An anonymous director reports

CEAPRO INC. ANNOUNCES THE MAILING OF MEETING MATERIALS IN CONNECTION WITH THE SPECIAL MEETING OF SECURITYHOLDERS TO APPROVE MERGER WITH AETERNA ZENTARIS

Ceapro Inc. has mailed and filed a management information circular dated Feb. 9, 2024, and related meeting materials for the special meeting of securityholders (as defined below) to be held on March 12, 2024, called to consider, among other things, the previously announced all-stock merger of equals, pursuant to which it is proposed that, in accordance with the terms announced on Dec. 14, 2023: (i) Aeterna Zentaris Inc. will acquire all of the issued and outstanding common shares in the share capital of the company from the shareholders of the company, in exchange for Aeterna Zentaris common shares; and (ii) each of the outstanding options to purchase shares will cease to represent an option or other right to acquire a share and will be exchanged for a replacement option allowing their holders to acquire Aeterna Zentaris shares on similar terms, by way of a statutory plan of arrangement.

After giving effect to the arrangement, the combined company (the resulting issuer) is expected to be listed on the Nasdaq Capital Market and the Toronto Stock Exchange, subject to the receipt of all necessary approvals. A new name for the resulting issuer is expected to be announced following the closing of the arrangement.

Board recommendation

Based on the unanimous recommendation of the special committee of independent directors of the company, and after consultation with its outside financial and legal advisers, the board of directors of the company, with Gilles Gagnon declaring his conflict of interest as a director of Aeterna Zentaris and therefore abstaining from voting, unanimously determined that the arrangement is in the best interests of the company and fair to securityholders, and recommends that securityholders vote in favour of the arrangement at the meeting.

The board believes this is a compelling opportunity for Ceapro and its investors for a number of reasons, including:

• Recurring revenue to support business expansion: The resulting issuer is expected to benefit from continuing revenue from existing Ceapro products, which provide near-term revenue owing to the streamlined development and commercialization opportunities in the cosmeceutical and nutraceutical space, along with licence revenue from the partnering of Aeterna Zentaris's pharmaceutical products, including macimorelin (Macrilen; Ghryvelin), which have the potential to create long-term value for investors. These revenue streams are planned to be used to support the development of high-potential-return products, ideally creating growing and sustainable revenue, and represent a more diversified value proposition for investors. The pipeline of products being developed should generate an increased and consistent news flow, a key supporting factor in investor interest.
• Stronger financial position and flexibility: The resulting issuer will have increased financial flexibility with enhanced free cash flow and a strengthened balance sheet, with approximately $57-million in unrestricted cash as at Sept. 30, 2023, on a pro forma basis.
• Diversified commercial and development product pipeline: The resulting issuer is anticipated to have a stronghold in the active ingredients market and value-driving cosmeceutical products (oat beta glucan and avenanthramides, which are found in leading skincare product brands, including Aveeno, Jergens, Neutrogena and Lubriderm, and other leading brand names) and nutraceuticals. The resulting issuer is also expected to benefit from an extensive pipeline of innovative products in development, including Ceapro's quicker to market biotechnology products and Aeterna Zentaris's potentially higher-return, but longer-horizon, products. With this pipeline rejuvenation, the resulting issuer is expected to boast:
  • More products in the pipeline that are closer to potential commercialization;
  • An enhanced ability to strategically focus financial and company resources in a manner that provides the most value to the company and shareholders;
  • A more compelling value proposition and lower-risk profile.
• Expanded pharmaceutical research and development capabilities: Both Ceapro and Aeterna Zentaris bring deep expertise and knowledge that are expected to play a key role in advancing the resulting issuer and its development pipeline. The resulting issuer will have the infrastructure to support development activities and potentially offer improved efficiencies, in addition to cost savings. The resulting issuer will also have an expanded development pipeline of products, which it is committed to prioritizing as management evaluates what will provide the best overall potential for the resulting issuer, shareholders and consumers.
• Improved trading liquidity and capital markets exposure: Subject to regulatory approvals, the resulting issuer will be listed on both the TSX and the Nasdaq, providing it with greater exposure to capital markets than is currently available to Ceapro.
• Experienced leadership: Both companies have expertise that can build upon each other resulting in a stronger company. For example, Aeterna Zentaris is adept at navigating the conduct of human clinical trials and the critical regulatory approval process required to bring pharmaceutical products to market, which provides a synergistic addition to Ceapro as it continues to advance higher-value pharmaceutical opportunities for its active ingredients and technologies.

Special meeting of securityholders

On Jan. 18, 2024, the Court of King's Bench of Alberta granted an interim order providing for, among other things, the calling and holding of the meeting. The meeting will be held at 9 a.m. Mountain Standard Time (11 a.m. Eastern Standard Time) on March 12, 2024, as a virtual-only securityholder meeting. Only securityholders of record as of the close of business on Jan. 12, 2024, are eligible to vote at the meeting.

To be effective, the special resolution approving the arrangement to be considered at the meeting must be approved by at least: (i) 66-2/3rds per cent of the votes cast by shareholders; and (ii) 66-2/3rds per cent of the votes cast by securityholders, voting together as a single class, present virtually or represented by proxy and entitled to vote at the meeting. Subject to the receipt of the requisite approval of the securityholders, final approval of the arrangement by the court and the satisfaction of other customary conditions, the arrangement is expected to be completed in the second quarter of 2024.

The meeting materials, which have been mailed to securityholders and are available under the company's profile on SEDAR+, provide important information about the arrangement, the meeting and related matters, including how securityholders can participate and vote at the meeting, and the background that led to the arrangement.

To be used at the meeting, instruments of proxy must be received by Broadridge Investor Communications Corp. later than 9 a.m. Mountain Standard Time on March 8, 2024, or, if the meeting is adjourned or postponed, no later than 48 hours (excluding Sundays, Saturdays and statutory holidays in the province of Alberta) prior to the time set for the adjourned or postponed meeting.

Securityholders who have any questions or require more information with regard to the transactions described herein or the procedures for voting should contact the company's proxy solicitation agent, Morrow Sodali, at 800-662-5200 toll-free in North America or call outside North America at 203-658-9400, or by e-mail at ceapro@investor.morrowsodali.com.

Voting methods

Registered securityholders

Registered securityholders and duly appointed proxyholders may vote on matters presented at the meeting by:

• Virtually: completing a ballot online during the meeting. Securityholders need to log in using the 16-digit control number included on the instrument of proxy;
• Via the Internet: entering the 16-digit control number included on the instrument of proxy and following the instructions on screen;
• Via mail: dating, signing and returning the instrument of proxy to Broadridge. To be valid, completed instruments of proxy must be dated, signed and deposited with Broadridge by mail to Broadridge, data processing centre, PO box 3700 STN Industrial Park, Markham, Ont., L3R 9Z9.

Non-registered shareholders

Non-registered shareholders (for example, shareholders who hold shares in an account with a broker or other intermediary) should follow the voting procedures described in the instrument of proxy or voting instruction form provided by their intermediary or call their intermediary for information as to how they can vote their shares.

About Ceapro Inc.

Ceapro is a Canadian biotechnology company involved in the development of proprietary extraction technology and the application of this technology to the production of extracts and active ingredients from oats and other renewable plant resources. Ceapro adds further value to its extracts by supporting their use in cosmeceutical, nutraceutical and therapeutics products for humans and animals. Ceapro 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.

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