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PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT

CLOSING MEMORANDUM

Registered Selling-Stockholder Secondary Offering of 6,250,000 Shares of Common Stock of Penterra Pharmaceuticals Corp.

Prepared by:

CALDERWOOD & HARKNESS LLP One Liberty Plaza, 52nd Floor New York, NY 10006

Audrey Zhou, Senior Associate Brendan Walsh, Associate

Under the Supervision of Jennifer Kwon, Partner

October 17, 2023

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I. INTRODUCTION AND TRANSACTION OVERVIEW

This Closing Memorandum has been prepared by Calderwood & Harkness LLP ("C&H" or "Firm") to memorialize the closing mechanics and confirm the successful settlement of the registered selling-stockholder secondary offering (the "Offering") of shares of common stock of Penterra Pharmaceuticals Corp. ("Penterra," "PPC," or the "Company"). This memorandum is intended to serve as a comprehensive record of the transaction, the parties involved, the key closing deliverables, the funds flow, and the satisfaction of all conditions precedent to the closing of the Offering. This memorandum is privileged and confidential and constitutes attorney work product.

The Issuer. Penterra Pharmaceuticals Corp. is a Delaware corporation headquartered at 400 Meridian Parkway, Suite 1200, Princeton, NJ 08540. The Company's common stock is listed on The Nasdaq Global Select Market under the ticker symbol "PNTR." The Company's Central Index Key with the U.S. Securities and Exchange Commission (the "SEC") is CIK: 0001987654, and its Employer Identification Number is 82-4039571. Penterra is a clinical-stage biopharmaceutical company focused on the development of novel therapeutics for inflammatory and autoimmune disorders. The Company completed its initial public offering on April 17, 2023 at a price to the public of $22.00 per share.

Offering Type. The Offering was structured as a registered selling-stockholder secondary offering, constituting a shelf takedown under the Company's existing registration statement on Form S-3 (File No. 333-274851), which was declared effective by the SEC on August 22, 2023 (the "Shelf Registration Statement"). The final prospectus supplement relating to the Offering was filed with the SEC on October 12, 2023 pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Securities Act"). Because the Offering was structured as a secondary offering by selling stockholders, the Company is not selling any shares in the Offering and will not receive any of the proceeds therefrom. All net proceeds from the sale of shares in the Offering are payable directly to the selling stockholders described herein.

Securities. The securities offered and sold consist of 6,250,000 shares of common stock, par value $0.001 per share, of Penterra Pharmaceuticals Corp. (CUSIP: 70831X 10 5).

Pricing. The public offering price was set at $41.60 per share, representing aggregate gross proceeds of $260,000,000 for the base offering. This represents an approximately 89.1% appreciation over the Company's IPO price of $22.00 per share.

Over-Allotment Option. In connection with the Offering, the selling stockholders granted the underwriters a 30-day option (expiring November 11, 2023) to purchase up to an additional 937,500 shares of common stock at the public offering price less the underwriting discount. If the over-allotment option is exercised in full, the maximum offering size would be approximately $299.0 million, representing a total of 7,187,500 shares.

Key Dates. The pricing and execution of the Underwriting Agreement (the "Underwriting Agreement") occurred on October 12, 2023 (the "Pricing Date" or "Trade Date"). Settlement and closing of the base offering (the "Closing") occurred on October 17, 2023 (T+3 from the Trade Date) (the "Closing Date").

II. PARTIES

A. Issuer. Penterra Pharmaceuticals Corp. is a corporation organized and existing under the laws of the State of Delaware. The Company's common stock is listed on The Nasdaq Global Select Market under the ticker symbol "PNTR." The Company's registered agent in Delaware is actionaltional Registered Agents Inc., located at 251 Little Falls Drive, Wilmington, DE 19808.

The principal officers of the Company relevant to this transaction are as follows:

• Chief Executive Officer: Dr. Marco Castellano

• Chief Financial Officer: Lisa Hargrove

• General Counsel and Corporate Secretary: David Orenstein

David Orenstein served as the primary Company contact for the transaction and also served as attorney-in-fact for the selling stockholders pursuant to the Power of Attorney and Custody Agreement described herein.

B. Selling Stockholders

The selling stockholders in the Offering are members of the Castellano family, who are the co-founders and early equity holders of Penterra. The following table sets forth the selling stockholders, their pre-offering share holdings, the number of shares sold in the base offering, their post-offering share holdings (base offering only), and their respective allocations under the over-allotment option:

Prior to the Offering, the combined Castellano family holdings totaled 40,100,000 shares, representing approximately 33.4% of the 120,000,000 shares of common stock outstanding. Following the closing of the base offering, the combined Castellano family holdings total 33,850,000 shares, representing approximately 28.2% of the 120,000,000 shares outstanding. If the over-allotment option is exercised in full, the combined Castellano family holdings will be further reduced to 32,912,500 shares, representing approximately 27.4% of the shares outstanding. The total shares outstanding will remain unchanged at 120,000,000, as no primary shares are being issued in connection with the Offering.

The selling stockholders are represented by personal counsel, Whitfield & Garza LLP, with Patricia Velázquez as the responsible partner, located at 590 Madison Avenue, 28th Floor, New York, NY 10022.

C. Underwriters. The following underwriters are participating in the Offering pursuant to the Underwriting Agreement:

Ridgeline Securities LLC (Lead Left Book-Runner) 383 Madison Avenue, New York, NY 10017 Key Contacts: Jonathan Pryce-Hall, Managing Director; Angela Ferris, Vice President, Syndicate Desk

Ridgeline Securities LLC is serving as the lead left book-running manager for the Offering and, together with Broadmark Capital Inc., as representative of the several underwriters (the "Representatives").

Broadmark Capital Inc. (Joint Book-Runner) 200 Park Avenue, New York, NY 10166 Key Contact: Samuel Okonkwo, Managing Director

Broadmark Capital Inc. is serving as joint book-running manager for the Offering and, together with Ridgeline Securities LLC, as a Representative of the several underwriters.

Linden Groves & Co. (Co-Manager) 745 Fifth Avenue, New York, NY 10151

Linden Groves & Co. is serving as co-manager for the Offering.

Harborview Partners LLC (Co-Manager) 1 Federal Street, Boston, MA 02110

Harborview Partners LLC is serving as co-manager for the Offering.

D. Counsel. Issuer's Counsel: Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor, New York, NY 10006

• Jennifer Kwon — Partner (Responsible Partner)

• Theodore Langston — Partner (Billing Partner)

• Audrey Zhou — Senior Associate (Lead Associate)

• Brendan Walsh — Associate

Calderwood & Harkness LLP has served as outside securities counsel to Penterra Pharmaceuticals Corp. since the Company's initial public offering in April 2023 and was engaged to represent the Company in connection with the Offering, including with respect to the preparation and filing of the prospectus supplement, negotiation of the Underwriting Agreement, rendering of the legal opinion and negative assurance letter, and coordination of closing deliverables.

Underwriters' Counsel: Caldwell, Pearce & Strauss LLP 1251 Avenue of the Americas, 40th Floor, New York, NY 10020

• Margaret Hui — Partner

• Ryan Petrosian — Associate

Caldwell, Pearce & Strauss LLP represented the underwriters in connection with the negotiation of the Underwriting Agreement, the due diligence process, and the review of the prospectus supplement and related offering documents.

E. Other Parties

Independent Auditors: Graystone & Whitmore LLP 30 Rockefeller Plaza, New York, NY 10112 Engagement Partner: Thomas Reiter

Graystone & Whitmore LLP serves as the independent registered public accounting firm of Penterra Pharmaceuticals Corp. and delivered the comfort letter and bring-down comfort letter described in Section VIII below.

Transfer Agent: Pinnacle Trust & Transfer Co. 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, NY 10004

Pinnacle Trust & Transfer Co. serves as the transfer agent and registrar for the shares of common stock of Penterra Pharmaceuticals Corp. and facilitated the book-entry delivery of shares through DTC in connection with the settlement of the Offering.

Financial Printer: Apex Financial Printing Inc. 55 Water Street, New York, NY 10041

Apex Financial Printing Inc. was engaged to provide EDGAR conversion and filing services as well as the preparation and distribution of preliminary and final prospectus supplements and related materials.

III. PRICING SUMMARY

The pricing terms of the Offering were established on October 12, 2023 (the "Pricing Date") and are summarized below:

The underwriting discount of 2.50% of the public offering price, or $1.04 per share, is consistent with market practice for registered secondary offerings of this size by selling stockholders. The aggregate underwriting commission for the base offering of 6,250,000 shares totals $6,500,000.

The aggregate gross proceeds of the base offering are $260,000,000, calculated as 6,250,000 shares multiplied by the public offering price of $41.60 per share. After deduction of the aggregate underwriting discount of $6,500,000, the aggregate net proceeds payable to the selling stockholders total $253,500,000.

It is noted for the record that the Company is not receiving any proceeds from the Offering. All net proceeds, after deduction of the underwriting discount, are payable to the selling stockholders in proportion to their respective shares sold, as detailed in Section V below.

For reference, the public offering price of $41.60 per share represents an appreciation of approximately 89.1% over the Company's initial public offering price of $22.00 per share, which priced on April 17, 2023 — approximately six months prior to the Pricing Date. This appreciation reflects strong market performance of the Company's common stock following positive clinical trial data readouts and favorable analyst coverage initiated during the second and third quarters of 2023.

IV. UNDERWRITING COMMISSION ALLOCATION

The total underwriting commission of $6,500,000 is allocated among the four underwriters in accordance with the terms of the Underwriting Agreement as follows:

Reconciliation: The sum of the individual commission amounts is confirmed as follows: $2,925,000 + $1,950,000 + $975,000 + $650,000 = $6,500,000, which equals 6,250,000 shares multiplied by $1.04 per share. The commission allocation is consistent with the economics set forth in the Underwriting Agreement and was confirmed by the syndicate desk of Ridgeline Securities LLC (Angela Ferris) prior to the Closing Date.

V. FUNDS FLOW

A. Aggregate Funds Flow Summary

The aggregate funds flow for the base offering is summarized below:

Total Gross Proceeds (6,250,000 shares × $41.60): $260,000,000

Less: Total Underwriting discount (6,250,000 shares × $1.04): ($6,500,000)

Net Proceeds Payable to Selling Stockholders: $253,500,000

B. Allocation of Net Proceeds Among Selling Stockholders

The net proceeds of $253,500,000 are allocated among the selling stockholders in proportion to the number of shares sold by each selling stockholder, with each selling stockholder bearing its pro rata share of the underwriting discount at the rate of $1.04 per share. The allocation is set forth in the table below:

Reconciliation: The sum of the individual net proceeds amounts is confirmed as follows: $121,680,000 + $101,400,000 + $20,280,000 + $10,140,000 = $253,500,000. Each individual amount is verified as the respective shares sold multiplied by the net price to selling stockholders of $40.56 per share.

C. Wire Transfer Mechanics

Funds were received from The Depository Trust Company ("DTC") upon settlement of the shares on October 17, 2023, the Closing Date. The settlement process operated as follows:

1. The 6,250,000 shares of common stock were delivered by the selling stockholders (through Pinnacle Trust & Transfer Co. as custodian) via book-entry transfer through the facilities of DTC against payment of the aggregate gross proceeds.

2. Ridgeline Securities LLC, in its capacity as representative of the several underwriters, received the aggregate gross proceeds of $260,000,000 through DTC's delivery-versus-payment settlement system.

3. The underwriters retained the aggregate underwriting discount of $6,500,000 from the gross proceeds, allocated among the underwriters in accordance with the percentages set forth in Section IV above.

4. The remaining net proceeds of $253,500,000 were wire-transferred by Ridgeline Securities LLC to the selling stockholders (or their designated bank accounts) in accordance with wire instructions provided under the Power of Attorney and Custody Agreement dated October 12, 2023. David Orenstein, in his capacity as attorney-in-fact for the selling stockholders pursuant to the Power of Attorney and Custody Agreement, coordinated the receipt and confirmation of wire transfer instructions for each selling stockholder.

5. Wire transfers to each selling stockholder's designated account were confirmed as completed on October 17, 2023, with the specific amounts set forth in the allocation table in Section V.B above.

D. Issuer Expenses

Although the Company is not selling shares and is not receiving any proceeds from the Offering, the Company agreed to bear all offering expenses other than the underwriting discount (which is borne by the selling stockholders). The estimated issuer expenses are as follows:

The Board of Directors of Penterra authorized the payment of issuer expenses up to $765,000 pursuant to resolutions adopted on September 8, 2023. The SEC registration fee was not required to be paid in connection with this Offering because the applicable registration fee was previously paid at the time of the filing of the Form S-3 Shelf Registration Statement. Calderwood & Harkness's legal fees are subject to a capped fee arrangement of $485,000, exclusive of disbursements, negotiated at the time of the engagement.

VI. SETTLEMENT MECHANICS

Settlement of the base offering was effected through the facilities of The Depository Trust Company ("DTC") on October 17, 2023, the Closing Date, which was the third business day following the Trade Date of October 12, 2023 (T+3), in accordance with Rule 15c6-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

The settlement process was coordinated among the transfer agent, the underwriters, the Company, and the selling stockholders as follows:

Transfer Agent Facilitation. Pinnacle Trust & Transfer Co., as transfer agent and registrar for the Company's common stock, facilitated the book-entry delivery of 6,250,000 shares through DTC. Pinnacle Trust & Transfer Co. acted pursuant to a direction letter dated October 16, 2023 (the "Transfer Agent Direction Letter"), signed by David Orenstein on behalf of the Company, instructing the transfer agent to deliver the shares via DTC's book-entry system to the accounts of the several underwriters (or their respective DTC participant accounts) on the Closing Date.

DTC Eligibility. The DTC eligibility of the Company's common stock (CUSIP: 70831X 10 5) was confirmed by Pinnacle Trust & Transfer Co. prior to the Closing Date. The shares were held in book-entry form through DTC and were eligible for DTC's automated delivery-versus-payment settlement system.

Delivery Versus Payment. Settlement was effected on a delivery-versus-payment basis, with the simultaneous exchange of 6,250,000 shares of common stock and aggregate gross proceeds of $260,000,000 occurring through DTC's settlement system. The underwriters confirmed receipt of the shares and the selling stockholders (through their attorney-in-fact) confirmed receipt of the net proceeds on the Closing Date.

No physical stock certificates were issued in connection with the Offering. All shares were delivered in book-entry form through the facilities of DTC, consistent with the Company's policy of maintaining all shares of common stock in uncertificated, book-entry form.

VII. LOCK-UP WAIVER AND NEW LOCK-UP

A. IPO Lock-Up Waiver

In connection with the Company's initial public offering, which closed on April 17, 2023, each of the selling stockholders entered into 180-day lock-up agreements (the "IPO Lock-Up Agreements") restricting the sale, transfer, or other disposition of their shares of common stock for a period of 180 calendar days following the closing of the IPO. The original lock-up expiration date under the IPO Lock-Up Agreements was October 14, 2023 (i.e., 180 days from April 17, 2023).

The counterparties to the IPO Lock-Up Agreements were the three underwriters that participated in the Company's IPO: (i) Ridgeline Securities LLC, (ii) Broadmark Capital Inc., and (iii) Morningstar Zanthor & Co. It is noted that Morningstar Zanthor & Co. is not participating in the syndicate for the current secondary offering and served solely as a counterparty to the IPO Lock-Up Agreements.

Because the Pricing Date for the secondary offering was October 12, 2023 — two calendar days prior to the natural expiration of the IPO lock-up period — it was necessary to obtain early release waivers from each of the three IPO underwriters in order to permit the selling stockholders to enter into the Underwriting Agreement and commit to sell their shares on the Pricing Date. The chronology of the waiver process was as follows:

September 18, 2023: Lock-up waiver request letters were sent by the Company (with copies to the selling stockholders and their personal counsel, Whitfield & Garza LLP) to each of the three IPO underwriters requesting early release of the IPO lock-up solely with respect to the shares being sold in the secondary offering.

September 29, 2023: All three lock-up waiver consents were received, as follows:

• Ridgeline Securities LLC — Consent letter dated September 29, 2023, signed by Jonathan Pryce-Hall, Managing Director.

• Broadmark Capital Inc. — Consent letter dated September 29, 2023, signed by Samuel Okonkwo, Managing Director.

• Morningstar Zanthor & Co. — Consent letter dated September 29, 2023, signed by Diane Chaudhary, Managing Director. As noted above, Morningstar Zanthor & Co. is not participating in the secondary offering syndicate but was required to consent as a counterparty to the IPO Lock-Up Agreements.

Each waiver was made effective as of October 12, 2023, solely with respect to the shares being sold in the secondary offering and the execution and delivery of the Underwriting Agreement and related transaction documents. The customary 14-day advance notice requirement applicable to early lock-up releases (typically required to allow for public disclosure prior to an anticipated offering) was waived by consent of the IPO underwriters given the de minimis gap between the Pricing Date (October 12, 2023) and the natural expiration of the IPO lock-up period (October 14, 2023) — a difference of only two calendar days.

B. New 90-Day Lock-Up (Secondary Offering)

In connection with the secondary offering, each of the selling stockholders executed new lock-up agreements (the "Secondary Lock-Up Agreements") in favor of Ridgeline Securities LLC and Broadmark Capital Inc. as representatives of the several underwriters. The Secondary Lock-Up Agreements restrict each selling stockholder from selling, transferring, hedging, pledging, or otherwise disposing of any retained shares of common stock of the Company for a period of 90 days following the Closing Date.

The key terms of the Secondary Lock-Up Agreements are as follows:

• Lock-Up Period: 90 days from and including October 17, 2023 (the Closing Date)

• Lock-Up Expiration Date: January 15, 2024

• Restricted Securities: All shares of common stock of the Company beneficially owned by each selling stockholder that are not sold in the Offering (including any shares subject to the over-allotment option that are not ultimately sold)

• Exceptions: Customary exceptions for estate planning transfers, charitable gifts, and certain other transfers subject to the transferee executing a lock-up agreement on substantially similar terms

• Early Release: Subject to the discretion of the Representatives

The Secondary Lock-Up Agreements were executed on October 12, 2023, concurrently with the execution of the Underwriting Agreement, and were delivered at closing as a closing deliverable.

VIII. CONDITIONS PRECEDENT — CONFIRMATION OF SATISFACTION

A. Underwriting Agreement Conditions

All conditions precedent to the obligations of the underwriters to close the purchase of the shares, as set forth in the Underwriting Agreement dated October 12, 2023, were satisfied or waived as of the Closing on October 17, 2023. Calderwood & Harkness LLP, in its capacity as issuer's counsel, coordinated with Caldwell, Pearce & Strauss LLP (underwriters' counsel) to confirm that each condition precedent was satisfied and that each required closing deliverable was received in form and substance satisfactory to the underwriters and their counsel.

B. Deliverables Confirmed Received

The following closing deliverables were confirmed received on or prior to the Closing Date:

1. Officer's Certificate of Penterra. An Officer's Certificate of Penterra Pharmaceuticals Corp. dated October 17, 2023, signed by Dr. Marco Castellano in his capacity as Chief Executive Officer and Lisa Hargrove in her capacity as Chief Financial Officer. The Officer's Certificate certified: (i) the accuracy of the Company's representations and warranties set forth in the Underwriting Agreement as of the Closing Date; (ii) the Company's compliance with all covenants and agreements required to be performed or satisfied on or prior to the Closing Date; and (iii) the absence of any material adverse change in the condition (financial or otherwise), business, properties, or results of operations of the Company and its subsidiaries, taken as a whole, since the date of the most recent financial statements included or incorporated by reference in the prospectus supplement.

2. Secretary's Certificate of Penterra. A Secretary's Certificate of Penterra Pharmaceuticals Corp. dated October 17, 2023, signed by David Orenstein in his capacity as General Counsel and Corporate Secretary. The Secretary's Certificate certified: (i) the incumbency and signatures of the officers of the Company authorized to execute the Underwriting Agreement and other transaction documents; (ii) that attached thereto were true and complete copies of the Company's Restated Certificate of Incorporation (as amended) and Amended and Restated Bylaws, each as in effect on the Closing Date; and (iii) that attached thereto were true and complete copies of the resolutions of the Board of Directors adopted on September 8, 2023, authorizing the Company's cooperation with and participation in the secondary offering, including the execution of the Underwriting Agreement, the filing of the prospectus supplement, the delivery of opinions and certificates, and the payment of issuer expenses.

3. Good Standing Certificate. A Certificate of Good Standing for Penterra Pharmaceuticals Corp. issued by the Secretary of State of the State of Delaware dated October 16, 2023, confirming that the Company is in good standing under the laws of the State of Delaware.

4. Issuer's Counsel Legal Opinion. A legal opinion of Calderwood & Harkness LLP dated October 17, 2023, addressed to the underwriters, opining on the following matters: (i) the 6,250,000 shares of common stock being sold in the Offering have been duly authorized and are validly issued, fully paid, and non-assessable; (ii) the Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware; (iii) the execution, delivery, and performance of the Underwriting Agreement by the Company do not violate, conflict with, or result in a breach of the Company's Restated Certificate of Incorporation (as amended) or Amended and Restated Bylaws; and (iv) such other customary matters as are typically addressed in legal opinions rendered in connection with registered secondary offerings. The legal opinion was signed by Jennifer Kwon, Partner.

5. Issuer's Counsel Negative Assurance Letter (10b-5 Letter). A negative assurance letter (commonly referred to as a "10b-5 letter") of Calderwood & Harkness LLP dated October 17, 2023, addressed to the underwriters. The negative assurance letter stated that, based upon C&H's participation in the preparation of the registration statement, the base prospectus, and the prospectus supplement, and its review of certain corporate records and documents, attendance at due diligence sessions, and discussions with officers and other representatives of the Company and its independent auditors, nothing came to C&H's attention that caused it to believe that: (i) the registration statement, as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; or (ii) the prospectus supplement or the base prospectus, as of the date thereof and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

6. Comfort Letter of Graystone & Whitmore LLP. An initial comfort letter of Graystone & Whitmore LLP was delivered in connection with the filing of the preliminary prospectus supplement on October 2, 2023. A bring-down comfort letter of Graystone & Whitmore LLP dated October 17, 2023 was delivered on the Closing Date, confirming that: (i) no material changes had occurred since the date of the initial comfort letter; (ii) certain financial data in the prospectus supplement had been agreed to the Company's accounting records; and (iii) such other matters as are customarily addressed in comfort letters delivered in connection with registered public offerings. The bring-down comfort letter was signed by Thomas Reiter, Engagement Partner.

7. Selling Stockholder Certificates. Certificates dated October 17, 2023, executed by each of the selling stockholders (or by David Orenstein as attorney-in-fact for the selling stockholders pursuant to the Power of Attorney and Custody Agreement) certifying that: (i) the representations and warranties of the selling stockholders set forth in the Underwriting Agreement and in the Selling Stockholder Representation Letters remain true and correct in all material respects as of the Closing Date; (ii) each selling stockholder has complied with all covenants and agreements applicable to it under the Underwriting Agreement; and (iii) all conditions precedent to closing applicable to the selling stockholders have been satisfied.

8. Lock-Up Waiver Consents. All three lock-up waiver consents from the IPO underwriters were received and confirmed, as described in detail in Section VII.A above: (i) Ridgeline Securities LLC (consent dated September 29, 2023, signed by Jonathan Pryce-Hall); (ii) Broadmark Capital Inc. (consent dated September 29, 2023, signed by Samuel Okonkwo); and (iii) Morningstar Zanthor & Co. (consent dated September 29, 2023, signed by Diane Chaudhary).

9. New Lock-Up Agreements. Executed 90-day lock-up agreements (the Secondary Lock-Up Agreements) were received from each of the four selling stockholders, as described in detail in Section VII.B above. Each Secondary Lock-Up Agreement restricts the disposition of retained shares for 90 days from the Closing Date (through January 15, 2024).

10. Power of Attorney and Custody Agreement. The Power of Attorney and Custody Agreement dated October 12, 2023, executed by each selling stockholder, appointing David Orenstein as attorney-in-fact with authority to execute and deliver the Underwriting Agreement, closing certificates, and other transaction documents on behalf of the selling stockholders, and appointing Pinnacle Trust & Transfer Co. as custodian of the shares to be sold in the Offering pending settlement. The Power of Attorney and Custody Agreement also authorized David Orenstein to coordinate the receipt of wire instructions for the disbursement of net proceeds to the selling stockholders.

11. Transfer Agent Direction Letter. A direction letter from Penterra Pharmaceuticals Corp. to Pinnacle Trust & Transfer Co. dated October 16, 2023, signed by David Orenstein on behalf of the Company, instructing the transfer agent to effect the book-entry delivery of 6,250,000 shares of common stock through the facilities of DTC on the Closing Date in connection with the settlement of the Offering.

12. Underwriting Agreement (Execution Version). The fully executed Underwriting Agreement dated October 12, 2023 was received, bearing the signatures of: (i) Penterra Pharmaceuticals Corp., by Lisa Hargrove, Chief Financial Officer; (ii) each of the four selling stockholders (Dr. Elena Castellano, Dr. Riccardo Castellano, Dr. Marco Castellano, and Castellano Family Holdings LLC, by David Orenstein as attorney-in-fact); (iii) Ridgeline Securities LLC, by Jonathan Pryce-Hall, Managing Director; (iv) Broadmark Capital Inc., by Samuel Okonkwo, Managing Director; (v) Linden Groves & Co.; and (vi) Harborview Partners LLC. The Underwriting Agreement sets forth the terms and conditions of the Offering, the representations and warranties of the Company and the selling stockholders, the covenants of the parties, the conditions to closing, and the indemnification and contribution provisions.

13. Selling Stockholder Representation Letters. Selling Stockholder Representation Letters dated October 12, 2023, executed by each of the four selling stockholders (or by David Orenstein as attorney-in-fact). The representation letters contain representations and warranties by the selling stockholders with respect to: (i) beneficial ownership of the shares to be sold; (ii) authority to sell the shares (including the effectiveness of the lock-up waiver consents); (iii) absence of liens, encumbrances, or third-party claims on the shares; (iv) the accuracy of information provided by the selling stockholders for inclusion in the prospectus supplement; and (v) compliance with the terms and conditions of the lock-up waiver consents.

All closing deliverables were reviewed by Calderwood & Harkness LLP (issuer's counsel) and Caldwell, Pearce & Strauss LLP (underwriters' counsel), and all parties confirmed that the form and substance of each deliverable was satisfactory.

IX. SEC FILINGS SUMMARY

The following SEC filings were made in connection with the Offering:

All filings were prepared or reviewed by Calderwood & Harkness LLP and were timely filed with the SEC via EDGAR through Apex Financial Printing Inc. The timely filing of the Section 16 Form 4s for the individual selling stockholders is being monitored as a post-closing matter (see Section XIII below).

X. OVER-ALLOTMENT OPTION STATUS

In connection with the Offering, the selling stockholders granted the several underwriters a 30-day option (the "Over-Allotment Option") to purchase up to an additional 937,500 shares of common stock at the public offering price less the underwriting discount. The Over-Allotment Option was granted pursuant to Section 2 of the Underwriting Agreement and expires on November 11, 2023 (i.e., 30 days from the Pricing Date of October 12, 2023).

The allocation of the Over-Allotment Option shares among the selling stockholders is as follows:

If the Over-Allotment Option is exercised in full, the economic impact would be as follows:

• Additional gross proceeds: 937,500 shares × $41.60 = $38,985,000 (note: 937,500 × $41.60 = $39,000,000; the prospectus supplement references "approximately $299.0 million" for the total offering inclusive of the over-allotment, consistent with 7,187,500 × $41.60 = $299,000,000)

• Additional underwriting commission: 937,500 shares × $1.04 = $975,000

• Additional net proceeds to selling stockholders: 937,500 shares × $40.56 = $38,025,000

If the Over-Allotment Option is exercised, the closing of the additional shares is expected to occur on or about November 16, 2023 (T+3 from anticipated exercise date), subject to satisfaction of applicable closing conditions and delivery of customary bring-down certificates and other deliverables.

As of the date of this memorandum (October 17, 2023), the Over-Allotment Option has not yet been exercised. Calderwood & Harkness LLP will continue to monitor the status of the Over-Allotment Option through its expiration date and will coordinate any additional closing deliverables if the option is exercised in whole or in part.

XI. POST-CLOSING OWNERSHIP SUMMARY

The following table sets forth the ownership positions of the Castellano family selling stockholders immediately following the closing of the base offering on October 17, 2023. The total shares of common stock outstanding remain unchanged at 120,000,000 shares, as no primary shares were issued in connection with the Offering.

The public float of the Company's common stock has increased as a result of the Offering. Prior to the Offering, the public float (shares outstanding minus Castellano family holdings) was approximately 79,900,000 shares (120,000,000 − 40,100,000). Following the closing of the base offering, the public float has increased to approximately 86,150,000 shares (120,000,000 − 33,850,000), representing an increase of 6,250,000 shares.

If the Over-Allotment Option is exercised in full, the combined Castellano family holdings would be further reduced to 32,912,500 shares (approximately 27.4% of shares outstanding), and the public float would increase to approximately 87,087,500 shares. It is noted that the total shares outstanding remain at 120,000,000 regardless of whether the Over-Allotment Option is exercised, as all shares sold in the Offering (including any over-allotment shares) are existing shares held by the selling stockholders and not newly issued shares.

XII. KEY TIMELINE RECAP

The following is a summary of the key dates and milestones in connection with the Offering:

XIII. OUTSTANDING ITEMS / POST-CLOSING MATTERS

The following items remain outstanding as of the date of this memorandum and require monitoring or further action by the Calderwood & Harkness deal team:

1. Over-Allotment Option Monitoring. Calderwood & Harkness will continue to monitor the Over-Allotment Option exercise period through its expiration on November 11, 2023. If the Over-Allotment Option is exercised in whole or in part by the underwriters, Calderwood & Harkness will coordinate the preparation and delivery of additional closing deliverables for the over-allotment closing, which is expected to occur on or about November 16, 2023 (T+3 from anticipated exercise date). Such additional deliverables would include, at a minimum, a bring-down officer's certificate, bring-down selling stockholder certificates, an updated transfer agent direction letter, and any other customary documents required under the Underwriting Agreement for an over-allotment closing.

2. Section 16 Form 4 Filings. The Section 16 Form 4 filings for the three individual selling stockholders who are Section 16 insiders — Dr. Elena Castellano (disposition of 3,000,000 shares), Dr. Riccardo Castellano (disposition of 2,500,000 shares), and Dr. Marco Castellano (disposition of 500,000 shares) — are due to be filed with the SEC within two business days of the Pricing Date (October 12, 2023). David Orenstein, the Company's General Counsel, is responsible for the preparation and filing of the Form 4s, but Calderwood & Harkness will confirm timely filing and flag any issues.

3. Closing Binder Compilation. Brendan Walsh will be responsible for the preparation and compilation of the closing binder, including the closing index and executed copies of all transaction documents and closing deliverables. Closing binder sets will be distributed to all parties in accordance with customary practice. The target completion date for the closing binder is October 27, 2023.

4. Lock-Up Compliance Monitoring. Calderwood & Harkness will monitor compliance with the new 90-day Secondary Lock-Up Agreements through the expiration date of January 15, 2024. Any requests for early release or transfer exceptions will be reviewed in consultation with the Representatives (Ridgeline Securities LLC and Broadmark Capital Inc.) and the Company.

5. Final Invoicing. Calderwood & Harkness will submit its final invoice under the capped fee arrangement of $485,000 (plus disbursements) upon the closing of the matter. If the Over-Allotment Option is exercised, the fee arrangement may be subject to adjustment as agreed with the Company. Final invoicing is expected upon matter close, currently anticipated for October 27, 2023 (absent over-allotment exercise).

XIV. DISTRIBUTION

This Closing Memorandum is privileged and confidential and constitutes attorney work product. It is being distributed solely to the following individuals:

Calderwood & Harkness LLP Deal Team:

• Jennifer Kwon, Partner

• Theodore Langston, Partner

• Audrey Zhou, Senior Associate

• Brendan Walsh, Associate

Penterra Pharmaceuticals Corp. (as appropriate, subject to privilege considerations):

• David Orenstein, General Counsel and Corporate Secretary

• Lisa Hargrove, Chief Financial Officer

This memorandum should not be distributed to any other persons without the prior written approval of Jennifer Kwon, and any distribution should be made in a manner consistent with the preservation of applicable attorney-client privilege and work product protections.

•

Prepared by:

________________________________________

Audrey Zhou Senior Associate Calderwood & Harkness LLP

________________________________________

Brendan Walsh Associate Calderwood & Harkness LLP

Reviewed and Approved by:

________________________________________

Jennifer Kwon Partner Calderwood & Harkness LLP

Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor New York, NY 10006

Date: October 17, 2023

Selling Stockholder	Relationship	Pre-Offering Shares	Base Shares Sold	Post-Offering Shares (Base)	Over-Allotment Allocation
Dr. Elena Castellano	Co-Founder, Board Chair	14,200,000	3,000,000	11,200,000	450,000
Dr. Riccardo Castellano	Co-Founder, Board Member	12,800,000	2,500,000	10,300,000	375,000
Dr. Marco Castellano	CEO	4,500,000	500,000	4,000,000	75,000
Castellano Family Holdings LLC	Delaware LLC (EIN: 87-2165438)	8,600,000	250,000	8,350,000	37,500
Total	40,100,000	6,250,000	33,850,000	937,500
Item	Per Share	Aggregate (Base)
Public Offering Price	$41.60	$260,000,000
Underwriting discount (2.50%)	$1.04	$6,500,000
Net Price to Selling Stockholders	$40.56	$253,500,000
Underwriter	Role	Allocation Percentage	Number of Shares	Commission Amount
Ridgeline Securities LLC	Lead Left Book-Runner	45%	2,812,500	$2,925,000
Broadmark Capital Inc.	Joint Book-Runner	30%	1,875,000	$1,950,000
Linden Groves & Co.	Co-Manager	15%	937,500	$975,000
Harborview Partners LLC	Co-Manager	10%	625,000	$650,000
Total	100%	6,250,000	$6,500,000
Selling Stockholder	Shares Sold (Base)	Gross Proceeds ($41.60/share)	Less Underwriting discount ($1.04/share)	Net Proceeds ($40.56/share)
Dr. Elena Castellano	3,000,000	$124,800,000	($3,120,000)	$121,680,000
Dr. Riccardo Castellano	2,500,000	$104,000,000	($2,600,000)	$101,400,000
Dr. Marco Castellano	500,000	$20,800,000	($520,000)	$20,280,000
Castellano Family Holdings LLC	250,000	$10,400,000	($260,000)	$10,140,000
Total	6,250,000	$260,000,000	($6,500,000)	$253,500,000
Expense Category	Payee	Amount
SEC Registration Fee	SEC (previously paid with Form S-3 shelf filing)	$0
Nasdaq Listing Fee	The Nasdaq Stock Market LLC	$45,000

Legal Fees	Calderwood & Harkness LLP (capped fee arrangement)	$485,000 (est.)
Accounting Fees (Comfort Letter)	Graystone & Whitmore LLP	$175,000
Printing	Apex Financial Printing Inc.	$35,000
Miscellaneous (filing fees, messenger, etc.)	Various	$25,000
Total Issuer Expenses	$765,000
Filing	Date	Description
Form S-3 Shelf Registration Statement (File No. 333-274851)	Declared effective August 22, 2023	Base shelf registration statement, registering an indeterminate amount of securities for primary and secondary offerings by the Company and/or selling stockholders
Preliminary Prospectus Supplement	Filed October 2, 2023	Preliminary supplement to the base prospectus setting forth the terms of the proposed secondary offering, the identity of the selling stockholders, and estimated pricing information; used in connection with the road show and marketing period
Final Prospectus Supplement (Rule 424(b)(5))	Filed October 12, 2023	Final supplement to the base prospectus filed pursuant to Rule 424(b)(5) under the Securities Act, setting forth the final pricing terms, including the public offering price of $41.60 per share, the underwriting discount, and the net proceeds to selling stockholders
Issuer Free Writing Prospectus (Pricing Term Sheet)	Filed October 12, 2023 pursuant to Rule 433	Pricing term sheet setting forth the final pricing terms of the Offering, filed as a free writing prospectus with the SEC pursuant to Rule 433 under the Securities Act
Form 8-K (Current Report)	Filed October 12, 2023	Current report on Form 8-K filed under Item 8.01 (Other Events) reporting the Company's entry into the Underwriting Agreement in connection with the registered selling-stockholder secondary offering
Section 16 Form 4 Filings	Due within two business days of October 12, 2023	Form 4 filings reporting the disposition of shares by the three individual selling stockholders who are Section 16 insiders: Dr. Elena Castellano (disposition of 3,000,000 shares), Dr. Riccardo Castellano (disposition of 2,500,000 shares), and Dr. Marco Castellano (disposition of 500,000 shares). Note: Castellano Family Holdings LLC may also be required to file a Form 4 or amendment to Schedule 13D, depending on its reporting status
Selling Stockholder	Over-Allotment Allocation (Shares)
Dr. Elena Castellano	450,000
Dr. Riccardo Castellano	375,000
Dr. Marco Castellano	75,000
Castellano Family Holdings LLC	37,500
Total	937,500
Stockholder	Pre-Offering Shares	Base Shares Sold	Post-Offering Shares (Base)	Post-Offering % (Base, approx.)
Dr. Elena Castellano	14,200,000	3,000,000	11,200,000	9.3%
Dr. Riccardo Castellano	12,800,000	2,500,000	10,300,000	8.6%
Dr. Marco Castellano	4,500,000	500,000	4,000,000	3.3%
Castellano Family Holdings LLC	8,600,000	250,000	8,350,000	7.0%
Family Total	40,100,000	6,250,000	33,850,000	~28.2%
Date	Event

September 5, 2023	Engagement opened at Calderwood & Harkness LLP; new matter initiated
September 8, 2023	Board of Directors of Penterra adopted resolutions authorizing cooperation with the secondary offering, execution of the Underwriting Agreement, filing of the prospectus supplement, and payment of issuer expenses up to $765,000
September 11, 2023	Initial confidential draft of the prospectus supplement circulated to the working group for review and comment
September 12, 2023	Organizational call held among all working group participants, including issuer's counsel, underwriters' counsel, the Company, the selling stockholders' personal counsel, and the lead book-runner
September 18, 2023	Lock-up waiver request letters sent to the three IPO syndicate underwriters (Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co.)
September 29, 2023	All three lock-up waiver consents received from the IPO underwriters
October 2, 2023	Preliminary prospectus supplement filed with the SEC via EDGAR
October 9–11, 2023	Road show and marketing period conducted by the selling stockholders, accompanied by Company management, with the support of Ridgeline Securities LLC and Broadmark Capital Inc.
October 12, 2023	Pricing of the Offering at $41.60 per share; Underwriting Agreement executed; trade date (T); Final Prospectus Supplement filed pursuant to Rule 424(b)(5); Pricing Term Sheet filed pursuant to Rule 433; Form 8-K filed reporting entry into Underwriting Agreement
October 14, 2023	Original IPO lock-up expiration date (180 days from April 17, 2023 IPO closing)
October 16, 2023	Good standing certificate obtained from the Delaware Secretary of State; Transfer Agent Direction Letter sent to Pinnacle Trust & Transfer Co.
October 17, 2023	Settlement / Closing Date (T+3): all closing deliverables received; book-entry delivery of 6,250,000 shares effected through DTC; net proceeds of $253,500,000 disbursed to selling stockholders
November 11, 2023	Over-Allotment Option exercise deadline (30 days from Pricing Date)
November 16, 2023	Anticipated over-allotment closing date (T+3 from anticipated exercise date), if the Over-Allotment Option is exercised
January 15, 2024	Expiration of the new 90-day Secondary Lock-Up Agreements
October 27, 2023	Anticipated matter close date (assuming no Over-Allotment Option exercise or following final over-allotment closing)

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT
CLOSING MEMORANDUM
Registered Selling-Stockholder Secondary Offering of 6,250,000 Shares of Common Stock of Penterra Pharmaceuticals Corp.
Prepared by:
CALDERWOOD & HARKNESS LLP One Liberty Plaza, 52nd Floor New York, NY 10006
Audrey Zhou, Senior Associate Brendan Walsh, Associate
Under the Supervision of Jennifer Kwon, Partner
October 17, 2023
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I. INTRODUCTION AND TRANSACTION OVERVIEW
This Closing Memorandum has been prepared by Calderwood & Harkness LLP ("C&H" or "Firm") to memorialize the closing mechanics and confirm the successful settlement of the registered selling-stockholder secondary offering (the "Offering") of shares of common stock of Penterra Pharmaceuticals Corp. ("Penterra," "PPC," or the "Company"). This memorandum is intended to serve as a comprehensive record of the transaction, the parties involved, the key closing deliverables, the funds flow, and the satisfaction of all conditions precedent to the closing of the Offering. This memorandum is privileged and confidential and constitutes attorney work product.
The Issuer. Penterra Pharmaceuticals Corp. is a Delaware corporation headquartered at 400 Meridian Parkway, Suite 1200, Princeton, NJ 08540. The Company's common stock is listed on The Nasdaq Global Select Market under the ticker symbol "PNTR." The Company's Central Index Key with the U.S. Securities and Exchange Commission (the "SEC") is CIK: 0001987654, and its Employer Identification Number is 82-4039571. Penterra is a clinical-stage biopharmaceutical company focused on the development of novel therapeutics for inflammatory and autoimmune disorders. The Company completed its initial public offering on April 17, 2023 at a price to the public of $22.00 per share.
Offering Type. The Offering was structured as a registered selling-stockholder secondary offering, constituting a shelf takedown under the Company's existing registration statement on Form S-3 (File No. 333-274851), which was declared effective by the SEC on August 22, 2023 (the "Shelf Registration Statement"). The final prospectus supplement relating to the Offering was filed with the SEC on October 12, 2023 pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Securities Act"). Because the Offering was structured as a secondary offering by selling stockholders, the Company is not selling any shares in the Offering and will not receive any of the proceeds therefrom. All net proceeds from the sale of shares in the Offering are payable directly to the selling stockholders described herein.
Securities. The securities offered and sold consist of 6,250,000 shares of common stock, par value $0.001 per share, of Penterra Pharmaceuticals Corp. (CUSIP: 70831X 10 5).
Pricing. The public offering price was set at $41.60 per share, representing aggregate gross proceeds of $260,000,000 for the base offering. This represents an approximately 89.1% appreciation over the Company's IPO price of $22.00 per share.
Over-Allotment Option. In connection with the Offering, the selling stockholders granted the underwriters a 30-day option (expiring November 11, 2023) to purchase up to an additional 937,500 shares of common stock at the public offering price less the underwriting discount. If the over-allotment option is exercised in full, the maximum offering size would be approximately $299.0 million, representing a total of 7,187,500 shares.
Key Dates. The pricing and execution of the Underwriting Agreement (the "Underwriting Agreement") occurred on October 12, 2023 (the "Pricing Date" or "Trade Date"). Settlement and closing of the base offering (the "Closing") occurred on October 17, 2023 (T+3 from the Trade Date) (the "Closing Date").
II. PARTIES
A. Issuer.  Penterra Pharmaceuticals Corp. is a corporation organized and existing under the laws of the State of Delaware. The Company's common stock is listed on The Nasdaq Global Select Market under the ticker symbol "PNTR." The Company's registered agent in Delaware is actionaltional Registered Agents Inc., located at 251 Little Falls Drive, Wilmington, DE 19808.
The principal officers of the Company relevant to this transaction are as follows:
•  Chief Executive Officer: Dr. Marco Castellano
•  Chief Financial Officer: Lisa Hargrove
•  General Counsel and Corporate Secretary: David Orenstein
David Orenstein served as the primary Company contact for the transaction and also served as attorney-in-fact for the selling stockholders pursuant to the Power of Attorney and Custody Agreement described herein.
B. Selling Stockholders
The selling stockholders in the Offering are members of the Castellano family, who are the co-founders and early equity holders of Penterra. The following table sets forth the selling stockholders, their pre-offering share holdings, the number of shares sold in the base offering, their post-offering share holdings (base offering only), and their respective allocations under the over-allotment option:
Prior to the Offering, the combined Castellano family holdings totaled 40,100,000 shares, representing approximately 33.4% of the 120,000,000 shares of common stock outstanding. Following the closing of the base offering, the combined Castellano family holdings total 33,850,000 shares, representing approximately 28.2% of the 120,000,000 shares outstanding. If the over-allotment option is exercised in full, the combined Castellano family holdings will be further reduced to 32,912,500 shares, representing approximately 27.4% of the shares outstanding. The total shares outstanding will remain unchanged at 120,000,000, as no primary shares are being issued in connection with the Offering.
The selling stockholders are represented by personal counsel, Whitfield & Garza LLP, with Patricia Velázquez as the responsible partner, located at 590 Madison Avenue, 28th Floor, New York, NY 10022.
C. Underwriters.  The following underwriters are participating in the Offering pursuant to the Underwriting Agreement:
Ridgeline Securities LLC (Lead Left Book-Runner) 383 Madison Avenue, New York, NY 10017 Key Contacts: Jonathan Pryce-Hall, Managing Director; Angela Ferris, Vice President, Syndicate Desk
Ridgeline Securities LLC is serving as the lead left book-running manager for the Offering and, together with Broadmark Capital Inc., as representative of the several underwriters (the "Representatives").
Broadmark Capital Inc. (Joint Book-Runner) 200 Park Avenue, New York, NY 10166 Key Contact: Samuel Okonkwo, Managing Director
Broadmark Capital Inc. is serving as joint book-running manager for the Offering and, together with Ridgeline Securities LLC, as a Representative of the several underwriters.
Linden Groves & Co. (Co-Manager) 745 Fifth Avenue, New York, NY 10151
Linden Groves & Co. is serving as co-manager for the Offering.
Harborview Partners LLC (Co-Manager) 1 Federal Street, Boston, MA 02110
Harborview Partners LLC is serving as co-manager for the Offering.
D. Counsel.  Issuer's Counsel: Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor, New York, NY 10006
•  Jennifer Kwon — Partner (Responsible Partner)
•  Theodore Langston — Partner (Billing Partner)
•  Audrey Zhou — Senior Associate (Lead Associate)
•  Brendan Walsh — Associate
Calderwood & Harkness LLP has served as outside securities counsel to Penterra Pharmaceuticals Corp. since the Company's initial public offering in April 2023 and was engaged to represent the Company in connection with the Offering, including with respect to the preparation and filing of the prospectus supplement, negotiation of the Underwriting Agreement, rendering of the legal opinion and negative assurance letter, and coordination of closing deliverables.
Underwriters' Counsel: Caldwell, Pearce & Strauss LLP 1251 Avenue of the Americas, 40th Floor, New York, NY 10020
•  Margaret Hui — Partner
•  Ryan Petrosian — Associate
Caldwell, Pearce & Strauss LLP represented the underwriters in connection with the negotiation of the Underwriting Agreement, the due diligence process, and the review of the prospectus supplement and related offering documents.
E. Other Parties
Independent Auditors: Graystone & Whitmore LLP 30 Rockefeller Plaza, New York, NY 10112 Engagement Partner: Thomas Reiter
Graystone & Whitmore LLP serves as the independent registered public accounting firm of Penterra Pharmaceuticals Corp. and delivered the comfort letter and bring-down comfort letter described in Section VIII below.
Transfer Agent: Pinnacle Trust & Transfer Co. 1 Ashbury Asset Advisors Plaza, 30th Floor, New York, NY 10004
Pinnacle Trust & Transfer Co. serves as the transfer agent and registrar for the shares of common stock of Penterra Pharmaceuticals Corp. and facilitated the book-entry delivery of shares through DTC in connection with the settlement of the Offering.
Financial Printer: Apex Financial Printing Inc. 55 Water Street, New York, NY 10041
Apex Financial Printing Inc. was engaged to provide EDGAR conversion and filing services as well as the preparation and distribution of preliminary and final prospectus supplements and related materials.
III. PRICING SUMMARY
The pricing terms of the Offering were established on October 12, 2023 (the "Pricing Date") and are summarized below:
The underwriting discount of 2.50% of the public offering price, or $1.04 per share, is consistent with market practice for registered secondary offerings of this size by selling stockholders. The aggregate underwriting commission for the base offering of 6,250,000 shares totals $6,500,000.
The aggregate gross proceeds of the base offering are $260,000,000, calculated as 6,250,000 shares multiplied by the public offering price of $41.60 per share. After deduction of the aggregate underwriting discount of $6,500,000, the aggregate net proceeds payable to the selling stockholders total $253,500,000.
It is noted for the record that the Company is not receiving any proceeds from the Offering. All net proceeds, after deduction of the underwriting discount, are payable to the selling stockholders in proportion to their respective shares sold, as detailed in Section V below.
For reference, the public offering price of $41.60 per share represents an appreciation of approximately 89.1% over the Company's initial public offering price of $22.00 per share, which priced on April 17, 2023 — approximately six months prior to the Pricing Date. This appreciation reflects strong market performance of the Company's common stock following positive clinical trial data readouts and favorable analyst coverage initiated during the second and third quarters of 2023.
IV. UNDERWRITING COMMISSION ALLOCATION
The total underwriting commission of $6,500,000 is allocated among the four underwriters in accordance with the terms of the Underwriting Agreement as follows:
Reconciliation: The sum of the individual commission amounts is confirmed as follows: $2,925,000 + $1,950,000 + $975,000 + $650,000 = $6,500,000, which equals 6,250,000 shares multiplied by $1.04 per share. The commission allocation is consistent with the economics set forth in the Underwriting Agreement and was confirmed by the syndicate desk of Ridgeline Securities LLC (Angela Ferris) prior to the Closing Date.
V. FUNDS FLOW
A. Aggregate Funds Flow Summary
The aggregate funds flow for the base offering is summarized below:
Total Gross Proceeds (6,250,000 shares × $41.60): $260,000,000
Less: Total Underwriting discount (6,250,000 shares × $1.04): ($6,500,000)
Net Proceeds Payable to Selling Stockholders: $253,500,000
B. Allocation of Net Proceeds Among Selling Stockholders
The net proceeds of $253,500,000 are allocated among the selling stockholders in proportion to the number of shares sold by each selling stockholder, with each selling stockholder bearing its pro rata share of the underwriting discount at the rate of $1.04 per share. The allocation is set forth in the table below:
Reconciliation: The sum of the individual net proceeds amounts is confirmed as follows: $121,680,000 + $101,400,000 + $20,280,000 + $10,140,000 = $253,500,000. Each individual amount is verified as the respective shares sold multiplied by the net price to selling stockholders of $40.56 per share.
C. Wire Transfer Mechanics
Funds were received from The Depository Trust Company ("DTC") upon settlement of the shares on October 17, 2023, the Closing Date. The settlement process operated as follows:
1.  The 6,250,000 shares of common stock were delivered by the selling stockholders (through Pinnacle Trust & Transfer Co. as custodian) via book-entry transfer through the facilities of DTC against payment of the aggregate gross proceeds.
2.  Ridgeline Securities LLC, in its capacity as representative of the several underwriters, received the aggregate gross proceeds of $260,000,000 through DTC's delivery-versus-payment settlement system.
3.  The underwriters retained the aggregate underwriting discount of $6,500,000 from the gross proceeds, allocated among the underwriters in accordance with the percentages set forth in Section IV above.
4.  The remaining net proceeds of $253,500,000 were wire-transferred by Ridgeline Securities LLC to the selling stockholders (or their designated bank accounts) in accordance with wire instructions provided under the Power of Attorney and Custody Agreement dated October 12, 2023. David Orenstein, in his capacity as attorney-in-fact for the selling stockholders pursuant to the Power of Attorney and Custody Agreement, coordinated the receipt and confirmation of wire transfer instructions for each selling stockholder.
5.  Wire transfers to each selling stockholder's designated account were confirmed as completed on October 17, 2023, with the specific amounts set forth in the allocation table in Section V.B above.
D. Issuer Expenses
Although the Company is not selling shares and is not receiving any proceeds from the Offering, the Company agreed to bear all offering expenses other than the underwriting discount (which is borne by the selling stockholders). The estimated issuer expenses are as follows:
The Board of Directors of Penterra authorized the payment of issuer expenses up to $765,000 pursuant to resolutions adopted on September 8, 2023. The SEC registration fee was not required to be paid in connection with this Offering because the applicable registration fee was previously paid at the time of the filing of the Form S-3 Shelf Registration Statement. Calderwood & Harkness's legal fees are subject to a capped fee arrangement of $485,000, exclusive of disbursements, negotiated at the time of the engagement.
VI. SETTLEMENT MECHANICS
Settlement of the base offering was effected through the facilities of The Depository Trust Company ("DTC") on October 17, 2023, the Closing Date, which was the third business day following the Trade Date of October 12, 2023 (T+3), in accordance with Rule 15c6-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
The settlement process was coordinated among the transfer agent, the underwriters, the Company, and the selling stockholders as follows:
Transfer Agent Facilitation. Pinnacle Trust & Transfer Co., as transfer agent and registrar for the Company's common stock, facilitated the book-entry delivery of 6,250,000 shares through DTC. Pinnacle Trust & Transfer Co. acted pursuant to a direction letter dated October 16, 2023 (the "Transfer Agent Direction Letter"), signed by David Orenstein on behalf of the Company, instructing the transfer agent to deliver the shares via DTC's book-entry system to the accounts of the several underwriters (or their respective DTC participant accounts) on the Closing Date.
DTC Eligibility. The DTC eligibility of the Company's common stock (CUSIP: 70831X 10 5) was confirmed by Pinnacle Trust & Transfer Co. prior to the Closing Date. The shares were held in book-entry form through DTC and were eligible for DTC's automated delivery-versus-payment settlement system.
Delivery Versus Payment. Settlement was effected on a delivery-versus-payment basis, with the simultaneous exchange of 6,250,000 shares of common stock and aggregate gross proceeds of $260,000,000 occurring through DTC's settlement system. The underwriters confirmed receipt of the shares and the selling stockholders (through their attorney-in-fact) confirmed receipt of the net proceeds on the Closing Date.
No physical stock certificates were issued in connection with the Offering. All shares were delivered in book-entry form through the facilities of DTC, consistent with the Company's policy of maintaining all shares of common stock in uncertificated, book-entry form.
VII. LOCK-UP WAIVER AND NEW LOCK-UP
A. IPO Lock-Up Waiver
In connection with the Company's initial public offering, which closed on April 17, 2023, each of the selling stockholders entered into 180-day lock-up agreements (the "IPO Lock-Up Agreements") restricting the sale, transfer, or other disposition of their shares of common stock for a period of 180 calendar days following the closing of the IPO. The original lock-up expiration date under the IPO Lock-Up Agreements was October 14, 2023 (i.e., 180 days from April 17, 2023).
The counterparties to the IPO Lock-Up Agreements were the three underwriters that participated in the Company's IPO: (i) Ridgeline Securities LLC, (ii) Broadmark Capital Inc., and (iii) Morningstar Zanthor & Co. It is noted that Morningstar Zanthor & Co. is not participating in the syndicate for the current secondary offering and served solely as a counterparty to the IPO Lock-Up Agreements.
Because the Pricing Date for the secondary offering was October 12, 2023 — two calendar days prior to the natural expiration of the IPO lock-up period — it was necessary to obtain early release waivers from each of the three IPO underwriters in order to permit the selling stockholders to enter into the Underwriting Agreement and commit to sell their shares on the Pricing Date. The chronology of the waiver process was as follows:
September 18, 2023: Lock-up waiver request letters were sent by the Company (with copies to the selling stockholders and their personal counsel, Whitfield & Garza LLP) to each of the three IPO underwriters requesting early release of the IPO lock-up solely with respect to the shares being sold in the secondary offering.
September 29, 2023: All three lock-up waiver consents were received, as follows:
•  Ridgeline Securities LLC — Consent letter dated September 29, 2023, signed by Jonathan Pryce-Hall, Managing Director.
•  Broadmark Capital Inc. — Consent letter dated September 29, 2023, signed by Samuel Okonkwo, Managing Director.
•  Morningstar Zanthor & Co. — Consent letter dated September 29, 2023, signed by Diane Chaudhary, Managing Director. As noted above, Morningstar Zanthor & Co. is not participating in the secondary offering syndicate but was required to consent as a counterparty to the IPO Lock-Up Agreements.
Each waiver was made effective as of October 12, 2023, solely with respect to the shares being sold in the secondary offering and the execution and delivery of the Underwriting Agreement and related transaction documents. The customary 14-day advance notice requirement applicable to early lock-up releases (typically required to allow for public disclosure prior to an anticipated offering) was waived by consent of the IPO underwriters given the de minimis gap between the Pricing Date (October 12, 2023) and the natural expiration of the IPO lock-up period (October 14, 2023) — a difference of only two calendar days.
B. New 90-Day Lock-Up (Secondary Offering)
In connection with the secondary offering, each of the selling stockholders executed new lock-up agreements (the "Secondary Lock-Up Agreements") in favor of Ridgeline Securities LLC and Broadmark Capital Inc. as representatives of the several underwriters. The Secondary Lock-Up Agreements restrict each selling stockholder from selling, transferring, hedging, pledging, or otherwise disposing of any retained shares of common stock of the Company for a period of 90 days following the Closing Date.
The key terms of the Secondary Lock-Up Agreements are as follows:
•  Lock-Up Period: 90 days from and including October 17, 2023 (the Closing Date)
•  Lock-Up Expiration Date: January 15, 2024
•  Restricted Securities: All shares of common stock of the Company beneficially owned by each selling stockholder that are not sold in the Offering (including any shares subject to the over-allotment option that are not ultimately sold)
•  Exceptions: Customary exceptions for estate planning transfers, charitable gifts, and certain other transfers subject to the transferee executing a lock-up agreement on substantially similar terms
•  Early Release: Subject to the discretion of the Representatives
The Secondary Lock-Up Agreements were executed on October 12, 2023, concurrently with the execution of the Underwriting Agreement, and were delivered at closing as a closing deliverable.
VIII. CONDITIONS PRECEDENT — CONFIRMATION OF SATISFACTION
A. Underwriting Agreement Conditions
All conditions precedent to the obligations of the underwriters to close the purchase of the shares, as set forth in the Underwriting Agreement dated October 12, 2023, were satisfied or waived as of the Closing on October 17, 2023. Calderwood & Harkness LLP, in its capacity as issuer's counsel, coordinated with Caldwell, Pearce & Strauss LLP (underwriters' counsel) to confirm that each condition precedent was satisfied and that each required closing deliverable was received in form and substance satisfactory to the underwriters and their counsel.
B. Deliverables Confirmed Received
The following closing deliverables were confirmed received on or prior to the Closing Date:
1. Officer's Certificate of Penterra. An Officer's Certificate of Penterra Pharmaceuticals Corp. dated October 17, 2023, signed by Dr. Marco Castellano in his capacity as Chief Executive Officer and Lisa Hargrove in her capacity as Chief Financial Officer. The Officer's Certificate certified: (i) the accuracy of the Company's representations and warranties set forth in the Underwriting Agreement as of the Closing Date; (ii) the Company's compliance with all covenants and agreements required to be performed or satisfied on or prior to the Closing Date; and (iii) the absence of any material adverse change in the condition (financial or otherwise), business, properties, or results of operations of the Company and its subsidiaries, taken as a whole, since the date of the most recent financial statements included or incorporated by reference in the prospectus supplement.
2. Secretary's Certificate of Penterra. A Secretary's Certificate of Penterra Pharmaceuticals Corp. dated October 17, 2023, signed by David Orenstein in his capacity as General Counsel and Corporate Secretary. The Secretary's Certificate certified: (i) the incumbency and signatures of the officers of the Company authorized to execute the Underwriting Agreement and other transaction documents; (ii) that attached thereto were true and complete copies of the Company's Restated Certificate of Incorporation (as amended) and Amended and Restated Bylaws, each as in effect on the Closing Date; and (iii) that attached thereto were true and complete copies of the resolutions of the Board of Directors adopted on September 8, 2023, authorizing the Company's cooperation with and participation in the secondary offering, including the execution of the Underwriting Agreement, the filing of the prospectus supplement, the delivery of opinions and certificates, and the payment of issuer expenses.
3. Good Standing Certificate. A Certificate of Good Standing for Penterra Pharmaceuticals Corp. issued by the Secretary of State of the State of Delaware dated October 16, 2023, confirming that the Company is in good standing under the laws of the State of Delaware.
4. Issuer's Counsel Legal Opinion. A legal opinion of Calderwood & Harkness LLP dated October 17, 2023, addressed to the underwriters, opining on the following matters: (i) the 6,250,000 shares of common stock being sold in the Offering have been duly authorized and are validly issued, fully paid, and non-assessable; (ii) the Company has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware; (iii) the execution, delivery, and performance of the Underwriting Agreement by the Company do not violate, conflict with, or result in a breach of the Company's Restated Certificate of Incorporation (as amended) or Amended and Restated Bylaws; and (iv) such other customary matters as are typically addressed in legal opinions rendered in connection with registered secondary offerings. The legal opinion was signed by Jennifer Kwon, Partner.
5. Issuer's Counsel Negative Assurance Letter (10b-5 Letter). A negative assurance letter (commonly referred to as a "10b-5 letter") of Calderwood & Harkness LLP dated October 17, 2023, addressed to the underwriters. The negative assurance letter stated that, based upon C&H's participation in the preparation of the registration statement, the base prospectus, and the prospectus supplement, and its review of certain corporate records and documents, attendance at due diligence sessions, and discussions with officers and other representatives of the Company and its independent auditors, nothing came to C&H's attention that caused it to believe that: (i) the registration statement, as of its effective date, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; or (ii) the prospectus supplement or the base prospectus, as of the date thereof and as of the Closing Date, contained an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
6. Comfort Letter of Graystone & Whitmore LLP. An initial comfort letter of Graystone & Whitmore LLP was delivered in connection with the filing of the preliminary prospectus supplement on October 2, 2023. A bring-down comfort letter of Graystone & Whitmore LLP dated October 17, 2023 was delivered on the Closing Date, confirming that: (i) no material changes had occurred since the date of the initial comfort letter; (ii) certain financial data in the prospectus supplement had been agreed to the Company's accounting records; and (iii) such other matters as are customarily addressed in comfort letters delivered in connection with registered public offerings. The bring-down comfort letter was signed by Thomas Reiter, Engagement Partner.
7. Selling Stockholder Certificates. Certificates dated October 17, 2023, executed by each of the selling stockholders (or by David Orenstein as attorney-in-fact for the selling stockholders pursuant to the Power of Attorney and Custody Agreement) certifying that: (i) the representations and warranties of the selling stockholders set forth in the Underwriting Agreement and in the Selling Stockholder Representation Letters remain true and correct in all material respects as of the Closing Date; (ii) each selling stockholder has complied with all covenants and agreements applicable to it under the Underwriting Agreement; and (iii) all conditions precedent to closing applicable to the selling stockholders have been satisfied.
8. Lock-Up Waiver Consents. All three lock-up waiver consents from the IPO underwriters were received and confirmed, as described in detail in Section VII.A above: (i) Ridgeline Securities LLC (consent dated September 29, 2023, signed by Jonathan Pryce-Hall); (ii) Broadmark Capital Inc. (consent dated September 29, 2023, signed by Samuel Okonkwo); and (iii) Morningstar Zanthor & Co. (consent dated September 29, 2023, signed by Diane Chaudhary).
9. New Lock-Up Agreements. Executed 90-day lock-up agreements (the Secondary Lock-Up Agreements) were received from each of the four selling stockholders, as described in detail in Section VII.B above. Each Secondary Lock-Up Agreement restricts the disposition of retained shares for 90 days from the Closing Date (through January 15, 2024).
10. Power of Attorney and Custody Agreement. The Power of Attorney and Custody Agreement dated October 12, 2023, executed by each selling stockholder, appointing David Orenstein as attorney-in-fact with authority to execute and deliver the Underwriting Agreement, closing certificates, and other transaction documents on behalf of the selling stockholders, and appointing Pinnacle Trust & Transfer Co. as custodian of the shares to be sold in the Offering pending settlement. The Power of Attorney and Custody Agreement also authorized David Orenstein to coordinate the receipt of wire instructions for the disbursement of net proceeds to the selling stockholders.
11. Transfer Agent Direction Letter. A direction letter from Penterra Pharmaceuticals Corp. to Pinnacle Trust & Transfer Co. dated October 16, 2023, signed by David Orenstein on behalf of the Company, instructing the transfer agent to effect the book-entry delivery of 6,250,000 shares of common stock through the facilities of DTC on the Closing Date in connection with the settlement of the Offering.
12. Underwriting Agreement (Execution Version). The fully executed Underwriting Agreement dated October 12, 2023 was received, bearing the signatures of: (i) Penterra Pharmaceuticals Corp., by Lisa Hargrove, Chief Financial Officer; (ii) each of the four selling stockholders (Dr. Elena Castellano, Dr. Riccardo Castellano, Dr. Marco Castellano, and Castellano Family Holdings LLC, by David Orenstein as attorney-in-fact); (iii) Ridgeline Securities LLC, by Jonathan Pryce-Hall, Managing Director; (iv) Broadmark Capital Inc., by Samuel Okonkwo, Managing Director; (v) Linden Groves & Co.; and (vi) Harborview Partners LLC. The Underwriting Agreement sets forth the terms and conditions of the Offering, the representations and warranties of the Company and the selling stockholders, the covenants of the parties, the conditions to closing, and the indemnification and contribution provisions.
13. Selling Stockholder Representation Letters. Selling Stockholder Representation Letters dated October 12, 2023, executed by each of the four selling stockholders (or by David Orenstein as attorney-in-fact). The representation letters contain representations and warranties by the selling stockholders with respect to: (i) beneficial ownership of the shares to be sold; (ii) authority to sell the shares (including the effectiveness of the lock-up waiver consents); (iii) absence of liens, encumbrances, or third-party claims on the shares; (iv) the accuracy of information provided by the selling stockholders for inclusion in the prospectus supplement; and (v) compliance with the terms and conditions of the lock-up waiver consents.
All closing deliverables were reviewed by Calderwood & Harkness LLP (issuer's counsel) and Caldwell, Pearce & Strauss LLP (underwriters' counsel), and all parties confirmed that the form and substance of each deliverable was satisfactory.
IX. SEC FILINGS SUMMARY
The following SEC filings were made in connection with the Offering:
All filings were prepared or reviewed by Calderwood & Harkness LLP and were timely filed with the SEC via EDGAR through Apex Financial Printing Inc. The timely filing of the Section 16 Form 4s for the individual selling stockholders is being monitored as a post-closing matter (see Section XIII below).
X. OVER-ALLOTMENT OPTION STATUS
In connection with the Offering, the selling stockholders granted the several underwriters a 30-day option (the "Over-Allotment Option") to purchase up to an additional 937,500 shares of common stock at the public offering price less the underwriting discount. The Over-Allotment Option was granted pursuant to Section 2 of the Underwriting Agreement and expires on November 11, 2023 (i.e., 30 days from the Pricing Date of October 12, 2023).
The allocation of the Over-Allotment Option shares among the selling stockholders is as follows:
If the Over-Allotment Option is exercised in full, the economic impact would be as follows:
•  Additional gross proceeds: 937,500 shares × $41.60 = $38,985,000 (note: 937,500 × $41.60 = $39,000,000; the prospectus supplement references "approximately $299.0 million" for the total offering inclusive of the over-allotment, consistent with 7,187,500 × $41.60 = $299,000,000)
•  Additional underwriting commission: 937,500 shares × $1.04 = $975,000
•  Additional net proceeds to selling stockholders: 937,500 shares × $40.56 = $38,025,000
If the Over-Allotment Option is exercised, the closing of the additional shares is expected to occur on or about November 16, 2023 (T+3 from anticipated exercise date), subject to satisfaction of applicable closing conditions and delivery of customary bring-down certificates and other deliverables.
As of the date of this memorandum (October 17, 2023), the Over-Allotment Option has not yet been exercised. Calderwood & Harkness LLP will continue to monitor the status of the Over-Allotment Option through its expiration date and will coordinate any additional closing deliverables if the option is exercised in whole or in part.
XI. POST-CLOSING OWNERSHIP SUMMARY
The following table sets forth the ownership positions of the Castellano family selling stockholders immediately following the closing of the base offering on October 17, 2023. The total shares of common stock outstanding remain unchanged at 120,000,000 shares, as no primary shares were issued in connection with the Offering.
The public float of the Company's common stock has increased as a result of the Offering. Prior to the Offering, the public float (shares outstanding minus Castellano family holdings) was approximately 79,900,000 shares (120,000,000 − 40,100,000). Following the closing of the base offering, the public float has increased to approximately 86,150,000 shares (120,000,000 − 33,850,000), representing an increase of 6,250,000 shares.
If the Over-Allotment Option is exercised in full, the combined Castellano family holdings would be further reduced to 32,912,500 shares (approximately 27.4% of shares outstanding), and the public float would increase to approximately 87,087,500 shares. It is noted that the total shares outstanding remain at 120,000,000 regardless of whether the Over-Allotment Option is exercised, as all shares sold in the Offering (including any over-allotment shares) are existing shares held by the selling stockholders and not newly issued shares.
XII. KEY TIMELINE RECAP
The following is a summary of the key dates and milestones in connection with the Offering:
XIII. OUTSTANDING ITEMS / POST-CLOSING MATTERS
The following items remain outstanding as of the date of this memorandum and require monitoring or further action by the Calderwood & Harkness deal team:
1. Over-Allotment Option Monitoring. Calderwood & Harkness will continue to monitor the Over-Allotment Option exercise period through its expiration on November 11, 2023. If the Over-Allotment Option is exercised in whole or in part by the underwriters, Calderwood & Harkness will coordinate the preparation and delivery of additional closing deliverables for the over-allotment closing, which is expected to occur on or about November 16, 2023 (T+3 from anticipated exercise date). Such additional deliverables would include, at a minimum, a bring-down officer's certificate, bring-down selling stockholder certificates, an updated transfer agent direction letter, and any other customary documents required under the Underwriting Agreement for an over-allotment closing.
2. Section 16 Form 4 Filings. The Section 16 Form 4 filings for the three individual selling stockholders who are Section 16 insiders — Dr. Elena Castellano (disposition of 3,000,000 shares), Dr. Riccardo Castellano (disposition of 2,500,000 shares), and Dr. Marco Castellano (disposition of 500,000 shares) — are due to be filed with the SEC within two business days of the Pricing Date (October 12, 2023). David Orenstein, the Company's General Counsel, is responsible for the preparation and filing of the Form 4s, but Calderwood & Harkness will confirm timely filing and flag any issues.
3. Closing Binder Compilation. Brendan Walsh will be responsible for the preparation and compilation of the closing binder, including the closing index and executed copies of all transaction documents and closing deliverables. Closing binder sets will be distributed to all parties in accordance with customary practice. The target completion date for the closing binder is October 27, 2023.
4. Lock-Up Compliance Monitoring. Calderwood & Harkness will monitor compliance with the new 90-day Secondary Lock-Up Agreements through the expiration date of January 15, 2024. Any requests for early release or transfer exceptions will be reviewed in consultation with the Representatives (Ridgeline Securities LLC and Broadmark Capital Inc.) and the Company.
5. Final Invoicing. Calderwood & Harkness will submit its final invoice under the capped fee arrangement of $485,000 (plus disbursements) upon the closing of the matter. If the Over-Allotment Option is exercised, the fee arrangement may be subject to adjustment as agreed with the Company. Final invoicing is expected upon matter close, currently anticipated for October 27, 2023 (absent over-allotment exercise).
XIV. DISTRIBUTION
This Closing Memorandum is privileged and confidential and constitutes attorney work product. It is being distributed solely to the following individuals:
Calderwood & Harkness LLP Deal Team:
•  Jennifer Kwon, Partner
•  Theodore Langston, Partner
•  Audrey Zhou, Senior Associate
•  Brendan Walsh, Associate
Penterra Pharmaceuticals Corp. (as appropriate, subject to privilege considerations):
•  David Orenstein, General Counsel and Corporate Secretary
•  Lisa Hargrove, Chief Financial Officer
This memorandum should not be distributed to any other persons without the prior written approval of Jennifer Kwon, and any distribution should be made in a manner consistent with the preservation of applicable attorney-client privilege and work product protections.
•            
Prepared by:
________________________________________
Audrey Zhou Senior Associate Calderwood & Harkness LLP
________________________________________
Brendan Walsh Associate Calderwood & Harkness LLP
Reviewed and Approved by:
________________________________________
Jennifer Kwon Partner Calderwood & Harkness LLP
Calderwood & Harkness LLP One Liberty Plaza, 52nd Floor New York, NY 10006
Date: October 17, 2023
Selling Stockholder | Relationship | Pre-Offering Shares | Base Shares Sold | Post-Offering Shares (Base) | Over-Allotment Allocation
Dr. Elena Castellano | Co-Founder, Board Chair | 14,200,000 | 3,000,000 | 11,200,000 | 450,000
Dr. Riccardo Castellano | Co-Founder, Board Member | 12,800,000 | 2,500,000 | 10,300,000 | 375,000
Dr. Marco Castellano | CEO | 4,500,000 | 500,000 | 4,000,000 | 75,000
Castellano Family Holdings LLC | Delaware LLC (EIN: 87-2165438) | 8,600,000 | 250,000 | 8,350,000 | 37,500
Total | 40,100,000 | 6,250,000 | 33,850,000 | 937,500
Item | Per Share | Aggregate (Base)
Public Offering Price | $41.60 | $260,000,000
Underwriting discount (2.50%) | $1.04 | $6,500,000
Net Price to Selling Stockholders | $40.56 | $253,500,000
Underwriter | Role | Allocation Percentage | Number of Shares | Commission Amount
Ridgeline Securities LLC | Lead Left Book-Runner | 45% | 2,812,500 | $2,925,000
Broadmark Capital Inc. | Joint Book-Runner | 30% | 1,875,000 | $1,950,000
Linden Groves & Co. | Co-Manager | 15% | 937,500 | $975,000
Harborview Partners LLC | Co-Manager | 10% | 625,000 | $650,000
Total | 100% | 6,250,000 | $6,500,000
Selling Stockholder | Shares Sold (Base) | Gross Proceeds ($41.60/share) | Less Underwriting discount ($1.04/share) | Net Proceeds ($40.56/share)
Dr. Elena Castellano | 3,000,000 | $124,800,000 | ($3,120,000) | $121,680,000
Dr. Riccardo Castellano | 2,500,000 | $104,000,000 | ($2,600,000) | $101,400,000
Dr. Marco Castellano | 500,000 | $20,800,000 | ($520,000) | $20,280,000
Castellano Family Holdings LLC | 250,000 | $10,400,000 | ($260,000) | $10,140,000
Total | 6,250,000 | $260,000,000 | ($6,500,000) | $253,500,000
Expense Category | Payee | Amount
SEC Registration Fee | SEC (previously paid with Form S-3 shelf filing) | $0
Nasdaq Listing Fee | The Nasdaq Stock Market LLC | $45,000
Legal Fees | Calderwood & Harkness LLP (capped fee arrangement) | $485,000 (est.)
Accounting Fees (Comfort Letter) | Graystone & Whitmore LLP | $175,000
Printing | Apex Financial Printing Inc. | $35,000
Miscellaneous (filing fees, messenger, etc.) | Various | $25,000
Total Issuer Expenses | $765,000
Filing | Date | Description
Form S-3 Shelf Registration Statement (File No. 333-274851) | Declared effective August 22, 2023 | Base shelf registration statement, registering an indeterminate amount of securities for primary and secondary offerings by the Company and/or selling stockholders
Preliminary Prospectus Supplement | Filed October 2, 2023 | Preliminary supplement to the base prospectus setting forth the terms of the proposed secondary offering, the identity of the selling stockholders, and estimated pricing information; used in connection with the road show and marketing period
Final Prospectus Supplement (Rule 424(b)(5)) | Filed October 12, 2023 | Final supplement to the base prospectus filed pursuant to Rule 424(b)(5) under the Securities Act, setting forth the final pricing terms, including the public offering price of $41.60 per share, the underwriting discount, and the net proceeds to selling stockholders
Issuer Free Writing Prospectus (Pricing Term Sheet) | Filed October 12, 2023 pursuant to Rule 433 | Pricing term sheet setting forth the final pricing terms of the Offering, filed as a free writing prospectus with the SEC pursuant to Rule 433 under the Securities Act
Form 8-K (Current Report) | Filed October 12, 2023 | Current report on Form 8-K filed under Item 8.01 (Other Events) reporting the Company's entry into the Underwriting Agreement in connection with the registered selling-stockholder secondary offering
Section 16 Form 4 Filings | Due within two business days of October 12, 2023 | Form 4 filings reporting the disposition of shares by the three individual selling stockholders who are Section 16 insiders: Dr. Elena Castellano (disposition of 3,000,000 shares), Dr. Riccardo Castellano (disposition of 2,500,000 shares), and Dr. Marco Castellano (disposition of 500,000 shares). Note: Castellano Family Holdings LLC may also be required to file a Form 4 or amendment to Schedule 13D, depending on its reporting status
Selling Stockholder | Over-Allotment Allocation (Shares)
Dr. Elena Castellano | 450,000
Dr. Riccardo Castellano | 375,000
Dr. Marco Castellano | 75,000
Castellano Family Holdings LLC | 37,500
Total | 937,500
Stockholder | Pre-Offering Shares | Base Shares Sold | Post-Offering Shares (Base) | Post-Offering % (Base, approx.)
Dr. Elena Castellano | 14,200,000 | 3,000,000 | 11,200,000 | 9.3%
Dr. Riccardo Castellano | 12,800,000 | 2,500,000 | 10,300,000 | 8.6%
Dr. Marco Castellano | 4,500,000 | 500,000 | 4,000,000 | 3.3%
Castellano Family Holdings LLC | 8,600,000 | 250,000 | 8,350,000 | 7.0%
Family Total | 40,100,000 | 6,250,000 | 33,850,000 | ~28.2%
Date | Event
September 5, 2023 | Engagement opened at Calderwood & Harkness LLP; new matter initiated
September 8, 2023 | Board of Directors of Penterra adopted resolutions authorizing cooperation with the secondary offering, execution of the Underwriting Agreement, filing of the prospectus supplement, and payment of issuer expenses up to $765,000
September 11, 2023 | Initial confidential draft of the prospectus supplement circulated to the working group for review and comment
September 12, 2023 | Organizational call held among all working group participants, including issuer's counsel, underwriters' counsel, the Company, the selling stockholders' personal counsel, and the lead book-runner
September 18, 2023 | Lock-up waiver request letters sent to the three IPO syndicate underwriters (Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co.)
September 29, 2023 | All three lock-up waiver consents received from the IPO underwriters
October 2, 2023 | Preliminary prospectus supplement filed with the SEC via EDGAR
October 9–11, 2023 | Road show and marketing period conducted by the selling stockholders, accompanied by Company management, with the support of Ridgeline Securities LLC and Broadmark Capital Inc.
October 12, 2023 | Pricing of the Offering at $41.60 per share; Underwriting Agreement executed; trade date (T); Final Prospectus Supplement filed pursuant to Rule 424(b)(5); Pricing Term Sheet filed pursuant to Rule 433; Form 8-K filed reporting entry into Underwriting Agreement
October 14, 2023 | Original IPO lock-up expiration date (180 days from April 17, 2023 IPO closing)
October 16, 2023 | Good standing certificate obtained from the Delaware Secretary of State; Transfer Agent Direction Letter sent to Pinnacle Trust & Transfer Co.
October 17, 2023 | Settlement / Closing Date (T+3): all closing deliverables received; book-entry delivery of 6,250,000 shares effected through DTC; net proceeds of $253,500,000 disbursed to selling stockholders
November 11, 2023 | Over-Allotment Option exercise deadline (30 days from Pricing Date)
November 16, 2023 | Anticipated over-allotment closing date (T+3 from anticipated exercise date), if the Over-Allotment Option is exercised
January 15, 2024 | Expiration of the new 90-day Secondary Lock-Up Agreements
October 27, 2023 | Anticipated matter close date (assuming no Over-Allotment Option exercise or following final over-allotment closing)

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT

CLOSING MEMORANDUM

I. INTRODUCTION AND TRANSACTION OVERVIEW

II. PARTIES

III. PRICING SUMMARY

IV. UNDERWRITING COMMISSION ALLOCATION

V. FUNDS FLOW

VI. SETTLEMENT MECHANICS

VII. LOCK-UP WAIVER AND NEW LOCK-UP

IX. SEC FILINGS SUMMARY

X. OVER-ALLOTMENT OPTION STATUS

XI. POST-CLOSING OWNERSHIP SUMMARY

XII. KEY TIMELINE RECAP

XIII. OUTSTANDING ITEMS / POST-CLOSING MATTERS

XIV. DISTRIBUTION

Record

Parties

Dates

Amounts