224028055/ex97-1.htm) |

---

\* Incorporated by reference. <br> \*\* Filed with this annual report on Form 20-F.

**Exhibit Index**

101. INS XBRL Instance Document

101. SCH XBRL Taxonomy Extension Schema

101. CAL XBRL Taxonomy Extension Schema Calculation Linkbase

101. DEF XBRL Taxonomy Extension Schema Definition Linkbase

101. LAB XBRL Taxonomy Extension Schema Label Linkbase

101. PRE XBRL Taxonomy Extension Schema Presentation Linkbase

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| |
|:---|
| COSCIENS BIOPHARMA INC. |
| */s/ Peter H. Puccetti* |
| Peter H. Puccetti |
| Chairman of the Board and Interim Chief Executive Officer |

---

**Date: March 25, 2026**

## Exhibit 2.2

**Exhibit 2.2**

**DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT**

As of the date of the Annual Report on Form 20-F of which this Exhibit 2.2 is a part, COSCIENS Biopharma Inc. (the "**Company**") had the following securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the "**Exchange Act**"):

---

| | | |
|:---|:---|:---|
| **Title of Each Class** | **Trading Symbol(s)** | **Name of Each Exchange on Which Registered** |
| Common Shares | CSCI.F | OTC Markets Group |
| Common Shares | CSCI | Toronto Stock Exchange |

---

**Common Shares:**

*The following description of our Common Shares is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our articles (the "**Articles**"), as amended, which are filed as an exhibit to the Annual Report on Form 20-F of which this Exhibit 2.2 is a part.*

We have 3,184,155 Common Shares issued and outstanding as of March 24, 2026, and we are authorized to issue an unlimited number of Common Shares, without par value.

***Basic Rights of our Common Shares***

The holders of Common Shares are entitled to one vote per share on all matters voted on by shareholders, including the election of directors. All our Common Shares rank equally as to dividends (as may be declared from time to time by our Board from funds available for distribution to holders), voting power and participation in assets. Upon liquidation, dissolution or winding up of the Company, holders of our Common Shares are entitled to receive pro rata the assets of the Company, if any, remaining after payments of all debts and liabilities.

Our Common Shares are not subject to liability to further capital calls by the Company. There are no provisions in our Articles discriminating against any existing or prospective shareholder as a result of such shareholder owning a substantial number of our Common Shares, and non-resident or foreign holders of our Common Shares are not limited in having, holding or exercising the voting rights associated with Common Shares. Also, no provision or rights exist in our Articles regarding our Common Shares in connection with exchange, redemption, retraction, purchase for cancellation, surrender or sinking or purchase funds.

***Pre-emptive Rights***

Our Common Shares do not contain any pre-emptive purchase rights to any of our securities.

***Transferability of Common Shares***

Our Articles do not impose restrictions on the transfer of Common Shares by a shareholder. We will not, however, register a transfer of Common Shares until: (1) we receive a duly signed instrument in respect of the transfer of Common Shares; (2) a share certificate, if any, representing the transferred Common Shares has been surrendered to us; and (3) if a non-transferable written acknowledgment of the shareholder's right to obtain a share certificate has been issued by the Company in respect of the Common Shares to be transferred, that acknowledgement has been surrendered to us.

***Action(s) to change Rights attaching to our Common Shares***

Provisions as to the modification, amendment or variation of shareholder rights for holders of our Common Shares are contained in the CBCA. The CBCA requires a "special resolution" of shareholders for specific corporate actions, including certain alterations of our share capital, with such "special resolution" requiring an affirmative two-thirds vote of shareholders (rather than a simple majority) for passage. No right or special right attached to any of our issued shares may be prejudiced or interfered with unless the shareholders holding shares of such class or series of shares to which the right or special right is attached consent by a separate "special resolution" of those shareholders.

***Change of Control restrictions for our Common Shares***

Our Articles do not contain provisions that would have an effect of delaying, deferring or preventing a change in control of the Company which would operate with respect to a merger, acquisition or corporate restructuring involving the Company or any of its subsidiaries.

***Ownership disclosure threshold for our Common Shares***

Our Articles do not have any specific threshold requiring disclosure of ownership by holders of our Common Shares. However, Canadian securities regulators do require disclosure of shareholder ownership by any shareholder owning more than 10% of our outstanding Common Shares.

## Exhibit 4.1

**Exhibit 4.1**

**AETERNA ZENTARIS INC.**

**2018 LONG-TERM INCENTIVE PLAN**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| 1. | Effective Date | 1 |
| 2. | Purposes of the Plan | 1 |
| 3. | Terminology | 1 |
| 4. | Administration | 1 |
| (a) | Administration of the Plan | 1 |
| (b) | Powers of the Administrator | 1 |
| (c) | Delegation of Administrative Authority | 3 |
| (d) | Non-Uniform Determinations | 3 |
| (e) | Limited Liability; Advisors | 3 |
| (f) | Indemnification | 3 |
| (g) | Effect of Administrator's Decision | 3 |
| 5. | Shares Issuable Pursuant to Awards | 4 |
| (a) | Share Pool | 4 |
| (b) | Source of Shares | 4 |
| (c) | Independent Directors | 4 |
| (d) | Exchange Limits | 4 |
| 6. | Participation | 4 |
| 7. | Awards | 5 |
| (a) | Awards, In General | 5 |
| (b) | Minimum Vesting/Restriction Period | 5 |
| (c) | Stock Options | 5 |
| (d) | Limitation on Reload Options | 6 |
| (e) | Stock Appreciation Rights | 7 |
| (f) | Repricing | 7 |
| (g) | Stock Awards | 8 |
| (h) | Stock Units | 9 |
| (i) | Performance Shares and Performance Units | 10 |
| (j) | Other Stock-Based Awards | 10 |
| (k) | Awards to Participants Outside the United States | 11 |
| (l) | Limitation on Dividend Reinvestment and Dividend Equivalents | 11 |
| 8. | Withholding of Taxes | 11 |
| 9. | Transferability of Awards | 11 |
| (a) | General Nontransferability Absent Administrator Permission | 11 |
| (b) | Administrator Discretion to Permit Transfers Other Than For Value | 12 |
| 10. | Adjustments for Corporate Transactions and Other Events | 12 |
| (a) | Mandatory Adjustments | 12 |
| (b) | Discretionary Adjustments | 13 |
| (c) | Adjustments to Performance Goals | 13 |
| (d) | Statutory Requirements Affecting Adjustments | 13 |
| (e) | Dissolution or Liquidation | 13 |

---

i

---

| | | |
|:---|:---|:---|
| 11. | Change in Control Provisions | 14.0 |
| (a) | Termination of Awards | 14.0 |
| (b) | Continuation, Assumption or Substitution of Awards | 14.0 |
| (c) | Other Permitted Actions | 15.0 |
| (d) | Application of Section 409A | 15.0 |
| 12. | Substitution of Awards in Mergers and Acquisitions | 15.0 |
| 13. | Compliance with Securities Laws; Listing and Registration | 15.0 |
| 14. | Section 409A Compliance | 16.0 |
| 15. | Plan Duration; Amendment and Discontinuance | 17.0 |
| (a) | Plan Duration | 17.0 |
| (b) | Amendment and Discontinuance of the Plan | 17.0 |
| (c) | Amendment of Awards | 17.0 |
| 16. | General Provisions | 17.0 |
| (a) | Non-Guarantee of Employment or Service | 17.0 |
| (b) | No Trust or Fund Created | 18.0 |
| (c) | Status of Awards | 18.0 |
| (d) | Subsidiary Employees | 18.0 |
| (e) | Governing Law and Interpretation | 18.0 |
| (f) | Use of English Language | 18.0 |
| (g) | Recovery of Amounts Paid | 18.0 |
| 17. | Glossary | 19.0 |

---

ii

**1.** **Effective Date.** 

AETERNA ZENTARIS INC., a company formed under the *Canada Business Corporations Act* ("**Aeterna**"), has established the AETERNA ZENTARIS INC. 2018 LONG-TERM INCENTIVE PLAN, as set forth herein, and as the same may be amended from time to time (the "**Plan**"). The Plan was adopted by the Board of Directors of Aeterna (the "**Board**") on March 27, 2018 (the "**Effective Date**").

**2.** **Purposes of the Plan.** 

The Plan is designed to:

&nbsp;&nbsp;&nbsp;&nbsp;(a) promote
 the long-term financial interests and growth of Aeterna and its Subsidiaries (together, the
 "**Company**") by attracting and retaining management and other personnel
 and key service providers with the training, experience and ability to enable them to make
 a substantial contribution to the success of the Company's business;

&nbsp;&nbsp;&nbsp;&nbsp;(b) motivate
 management personnel by means of growth-related incentives to achieve long-range goals; and

&nbsp;&nbsp;&nbsp;&nbsp;(c) further
 the alignment of interests of Participants with those of the shareholders of Aeterna through
 opportunities for increased stock or stock-based ownership in Aeterna.

Toward these objectives, the Administrator may grant stock options, stock appreciation rights, stock awards, stock units, performance shares, performance units, and other stock-based awards to eligible individuals on the terms and subject to the conditions set forth in the Plan.

**3.** **Terminology.** 

Except as otherwise specifically provided in an Award Agreement, capitalized words and phrases used in the Plan or an Award Agreement shall have the meaning set forth in the glossary at Section 17 of the Plan or as defined the first place such word or phrase appears in the Plan.

**4.** **Administration.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Administration of the Plan.* The Plan shall be administered by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Powers of the Administrator.* The Administrator shall, except as otherwise provided under the
 Plan, have plenary authority, in its sole and absolute discretion, to grant Awards pursuant
 to the terms of the Plan to Eligible Individuals and to take all other actions necessary
 or desirable to carry out the purpose and intent of the Plan. Among other things, the Administrator
 shall have the authority, in its sole and absolute discretion, subject to the terms and conditions
 of the Plan and in accordance with the provisions of the Award Agreement to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) determine
 the Eligible Individuals to whom, and the time or times at which, Awards shall be granted;

(ii) determine
 the types of Awards to be granted any Eligible Individual;

(iii) determine
 the number of Common Shares to be covered by or used for reference purposes for each Award
 or the value to be transferred pursuant to any Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) determine
 the terms, conditions and restrictions applicable to each Award (which need not be identical)
 and any shares acquired pursuant thereto, including, without limitation, (A) the purchase
 price of any Common Shares, (B) the method of payment for shares purchased pursuant to any
 Award, (C) the method for satisfying any Tax Withholding Obligation arising in connection
 with any Award, including by the withholding or delivery of Common Shares, (D) subject to
 Section 7(b), the timing, terms and conditions of the exercisability, vesting or payout of
 any Award or any shares acquired pursuant thereto, (E) the Performance Goals applicable to
 any Award and the extent to which such Performance Goals have been attained, (F) the time
 of the expiration of any Award, (G) the effect of the Participant's Termination of
 Service on any of the foregoing, and (H) all other terms, conditions and restrictions applicable
 to any Award or shares acquired pursuant thereto as the Administrator shall consider to be
 appropriate and not inconsistent with the terms of the Plan;

(v) modify,
 amend or adjust the terms and conditions of any Award;

(vi) subject
 to Section 7(b), accelerate or otherwise change the time at or during which an Award may
 be exercised or becomes payable and waive or accelerate the lapse, in whole or in part, of
 any restriction, condition or risk of forfeiture with respect to such Award; provided, however,
 that, except in connection with death, Disability or a Change in Control, no such change,
 waiver or acceleration shall be made to any Award that is considered "deferred compensation"
 within the meaning of Section 409A of the Code if the effect of such action is inconsistent
 with Section 409A of the Code;

(vii) for
 any purpose, including but not limited to, qualifying for preferred or beneficial tax treatment,
 accommodating the customs or administrative challenges or otherwise complying with the tax,
 accounting or regulatory requirements of one or more jurisdictions, adopt, amend, modify,
 administer or terminate sub-plans, appendices, special provisions or supplements applicable
 to Awards regulated by the laws of a particular jurisdiction, which sub-plans, appendices,
 supplements and special provisions may take precedence over other provisions of the Plan,
 and prescribe, amend and rescind rules and regulations relating to such sub-plans, supplements
 and special provisions;

(viii) subject
 to 7(c)(iii), establish any "blackout" period, during which transactions affecting
 Awards may not be effectuated, that the Administrator in its sole discretion deems necessary
 or advisable;

(ix) determine
 the Fair Market Value of Common Shares or other property for any purpose under the Plan or
 any Award;

(x) administer,
 construe and interpret the Plan, Award Agreements and all other documents relevant to the
 Plan and Awards issued thereunder, and decide all other matters to be determined in connection
 with an Award;

(xi) establish,
 amend, rescind and interpret such administrative rules, regulations, agreements, guidelines,
 instruments and practices for the administration of the Plan and for the conduct of its business
 as the Administrator deems necessary or advisable;

(xii) correct
 any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award
 or Award Agreement in the manner and to the extent the Administrator shall consider it desirable
 to carry it into effect; and

(xiii) specify
 that vesting conditions in respect of Awards shall not extend beyond applicable limitations
 such that the Award complies at all times with the exception in paragraph (k) of the definition
 of "salary deferral arrangement" in subsection 248(1) of the *Income Tax Act* (Canada) or comparable legislation of any jurisdiction; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) otherwise
 administer the Plan and all Awards granted under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Delegation of Administrative Authority.* The Administrator may designate officers or employees of
 the Company to assist the Administrator in the administration of the Plan and, to the extent
 permitted by applicable law and Exchange rules, the Administrator may delegate to officers
 or other employees of the Company the Administrator's duties and powers under the Plan,
 subject to such conditions and limitations as the Administrator shall prescribe, including
 without limitation the authority to execute agreements or other documents on behalf of the
 Administrator; provided, however, that such delegation of authority shall not extend to the
 granting of, or exercise of discretion with respect to, Awards to Eligible Individuals who
 are officers under Section 16 of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Non-Uniform Determinations.* The Administrator's determinations under the Plan (including without
 limitation, determinations of the persons to receive Awards, the form, amount and timing
 of such Awards, the terms and provisions of such Awards and the Award Agreements evidencing
 such Awards, and the ramifications of a Change in Control upon outstanding Awards) need not
 be uniform and may be made by the Administrator selectively among Awards or persons who receive,
 or are eligible to receive, Awards under the Plan, whether or not such persons are similarly
 situated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e)* *Limited Liability; Advisors.* To the maximum extent permitted by law, no member of the Administrator
 shall be liable for any action taken or decision made in good faith relating to the Plan
 or any Award thereunder. The Administrator may employ counsel, consultants, accountants,
 appraisers, brokers or other persons. The Administrator, Aeterna, and the officers and directors
 of Aeterna shall be entitled to rely upon the advice, opinions or valuations of any such
 persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(f)* *Indemnification.* To the maximum extent permitted by law, by Aeterna's Articles and By-Laws, and by any
 directors' and officers' liability insurance coverage which may be in effect
 from time to time, the members of the Administrator and any agent or delegate of the Administrator
 who is a director, officer or employee of Aeterna or an Affiliate shall be indemnified by
 Aeterna against any and all liabilities and expenses to which they may be subjected by reason
 of any act or failure to act with respect to their duties on behalf of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(g)* *Effect of Administrator's Decision.* All actions taken and determinations made by the Administrator
 on all matters relating to the Plan or any Award pursuant to the powers vested in it hereunder
 shall be in the Administrator's sole and absolute discretion, unless in contravention
 of any express term of the Plan, including, without limitation, any determination involving
 the appropriateness or equitableness of any action. All determinations made by the Administrator
 shall be conclusive, final and binding on all parties concerned, including Aeterna, its shareholders,
 any Participants and any other employee, consultant, or director of Aeterna and its Affiliates,
 and their respective successors in interest. No member of the Administrator, nor any director,
 officer, employee or representative of Aeterna shall be personally liable for any action,
 determination or interpretation made in good faith with respect to the Plan or Awards.

**5.** **Shares Issuable Pursuant to Awards.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Share Pool*. The number of Common Shares issuable pursuant to Awards that may be granted under
 this Plan (the "**Share Pool**") shall not exceed eleven point four percent
 (11.4%) of the total number of issued and outstanding Common Shares at any given time less
 the number of Common Shares issuable pursuant to stock options granted at such time under
 the 2016 Stock Option Plan. Subject to Section 5(c), no one Eligible Individual shall hold
 options (whether under this Plan or under any other Security-Based Compensation Arrangement)
 to purchase more than five percent (5%) of the number of Common Shares issued and outstanding
 from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Source of Shares.* The Common Shares with respect to which Awards may be made under the Plan
 shall be shares authorized for issuance under Aeterna's Articles and By-laws but unissued,
 or issued and reacquired, including without limitation shares purchased in the open market
 or in private transactions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Independent Directors*. The aggregate fair value of options granted under all Security-Based Compensation
 Arrangements to any one non-employee, independent director of Aeterna entitled to receive
 a benefit under the Plan, within any one-year period, cannot exceed US$100,000 valued on
 a Black-Scholes basis and as determined by the Administrator; and the aggregate number of
 securities issuable to all non-employee, independent directors of Aeterna entitled to receive
 a benefit under the Plan, within any one-year period, under all Security-Based Compensation
 Arrangements, cannot exceed one percent (1%) of its issued and outstanding securities.

*(d)* *Exchange Limits.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) No
 one Participant shall be granted Awards which exceed, in aggregate, the maximum number permitted
 by any Exchange.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) The
 aggregate number of Common Shares that may be issued pursuant to the exercise of Awards under
 the Plan and all other Security-Based Compensation Arrangements are subject to the following
 additional limitations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) in
 the aggregate, no more than 10% of the issued and outstanding Common Shares (on a non-diluted
 basis) may be reserved at any time for insiders (as defined in the Securities Act (Ontario))
 and includes an associate and Affiliate, as defined in the Securities Act (Ontario) ()"**Insider(s)** ")
 under the Plan, together with all other security based compensation arrangements of the Company;
 and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) the
 number of securities of the Company issued to Insiders, within any one year period, under
 all security based compensation arrangements, cannot exceed 10% of the issued and outstanding
 Common Shares.

**6.** **Participation.** 

Participation in the Plan shall be open to all Eligible Individuals, as may be selected by the Administrator from time to time. The Administrator may also grant Awards to Eligible Individuals in connection with hiring, recruiting or otherwise, prior to the date the individual first performs services for Aeterna or a Subsidiary; *provided*, *however*, that such Awards shall not become vested or exercisable, and no shares shall be issued to such individual, prior to the date the individual first commences performance of such services.

**7.** **Awards.** 

*(a)* *Awards, In General.* The Administrator, in its sole discretion, shall establish the terms of all
 Awards granted under the Plan consistent with the terms of the Plan. Awards may be granted
 individually or in tandem with other types of Awards, concurrently with or with respect to
 outstanding Awards. All Awards are subject to the terms and conditions of the Plan and as
 provided in the Award Agreement, which shall be delivered to the Participant receiving such
 Award upon, or as promptly as is reasonably practicable following, the grant of such Award.
 Unless otherwise specified by the Administrator, in its sole discretion, or otherwise provided
 in the Award Agreement, an Award shall not be effective unless the Award Agreement is signed
 or otherwise accepted by Aeterna and the Participant receiving the Award (including by electronic
 delivery and/or electronic signature). Unless the Administrator determines otherwise, any
 failure by the Participant to sign and return the Award Agreement within such period of time
 following the granting of the Award as the Administrator shall prescribe shall cause such
 Award to the Participant to be null and void. The Administrator may direct that any stock
 certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth
 such restrictions on transferability as may apply to such shares pursuant to the Plan.

*(b)* *Minimum Vesting/Restriction Period.* Except as provided below or within any Award Agreement and
 notwithstanding any provision of the Plan to the contrary (but subject to Section 11 of the
 Plan), each Award granted under the Plan (other than a Performance Unit that cannot be paid
 in Common Shares) will be subject to a minimum vesting period or minimum Restriction Period
 as follows: (i) beginning on the Effective Date, each stock option and stock appreciation
 right granted under the Plan shall be subject to a minimum vesting period of 12 months from
 the date of grant, (ii) each Full Value Award granted under the Plan to a non-employee director
 shall be subject to a minimum Restriction Period of 12 months from the date of grant, and
 (iii) each Full Value Award granted under the Plan to an Eligible Individual who is not a
 non-employee director shall be subject to (A) a minimum Restriction Period of 12 months from
 the date of grant if vesting of or lapse of restrictions on such Award is based on the satisfaction
 of Performance Goals and (B) a minimum Restriction Period of 36 months from the date of grant,
 applied in either pro rata installments or a single installment, if vesting of or lapse of
 restrictions on such Award is based solely on the Participant's satisfaction of specified
 service requirements with the Company (provided that no portion of the Full Value Award shall
 vest or have its restrictions lapse during the first 12 months following the date of grant).
 If the grant of a Performance Award is conditioned on satisfaction of Performance Goals,
 the Performance Period shall not be less than 12 months' duration, but no additional
 minimum Restriction Period need apply to such Award. The minimum vesting period or minimum
 Restriction Period shall not apply in the case of death or Disability of a Participant or
 in the event of a Change in Control. Notwithstanding the foregoing, Awards that result in
 the issuance of an aggregate of up to 5% of the Share Pool as set forth in Section 5(a) may
 be granted without regard to such minimum vesting period or minimum Restriction Period.

*(c)* *Stock Options.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Grants.* A stock option means a right to purchase a specified number of Common Shares from Aeterna
 at a specified price during a specified period of time. The Administrator may from time to
 time grant to Eligible Individuals Awards of Incentive Stock Options or Nonqualified Options;
 provided, however, that Awards of Incentive Stock Options shall be limited to employees of
 Aeterna or of any current or hereafter existing "parent corporation" or "subsidiary
 corporation," as defined in Sections 424(e) and 424(f) of the Code, respectively, of
 Aeterna, and any other Eligible Individuals who are eligible to receive Incentive Stock Options
 under the provisions of Section 422 of the Code. No stock option shall be an Incentive Stock
 Option unless so designated by the Administrator at the time of grant or in the applicable
 Award Agreement. No Incentive Stock Option will be exercised or otherwise paid hereunder
 until this Plan has been approved by the holders of at least a majority of the outstanding
 Common Shares represented in person or by proxy at a meeting at which approval of this Plan
 is considered; and provided further, no Incentive Stock Option may be granted under this
 Plan after the tenth anniversary of the Effective Date. With respect to Incentive Stock Options,
 all such interpretations, rules, determinations, terms, and conditions shall be made and
 prescribed in the context of preserving the tax status of the Incentive Stock Options as
 incentive stock options within the meaning of Section 422 of the Code. The Award Agreement
 for an Incentive Stock Option shall contain such limitations and restrictions upon the exercise
 of the Stock Option as shall be necessary in order that such Stock Option constitutes an
 "incentive stock option" within the meaning of Section 422 of the Code. Further,
 the Award Agreements authorized under the Plan shall be subject to such other terms and conditions
 including, without limitation, restrictions upon the exercise of the Stock Option, as the
 Administrator shall deem advisable and which, in the case of Incentive Stock Options, are
 not inconsistent with the requirements of Section 422 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Exercise.* Subject to the limitations set forth in Section 7(b), stock options shall be exercisable,
 by cash purchase or any other method approved by the Administrator, at such time or times
 and subject to such terms and conditions as shall be determined by the Administrator; provided,
 however, that Awards of stock options may not have a term in excess of ten years' duration
 unless required otherwise by applicable law. The exercise price per share subject to a stock
 option granted under the Plan shall not be less than the Fair Market Value (or 110% of Fair
 Market Value if applicable in the case of certain Incentive Stock Options) of one Common
 Share on the date of grant of the stock option. Should the expiry date of a stock option
 fall within a period during which the relevant Participant is prohibited from exercising
 a Nonqualified Option due to trading restrictions imposed by the Company pursuant to any
 policy of the Company respecting restrictions on trading that is in effect at that time (a
 "**blackout period**") or within nine Business Days following the expiration
 of a blackout period, such expiry date of the Nonqualified Option shall be automatically
 extended without any further act or formality to that date which is the tenth Business Day
 after the end of the blackout period, such tenth Business Day to be considered the expiry
 date for such Nonqualified Option for all purposes under the Plan. The ten Business Day period
 referred to in this paragraph may not be extended by the Board. The Fair Market Value of
 the Common Shares (determined at the time the Incentive Stock Option is granted) as to which
 Incentive Options are exercisable for the first time by any Participant during any single
 calendar year (under the Plan and under any other Security-Based Compensation Arrangements)
 shall not exceed $100,000.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Termination of Service.* Subject to the limitations set forth in Section 7(b), except as provided
 in the applicable Award Agreement or otherwise determined by the Administrator, to the extent
 stock options are not vested and exercisable, a Participant's stock options shall be
 forfeited upon his or her Termination of Service provided that, subject to the limitations
 set forth in Section 7(b), the Administrator may provide, by rule or regulation or in any
 Award Agreement, or may determine in any individual case, that vesting or forfeiture conditions
 relating to stock options will be waived in whole or in part in the event of terminations
 resulting from specified causes, and the Administrator may in other cases waive in whole
 or in part the forfeiture of stock options.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Additional Terms and Conditions.* The Administrator may, by way of the Award Agreement or otherwise,
 determine such other terms, conditions, restrictions, and/or limitations, if any, of any
 Award of stock options, provided they are not inconsistent with Section 7(b) or any other
 section of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Limitation on Reload Options.* The Administrator shall not grant stock options under the Plan that
 contain a reload or replenishment feature pursuant to which a new stock option would be granted
 automatically upon receipt of delivery of Common Shares to Aeterna in payment of the exercise
 price or any Tax Withholding Obligation under any other stock option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e)* *Stock Appreciation Rights.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Grants.* The Administrator may from time to time grant to Eligible Individuals Awards of stock appreciation
 rights. A stock appreciation right entitles the Participant to receive, subject to the provisions
 of the Plan and the Award Agreement, a payment having an aggregate value equal to the product
 of (i) the excess of (A) the Fair Market Value on the exercise date of one Common Share over
 (B) the base price per share specified in the Award Agreement, times (ii) the number of shares
 specified by the stock appreciation right, or portion thereof, which is exercised. The base
 price per share specified in the Award Agreement shall not be less than the Fair Market Value
 on the date of grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Exercise.* Subject to the limitations set forth in Section 7(b), stock appreciation rights shall be
 exercisable at such time or times and subject to such terms and conditions as shall be determined
 by the Administrator; provided, however, that stock appreciation rights granted under the
 Plan may not have a term in excess of ten years' duration unless required otherwise
 by applicable law. The applicable Award Agreement shall specify whether payment by Aeterna
 of the amount receivable upon any exercise of a stock appreciation right is to be made in
 cash or Common Shares or a combination of both, or shall reserve to the Administrator or
 the Participant the right to make that determination prior to or upon the exercise of the
 stock appreciation right. If upon the exercise of a stock appreciation right a Participant
 is to receive a portion of such payment in Common Shares, the number of shares shall be determined
 by dividing such portion by the Fair Market Value of a Common Share on the exercise date.
 No fractional shares shall be used for such payment and the Administrator shall determine
 whether cash shall be given in lieu of such fractional shares or whether such fractional
 shares shall be eliminated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Termination of Service.* Subject to the limitations set forth in Section 7(b), except as provided
 in the applicable Award Agreement or otherwise determined by the Administrator, to the extent
 stock appreciation rights are not vested and exercisable, a Participant's stock appreciation
 rights shall be forfeited upon his or her Termination of Service; provided that, subject
 to the limitations set forth in Section 7(b), the Administrator may provide, by rule or regulation
 or in any Award Agreement, or may determine in any individual case, that vesting or forfeiture
 conditions relating to stock appreciation rights will be waived in whole or in part in the
 event of terminations resulting from specified causes, and the Administrator may in other
 cases waive in whole or in part the forfeiture of stock appreciation rights.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Additional Terms and Conditions.* The Administrator may, by way of the Award Agreement or otherwise,
 determine such other terms, conditions, restrictions, and/or limitations, if any, of any
 Award of stock appreciation rights, provided they are not inconsistent with Section 7(b)
 or any other section of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(f)* *Repricing.* Notwithstanding anything herein to the contrary, except in connection with a corporate transaction
 involving Aeterna (including, without limitation, any stock dividend, stock split, extraordinary
 cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off,
 combination, or exchange of shares), the terms of options and stock appreciation rights granted
 under the Plan may not be amended, after the date of grant, to reduce the exercise price
 of such options or stock appreciation rights, nor may outstanding options or stock appreciation
 rights be canceled in exchange for (i) cash, (ii) options or stock appreciation rights with
 an exercise price or base price that is less than the exercise price or base price of the
 original outstanding options or stock appreciation rights, or (iii) other Awards, unless
 such action is approved by Aeterna's shareholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(g)* *Stock Awards.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Grants.* The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted
 Common Shares or Restricted Stock (collectively, "**Stock Awards**") on such
 terms and conditions, and for such consideration, including no consideration or such minimum
 consideration as may be required by law, as the Administrator shall determine, subject to
 the limitations set forth in Section 7(b). Stock Awards shall be evidenced in such manner
 as the Administrator may deem appropriate, including via book-entry registration.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Vesting.* Restricted Stock shall be subject to such vesting, restrictions on transferability and other
 restrictions, if any, and/or risk of forfeiture as the Administrator may impose at the date
 of grant or thereafter. The Restriction Period to which such vesting, restrictions and/or
 risk of forfeiture apply may lapse under such circumstances, including without limitation
 upon the attainment of Performance Goals, in such installments, or otherwise, as the Administrator
 may determine. Subject to the provisions of the Plan and the applicable Award Agreement,
 during the Restriction Period, the Participant shall not be permitted to vote, sell, assign,
 transfer, pledge or otherwise encumber shares of Restricted Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Rights of a Shareholder; Dividends.* Except to the extent restricted under the Award Agreement
 relating to the Restricted Stock, a Participant granted Restricted Stock shall have all of
 the rights of a shareholder of Common Shares including, without limitation, the right to
 vote Restricted Stock upon the expiry of the Restriction Period. Subject to shareholder approval,
 cash dividends declared payable on Common Shares shall be paid, with respect to outstanding
 Restricted Stock, either as soon as practicable following the dividend payment date or deferred
 for payment to such later date as determined by the Administrator, and shall be paid in cash
 or as unrestricted Common Shares having a Fair Market Value equal to the amount of such dividends
 or may be reinvested in additional shares of Restricted Stock as determined by the Administrator.
 Stock distributed in connection with a stock split or stock dividend, and other property
 distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the
 same extent as the Restricted Stock with respect to which such Common Shares or other property
 has been distributed. As soon as is practicable following the date on which restrictions
 on any shares of Restricted Stock lapse, Aeterna shall deliver to the Participant the certificates
 for such shares or shall cause the shares to be registered in the Participant's name
 in book-entry form, in either case with the restrictions removed, provided that the Participant
 shall have complied with all conditions for delivery of such shares contained in the Award
 Agreement or otherwise reasonably required by Aeterna.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Termination of Service.* Subject to the limitations set forth in Section 7(b), except as provided
 in the applicable Award Agreement, upon Termination of Service during the applicable Restriction
 Period, Restricted Stock and any accrued but unpaid dividends that are at that time subject
 to restrictions shall be forfeited; provided that, subject to the limitations set forth in
 Section 7(b), the Administrator may provide, by rule or regulation or in any Award Agreement,
 or may determine in any individual case, that restrictions or forfeiture conditions relating
 to Restricted Stock will be waived in whole or in part in the event of terminations resulting
 from specified causes, and the Administrator may in other cases waive in whole or in part
 the forfeiture of Restricted Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) *Additional Terms and Conditions.* The Administrator may, by way of the Award Agreement or otherwise,
 determine such other terms, conditions, restrictions, and/or limitations, if any, of any
 Award of Restricted Stock, provided they are not inconsistent with Section 7(b) or any other
 section of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(h)* *Stock Units.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Grants.* The Administrator may from time to time grant to Eligible Individuals Awards of unrestricted
 stock Units or Restricted Stock Units on such terms and conditions, and for such consideration,
 including no consideration or such minimum consideration as may be required by law, as the
 Administrator shall determine, subject to the limitations set forth in Section 7(b). Restricted
 Stock Units represent a contractual obligation by Aeterna to deliver a number of Common Shares,
 an amount in cash equal to the Fair Market Value of the specified number of shares subject
 to the Award, or a combination of Common Shares and cash, in accordance with the terms and
 conditions set forth in the Plan and any applicable Award Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Vesting and Payment.* Restricted Stock Units shall be subject to such vesting, risk of forfeiture
 and/or payment provisions as the Administrator may impose at the date of grant. The Restriction
 Period to which such vesting and/or risk of forfeiture apply may lapse under such circumstances,
 in such installments, or otherwise, as the Administrator may determine. Common Shares, cash
 or a combination of Common Shares and cash, as applicable, payable in settlement of Restricted
 Stock Units shall be delivered to the Participant as soon as administratively practicable,
 but no later than 30 days, after the date on which payment is due under the terms of the
 Award Agreement provided that the Participant shall have complied with all conditions for
 delivery of such shares or payment contained in the Award Agreement or otherwise reasonably
 required by Aeterna, or in accordance with an election of the Participant, if the Administrator
 so permits, that meets the requirements of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *No Rights of a Shareholder; Dividend Equivalents.* Until Common Shares are issued to the
 Participant in settlement of stock Units, the Participant shall not have any rights of a
 shareholder of Aeterna with respect to the stock Units or the shares issuable thereunder.
 The Administrator may grant to the Participant the right to receive Dividend Equivalents
 on stock Units, on a current, reinvested and/or restricted basis, subject to such terms as
 the Administrator may determine provided, however, that Dividend Equivalents payable on stock
 Units that are granted as a Performance Award shall, rather than be paid on a current basis,
 be accrued and made subject to forfeiture at least until achievement of the applicable Performance
 Goal related to such stock Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Termination of Service.* Upon Termination of Service during the applicable deferral period or portion
 thereof to which forfeiture conditions apply, or upon failure to satisfy any other conditions
 precedent to the delivery of Common Shares or cash to which such Restricted Stock Units relate,
 all Restricted Stock Units and any accrued but unpaid Dividend Equivalents with respect to
 such Restricted Stock Units that are then subject to deferral or restriction shall be forfeited;
 provided that, subject to the limitations set forth in Section 7(b), the Administrator may
 provide, by rule or regulation or in any Award Agreement, or may determine in any individual
 case, that restrictions or forfeiture conditions relating to Restricted Stock Units will
 be waived in whole or in part in the event of termination resulting from specified causes,
 and the Administrator may in other cases waive in whole or in part the forfeiture of Restricted
 Stock Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) *Additional Terms and Conditions.* The Administrator may, by way of the Award Agreement or otherwise,
 determine such other terms, conditions, restrictions, and/or limitations, if any, of any
 Award of stock Units, provided they are not inconsistent with Section 7(b) or any other section
 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i)* *Performance Shares and Performance Units.* 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) *Grants.* The Administrator may from time to time grant to Eligible Individuals Awards in the form
 of Performance Shares and Performance Units. Performance Shares, shall refer to Common Shares
 or Units that are expressed in terms of Common Shares. Performance Units, shall refer to
 dollar-denominated Units valued by reference to designated criteria established by the Administrator,
 other than Common Shares. The applicable Award Agreement shall specify whether Performance
 Shares and Performance Units will be settled or paid in cash or Common Shares or a combination
 of both, or shall reserve to the Administrator or the Participant the right to make that
 determination prior to or at the payment or settlement date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) *Performance Criteria.* The Administrator shall, prior to or at the time of grant, condition the grant,
 vesting or payment of, or lapse of restrictions on, an Award of Performance Shares or Performance
 Units upon (A) the attainment of Performance Goals during a Performance Period or (B) the
 attainment of Performance Goals and the continued service of the Participant. The length
 of the Performance Period, the Performance Goals to be achieved during the Performance Period,
 and the measure of whether and to what degree such Performance Goals have been attained shall
 be conclusively determined by the Administrator in the exercise of its absolute discretion.
 Performance Goals may include minimum, maximum and target levels of performance, with the
 size of the Award or payout of Performance Shares or Performance Units or the vesting or
 lapse of restrictions with respect thereto based on the level attained. An Award of Performance
 Shares or Performance Units shall be settled as and when the Award vests or at a later time
 specified in the Award Agreement or in accordance with an election of the Participant, if
 the Administrator so permits, that meets the requirements of Section 409A of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) *Termination of Service.* Upon Termination of Service during the applicable period or portion thereof
 to which forfeiture conditions apply, or upon failure to satisfy any other conditions precedent
 to the delivery of Common Shares or cash to which such Performance Shares or Performance
 Units relate, all Performance Shares or Performance Units that are then subject to restriction
 shall be forfeited; provided that, subject to the limitations set forth in Section 7(b),
 the Administrator may provide, by rule or regulation or in any Award Agreement, or may determine
 in any individual case, that restrictions or forfeiture conditions relating to Performance
 Shares or Performance Units will be waived in whole or in part in the event of termination
 resulting from specified causes, and the Administrator may in other cases waive in whole
 or in part the forfeiture of Performance Shares or Performance Units.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) *Additional Terms and Conditions.* The Administrator may, by way of the Award Agreement or otherwise,
 determine such other terms, conditions, restrictions, and/or limitations, if any, of any
 Award of Performance Shares or Performance Units, provided they are not inconsistent with
 the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(j)* *Other Stock-Based Awards.* The Administrator may from time to time grant to Eligible Individuals
 Awards in the form of Other Stock-Based Awards. Other Stock-Based Awards in the form of Dividend
 Equivalents may be (A) awarded on a free-standing basis or in connection with another Award
 other than a stock option or stock appreciation right, (B) paid currently or credited to
 an account for the Participant, including the reinvestment of such credited amounts in Common
 Shares equivalents, to be paid on a deferred basis, and (C) settled in cash or Common Shares
 as determined by the Administrator; *provided*, *however*, that Dividend Equivalents
 payable on Other Stock-Based Awards that are granted as a Performance Award shall, rather
 than be paid on a current basis, be accrued and made subject to forfeiture at least until
 achievement of the applicable Performance Goal related to such Other Stock-Based Awards.
 Any such settlements, and any such crediting of Dividend Equivalents, may be subject to such
 conditions, restrictions and contingencies as the Administrator shall establish.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(k)* *Awards to Participants Outside the United States.* The Administrator may grant Awards to Eligible
 Individuals who are foreign nationals, who are located outside the United States or who are
 not compensated from a payroll maintained in the United States, or who are otherwise subject
 to (or could cause Aeterna or a Subsidiary to be subject to) tax, legal or regulatory provisions
 of countries or jurisdictions outside the United States, on such terms and conditions different
 from those specified in the Plan as may, in the judgment of the Administrator, be necessary
 or desirable in order that any such Award shall conform to laws, regulations, and customs
 of the country or jurisdiction in which the Participant is then resident or primarily employed
 or to foster and promote achievement of the purposes of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(l)* *Limitation on Dividend Reinvestment and Dividend Equivalents.* Reinvestment of dividends in additional
 Restricted Stock at the time of any dividend payment, and the payment of Common Shares with
 respect to dividends to Participants holding Awards of stock Units, shall only be permissible
 if sufficient shares are available under the Share Pool for such reinvestment or payment
 (taking into account then outstanding Awards). In the event that sufficient shares are not
 available under the Share Pool for such reinvestment or payment, such reinvestment or payment
 shall be made in the form of a grant of stock Units equal in number to the Common Shares
 that would have been obtained by such payment or reinvestment, the terms of which stock Units
 shall provide for settlement in cash and for Dividend Equivalent reinvestment in further
 stock Units on the terms contemplated by this Section 7(l).

**8.** **Withholding of Taxes.** 

Participants and holders of Awards shall pay to Aeterna or its Affiliate, or make arrangements satisfactory to the Administrator for payment of, any Tax Withholding Obligation in respect of Awards granted under the Plan no later than the date of the event creating the tax or social insurance contribution liability. The obligations of Aeterna under the Plan shall be conditional on such payment or arrangements. Unless otherwise determined by the Administrator, and subject always to applicable law, Tax Withholding Obligations may be settled in whole or in part with Common Shares, including unrestricted outstanding shares surrendered to Aeterna and unrestricted shares that are part of the Award that gives rise to the Tax Withholding Obligation, having a Fair Market Value on the date of surrender or withholding equal to the statutory minimum amount (and not any greater amount) required to be withheld for tax or social insurance contribution purposes, all in accordance with such procedures as the Administrator establishes. Aeterna or its Affiliate may deduct, to the extent permitted by law, any such Tax Withholding Obligations from any payment of any kind otherwise due to the Participant or holder of an Award.

**9.** **Transferability of Awards.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *General Nontransferability Absent Administrator Permission.* Except as otherwise determined by
 the Administrator, and in any event in the case of an Incentive Stock Option or a tandem
 stock appreciation right granted with respect to an Incentive Stock Option, no Award granted
 under the Plan shall be transferable by a Participant otherwise than by will or in accordance
 with the applicable laws of estates and succession. The Administrator shall not permit any
 transfer of an Award for value. An Award may be exercised during the lifetime of the Participant,
 only by the Participant or, during the period the Participant is under a legal disability,
 by the Participant's guardian or legal representative, unless otherwise determined
 by the Administrator. Awards granted under the Plan shall not be subject in any manner to
 alienation, anticipation, sale, transfer, assignment, pledge, or encumbrance, except as otherwise
 determined by the Administrator; *provided, however,* that the restrictions in this
 sentence shall not apply to the Common Shares received in connection with an Award after
 the date that the restrictions on transferability of such shares set forth in the applicable
 Award Agreement have lapsed. Nothing in this paragraph shall be interpreted or construed
 as overriding the terms of any Aeterna stock ownership or retention policy, now or hereafter
 existing, that may apply to the Participant or Common Shares received under an Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Administrator Discretion to Permit Transfers Other Than For Value.* Except as otherwise restricted by
 applicable law, the Administrator may, but need not, permit an Award, other than an Incentive
 Stock Option or a tandem stock appreciation right granted with respect to an Incentive Stock
 Option, to be transferred to a Participant's Family Member (as defined below) as a
 gift or pursuant to a domestic relations order in settlement of marital property rights.
 The Administrator shall not permit any transfer of an Award for value. For purposes of this
 Section 9, "**Family Member**" means any child, stepchild, grandchild, parent,
 stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
 son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
 any person sharing the Participant's household (other than a tenant or employee), a
 trust in which these persons have more than fifty percent of the beneficial interest, a foundation
 in which these persons (or the Participant) control the management of assets, and any other
 entity in which these persons (or the Participant) own more than fifty percent (50%) of the
 voting interests. The following transactions are not prohibited transfers for value: (i)
 a transfer under a domestic relations order in settlement of marital property rights; and
 (ii) a transfer to an entity in which more than fifty percent of the voting interests are
 owned by Family Members (or the Participant) in exchange for an interest in that entity.

**10.** **Adjustments for Corporate Transactions and Other Events.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Mandatory Adjustments.* In the event of a merger, consolidation, stock rights offering, statutory
 share exchange or similar event affecting Aeterna (each, a "**Corporate Event** ")
 or a stock dividend, stock split, reverse stock split, separation, spinoff, reorganization,
 extraordinary dividend of cash or other property, share combination or subdivision, or recapitalization
 or similar event affecting the capital structure of Aeterna (each, a "**Share Change** ")
 that occurs at any time after adoption of the Plan by the Board (including any such Corporate
 Event or Share Change that occurs after such adoption and coincident with or prior to the
 Effective Date), the Administrator shall, with the approval of any Exchange (if required),
 make equitable and appropriate substitutions or proportionate adjustments to (i) the aggregate
 number and kind of Common Shares or other securities on which Awards under the Plan may be
 granted to Eligible Individuals, (ii) the maximum number of Common Shares or other securities
 with respect to which Awards may be granted during any one calendar year to any individual,
 (iii) the maximum number of Common Shares or other securities that may be issued with respect
 to Incentive Stock Options granted under the Plan, (iv) the number of Common Shares or other
 securities covered by each outstanding Award and the exercise price, base price or other
 price per share, if any, and other relevant terms of each outstanding Award, and (v) all
 other numerical limitations relating to Awards, whether contained in the Plan or in Award
 Agreements; *provided*, *however*, that any fractional shares resulting from any
 such adjustment shall be eliminated; and, *provided further,* that in no event shall
 the exercise price per Common Share of a stock option or stock appreciation right, or subscription
 price per Common Share or any other Award, be reduced to an amount that is lower than the
 par value of a Common Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Discretionary Adjustments.* In the case of Corporate Events, the Administrator may, with the approval
 of any Exchange (if required), make such other adjustments to outstanding Awards as it determines
 to be appropriate and desirable, which adjustments may include, without limitation, (i) the
 cancellation of outstanding Awards in exchange for payments of cash, securities or other
 property or a combination thereof having an aggregate value equal to the value of such Awards,
 as determined by the Administrator in its sole discretion (it being understood that in the
 case of a Corporate Event with respect to which shareholders of Aeterna receive consideration
 other than publicly traded equity securities of the ultimate surviving entity, any such determination
 by the Administrator that the value of a stock option or stock appreciation right shall for
 this purpose be deemed to equal the excess, if any, of the value of the consideration being
 paid for each Common Share pursuant to such Corporate Event over the exercise price or base
 price of such stock option or stock appreciation right shall conclusively be deemed valid
 and that any stock option or stock appreciation right may be cancelled for no consideration
 upon a Corporate Event if its exercise price or base price equals or exceeds the value of
 the consideration being paid for each Common Share pursuant to such Corporate Event), (ii)
 the substitution of securities or other property (including, without limitation, cash or
 other securities of Aeterna and securities of entities other than Aeterna) for the Common
 Shares subject to outstanding Awards, and (iii) the substitution of equivalent awards, as
 determined in the sole discretion of the Administrator, of the surviving or successor entity
 or a parent thereof ()"**Substitute Awards** ").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Adjustments to Performance Goals.* The Administrator may, in its discretion, adjust the Performance
 Goals applicable to any Awards to reflect any unusual or non-recurring events and other extraordinary
 items, impact of charges for restructurings, discontinued operations and the cumulative effects
 of accounting or tax changes, each as defined by generally accepted accounting principles
 or as identified in Aeterna's consolidated financial statements, notes to the consolidated
 financial statements, management's discussion and analysis or other Aeterna filings
 with the Securities and Exchange Commission. If the Administrator determines that a change
 in the business, operations, corporate structure or capital structure of Aeterna or the applicable
 subsidiary, business segment or other operational unit of Aeterna or any such entity or segment,
 or the manner in which any of the foregoing conducts its business, or other events or circumstances,
 render the Performance Goals to be unsuitable, the Administrator may modify such Performance
 Goals or the related minimum acceptable level of achievement, in whole or in part, as the
 Administrator deems appropriate and equitable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Statutory Requirements Affecting Adjustments.* Notwithstanding the foregoing: (A) any adjustments
 made pursuant to Section 10 to Awards that are considered "deferred compensation"
 within the meaning of Section 409A of the Code shall be made in compliance with the requirements
 of Section 409A of the Code; (B) any adjustments made pursuant to Section 10 to Awards that
 are not considered "deferred compensation" subject to Section 409A of the Code
 shall be made in such a manner as to ensure that after such adjustment, the Awards either
 (1) continue not to be subject to Section 409A of the Code or (2) comply with the requirements
 of Section 409A of the Code; (C) in any event, the Administrator shall not have the authority
 to make any adjustments pursuant to Section 10 to the extent the existence of such authority
 would cause an Award that is not intended to be subject to Section 409A of the Code at the
 date of grant to be subject thereto; and (D) any adjustments made pursuant to Section 10
 to Awards that are Incentive Stock Options shall be made in compliance with the requirements
 of Section 424(a) of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e)* *Dissolution or Liquidation.* Unless the Administrator determines otherwise, all Awards outstanding
 under the Plan shall terminate upon the dissolution or liquidation of Aeterna.

**11.** **Change in Control Provisions.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Termination of Awards.* Notwithstanding the provisions of Section 11(b), in the event that any transaction
 resulting in a Change in Control occurs, outstanding Awards will terminate upon the effective
 time of such Change in Control unless provision is made in connection with the transaction
 for the continuation or assumption of such Awards by, or for the issuance therefor of Substitute
 Awards of, the surviving or successor entity or a parent thereof. Solely with respect to
 Awards that will terminate as a result of the immediately preceding sentence and except as
 otherwise provided in the applicable Award Agreement:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the
 outstanding Awards of stock options and stock appreciation rights that will terminate upon
 the effective time of the Change in Control shall, immediately before the effective time
 of the Change in Control, become fully exercisable and the holders of such Awards will be
 permitted, immediately before the Change in Control, to exercise the Awards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 outstanding shares of Restricted Stock the vesting or restrictions on which are then solely
 time-based and not subject to achievement of Performance Goals shall, immediately before
 the effective time of the Change in Control, become fully vested, free of all transfer and
 lapse restrictions and free of all risks of forfeiture;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the
 outstanding shares of Restricted Stock the vesting or restrictions on which are then subject
 to and pending achievement of Performance Goals shall, immediately before the effective time
 of the Change in Control and unless the Award Agreement provides for vesting or lapsing of
 restrictions in a greater amount upon the occurrence of a Change in Control, become vested,
 free of transfer and lapse restrictions and risks of forfeiture in such amounts as if the
 applicable Performance Goals for the unexpired Performance Period had been achieved at the
 target level set forth in the applicable Award Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the
 outstanding Restricted Stock Units, Performance Shares and Performance Units the vesting,
 earning or settlement of which is then solely time-based and not subject to or pending achievement
 of Performance Goals shall, immediately before the effective time of the Change in Control,
 become fully earned and vested and shall be settled in cash or Common Shares (consistent
 with the terms of the Award Agreement after taking into account the effect of the Change
 in Control transaction on the shares) as promptly as is practicable, subject to any applicable
 limitations imposed thereon by Section 409A of the Code; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) the
 outstanding Restricted Stock Units, Performance Shares and Performance Units the vesting,
 earning or settlement of which is then subject to and pending achievement of Performance
 Goals shall, immediately before the effective time of the Change in Control and unless the
 Award Agreement provides for vesting, earning or settlement in a greater amount upon the
 occurrence of a Change in Control, become vested and earned in such amounts as if the applicable
 Performance Goals for the unexpired Performance Period had been achieved at the target level
 set forth in the applicable Award Agreement and shall be settled in cash or Common Shares
 (consistent with the terms of the Award Agreement after taking into account the effect of
 the Change in Control transaction on the shares) as promptly as is practicable, subject to
 any applicable limitations imposed thereon by Section 409A of the Code.

Implementation of the provisions of this Section 11(a) shall be conditioned upon consummation of the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Continuation, Assumption or Substitution of Awards.* The administrator may specify, on or after the
 date of grant, in an award agreement or amendment thereto, the consequences of a Participant's
 Termination of Service that occurs coincident with or following the occurrence of a Change
 in Control, if a Change in Control occurs under which provision is made in connection with
 the transaction for the continuation or assumption of outstanding Awards by, or for the issuance
 therefor of Substitute Awards of, the surviving or successor entity or a parent thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Other Permitted Actions.* In the event that any transaction resulting in a Change in Control
 occurs, the Administrator may take any of the actions set forth in Section 10 with respect
 to any or all Awards granted under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Application of Section 409A .* Notwithstanding the foregoing, if any Award constitutes "nonqualified
 deferred compensation plan" within the meaning of Section 409A of the Code, this Section
 11 shall apply to such Award only to the extent that its application would not result in
 the imposition of any tax or interest or the inclusion of any amount in income under Section
 409A of the Code.

**12.** **Substitution of Awards in Mergers and Acquisitions.** 

Awards may be granted under the Plan from time to time in substitution for assumed awards held by employees, officers, consultants or directors of entities who become employees, officers, consultants or directors of Aeterna or a Subsidiary as the result of a merger or consolidation of the entity for which they perform services with Aeterna or a Subsidiary, or the acquisition by Aeterna of the assets or stock of the such entity. The terms and conditions of any Awards so granted may vary from the terms and conditions set forth herein to the extent that the Administrator deems appropriate at the time of grant to conform the Awards to the provisions of the assumed awards for which they are substituted and to preserve their intrinsic value as of the date of the merger, consolidation or acquisition transaction. To the extent permitted by applicable law and marketplace or listing rules of the primary securities market or exchange on which the Common Shares are listed or admitted for trading, any available shares under a shareholder-approved plan of an acquired company (as appropriately adjusted to reflect the transaction) may be used for Awards granted pursuant to this Section 12 and, upon such grant, shall not reduce the Share Pool.

**13.** **Compliance with Securities Laws; Listing and Registration.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) The
 obligation of Aeterna to sell or deliver Common Shares with respect to any Award granted
 under the Plan shall be subject to all applicable laws, rules and regulations, including
 all applicable federal, state or foreign (non-United States) securities laws, or foreign
 (non-United States) securities laws and the obtaining of all such approvals by governmental
 agencies as may be deemed necessary or appropriate by the Administrator. If at any time the
 Administrator determines that the delivery of Common Shares under the Plan is or may be unlawful
 under the laws of any applicable jurisdiction, or federal, state or foreign (non-United States)
 securities laws, the right to exercise an Award or receive Common Shares pursuant to an Award
 shall be suspended until the Administrator determines that such delivery is lawful. If at
 any time the Administrator determines that the delivery of Common Shares under the Plan would
 or may violate the rules of any Exchange, the right to exercise an Award or receive Common
 Shares pursuant to an Award shall be suspended until the Administrator determines that such
 delivery would not violate such rules. If the Administrator determines that the exercise
 or nonforfeitability of, or delivery of benefits pursuant to, any Award would violate any
 applicable provision of securities laws or the listing requirements of any Exchange, then
 the Administrator may postpone any such exercise, nonforfeitability or delivery, as applicable,
 but Aeterna shall use all reasonable efforts to cause such exercise, nonforfeitability or
 delivery to comply with all such provisions at the earliest practicable date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Each
 Award is subject to the requirement that, if at any time the Administrator determines, in
 its absolute discretion, that the listing, registration or qualification of Common Shares
 issuable pursuant to the Plan is required by any securities exchange or under any state,
 federal or foreign (non-United States) law, or the consent or approval of any governmental
 regulatory body is necessary or desirable as a condition of, or in connection with, the grant
 of an Award or the issuance of Common Shares, no such Award shall be granted or payment made
 or Common Shares issued, in whole or in part, unless listing, registration, qualification,
 consent or approval has been effected or obtained free of any conditions not acceptable to
 the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In
 the event that the disposition of Common Shares acquired pursuant to the Plan is not covered
 by a then current registration statement under the Securities Act of 1933, as amended (the
 "**Securities Act** "), and is not otherwise exempt from such registration,
 such Common Shares shall be restricted against transfer to the extent required by the Securities
 Act or regulations thereunder, and the Administrator may require a person receiving Common
 Shares pursuant to the Plan, as a condition precedent to receipt of such Common Shares, to
 represent to Aeterna in writing that the Common Shares acquired by such person is acquired
 for investment only and not with a view to distribution and that such person will not dispose
 of the Common Shares so acquired in violation of federal, state or foreign securities laws
 and furnish such information as may, in the opinion of counsel for the Company, be appropriate
 to permit the Company to issue the Common Shares in compliance with applicable federal, state
 or foreign securities laws. If applicable, all certificates representing such Common Shares
 shall bear applicable legends as required by federal, state or foreign securities laws or
 Exchange regulation.

**14.** **Section 409A Compliance.** 

It is the intention of Aeterna that any Award that constitutes a "nonqualified deferred compensation plan" within the meaning of Section 409A of the Code shall comply in all respects with the requirements of Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code, and the terms of each such Award shall be construed, administered and deemed amended, if applicable, in a manner consistent with this intention. Notwithstanding the foregoing, neither Aeterna nor any of its Affiliates nor any of its or their directors, officers, employees, agents or other service providers will be liable for any taxes, penalties or interest imposed on any Participant or other person with respect to any amounts paid or payable (whether in cash, Common Shares or other property) under any Award, including any taxes, penalties or interest imposed under or as a result of Section 409A of the Code. Any payments described in an Award that are due within the "short term deferral period" as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise. For purposes of any Award, each amount to be paid or benefit to be provided to a Participant that constitutes deferred compensation subject to Section 409A of the Code shall be construed as a separate identified payment for purposes of Section 409A of the Code. For purposes of Section 409A of the Code, the payment of Dividend Equivalents under any Award shall be construed as earnings and the time and form of payment of such Dividend Equivalents shall be treated separately from the time and form of payment of the underlying Award. Notwithstanding any other provision of the Plan to the contrary, with respect to any Award that constitutes a "nonqualified deferred compensation plan" within the meaning of Section 409A of the Code, any payments (whether in cash, Common Shares or other property) to be made with respect to the Award that become payable on account of the Participant's separation from service, within the meaning of Section 409A of the Code, while the Participant is a "specified employee" (as determined in accordance with the uniform policy adopted by the Administrator with respect to all of the arrangements subject to Section 409A of the Code maintained by Aeterna and its Affiliates) and which would otherwise be paid within six months after the Participant's separation from service shall be accumulated (without interest) and paid on the first day of the seventh month following the Participant's separation from service or, if earlier, within 15 days after the appointment of the personal representative or executor of the Participant's estate following the Participant's death. Notwithstanding anything in the Plan or an Award Agreement to the contrary, in no event shall the Administrator exercise its discretion to accelerate the payment or settlement of an Award where such payment or settlement constitutes deferred compensation within the meaning of Code section 409A unless, and solely to the extent that, such accelerated payment or settlement is permissible under Treasury Regulation section 1.409A-3(j)(4).

**15.** **Plan Duration; Amendment and Discontinuance.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Plan Duration.* The Plan shall remain in effect, subject to the right of the Board or the Compensation
 Committee to amend or terminate the Plan at any time, until the earlier of (a) the earliest
 date as of which all Awards granted under the Plan have been satisfied in full or terminated
 and no Common Shares approved for issuance under the Plan remain available to be granted
 under new Awards or (b) the tenth anniversary of the Effective Date. No Awards shall be granted
 under the Plan after such termination date. Subject to other applicable provisions of the
 Plan, all Awards made under the Plan on or before the tenth anniversary of the Effective
 Date, or such earlier termination of the Plan, shall remain in effect until such Awards have
 been satisfied or terminated in accordance with the Plan and the terms of such Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *Amendment and Discontinuance of the Plan.* The Board or the Compensation Committee may, without
 shareholder approval, amend, alter or discontinue the Plan, but no amendment, alteration
 or discontinuation shall be made which would materially impair the rights of a Participant
 with respect to a previously granted Award without such Participant's consent, except
 such an amendment made to comply with applicable law or rule of any Exchange or to prevent
 adverse tax or accounting consequences to Aeterna or the Participant. Notwithstanding the
 foregoing, no such amendment shall be made without the approval of Aeterna's shareholders
 to the extent such amendment would (A) materially increase the benefits accruing to Participants
 under the Plan, (B) increase the number of Common Shares which may be issued under the Plan
 or to a Participant, (C) materially expand the eligibility for participation in the Plan,
 (D) eliminate or modify the prohibition set forth in Section 7(f) on repricing of stock options
 and stock appreciation rights, (E) lengthen the maximum term or lower the minimum exercise
 price or base price permitted for stock options and stock appreciation rights, or (F) modify
 the prohibition on the issuance of reload or replenishment options, or (G) amend the provisions
 set out in this Section 15(b). Except as otherwise determined by the Board or Compensation
 Committee, termination of the Plan shall not affect the Administrator's ability to
 exercise the powers granted to it hereunder with respect to Awards granted under the Plan
 prior to the date of such termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Amendment of Awards.* Subject to Section 7(f) and Section 15(b), the Administrator may unilaterally
 amend the terms of any Award theretofore granted, but no such amendment shall materially
 impair the rights of any Participant with respect to an Award without the Participant's
 consent, except such an amendment made to cause the Plan or Award to comply with applicable
 law, applicable rule of any Exchange, or to prevent adverse tax or accounting consequences
 for the Participant or the Company or any of its Affiliates. For purposes of the foregoing
 sentence, an amendment to an Award that results in a change in the tax consequences of the
 Award to the Participant shall not be considered to be a material impairment of the rights
 of the Participant and shall not require the Participant's consent.

**16.** **General Provisions.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(a)* *Non-Guarantee of Employment or Service.* Nothing in the Plan or in any Award Agreement thereunder shall
 confer any right on an individual to continue in the service of Aeterna or any Affiliate
 or shall interfere in any way with any right of Aeterna or any Affiliate may have to terminate
 such service at any time with or without cause or notice and whether or not such termination
 results in (i) the failure of any Award to vest or become payable; (ii) the forfeiture of
 any unvested or vested portion of any Award; and/or (iii) any other adverse effect on the
 individual's interests under any Award or the Plan. No person, even though deemed an
 Eligible Individual, shall have a right to be selected as a Participant, or, having been
 so selected, to be selected again as a Participant. To the extent that an Eligible Individual
 who is an employee of a Subsidiary receives an Award under the Plan, that Award shall in
 no event be understood or interpreted to mean that Aeterna is the Participant's employer
 or that the Participant has an employment relationship with Aeterna.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(b)* *No Trust or Fund Created.* Neither the Plan nor any Award shall create or be construed to
 create a trust or separate fund of any kind or a fiduciary relationship between Aeterna and
 a Participant or any other person. To the extent that any Participant or other person acquires
 a right to receive payments from Aeterna pursuant to an Award, such right shall be no greater
 than the right of any unsecured general creditor of Aeterna.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(c)* *Status of Awards.* Awards shall be special incentive payments to the Participant and shall not
 be taken into account in computing the amount of salary or compensation of the Participant
 for purposes of determining any pension, retirement, death, severance or other benefit under
 (a) any pension, retirement, profit-sharing, bonus, insurance, severance or other employee
 benefit plan of Aeterna or any Affiliate now or hereafter in effect under which the availability
 or amount of benefits is related to the level of compensation or (b) any agreement between
 (i) Aeterna or any Affiliate and (ii) the Participant, except as such plan or agreement shall
 otherwise expressly provide.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(d)* *Subsidiary Employees.* In the case of a grant of an Award to an Eligible Individual who provides
 services to any Subsidiary, Aeterna may, if the Administrator so directs, issue or transfer
 the Common Shares, if any, covered by the Award to the Subsidiary, for such lawful consideration
 as the Administrator may specify, upon the condition or understanding that the Subsidiary
 will transfer the Common Shares to the Eligible Individual in accordance with the terms of
 the Award specified by the Administrator pursuant to the provisions of the Plan. All Common
 Shares underlying Awards that are forfeited or canceled after such issue or transfer of shares
 to the Subsidiary shall revert to Aeterna.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(e)* *Governing Law and Interpretation.* The validity, construction and effect of the Plan, of Award Agreements
 entered into pursuant to the Plan, and of any rules, regulations, determinations or decisions
 made by the Administrator relating to the Plan or such Award Agreements, and the rights of
 any and all persons having or claiming to have any interest therein or thereunder, shall
 be determined exclusively in accordance with the laws of the province of Quebec and the laws
 of Canada applicable thereto. The captions of the Plan are not part of the provisions hereof
 and shall have no force or effect. Except where the context otherwise requires: (i) the singular
 includes the plural and vice versa; (ii) a reference to one gender includes other genders;
 (iii) a reference to a person includes a natural person, partnership, corporation, association,
 governmental or local authority or agency or other entity; and (iv) a reference to a statute,
 ordinance, code or other law includes regulations and other instruments under it and consolidations,
 amendments, re-enactments or replacements of any of them. To the extent applicable, the Plan
 will comply in all respects with the Employee Retirement Income Security Act of 1974, as
 amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(f)* *Use of English Language.* The Plan, each Award Agreement, and all other documents, notices
 and legal proceedings entered into, given or instituted pursuant to an Award shall be written
 in English, unless otherwise determined by the Administrator. If a Participant receives an
 Award Agreement, a copy of the Plan or any other documents related to an Award translated
 into a language other than English, and if the meaning of the translated version is different
 from the English version, the English version shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(g)* *Recovery of Amounts Paid.* Except as otherwise provided by the Administrator, Awards granted under
 the Plan shall be subject to any and all policies, guidelines, codes of conduct, or other
 agreement or arrangement adopted by the Board or Compensation Committee with respect to the
 recoupment, recovery or clawback of compensation (collectively, the "**Recoupment Policy**") and/or to any provisions set forth in the applicable Award Agreement under
 which Aeterna may recover from current and former Participants any amounts paid or Common
 Shares issued under an Award and any proceeds therefrom under such circumstances as the Administrator
 determines appropriate. The Administrator may apply the Recoupment Policy to Awards granted
 before the policy is adopted to the extent required by applicable law or rule of any Exchange,
 as determined by the Administrator in its sole discretion.

**17.** **Glossary.** 

Under the Plan, except where the context otherwise indicates, the following definitions apply:

"**2016 Stock Option Plan**" refers to the second amended and restated stock option plan of Aeterna adopted by the Board on March 29, 2016 and ratified by the shareholders of Aeterna on May 10, 2016.

*"***Administrator**" means the Compensation Committee, or such other committee(s) or officer(s) duly appointed by the Board or the Compensation Committee to administer the Plan or delegated limited authority to perform administrative actions under the Plan, and having such powers as shall be specified by the Board or the Compensation Committee; provided, however, that at any time the Board may serve as the Administrator in lieu of or in addition to the Compensation Committee or such other committee(s) or officer(s) to whom administrative authority has been delegated. With respect to any Award to which Section 16 of the Exchange Act applies, the Administrator shall consist of either the Board or a committee of the Board, which committee shall consist of two or more directors, each of whom is intended to be, to the extent required by Rule 16b-3 of the Exchange Act, a "non-employee director" as defined in Rule 16b-3 of the Exchange Act and an "independent director" to the extent required by the rules of the national securities exchange that is the principal trading market for the Common Shares; *provided*, that with respect to Awards made to a member of the Board who is not an employee of the Company, "Administrator" means the Board. Any member of the Administrator who does not meet the foregoing requirements shall abstain from any decision regarding an Award and shall not be considered a member of the Administrator to the extent required to comply with Rule 16b-3 of the Exchange Act.

"**Aeterna***"* means Aeterna Zentaris Inc., a company organized under the *Canada Business Corporations Act*.

"**Affiliate***"* means any entity, whether now or hereafter existing, which controls, is controlled by, or is under common control with, Aeterna or any successor to Aeterna. For this purpose, "control" (including the correlative meanings of the terms "controlled by" and "under common control with") shall mean ownership, directly or indirectly, of 50% or more of the total combined voting power of all classes of voting securities issued by such entity, or the possession, directly or indirectly, of the power to direct the management and policies of such entity, by contract or otherwise.

"**Articles***"* means the restated articles of incorporation of Aeterna, together with the articles of amendment dated October 2, 2012 and November 17, 2015.

"**Award**" means any stock option, stock appreciation right, stock award, stock unit, Performance Share, Performance Unit, and/or Other Stock-Based Award, whether granted under the Plan.

*"***Award Agreement***"* means the written document(s), including an electronic writing acceptable to the Administrator, and any notice, addendum or supplement thereto, memorializing the terms and conditions of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.

"**Board**" means the Board of Directors of Aeterna.

"**Business Day**" means a day, other than a Saturday, Sunday or statutory holiday, when banks are generally open in the City of Toronto for the transaction of banking business.

"**By-Laws**" means the amended and restated by-laws of Aeterna dated March 21, 2013.

"**Change in Control**" means the first of the following to occur: (i) a Change in Ownership of Aeterna, (ii) a Change in Effective Control of Aeterna, or (iii) a Change in the Ownership of Assets of Aeterna, as described herein and construed in accordance with Code section 409A.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) A
 "Change in Ownership of Aeterna" shall occur on the date that any one Person
 acquires, or Persons Acting as a Group acquire, ownership of the capital stock of Aeterna
 that, together with the stock held by such Person or Group, constitutes more than 50% of
 the total fair market value or total voting power of the capital stock of Aeterna. However,
 if any one Person is, or Persons Acting as a Group are, considered to own more than 50%,
 on a fully diluted basis, of the total fair market value or total voting power of the capital
 stock of Aeterna, the acquisition of additional stock by the same Person or Persons Acting
 as a Group is not considered to cause a Change in Ownership of Aeterna or to cause a Change
 in Effective Control of Aeterna (as described below). An increase in the percentage of capital
 stock owned by any one Person, or Persons Acting as a Group, as a result of a transaction
 in which Aeterna acquires its stock in exchange for property will be treated as an acquisition
 of stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) A
 "Change in Effective Control of Aeterna" shall occur on the date either (A) a
 majority of members of Aeterna's Board is replaced during any 12-month period by directors
 whose appointment or election is not endorsed by a majority of the members of Aeterna's
 Board before the date of the appointment or election, or (B) any one Person, or Persons Acting
 as a Group, acquires (or has acquired during the 12-month period ending on the date of the
 most recent acquisition by such Person or Persons) ownership of stock of Aeterna possessing
 50% or more of the total voting power of the stock of Aeterna.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) A
 "Change in the Ownership of Assets of Aeterna" shall occur on the date that any
 one Person acquires, or Persons Acting as a Group acquire (or has or have acquired during
 the 12-month period ending on the date of the most recent acquisition by such Person or Persons),
 assets from Aeterna that have a total gross fair market value equal to or more than 50% of
 the total gross fair market value of all of the assets of Aeterna immediately before such
 acquisition or acquisitions. For this purpose, gross fair market value means the value of
 the assets of Aeterna, or the value of the assets being disposed of, determined without regard
 to any liabilities associated with such assets.

The following rules of construction apply in interpreting the definition of Change in Control:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A. A
 "**Person**" means any individual, entity or group within the meaning of Section
 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended, other than employee
 benefit plans sponsored or maintained by Aeterna and by entities controlled by Aeterna or
 an underwriter, initial purchaser or placement agent temporarily holding the capital stock
 of Aeterna pursuant to a registered public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B. Persons
 will be considered to be Persons Acting as a Group (or Group) if they are owners of a corporation
 that enters into a merger, consolidation, purchase or acquisition of stock, or similar business
 transaction with the corporation. If a Person owns stock in both corporations that enter
 into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such
 shareholder is considered to be acting as a Group with other shareholders only with respect
 to the ownership in that corporation before the transaction giving rise to the change and
 not with respect to the ownership interest in the other corporation. Persons will not be
 considered to be acting as a Group solely because they purchase assets of the same corporation
 at the same time or purchase or own stock of the same corporation at the same time, or as
 a result of the same public offering.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C. A
 Change in Control shall not include a transfer to a related person as described in Code section
 409A or a public offering of capital stock of Aeterna.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D. For
 purposes of the definition of Change in Control, Section 318(a) of the Code applies to determine
 stock ownership. Stock underlying a vested option is considered owned by the individual who
 holds the vested option (and the stock underlying an unvested option is not considered owned
 by the individual who holds the unvested option). For purposes of the preceding sentence,
 however, if a vested option is exercisable for stock that is not substantially vested (as
 defined by Treasury Regulation §1.83-3(b) and (j)), the stock underlying the option
 is not treated as owned by the individual who holds the option.

*"***Code**" means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto, the Treasury Regulations thereunder and other relevant interpretive guidance issued by the Internal Revenue Service or the Treasury Department. Reference to any specific section of the Code shall be deemed to include such regulations and guidance, as well as any successor section, regulations and guidance.

*"***Common Shares***"* means common shares in the capital of Aeterna, without par value, and any capital securities into which they are converted.

"**Company**" means Aeterna and its Subsidiaries, except where the context otherwise requires. For purposes of determining whether a Change in Control has occurred, Company shall mean only Aeterna.

*"***Compensation Committee***"* means the Nominating, Governance and Compensation Committee of the Board.

"**Disability**" means an injury or disability for which benefits were received by the Participant under an established long-term disability plan or as determined by the Administrator. Where applicable to an Award, the term Disability shall be interpreted in a manner consistent with Section 409A of the Code.

**"Dividend Equivalent"** means a right, granted to a Participant, to receive cash, Common Shares, stock Units or other property equal in value to dividends paid with respect to a specified number of Common Shares.

"**Effective Date**" means the date on which adoption of the Plan is approved by the Board.

"**Eligible Individuals**" means (i) officers and employees of, and other individuals, including non-employee directors, who are natural persons providing bona fide services to or for, Aeterna or any of its Subsidiaries, *provided* that such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for Aeterna's securities, (ii) prospective officers, employees and service providers who have accepted offers of employment or other service relationship from Aeterna or a Subsidiary; and (iii) consultants who are natural persons providing bona fide services to or for, Aeterna or any of its Subsidiaries, *provided* that such services are not in connection with the offer or sale of securities in a capital-raising transaction and do not directly or indirectly promote or maintain a market for Aeterna's securities.

"**Exchange**" means collectively, the Toronto Stock Exchange and the NASDAQ or any other stock exchange in Canada or the United States on which Common Shares are listed and posted for trading.

"**Exchange Act**" means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. Reference to any specific section of the Exchange Act shall be deemed to include such regulations and guidance issued thereunder, as well as any successor section, regulations and guidance.

*"***Fair Market Value**" means, on a per share basis as of any date, unless otherwise determined by the Administrator:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. if
 the principal market for the Common Shares (as determined by the Administrator if the Common
 Shares are listed or admitted to trading on more than one Exchange) is a national securities
 exchange or an established securities market, the official closing price per Common Share
 for the regular market session on that date on the principal exchange or market on which
 the Common Shares are then listed or admitted to trading or, if no sale is reported for that
 date, on the last preceding day on which a sale was reported, all as reported by such source
 as the Administrator may select;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. if
 the principal market for the Common Shares is not a national securities exchange or an established
 securities market, but the Common Shares are quoted by a national quotation system, the average
 of the highest bid and lowest asked prices for the Common Shares on that date as reported
 on a national quotation system or, if no prices are reported for that date, on the last preceding
 day on which prices were reported, all as reported by such source as the Administrator may
 select; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. if
 the Common Shares are neither listed or admitted to trading on a national securities exchange
 or an established securities market, nor quoted by a national quotation system, the value
 determined by the Administrator in good faith by the reasonable application of a reasonable
 valuation method, which method may, but need not, include taking into account an appraisal
 of the fair market value of the Common Shares conducted by a nationally recognized appraisal
 firm selected by the Administrator.

Notwithstanding the preceding, for foreign, federal, state and local income tax reporting purposes and for such other purposes as the Administrator deems appropriate, the Fair Market Value shall be determined by the Administrator in accordance with uniform and nondiscriminatory standards adopted by it from time to time.

"**Full Value Award**" means an Award that results in Aeterna transferring the full value of a Common Share under the Award, whether or not an actual share of stock is issued. Full Value Awards shall include, but are not limited to, stock awards, stock units, Performance Shares, Performance Units that are payable in Common Shares, and Other Stock-Based Awards for which Aeterna transfers the full value of a Common Share under the Award, but shall not include Dividend Equivalents.

"**Incentive Stock Option**" means any stock option that is designated, in the applicable Award Agreement or the resolutions of the Administrator under which the stock option is granted, as an "incentive stock option" within the meaning of Section 422 of the Code and otherwise meets the requirements to be an "incentive stock option" set forth in Section 422 of the Code.

"**Nonqualified Option**" means any stock option that is not an Incentive Stock Option.

"**Other Stock-Based Award**" means an Award of Common Shares or any other Award that is valued in whole or in part by reference to, or is otherwise based upon, Common Shares, including without limitation Dividend Equivalents.

"**Participant**" means an Eligible Individual to whom one or more Awards are or have been granted pursuant to the Plan and have not been fully settled or cancelled and, following the death of any such person, his successors, heirs, executors and administrators, as the case may be.

"**Performance Award**" means a Full Value Award, the grant, vesting, lapse of restrictions or settlement of which is conditioned upon the achievement of performance objectives over a specified Performance Period and includes, without limitation, Performance Shares and Performance Units.

"**Performance Goals**" means the performance goals established by the Administrator in connection with the grant of Awards based on Performance Metrics or other performance criteria selected by the Administrator.

"**Performance Metrics**" means criteria established by the Administrator relating to any of the following, as it may apply to an individual, one or more business units, divisions, or Affiliates, or on a company-wide basis, and in absolute terms, relative to a base period, or relative to the performance of one or more comparable companies, peer groups, or an index covering multiple companies:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;i. Earnings
 or Profitability Metrics: any derivative of revenue; earnings/loss (gross, operating, net,
 or adjusted); earnings/loss before interest and taxes ()"**EBIT** "); earnings/loss
 before interest, taxes, depreciation and amortization ()"**EBITDA** "); profit
 margins; operating margins; expense levels or ratios; provided that any of the foregoing
 metrics may be adjusted to eliminate the effect of any one or more of the following: interest
 expense, asset impairments or investment losses, early extinguishment of debt or stock-based
 compensation expense;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ii. Return
 Metrics: any derivative of return on investment, assets, equity or capital (total or invested);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iii. Investment
 Metrics: relative risk-adjusted investment performance; investment performance of assets
 under management;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;iv. Cash
 Flow Metrics: any derivative of operating cash flow; cash flow sufficient to achieve financial
 ratios or a specified cash balance; free cash flow; cash flow return on capital; net cash
 provided by operating activities; cash flow per share; working capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;v. Liquidity
 Metrics: any derivative of debt leverage (including debt to capital, net debt-to-capital,
 debt-to-EBITDA or other liquidity ratios);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vi. Stock
 Price and Equity Metrics: any derivative of return on shareholders' equity; total shareholder
 return; stock price; stock price appreciation; market capitalization; earnings/loss per share
 (basic or diluted) (before or after taxes); and/or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;vii. Strategic
 Metrics: product research and development; completion of an identified special project; clinical
 trials; regulatory filings or approvals; patent application or issuance; manufacturing or
 process development; sales or net sales; market share; market penetration; economic value
 added; customer service; customer satisfaction; inventory control; balance of cash, cash
 equivalents and marketable securities; growth in assets; key hires; employee satisfaction;
 employee retention; business expansion; acquisitions, divestitures, joint ventures or financing;
 legal compliance or safety and risk reduction.

"**Performance Period**" means that period established by the Administrator during which any Performance Goals specified by the Administrator with respect to such Award are to be measured

*"***Performance Shares**" means a grant of stock or stock Units the issuance, vesting or payment of which is contingent on performance as measured against predetermined objectives over a specified Performance Period.

"**Performance Units**" means a grant of dollar-denominated Units the value, vesting or payment of which is contingent on performance against predetermined objectives over a specified Performance Period.

"**Plan**" means this Aeterna Zentaris Inc. 2018 Long-Term Incentive Plan, as set forth herein and as it may be amended from time to time.

"**Restricted Stock**" means an Award of Common Shares to a Participant that may be subject to certain transferability and other restrictions and to a risk of forfeiture (including by reason of not satisfying certain Performance Goals).

"**Restricted Stock Unit**" means a right granted to a Participant to receive Common Shares or cash at the end of a specified deferral period, which right may be conditioned on the satisfaction of certain requirements (including the satisfaction of certain Performance Goals).

"**Restriction Period**" means, with respect to Full Value Awards, the period commencing on the date of grant of such Award to which vesting or transferability and other restrictions and a risk of forfeiture apply and ending upon the expiration of the applicable vesting conditions, transferability and other restrictions and lapse of risk of forfeiture and/or the achievement of the applicable Performance Goals (it being understood that the Administrator may provide that vesting shall occur and/or restrictions shall lapse with respect to portions of the applicable Award during the Restriction Period in accordance with Section 7(b)).

"**Security-Based Compensation Arrangement**" means any stock option, stock option plan, employee stock purchase plan or any other compensation or incentive mechanism of Aeterna or its Affiliates involving the issuance or potential issuance of shares, including, for greater certainty, the 2016 Stock Option Plan (but excluding any compensation or incentive mechanism of Aeterna involving the issuance or potential issuance of shares in accordance with section 613(c) of the TSX Company Manual).

"**Subsidiary**" means any corporation or other entity in an unbroken chain of corporations or other entities beginning with Aeterna if each of the corporations or other entities, or group of commonly controlled corporations or other entities, other than the last corporation or other entity in the unbroken chain then owns stock or other equity interests possessing 50% or more of the total combined voting power of all classes of stock or other equity interests in one of the other corporations or other entities in such chain or otherwise has the power to direct the management and policies of the entity by contract or by means of appointing a majority of the members of the board or other body that controls the affairs of the entity; *provided, however,* that solely for purposes of determining whether a Participant has a Termination of Service that is a "separation from service" within the meaning of Section 409A of the Code or whether an Eligible Individual is eligible to be granted an Award that in the hands of such Eligible Individual would constitute a "nonqualified deferred compensation plan" within the meaning of Section 409A of the Code, a "Subsidiary" of a corporation or other entity means all other entities with which such corporation or other entity would be considered a single employer under Sections 414(b) or 414(c) of the Code.

"**Tax Withholding Obligation**" means any federal, state, local or foreign (non-United States) income, employment or other tax or social insurance contribution required by applicable law to be withheld in respect of Awards.

"**Termination of Service**" means the termination of the Participant's employment or consultancy or performance of services for, Aeterna and its Subsidiaries. Temporary absences from employment because of illness, vacation or leave of absence and transfers among Aeterna and its Subsidiaries shall not be considered Terminations of Service. With respect to any Award that constitutes a "nonqualified deferred compensation plan" within the meaning of Section 409A of the Code, "Termination of Service" shall mean a "separation from service" as defined under Section 409A of the Code to the extent required by Section 409A of the Code to avoid the imposition of any tax or interest or the inclusion of any amount in income pursuant to Section 409A of the Code. A Participant has a separation from service within the meaning of Section 409A of the Code if the Participant terminates employment with Aeterna and all Subsidiaries for any reason. A Participant will generally be treated as having terminated employment with Aeterna and all Subsidiaries as of a certain date if the Participant and the entity that employs the Participant reasonably anticipate that the Participant will perform no further services for Aeterna or any Subsidiary after such date or that the level of bona fide services that the Participant will perform after such date (whether as an employee or an independent contractor) will permanently decrease to no more than 20 percent (20%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the Participant has been providing services for fewer than 36 months); *provided, however,* that the employment relationship is treated as continuing while the Participant is on military leave, sick leave or other bona fide leave of absence if the period of leave does not exceed six months or, if longer, so long as the Participant retains the right to reemployment with Aeterna or any Subsidiary.

"**Unit**" means a bookkeeping entry used by Aeterna to record and account for the grant of the following types of Awards until such time as the Award is paid, cancelled, forfeited or terminated, as the case may be: stock units, Restricted Stock Units, Performance Units, and Performance Shares that are expressed in terms of units of Common Shares.

## Exhibit 8.1

**Exhibit 8.1**

**SUBSIDIARIES OF THE REGISTRANT**

**COSCIENS BIOPHARMA INC.**

![](ex8-1_001.jpg)

## Exhibit 12.1

**Exhibit 12.1**

***Certification of the Principal Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002***

I, Peter Puccetti, certify that:

1. I
 have reviewed this annual report on Form 20-F of COSCIENS Biopharma Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this
 report;

4. The
 company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated
 the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) Disclosed
 in this report any change in the company's internal control over financial reporting that occurred during the period covered
 by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control
 over financial reporting; and

5. The
 company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal
 control over financial reporting.

Date: March 25, 2026

---

| |
|:---|
| */s/ Peter Puccetti* |
| Peter Puccetti |
| Interim Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

***Certification of the Principal Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002***

 ****

I, Giuliano La Fratta, certify that:

1. I
 have reviewed this annual report on Form 20-F of COSCIENS Biopharma Inc.;

2. Based
 on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
 to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
 the period covered by this report;

3. Based
 on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
 respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this
 report;

4. The
 company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
 (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
 Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed
 such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
 to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others
 within those entities, particularly during the period in which this report is being prepared;

(b) Designed
 such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
 supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
 for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated
 the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the
 effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
 and

(d) Disclosed
 in this report any change in the company's internal control over financial reporting that occurred during the period covered
 by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control
 over financial reporting; and

5. The
 company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
 reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing
 the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All
 significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
 reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information;
 and

(b) Any
 fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal
 control over financial reporting.

Date: March 25, 2026

---

| |
|:---|
| */s/ Giuliano La Fratta* |
| Giuliano La Fratta |
| Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the annual report of COSCIENS Biopharma Inc. (the "**Company**") on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "**Report**"), I, Peter Puccetti, Interim Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies
 with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained
 in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

**Dated: March 25, 2026**

---

| |
|:---|
| */s/ Peter Puccetti* |
| Peter Puccetti |
| Interim Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the annual report of COSCIENS Biopharma Inc. (the "**Company**") on Form 20-F for the year ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "**Report**"), I, Giuliano La Fratta, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The
 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The
 information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
 of the Company.

**Dated: March 25, 2026**

---

| |
|:---|
| */s/ Giuliano La Fratta* |
| Giuliano La Fratta |
| Chief Financial Officer |

---