Contract analysis

I. EXECUTIVE SUMMARY This memorandum has been prepared by Calderwood & Harkness LLP ("C&H" or "Calderwood & Harkness") as independent legal counsel to the Special Committee of the Board of Directors (the "Special Committee") of Penterra Pharmaceuticals Corp. ("Penterra" or the "Company") (NYSE: PPHR). The purpose of this memorandum is to provide a comprehensive narrative documenting the process undertaken by the Spec

II. BACKGROUND A. The Company — Penterra Pharmaceuticals Corp. Penterra Pharmaceuticals Corp. is a Delaware corporation headquartered at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540. The Company's shares of common stock are listed and traded on the New York Stock Exchange under the ticker symbol "PPHR." As of June 1, 2023, Penterra's market capitalization was approximately $4.72 billion. Penterra is

III. GENESIS OF THE PROPOSED TRANSACTION A. February 14, 2023 — Dr. Hale's Disclosure and Proposal At a regularly scheduled meeting of the Penterra Board of Directors held on February 14, 2023, Dr. Marcus Hale disclosed for the first time to the Board that he held a 28.5% equity interest in Caliston BioSciences, Inc., a clinical-stage biopharmaceutical company focused on novel kinase inhibitors for solid tumors. Dr.

IV. CONSTITUTION OF THE SPECIAL COMMITTEE AND ENGAGEMENT OF ADVISORS A. June 2, 2023 — Formal Constitution; Engagement of Independent Counsel On June 2, 2023, the Board of Directors of Penterra formally constituted the Special Committee by unanimous vote of the six independent directors of the Board. Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk recused themselves from the vote and from all deliberations related

V. DUE DILIGENCE PROCESS A. Issuance of Due Diligence Request List — June 9, 2023 On June 9, 2023, Calderwood & Harkness issued a comprehensive due diligence request list to Whitfield Graves LLP ("Whitfield Graves"), counsel to Caliston, for the attention of Kenneth Pratt, lead partner in Whitfield Graves' corporate and life sciences practice group. The request list was transmitted by Sophie Tremblay via email and wa

1. Corporate Organization and Good Standing

5. Regulatory and FDA Matters

6. Litigation and Legal Proceedings

12. Data Privacy and Security

13. Financial Statements and Projections

14. Miscellaneous / Other The request list was designed to enable a thorough evaluation of all material aspects of Caliston's business, operations, assets, liabilities, and legal and regulatory posture. The transmittal email proposed a timeline for the production of responsive materials, requested that Caliston provide access to an electronic virtual data room, and identified C&H's working team members who would requ

Section 280G. The analysis identified potential "parachute payments" within the meaning of Section 280G of the Internal Revenue Code that may be triggered by the change-of-control provisions in certain Caliston executive employment agreements. The memorandum recommended that the Merger Agreement include protective provisions, including a potential stockholder approval mechanism to exempt such payments from the Sectio

VI. SUMMARY OF SPECIAL COMMITTEE MEETINGS A. Meeting No. 1 — June 2, 2023 (Organizational Meeting) Attendees: Diane Prescott (Chair), James Okafor, Dr. Helen Ng; Renata Vasquez and Sophie Tremblay (Calderwood & Harkness LLP). Minutes Prepared by: Daniel Obi (Calderwood & Harkness LLP). The first meeting of the Special Committee was convened on June 2, 2023, immediately following the adoption of the Board Resolution e