Contract analysis

I. Executive Summary Calderwood & Harkness LLP has been engaged by Penterra Pharmaceuticals Corp. ("Penterra" or the "Company") to analyze the Company's reporting obligations under Section 6002 of the Patient Protection and Affordable Care Act (Pub. L. No. 111-148) (the "Physician Payments Sunshine Act"), codified at 42 U.S.C. § 1320a-7h, and the Centers for Medicare & Medicaid Services' ("CMS") implementing regulati

1. Penterra is an "applicable manufacturer" subject to the reporting obligations of the Open Payments program.

2. The majority of payments under the MCTA — including per-patient site fees, start-up fees, annual site maintenance fees, investigator grants, and compensation under the investigator agreements — are reportable to CMS under the "research" nature of payment category.

3. These research payments are eligible for delayed publication under 42 C.F.R. § 403.904(g), meaning that while the payments must be reported to CMS on the same annual reporting schedule as all other payments, public availability of the data will be delayed until the earlier of (a) four years from the date of payment, (b) the date of FDA approval, licensure, or clearance of penterafenib, or (c) the date on which Pen

4. Certain payment streams — specifically, the network coordination/administrative fee paid to Veridian and the technology/EDC integration costs paid to Pinnacle Data Solutions, Inc. — may fall outside the scope of reportable transfers of value, but require further analysis of potential pass-through allocations to covered recipients.

5. Penterra should immediately implement a centralized payment tracking system, establish robust data-sharing mechanisms with Veridian, its member sites, and Meridian CRO, and designate responsible internal personnel to manage Open Payments data collection and annual submission for the CLARION trial.

II. Background A. The CLARION Trial and the MCTA Penterra is sponsoring a Phase III, randomized, double-blind, placebo-controlled clinical trial evaluating the safety and efficacy of penterafenib (PPC-4871), an oral multi-kinase inhibitor, for the treatment of advanced hepatocellular carcinoma ("HCC") in patients who have progressed on or are intolerant to prior systemic therapy. The trial is being conducted under In

1. Per-Patient Site Fees — $62,400,000. Penterra will pay per-patient site fees of $52,000 per subject for each of the planned 1,200 enrolled subjects. These fees are payable in four milestone-based installments: • Twenty-five percent (25%) — $13,000 — upon randomization of the subject • Twenty-five percent (25%) — $13,000 — upon completion of the Week 12 visit • Twenty-five percent (25%) — $13,000 — upon completion

2. Start-Up Fees — $2,850,000. Each of the 38 participating sites will receive a start-up fee of $75,000, payable in two installments: • Fifty percent (50%) — $37,500 — upon site activation (defined as IRB/IEC approval, site initiation visit completion, and regulatory readiness) • Fifty percent (50%) — $37,500 — upon enrollment of the first patient at the site The aggregate start-up fees total $2,850,000 across all 3

3. Annual Site Maintenance Fees — $5,320,000. Each participating site will receive an annual site maintenance fee of $40,000, payable annually in advance on each anniversary of the site's activation date. Based on an average participation period of 3.5 years per site across 38 sites, the aggregate projected site maintenance fees total $5,320,000.

4. Investigator Grants (Publication and Academic Support) — $1,500,000. The MCTA allocates $1,500,000 for grants to support investigator-initiated publications, academic presentations, and scholarly activities related to the CLARION trial. Disbursement of these funds is contingent upon the acceptance of manuscripts for publication in peer-reviewed journals. These grants are anticipated to be paid primarily to Dr. Cat

5. Network Coordination/Administrative Fee to Veridian Central — $4,200,000. Penterra will pay Veridian a quarterly network coordination and administrative fee of $300,000 per quarter over the anticipated 14-quarter active enrollment and follow-up period, totaling $4,200,000. These payments compensate Veridian for central coordination of the multi-site trial, including site selection and qualification, protocol train

6. Technology/EDC Integration Costs — $1,230,000. A fixed sum of $1,230,000 is allocated for the integration of the electronic data capture ("EDC") platform provided by Pinnacle Data Solutions, Inc. ("Pinnacle"), a third-party technology vendor. These costs cover the configuration of the EDC system for the CLARION protocol, integration with site electronic health record systems, user training, validation testing, and

7. Contingency/Change Order Reserve — $2,500,000. The MCTA includes a contingency and change order reserve of $2,500,000 to cover unanticipated costs, protocol amendments, additional site activations, and other modifications to the trial scope. This reserve has not yet been allocated or disbursed as of the date of this memorandum. In addition to the payments under the MCTA, Penterra has entered into separate investig

III. Legal Framework — The Physician Payments Sunshine Act and Open Payments A. Statutory Overview

Section 6002 of the Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119, 689 (2010), enacted the Physician Payments Sunshine Act, codified at 42 U.S.C. § 1320a-7h. The statute was enacted to promote transparency in the financial relationships between the healthcare industry — specifically manufacturers of drugs, devices, biologicals, and medical supplies — and certain healthcare providers.

IV. Categorization of MCTA Payment Streams Under Open Payments This section analyzes each of the payment streams under the MCTA and investigator agreements to determine: (i) whether the payment constitutes a reportable transfer of value; (ii) the identity and category of the covered recipient(s); (iii) the applicable "nature of payment" classification; and (iv) whether the payment qualifies for delayed publication un

1. Written Research Agreement or Protocol. The payment must be made pursuant to a written agreement or protocol for the conduct of research. Here, the MCTA constitutes the written agreement, and Protocol PPC-4871-III constitutes the protocol. Both are documented, executed instruments that define the scope, terms, and conditions of the research to be conducted. This requirement is clearly satisfied.

2. Systematic Investigation Contributing to Generalizable Knowledge. The research must constitute a "systematic investigation, including research development, testing, and evaluation, designed to develop or contribute to generalizable knowledge." The CLARION trial is a Phase III, randomized, double-blind, placebo-controlled clinical trial designed to evaluate the safety and efficacy of penterafenib in a well-defined

3. ClinicalTrials.gov Registration. For clinical trials, the payment must be associated with a research study registered on ClinicalTrials.gov, and the applicable manufacturer must include the ClinicalTrials.gov identifier in its report. The CLARION trial is registered under ClinicalTrials.gov Identifier NCT05928174. This requirement is clearly satisfied. Accordingly, the CLARION trial payments that qualify as resear

I. Payments Under Investigator Agreements In addition to the institutional payments under the MCTA, Penterra has entered into separate investigator agreements with the Global Principal Investigator, Dr. Catherine Aldridge, and the Co-Principal Investigator, Dr. Howard Matsuoka. These agreements provide for compensation for the following categories of services: • Professional effort in overseeing the conduct of the CL

V. Reporting Mechanics and Timing A. Annual Reporting Cycle Under 42 C.F.R. § 403.904, applicable manufacturers must submit Open Payments reports to CMS on an annual basis. The report for each calendar year must be submitted by the 90th day of the following calendar year — typically March 31, unless CMS extends the deadline or the 90th day falls on a weekend or federal holiday. For the CLARION trial, the relevant rep

1. Name of the covered recipient (full legal name as it appears on the physician's medical license)

2. Business address of the covered recipient (primary practice or institutional address)

3. National Provider Identifier (NPI) of the covered recipient

4. State medical license number(s) of the covered recipient, including the state(s) of licensure

5. Specialty of the covered recipient

6. Amount of payment or transfer of value (in U.S. dollars)

8. Form of payment (e.g., cash or cash equivalent, in-kind items or services, stock, stock option, or any other ownership interest, dividend, profit, or other return on investment)

9. Nature of payment (one of the following categories: consulting fee; compensation for services other than consulting, including serving as faculty or as a speaker at a venue other than a continuing education program; honorarium; gift; entertainment; food and beverage; travel and lodging; education; research; charitable contribution; royalty or license; current or prospective ownership or investment interest; direct

10. If the nature of payment is "research": a. Name of the research study or project (CLARION — Clinical Assessment of Response with Longitudinal Investigation in ONcology) b. ClinicalTrials.gov identifier (NCT05928174) c. Research indication or therapeutic area (advanced hepatocellular carcinoma, second-line) d. Name of the entity or individual receiving the research funding (Veridian Health Research Network, Inc.;

11. Name of the associated covered drug, device, biological, or medical supply (penterafenib / PPC-4871)

12. Whether the product is covered (approved and reimbursable) or not yet covered (investigational)

14. Any additional contextual information permitted by CMS to provide context for the reported payment For Payments to Teaching Hospitals: The data elements are similar to those for physician payments, but substitute the teaching hospital's name, address, and CMS-assigned teaching hospital identifier for the physician-specific identifiers (NPI, state license, and specialty). C. Disputed and Corrected Reports Followin

VI. Interaction with Anti-Kickback Statute Compliance This memorandum focuses on Penterra's obligations under the Open Payments / Sunshine Act program. However, it is essential to note the intersection between Open Payments compliance and compliance with the federal Anti-Kickback Statute ("AKS"), 42 U.S.C. § 1320a-7b(b). A separate and more detailed Anti-Kickback Statute Compliance Analysis memorandum is being prepar