Contract analysis

I. Executive Summary The purpose of this memorandum is to analyze the disclosure obligations of Penterra Pharmaceuticals Corp. ("Penterra" or the "Company") under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and related rules and regulations promulgated by the U.S. Securities and Exchange Commission (the "SEC"), arising from the Company's receipt of an inquiry letter dated October 12, 2023 (r

1. Form 8-K Filing. Penterra should file a Current Report on Form 8-K promptly — with a target filing date of November 6, 2023 — disclosing receipt of the OPDP inquiry as a material regulatory development under Item 8.01 ("Other Events"). Although there is no specific Form 8-K triggering item for receipt of an FDA inquiry letter, the materiality of the inquiry to the Company's principal revenue-generating product, co

2. Form 10-K Disclosure. Penterra should prepare appropriate risk-factor disclosures (Item 1A), legal-proceedings disclosures (Item 3), and Management's Discussion and Analysis ("MD&A") commentary (Item 7) for inclusion in Penterra's FY 2023 Annual Report on Form 10-K, which we understand is anticipated to be filed on or about February 28, 2024.

3. Auditor Coordination. The Company should coordinate with its independent registered public accounting firm, Meriden & Cole CPAs LLP ("Meriden & Cole"), regarding contingent-liability footnote considerations under Accounting Standards Codification Topic 450, Contingencies ("ASC 450"), for both the Q3 2023 quarterly period and the FY 2023 annual period.

4. Regulation FD Compliance. Penterra should take immediate steps to restrict internal discussion of the OPDP inquiry pending the Form 8-K filing so as to avoid any selective disclosure of material nonpublic information in violation of Regulation FD. We note that this memorandum is confined to securities-disclosure obligations. It does not constitute advice on the merits of the FDA inquiry itself, including the stren

II. Factual Background A. The OPDP Inquiry On October 12, 2023, the FDA's Office of Prescription Drug Promotion issued an inquiry letter to Penterra Pharmaceuticals Corp. bearing reference number OPDP-2023-1847. The letter was received at Penterra's corporate headquarters in Summit, New Jersey, on October 16, 2023, and was promptly routed to the office of Margaret Tan, Executive Vice President and General Counsel. Th

1. Digital Banner Advertisement (Material ID: ZVR-2023-BNR-044). This banner advertisement was placed on the MedLinkPro digital platform and ran continuously from April 15, 2023 through August 31, 2023 — a period of approximately four and one-half months. The banner featured the claim "Fastest Onset in Its Class," which OPDP characterizes as lacking adequate substantiation. Additionally, OPDP alleges that the banner

2. Physician Email Blast (Material ID: ZVR-2023-EML-019). This email communication was sent on June 7, 2023 to a distribution list of approximately 42,000 neurologists and primary-care physicians. OPDP alleges that the email featured a truncated y-axis bar chart that had the effect of visually exaggerating the efficacy differential between Zelvara® and a comparator product, thereby presenting a misleading impression

3. Sales Representative Detail Aid (Material ID: ZVR-2023-DA-007). This detail aid was approved by Penterra's internal Promotional Review Committee ("PRC") on March 22, 2023. OPDP alleges that the detail aid cited an unpublished, Penterra-funded retrospective chart review (Harmon et al., poster presentation, American Headache Society Annual Meeting, June 2022) without adequately disclosing (a) that the study was spon

III. Legal Framework for Disclosure Obligations A. Form 8-K — Current Report Requirements Under Section 13(a) and Section 15(d) of the Exchange Act, as implemented by SEC Regulation S-K and the instructions to Form 8-K, a publicly traded company is required to file a Current Report on Form 8-K to disclose certain specified events within four business days of their occurrence. In addition to the enumerated triggering

IV. Materiality Analysis The threshold question for all of the disclosure obligations discussed in Section III is whether the OPDP inquiry is "material" within the meaning of the federal securities laws. Under the standard articulated by the Supreme Court in TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (1976), and applied in the context of forward-looking information in Basic Inc. v. Levinson, 485 U.S. 2

V. Recommended 8-K Disclosure A. Timing We recommend that Penterra file the Form 8-K by November 6, 2023. This target date is designed to ensure that the filing occurs within a reasonable period following the engagement of outside counsel (October 30, 2023), the completion of the initial legal assessment (this memorandum, dated November 3, 2023), and the voluntary withdrawal of the three cited promotional materials f

1. Draft Preparation. The initial draft of the 8-K will be prepared by Audrey Zhou and Jeffrey Park at Calderwood & Harkness and submitted to Leonard Cross for partner-level review.

2. Penterra Legal Review. Following partner review, the draft will be transmitted to Margaret Tan and Christine Holloway (Associate General Counsel, Securities and Compliance) for review and comment. We anticipate a single round of revisions.

3. Scientific Accuracy Review. We recommend that Dr. Rajeev Anand, Penterra's Chief Medical Officer, be given an opportunity to review the disclosure for scientific accuracy, particularly the description of Zelvara®'s approved indication and the characterization of the promotional materials. Dr. Anand's review should be limited to factual accuracy and should not extend to the legal analysis or disclosure strategy.

4. Investor Relations Coordination. In connection with the 8-K filing, Penterra's investor-relations function should prepare (a) a brief press release, if management deems one appropriate, to accompany the 8-K filing; and (b) a prepared Q&A document for use in responding to analyst or media inquiries following the filing. Calderwood & Harkness should review the press release and Q&A for consistency with the 8-K discl

5. EDGAR Filing. Following final approval by Margaret Tan, the 8-K will be filed electronically via the SEC's EDGAR system. Penterra's EDGAR filing agent should be alerted to the anticipated filing date.

VI. Coordination with Meriden & Cole CPAs LLP — Contingent-Liability Considerations A. ASC 450 (Contingencies) Analysis Under ASC 450-20 (Loss Contingencies), a loss contingency must be evaluated to determine whether it requires (a) accrual in the financial statements, (b) disclosure in the footnotes without accrual, or (c) neither accrual nor disclosure. Accrual is required when two conditions are met: (1) informati

1. Initial Contact. Jeffrey Park or Audrey Zhou will contact Susan Nakamura, CPA, Engagement Partner at Meriden & Cole CPAs LLP (200 Park Avenue, New York, NY 10166), to inform her of the OPDP inquiry and to initiate a discussion regarding its potential impact on the Q3 2023 and FY 2023 financial-statement footnotes. This contact should be made promptly after the filing of the Form 8-K to ensure that Meriden & Cole i

2. Privilege-Conscious Information Sharing. In communicating with Meriden & Cole, care must be taken not to waive the attorney-client privilege or the work-product protection by over-disclosing the substance of the internal investigation or Calderwood & Harkness's legal analysis. We recommend providing Meriden & Cole with (a) a copy of the filed Form 8-K (which will be a public document), and (b) a brief, privilege-c

3. Audit Committee Briefing. We recommend that Penterra's Audit Committee be briefed on the OPDP inquiry and its potential financial-statement implications at the earliest practicable meeting. The Audit Committee has oversight responsibility for the Company's financial reporting and internal controls, and awareness of the inquiry is necessary for the Committee to discharge its responsibilities effectively. Margaret T

VII. FY 2023 Form 10-K Disclosure Recommendations Penterra's FY 2023 Annual Report on Form 10-K, which we understand is anticipated to be filed with the SEC on or about February 28, 2024, will need to address the OPDP inquiry in several sections. The recommendations below are based on the facts known as of November 3, 2023, and may need to be updated as the inquiry progresses. Calderwood & Harkness will work with Pen

VIII. Impact on Penterra's Stock (NYSE: PTPH) and Market Considerations Beyond the legal requirements for disclosure, Penterra should consider the practical market implications of the OPDP inquiry and the recommended disclosure strategy. Penterra's approximate market capitalization of $6.9 billion means that even a modest percentage decline in the Company's stock price in response to public disclosure of the OPDP inq

IX. Recommendations Summary Based on the foregoing analysis, we recommend the following actions:

1. Form 8-K Filing. Penterra should file a Current Report on Form 8-K under Item 8.01 ("Other Events") by November 6, 2023, disclosing receipt of the OPDP inquiry letter (reference OPDP-2023-1847) and the Company's voluntary withdrawal of the cited promotional materials. The 8-K should include appropriate cautionary language, forward-looking statements safe-harbor boilerplate, and a statement regarding the Company's

2. Regulation FD Compliance. Margaret Tan should immediately issue an internal directive restricting discussion of the OPDP inquiry by Penterra personnel pending the filing of the Form 8-K. The directive should specifically address Derek Foss (VP, Commercial Operations & Marketing), the investor-relations team, and any other personnel who may interact with securities analysts, institutional investors, or other market

3. Auditor Coordination. Jeffrey Park or Audrey Zhou will contact Susan Nakamura, CPA, Engagement Partner at Meriden & Cole CPAs LLP, to discuss the OPDP inquiry and its potential impact on the contingent-liability footnote disclosures in Penterra's Q3 2023 Form 10-Q and FY 2023 Form 10-K financial statements, consistent with the recommendations in Section VI of this memorandum.

4. Audit Committee Briefing. Penterra's Audit Committee should be briefed on the OPDP inquiry, the Company's response strategy, the recommended securities-disclosure approach, and the potential ASC 450 implications at the earliest practicable Audit Committee meeting. Margaret Tan, in coordination with Leonard Cross at Calderwood & Harkness, should prepare the briefing materials.

5. FY 2023 10-K Preparation. Penterra should update the risk factors (Item 1A), legal-proceedings disclosures (Item 3), MD&A commentary (Item 7), and financial-statement footnotes in its FY 2023 Annual Report on Form 10-K (anticipated filing date: February 28, 2024) to reflect the OPDP inquiry and, if resolved by that date, its resolution. Calderwood & Harkness will work with Pen