Contract analysis

I. EXECUTIVE SUMMARY This report constitutes the final quarterly status report submitted by Calderwood & Harkness LLP ("C&H") in connection with the defense of Penterra Pharmaceuticals Corp. ("PPC" or the "Company") in the Internal Revenue Service ("IRS") transfer pricing examination covering tax years 2017 through 2020. As set forth in detail below, the examination has been resolved in full, and the matter is now cl

II. MATTER BACKGROUND AND SCOPE A. Client Overview Penterra Pharmaceuticals Corp. is a Delaware corporation, publicly traded on the Nasdaq Stock Market under the ticker symbol "PPCA," with its principal executive offices located at 2200 Independence Boulevard, Princeton Junction, New Jersey 08550. PPC is a specialty pharmaceutical and biotechnology company with therapeutic franchises concentrated in oncology, immunol

III. Q1 2024 ACTIVITY SUMMARY A. Assignment to IRS Appeals (January 2024) Following C&H's filing of the formal Protest on December 22, 2023, the IRS examination team transmitted the case file to the IRS Office of Appeals in accordance with standard administrative procedures. In January 2024, the case was assigned to Appeals Officer Noreen Castañeda, based in the IRS Appeals Office in Manhattan, New York. Upon receipt

IV. SUMMARY OF IRS PROPOSED ADJUSTMENTS VS. SETTLEMENT OUTCOME A. IRS Proposed Adjustments (NOPA Dated October 12, 2023) The IRS exam team's Notice of Proposed Adjustment, issued on October 12, 2023, proposed the following adjustments to PPC's taxable income for the four tax years under examination:

1. CSA Cost-Sharing Ratio Adjustments The IRS proposed to increase PBI's share of total qualified cost-sharing payments under the CSA by 8 to 12 percentage points per year, resulting in the following adjustments:

2. Legacy IP Royalty Rate Adjustments The IRS proposed to increase the intercompany royalty rate charged by PPC to PBI for PBI's license to the Legacy IP from PPC's reported rate of 4.5% to 11.0%, resulting in a 6.5 percentage point increase applied to PBI's sales of Legacy IP products:

3. Correlative Offset The IRS applied a correlative offset of ($42,650,000) to avoid double-counting where the CSA cost-sharing adjustments and the royalty rate adjustments overlapped with respect to certain categories of income.

4. Net Proposed Adjustment and Penalty The proposed penalty was computed as 20% of the additional tax attributable to the $380.4 million adjustment at the 21% corporate tax rate: $380,400,000 × 21% = $79,884,000 × 20% = approximately $15,977,000. B. Settlement Outcome The settlement achieved the following outcome: C. Comparison Table The following table presents a comprehensive comparison of the IRS's proposed exposu

V. EXAMINATION CHRONOLOGY (FULL MATTER TIMELINE) The following chronology sets forth the key dates and events over the full course of the matter, from the establishment of PPC's Irish IP structure through the execution of the Closing Agreement:

VI. FINANCIAL SUMMARY A. Professional Fees The following is a summary of professional fees incurred over the full duration of the engagement (June 2022 through matter closure on March 29, 2024):

1. Calderwood & Harkness LLP — Legal Fees Total C&H legal fees for the engagement: $5,837,420 This amount falls within the estimated fee range of $4.5 million to $7.0 million that was communicated to PPC at the commencement of the engagement and is consistent with the scope and complexity of the examination, which involved four tax years, three discrete transfer pricing issues, a contested NOPA, a formal Protest, and

2. Whitmore Valuation Group LLC — Expert Fees Total WVG expert fees for the engagement: $2,146,800 WVG's fees were billed at a blended rate of approximately $650 per hour and covered the full scope of WVG's economic services, including: (i) the CUT analysis of the Legacy IP royalty rate; (ii) the CPM/TNMM benchmarking analysis of PBI's cost-sharing ratios and operating margins; (iii) the DCF valuation of the PCT paym

3. Thornbury & Keogh — Irish Tax Advisor Coordination Fees Total Thornbury & Keogh fees for the engagement: €312,500 (approximately $341,200 at the average USD/EUR exchange rate of approximately $1.092/€) Thornbury & Keogh served as PPC's Irish tax advisors and provided coordination services throughout the engagement, including advice on the Irish tax implications of the IRS examination, PBI's Irish tax filings and K

VII. KEY DELIVERABLES PRODUCED DURING Q1 2024 The following is a list of the major documents and deliverables produced by C&H, WVG, and/or PPC during Q1 2024 in connection with the Appeals phase and settlement of the examination:

1. IRS Economist Rebuttal Memorandum — Prepared by Dr. Helena Vasquez and Dr. Rohan Chakrabarti of Whitmore Valuation Group LLC, January 2024. Comprehensive rebuttal of IRS Economist Dr. Alan Washburne's CUT analysis, WACC assumptions, and revenue growth projections.

2. Appeals Pre-Conference Memorandum — Prepared by C&H, completed February 15, 2024. Detailed briefing document summarizing key arguments, anticipated questions, witness preparation status, and conference logistics.

3. Witness Preparation Memoranda: (a) Marcus Whitfield preparation memorandum — February 20, 2024 (b) Dr. Helena Vasquez preparation memorandum — February 22, 2024

4. Appeals Conference Presentation — Northgate Services Inc. presentation and accompanying talking points used at the February 28, 2024, Appeals conference.

5. Post-Conference Summary Memorandum — Prepared by Garrett Simmons, dated March 1, 2024. Summary of conference proceedings, Appeals Officer questions and reactions, and C&H assessment of conference outcome.

6. Supplemental Submission to Appeals — Letter from Leonard Cross to Appeals Officer Castañeda, dated March 8, 2024, providing additional comparable license agreements and updated benchmarking data.

7. Settlement Offer Analysis Memorandum — Prepared by Leonard Cross and Sylvia Hartwell, dated March 18, 2024. Detailed analysis of settlement terms, tax and interest computations, comparison to proposed exposure, and FIN 48 / ASC 740-10 impact.

8. Financial Impact Analysis Workbook — Excel workbook detailing the year-by-year tax, interest, and penalty computations, FIN 48 reserve adjustment, and effective tax rate impact.

9. Settlement Acceptance Letter — Letter from Leonard Cross to Appeals Officer Castañeda, dated March 22, 2024, communicating PPC's formal acceptance of the settlement offer.

10. Draft Form 906 Closing Agreement — Draft prepared by C&H and circulated for review prior to execution.

11. Executed Form 906 Closing Agreement — Executed on March 29, 2024, by Marcus Whitfield on behalf of PPC and by IRS Appeals.

12. Updated FIN 48 Analysis — Post-Settlement — Prepared in March 2024, reflecting the impact of the settlement on PPC's ASC 740-10 reserve for uncertain tax positions. All deliverables listed above are maintained in C&H's matter file and are subject to the attorney-client privilege and work-product doctrine protections discussed in Section XI of this report. Copies of all deliverables have been provided to PPC in th

VIII. POST-CLOSURE ACTION ITEMS AND NEXT STEPS Although the IRS examination has been formally closed, several post-closure action items remain for PPC's attention. C&H has identified the following items and, where applicable, has provided or will provide guidance to PPC and its other advisors. A. Amended Return Filings PPC is required to file amended federal income tax returns (Forms 1120X) for tax years 2017 through

IX. KEY PERSONNEL A. Penterra Pharmaceuticals Corp. B. Penterra Biopharma International DAC C. Calderwood & Harkness LLP — Engagement Team D. Whitmore Valuation Group LLC E. Internal Revenue Service F. Other Advisors

X. MATTER CLOSURE Matter No. 1018-00009 is hereby closed effective March 29, 2024, the date on which the IRS Form 906 Closing Agreement was executed by both parties. All work product, correspondence, memoranda, analyses, and other files generated in connection with this engagement will be maintained in accordance with Calderwood & Harkness LLP's document retention policies, which provide for retention of closed matte

XI. PRIVILEGE AND CONFIDENTIALITY NOTICE This Matter Status Report and all enclosures, attachments, and accompanying materials are protected by the attorney-client privilege and the work-product doctrine. This report was prepared by Calderwood & Harkness LLP in connection with the provision of legal advice to Penterra Pharmaceuticals Corp. regarding the IRS transfer pricing examination of PPC for tax years 2017 throu