Contract analysis

1. Background and Examination History 1.1 Examination Opening and Scope On May 16, 2022, the IRS LB&I Division opened an examination of PPC by issuing Letter 2205-A (Examination Notification). The Examination was conducted by the LB&I Northeast Transfer Pricing Practice, designated as Team ID LB&I-NE-TP-2022-00641. The IRS examination team was led by Supervisory Revenue Agent Gerald Meskill, who served as Team Manage

2. Defense and Protest 2.1 Key Defense Strategies Employed C&H, together with Whitmore Valuation Group and in coordination with PPC's internal tax team, developed and executed a comprehensive defense strategy addressing each of the IRS's proposed adjustments. The defense was built upon the following principal pillars: Functional Analysis and PBI Substance. C&H prepared and submitted to the IRS a comprehensive functio

3. Settlement Terms and Resolution 3.1 Settlement Offer and Acceptance On March 15, 2024, Appeals Officer Castañeda transmitted a formal settlement offer to C&H on behalf of the IRS. The settlement offer reflected Appeals Officer Castañeda's independent evaluation of the hazards of litigation faced by both the IRS and PPC and represented a significant reduction from the IRS examination team's original proposed adjust

4. Total Engagement Cost Summary 4.1 Professional Fees The professional fees incurred by PPC in connection with the Examination defense, from inception of the C&H engagement through matter closure on March 29, 2024, are as follows: The Calderwood & Harkness fees reflect the aggregate of all professional time billed to C&H Matter No. 1018-00009 from June 2, 2022, through March 29, 2024, including attorney and paralega

5. Impact on Financial Reporting and Reserves 5.1 FIN 48 / ASC 740-10 Reserve Adjustment Prior to the settlement, PPC maintained a reserve for uncertain tax positions under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740-10 (formerly FIN 48) related to the Irish IP structure and the intercompany arrangements at issue in the Examination. As of PPC's most recent financial sta

6. Next Steps and Required Actions 6.1 Amended Federal Income Tax Returns PPC is required to file amended federal income tax returns on Form 1120X for each of tax years 2017, 2018, 2019, and 2020 to reflect the $47.6 million settlement adjustment, allocated among the examination years as set forth in the Closing Agreement (TY 2017: $11.2 million; TY 2018: $12.4 million; TY 2019: $12.8 million; TY 2020: $11.2 million)

7. Matter Closure C&H Matter Number 1018-00009 is now closed effective March 29, 2024, the date of execution of the Form 906 Closing Agreement. All final invoices for professional services rendered by Calderwood & Harkness LLP in connection with this matter will be transmitted to PPC under separate cover. C&H remains available to assist PPC with any questions or matters arising from the implementation of the settleme

1. Copy of executed IRS Form 906 Closing Agreement (dated March 29, 2024)

2. Settlement financial impact analysis workbook

3. Summary of settlement allocation by tax year PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION — ATTORNEY WORK PRODUCT This communication is intended solely for the use of the addressee and the individuals copied herein. Any dissemination, distribution, or copying of this communication without the prior written consent of Calderwood & Harkness LLP and Penterra Pharmaceuticals Corp. is strictly prohibited.

§ 6662(e) penalty | $15.98 million | $0 | $15.98 million Total (excl. interest) | $95.86 million | $10.00 million | $85.86 million Advisor | Fees Calderwood & Harkness LLP — legal fees | $5,837,420 Whitmore Valuation Group LLC — expert/economist fees | $2,146,800 Thornbury & Keogh — Irish tax coordination fees | €312,500 (~$341,200) Total professional fees | ~$8,325,420 Component | Amount Professional fees (C&H, Whit