1018-00001 · Client 1018 · Closing Documents

selling-stockholder-certificate.docx DOCUMENT Capital Markets

5 / 35 ← → ✕

SELLING STOCKHOLDER CERTIFICATE

Penterra Pharmaceuticals Corp.

Selling Stockholder Secondary Offering of 6,250,000 Shares of Common Stock

October 17, 2023

This Selling Stockholder Certificate (this "Certificate") is delivered in connection with the Underwriting Agreement dated as of October 12, 2023 (the "Underwriting Agreement"), among Penterra Pharmaceuticals Corp., a Delaware corporation (the "Company"), the selling stockholders named therein (collectively, the "Selling Stockholders"), and the several underwriters named in Schedule I thereto (the "Underwriters"), for whom Ridgeline Securities LLC and Broadmark Capital Inc. are acting as representatives (the "Representatives"). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Underwriting Agreement.

1. Identity of Certifying Party and Capacity

This Certificate is executed and delivered by David Orenstein, in his capacity as attorney-in-fact for each of the Selling Stockholders identified below, pursuant to that certain Power of Attorney and Custody Agreement dated as of October 12, 2023 (the "POA"), duly executed by each such Selling Stockholder and delivered to the Representatives and the Company in connection with the Underwriting Agreement. Mr. Orenstein hereby certifies that the POA remains in full force and effect and has not been revoked, amended, or modified in any respect as of the date hereof.

The Selling Stockholders on whose behalf this Certificate is executed, and the number of shares of common stock, par value $0.001 per share, of the Company ("Common Stock") being sold by each such Selling Stockholder at the Closing (as defined in the Underwriting Agreement), are as follows:

(a) Dr. Elena Castellano — selling 3,000,000 shares of Common Stock;

(b) Dr. Riccardo Castellano — selling 2,500,000 shares of Common Stock;

(d) Castellano Family Holdings LLC, a Delaware limited liability company — selling 250,000 shares of Common Stock.

The aggregate number of shares of Common Stock being sold by the Selling Stockholders at the Closing is 6,250,000 shares (the "Firm Shares"). In addition, pursuant to Section 2(b) of the Underwriting Agreement, the Selling Stockholders have granted to the Underwriters an option, exercisable for a period of 30 days from the date of the Prospectus Supplement, to purchase up to an additional 937,500 shares of Common Stock (the "Option Shares" and, together with the Firm Shares, the "Shares") solely to cover over-allotments, if any. The allocation of Option Shares among the Selling Stockholders is set forth in Section 7 of this Certificate.

This Certificate is delivered pursuant to Section 7(h) of the Underwriting Agreement as a condition precedent to the obligations of the Underwriters to purchase and pay for the Firm Shares at the Closing scheduled for October 17, 2023 (the "Closing Date").

2. Certification Regarding Representations and Warranties in the Underwriting Agreement

Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that all representations and warranties of such Selling Stockholder set forth in the Underwriting Agreement dated as of October 12, 2023 are true and correct in all material respects as of the date hereof, October 17, 2023, with the same force and effect as though expressly made on and as of such date, except for those representations and warranties that by their terms speak as of a specific date or time, which representations and warranties are certified to be true and correct in all material respects as of such specified date or time.

Without limiting the generality of the foregoing, each Selling Stockholder specifically certifies that the following representations and warranties, among others, as set forth in the Underwriting Agreement, remain true and correct in all material respects as of the date hereof:

(i) Beneficial Ownership of Shares. Each Selling Stockholder is the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of the number of shares of Common Stock set forth opposite such Selling Stockholder's name in Section 7 of this Certificate, and has the full right, power, and authority to sell, assign, transfer, and deliver such Selling Stockholder's portion of the Firm Shares (and, if applicable, Option Shares) as contemplated by the Underwriting Agreement.

(ii) Due Authorization and Valid Execution. Each Selling Stockholder has duly authorized, executed, and delivered the Underwriting Agreement, the POA, and the Custody Agreement, and each such agreement constitutes a legal, valid, and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

(iii) Absence of Liens, Encumbrances, or Restrictions. The shares of Common Stock being sold by each Selling Stockholder hereunder are free and clear of all liens, encumbrances, equities, claims, security interests, pledges, mortgages, charges, restrictions on transfer, or other defects of title of any nature whatsoever, and no such liens, encumbrances, or other defects have arisen or been created since the date of the Underwriting Agreement.

(iv) No Conflicts. The execution, delivery, and performance by each Selling Stockholder of the Underwriting Agreement, the POA, and the Custody Agreement, and the consummation of the transactions contemplated thereby, including the sale and delivery of the Firm Shares (and, if applicable, Option Shares), do not and will not (A) violate any provision of applicable federal, state, local, or foreign law, statute, rule, regulation, order, judgment, or decree applicable to such Selling Stockholder, (B) conflict with or result in a breach of, or constitute a default under, any agreement, contract, indenture, mortgage, deed of trust, loan agreement, lease, or other instrument to which such Selling Stockholder is a party or by which such Selling Stockholder or any of such Selling Stockholder's properties may be bound, or (C) result in the creation or imposition of any lien, encumbrance, or restriction upon any of the shares of Common Stock being sold by such Selling Stockholder.

3. Certification Regarding Representations and Warranties in the Selling Stockholder Representation Letter

Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that all representations, warranties, and statements made by such Selling Stockholder in the Selling Stockholder Representation Letter dated as of October 12, 2023, addressed to the Company and the Underwriters and delivered in connection with the offering (the "Representation Letter"), are true and correct in all material respects as of the date hereof, October 17, 2023, with the same force and effect as though expressly made on and as of such date.

Without limiting the generality of the foregoing, each Selling Stockholder specifically confirms and certifies as follows:

(i) Accuracy of Prospectus Disclosure. All information furnished by, or on behalf of, the Selling Stockholders expressly for use in, or inclusion in, the Prospectus Supplement dated October 12, 2023 (filed with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Securities Act")) and the base prospectus forming part of the Registration Statement on Form S-3 (File No. 333-274851) (together, the "Prospectus"), as of the date of the Prospectus Supplement, as of the date of this Certificate, and as of the Closing Date, did not and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No event has occurred or condition exists that would require any supplement or amendment to the Prospectus with respect to information relating to the Selling Stockholders.

(ii) Accuracy of Selling Stockholder Table. The selling stockholder table included in the Prospectus Supplement accurately reflects, as of the applicable determination date, the beneficial ownership of Common Stock by each Selling Stockholder, including the number of shares of Common Stock beneficially owned prior to the offering, the number of Firm Shares and Option Shares being offered, and the number of shares of Common Stock to be beneficially owned after the offering (assuming both no exercise and full exercise of the over-allotment option). No changes in beneficial ownership have occurred since the date of the Prospectus Supplement that have not been disclosed to the Company and the Representatives.

(iii) Lock-Up Waiver Compliance. Each Selling Stockholder has fully complied with, and is currently in compliance with, all terms, conditions, and limitations of the lock-up waiver granted by Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co., effective as of October 12, 2023 (the "Lock-Up Waiver"), which permitted the Selling Stockholders to sell the Shares in the offering notwithstanding the lock-up agreements previously entered into in connection with the Company's initial public offering. Each Selling Stockholder confirms that the sale of the Shares is the only transaction that has been, or will be, effected pursuant to, or in reliance upon, the Lock-Up Waiver, and that no Selling Stockholder has engaged in any hedging, short sale, or other transaction that would be inconsistent with the terms of the Lock-Up Waiver.

4. Certification Regarding Compliance with Covenants and Agreements

Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that such Selling Stockholder has duly performed and complied with all covenants, agreements, obligations, and conditions set forth in, or arising under, the Underwriting Agreement that are required to be performed or complied with by such Selling Stockholder at or prior to the Closing Date, October 17, 2023.

Without limiting the generality of the foregoing, each Selling Stockholder specifically certifies that the following covenants and agreements have been duly performed and complied with:

(a) Delivery of Firm Shares. Each Selling Stockholder has duly delivered, or caused to be delivered, such Selling Stockholder's allocable portion of the Firm Shares in book-entry form through the facilities of The Depository Trust Company ("DTC") (CUSIP No. 70831X 10 5) for the accounts of the several Underwriters, in accordance with the settlement instructions provided by the Representatives, and such delivery has been confirmed by DTC on or before 10:00 a.m., Eastern Time, on the Closing Date.

(b) Execution and Delivery of Lock-Up Agreement. Each Selling Stockholder has duly executed and delivered a new lock-up agreement dated as of October 17, 2023 (the "New Lock-Up Agreement") in favor of the Representatives, pursuant to which each Selling Stockholder has agreed not to, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale of, or otherwise dispose of, or enter into any hedging or similar transaction with respect to, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock beneficially owned by such Selling Stockholder (other than the Firm Shares and, if applicable, Option Shares sold in the offering) for a period of 90 days following the date of the Prospectus Supplement, through and including January 15, 2024, without the prior written consent of the Representatives, subject to customary exceptions set forth in the New Lock-Up Agreement.

(c) Cooperation. Each Selling Stockholder has cooperated fully with the Company and the Underwriters in connection with the preparation of the Registration Statement, the Prospectus Supplement, and any amendments or supplements thereto, and in connection with the marketing and closing of the offering, including by providing such information, documents, and certifications as have been reasonably requested by the Company, the Underwriters, and their respective counsel.

(d) Payment of Underwriting discount. Each Selling Stockholder acknowledges and confirms that the Underwriters are entitled to deduct from the proceeds of the sale of the Firm Shares (and, if applicable, Option Shares) an underwriting discount of $1.04 per share, representing 2.50% of the public offering price of $41.60 per share, and that the net proceeds per share payable to the Selling Stockholders (before deduction of certain expenses) equal $40.56 per share. Each Selling Stockholder has authorized the Custodian (as defined in the Custody Agreement) to release from the custodial account the portion of the aggregate underwriting discount allocable to such Selling Stockholder's Firm Shares for payment to the Underwriters at the Closing.

5. Certification Regarding Conditions to Closing

Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that, to the knowledge of such Selling Stockholder (after reasonable inquiry), all conditions precedent to the obligations of the Underwriters to purchase and pay for the Firm Shares at the Closing, as set forth in Section 7 of the Underwriting Agreement, that are required to be satisfied by the Selling Stockholders or that relate to actions or circumstances within the control of, or knowledge of, the Selling Stockholders, have been duly satisfied as of the date hereof.

In addition, each Selling Stockholder certifies as follows:

(a) No Stop Order. To the knowledge of each Selling Stockholder, no stop order suspending the effectiveness of the Registration Statement on Form S-3 (File No. 333-274851) has been issued by the SEC, and no proceedings for that purpose or pursuant to Section 8A of the Securities Act have been initiated, pending, or, to the knowledge of such Selling Stockholder, threatened by the SEC as of the date hereof.

(b) No Material Adverse Effect. To the knowledge of each Selling Stockholder, no Material Adverse Effect (as defined in Section 1(a) of the Underwriting Agreement) has occurred with respect to the Company or its subsidiaries since the date of the most recent audited and unaudited financial statements of the Company included or incorporated by reference in the Prospectus Supplement, whether or not arising in the ordinary course of business. Each Selling Stockholder acknowledges that this certification is being made based on such Selling Stockholder's knowledge as a stockholder of the Company and not in any capacity as an officer, director, or employee of the Company (except to the extent that any individual Selling Stockholder also serves in such capacity).

6. Certification Regarding No Encumbrances

Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that, as of the Closing Date, October 17, 2023, each Selling Stockholder has good and valid title to all shares of Common Stock being sold by such Selling Stockholder pursuant to the Underwriting Agreement, free and clear of all liens, encumbrances, equities, claims, security interests, pledges, mortgages, charges, restrictions on transfer, community property interests, preemptive rights, rights of first refusal, or other defects of title of any nature whatsoever, other than restrictions arising under federal and state securities laws. No shares of Common Stock being sold by any Selling Stockholder at the Closing are subject to any voting trust, voting agreement, stockholders' agreement, proxy, or other arrangement or understanding with respect to the voting, sale, transfer, or other disposition thereof that would impair or restrict the sale and delivery of such shares as contemplated by the Underwriting Agreement.

Upon delivery of the Firm Shares (and, if applicable, Option Shares) in book-entry form through the facilities of DTC and payment of the purchase price therefor by the several Underwriters in accordance with the terms of the Underwriting Agreement, each Underwriter will receive good and valid title to the shares of Common Stock purchased by such Underwriter, free and clear of all liens, encumbrances, equities, claims, security interests, pledges, mortgages, charges, restrictions on transfer, or other defects of title of any nature whatsoever, other than restrictions arising under federal and state securities laws and any liens, encumbrances, or defects of title created by or through the actions of such Underwriter.

7. Share Ownership Confirmation

The following table sets forth certain information with respect to the beneficial ownership of Common Stock by each Selling Stockholder, including (i) the number of shares of Common Stock beneficially owned prior to the offering, (ii) the number of Firm Shares being offered at the Closing, (iii) the number of Option Shares subject to the over-allotment option, and (iv) the number of shares of Common Stock to be beneficially owned after the offering assuming full exercise of the over-allotment option. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and the information is not necessarily indicative of beneficial ownership for any other purpose.

Each Selling Stockholder confirms that the information set forth in the table above is accurate and complete in all material respects as of the Closing Date. The pre-offering beneficial ownership figures set forth above include shares held directly by each Selling Stockholder and do not include shares that may be deemed beneficially owned by such Selling Stockholder by reason of the beneficial ownership of shares by other Selling Stockholders or by reason of shared voting or dispositive power, except to the extent reported in the Prospectus Supplement. The post-offering beneficial ownership figures assume the sale of all Firm Shares and the full exercise of the over-allotment option and the sale of all Option Shares, and do not reflect any shares of Common Stock that may be acquired or disposed of by any Selling Stockholder after the date hereof.

8. Reliance

This Certificate is furnished to the Underwriters, namely Ridgeline Securities LLC, Broadmark Capital Inc., Linden Groves & Co., and Harborview Partners LLC, and to the Company, Penterra Pharmaceuticals Corp., in connection with the Closing under the Underwriting Agreement. This Certificate may be relied upon by the Underwriters and the Company, and by their respective counsel — Caldwell, Pearce & Strauss LLP (counsel to the Underwriters) and Calderwood & Harkness LLP (counsel to the Company) — in connection with the consummation of the transactions contemplated by the Underwriting Agreement, including the purchase and sale of the Firm Shares at the Closing and any subsequent purchase and sale of Option Shares, and in rendering the opinions and negative assurance letters required to be delivered at the Closing pursuant to the Underwriting Agreement.

The undersigned acknowledges that the Underwriters are entering into the Underwriting Agreement and purchasing the Firm Shares in reliance upon, among other things, the certifications, representations, and warranties of the Selling Stockholders contained in this Certificate, the Underwriting Agreement, and the Representation Letter, and that the accuracy of such certifications, representations, and warranties is a condition precedent to the obligations of the Underwriters under the Underwriting Agreement.

[Signature Page Follows]

[SIGNATURE PAGE TO SELLING STOCKHOLDER CERTIFICATE]

IN WITNESS WHEREOF, the undersigned has executed this Selling Stockholder Certificate as of October 17, 2023.

SELLING STOCKHOLDERS:

By: ________

Name: David Orenstein

Title: Attorney-in-Fact for each of the following Selling Stockholders, pursuant to the Power of Attorney and Custody Agreement dated October 12, 2023:

— Dr. Elena Castellano — Dr. Riccardo Castellano — Dr. Marco Castellano — Castellano Family Holdings LLC

CASTELLANO FAMILY HOLDINGS LLC

By: ________

Name: David Orenstein

Title: Attorney-in-Fact

Address for Notices:

c/o Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, New Jersey 08540

Attention: General Counsel

Telephone: (609) 555-4200

With a copy (which shall not constitute notice) to:

Whitfield & Garza LLP 590 Madison Avenue, 28th Floor New York, New York 10022

Attention: Patricia Velázquez, Esq.

Telephone: (212) 555-7800 Facsimile: (212) 555-7801

Email: pvelazquez@whitfieldgarza.com

Selling Stockholder	Shares Beneficially Owned Pre-Offering	Firm Shares Offered	Over-Allotment Shares	Shares Beneficially Owned Post-Offering (Full Exercise)
Dr. Elena Castellano	14,200,000	3,000,000	450,000	10,750,000
Dr. Riccardo Castellano	12,800,000	2,500,000	375,000	9,925,000
Dr. Marco Castellano	4,500,000	500,000	75,000	3,925,000
Castellano Family Holdings LLC	8,600,000	250,000	37,500	8,312,500
Total	40,100,000	6,250,000	937,500	32,912,500

SELLING STOCKHOLDER CERTIFICATE
Penterra Pharmaceuticals Corp.
Selling Stockholder Secondary Offering of 6,250,000 Shares of Common Stock
October 17, 2023
This Selling Stockholder Certificate (this "Certificate") is delivered in connection with the Underwriting Agreement dated as of October 12, 2023 (the "Underwriting Agreement"), among Penterra Pharmaceuticals Corp., a Delaware corporation (the "Company"), the selling stockholders named therein (collectively, the "Selling Stockholders"), and the several underwriters named in Schedule I thereto (the "Underwriters"), for whom Ridgeline Securities LLC and Broadmark Capital Inc. are acting as representatives (the "Representatives"). Capitalized terms used but not defined herein shall have the respective meanings ascribed to such terms in the Underwriting Agreement.
1. Identity of Certifying Party and Capacity
This Certificate is executed and delivered by David Orenstein, in his capacity as attorney-in-fact for each of the Selling Stockholders identified below, pursuant to that certain Power of Attorney and Custody Agreement dated as of October 12, 2023 (the "POA"), duly executed by each such Selling Stockholder and delivered to the Representatives and the Company in connection with the Underwriting Agreement. Mr. Orenstein hereby certifies that the POA remains in full force and effect and has not been revoked, amended, or modified in any respect as of the date hereof.
The Selling Stockholders on whose behalf this Certificate is executed, and the number of shares of common stock, par value $0.001 per share, of the Company ("Common Stock") being sold by each such Selling Stockholder at the Closing (as defined in the Underwriting Agreement), are as follows:
(a) Dr. Elena Castellano — selling 3,000,000 shares of Common Stock;
(b) Dr. Riccardo Castellano — selling 2,500,000 shares of Common Stock;
(c) Dr. Marco Castellano — selling 500,000 shares of Common Stock; and
(d) Castellano Family Holdings LLC, a Delaware limited liability company — selling 250,000 shares of Common Stock.
The aggregate number of shares of Common Stock being sold by the Selling Stockholders at the Closing is 6,250,000 shares (the "Firm Shares"). In addition, pursuant to Section 2(b) of the Underwriting Agreement, the Selling Stockholders have granted to the Underwriters an option, exercisable for a period of 30 days from the date of the Prospectus Supplement, to purchase up to an additional 937,500 shares of Common Stock (the "Option Shares" and, together with the Firm Shares, the "Shares") solely to cover over-allotments, if any. The allocation of Option Shares among the Selling Stockholders is set forth in Section 7 of this Certificate.
This Certificate is delivered pursuant to Section 7(h) of the Underwriting Agreement as a condition precedent to the obligations of the Underwriters to purchase and pay for the Firm Shares at the Closing scheduled for October 17, 2023 (the "Closing Date").
2. Certification Regarding Representations and Warranties in the Underwriting Agreement
Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that all representations and warranties of such Selling Stockholder set forth in the Underwriting Agreement dated as of October 12, 2023 are true and correct in all material respects as of the date hereof, October 17, 2023, with the same force and effect as though expressly made on and as of such date, except for those representations and warranties that by their terms speak as of a specific date or time, which representations and warranties are certified to be true and correct in all material respects as of such specified date or time.
Without limiting the generality of the foregoing, each Selling Stockholder specifically certifies that the following representations and warranties, among others, as set forth in the Underwriting Agreement, remain true and correct in all material respects as of the date hereof:
(i) Beneficial Ownership of Shares. Each Selling Stockholder is the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of the number of shares of Common Stock set forth opposite such Selling Stockholder's name in Section 7 of this Certificate, and has the full right, power, and authority to sell, assign, transfer, and deliver such Selling Stockholder's portion of the Firm Shares (and, if applicable, Option Shares) as contemplated by the Underwriting Agreement.
(ii) Due Authorization and Valid Execution. Each Selling Stockholder has duly authorized, executed, and delivered the Underwriting Agreement, the POA, and the Custody Agreement, and each such agreement constitutes a legal, valid, and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and similar laws affecting creditors' rights generally, and subject, as to enforceability, to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
(iii) Absence of Liens, Encumbrances, or Restrictions. The shares of Common Stock being sold by each Selling Stockholder hereunder are free and clear of all liens, encumbrances, equities, claims, security interests, pledges, mortgages, charges, restrictions on transfer, or other defects of title of any nature whatsoever, and no such liens, encumbrances, or other defects have arisen or been created since the date of the Underwriting Agreement.
(iv) No Conflicts. The execution, delivery, and performance by each Selling Stockholder of the Underwriting Agreement, the POA, and the Custody Agreement, and the consummation of the transactions contemplated thereby, including the sale and delivery of the Firm Shares (and, if applicable, Option Shares), do not and will not (A) violate any provision of applicable federal, state, local, or foreign law, statute, rule, regulation, order, judgment, or decree applicable to such Selling Stockholder, (B) conflict with or result in a breach of, or constitute a default under, any agreement, contract, indenture, mortgage, deed of trust, loan agreement, lease, or other instrument to which such Selling Stockholder is a party or by which such Selling Stockholder or any of such Selling Stockholder's properties may be bound, or (C) result in the creation or imposition of any lien, encumbrance, or restriction upon any of the shares of Common Stock being sold by such Selling Stockholder.
3. Certification Regarding Representations and Warranties in the Selling Stockholder Representation Letter
Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that all representations, warranties, and statements made by such Selling Stockholder in the Selling Stockholder Representation Letter dated as of October 12, 2023, addressed to the Company and the Underwriters and delivered in connection with the offering (the "Representation Letter"), are true and correct in all material respects as of the date hereof, October 17, 2023, with the same force and effect as though expressly made on and as of such date.
Without limiting the generality of the foregoing, each Selling Stockholder specifically confirms and certifies as follows:
(i) Accuracy of Prospectus Disclosure. All information furnished by, or on behalf of, the Selling Stockholders expressly for use in, or inclusion in, the Prospectus Supplement dated October 12, 2023 (filed with the Securities and Exchange Commission (the "SEC") pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Securities Act")) and the base prospectus forming part of the Registration Statement on Form S-3 (File No. 333-274851) (together, the "Prospectus"), as of the date of the Prospectus Supplement, as of the date of this Certificate, and as of the Closing Date, did not and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No event has occurred or condition exists that would require any supplement or amendment to the Prospectus with respect to information relating to the Selling Stockholders.
(ii) Accuracy of Selling Stockholder Table. The selling stockholder table included in the Prospectus Supplement accurately reflects, as of the applicable determination date, the beneficial ownership of Common Stock by each Selling Stockholder, including the number of shares of Common Stock beneficially owned prior to the offering, the number of Firm Shares and Option Shares being offered, and the number of shares of Common Stock to be beneficially owned after the offering (assuming both no exercise and full exercise of the over-allotment option). No changes in beneficial ownership have occurred since the date of the Prospectus Supplement that have not been disclosed to the Company and the Representatives.
(iii) Lock-Up Waiver Compliance. Each Selling Stockholder has fully complied with, and is currently in compliance with, all terms, conditions, and limitations of the lock-up waiver granted by Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co., effective as of October 12, 2023 (the "Lock-Up Waiver"), which permitted the Selling Stockholders to sell the Shares in the offering notwithstanding the lock-up agreements previously entered into in connection with the Company's initial public offering. Each Selling Stockholder confirms that the sale of the Shares is the only transaction that has been, or will be, effected pursuant to, or in reliance upon, the Lock-Up Waiver, and that no Selling Stockholder has engaged in any hedging, short sale, or other transaction that would be inconsistent with the terms of the Lock-Up Waiver.
4. Certification Regarding Compliance with Covenants and Agreements
Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that such Selling Stockholder has duly performed and complied with all covenants, agreements, obligations, and conditions set forth in, or arising under, the Underwriting Agreement that are required to be performed or complied with by such Selling Stockholder at or prior to the Closing Date, October 17, 2023.
Without limiting the generality of the foregoing, each Selling Stockholder specifically certifies that the following covenants and agreements have been duly performed and complied with:
(a) Delivery of Firm Shares. Each Selling Stockholder has duly delivered, or caused to be delivered, such Selling Stockholder's allocable portion of the Firm Shares in book-entry form through the facilities of The Depository Trust Company ("DTC") (CUSIP No. 70831X 10 5) for the accounts of the several Underwriters, in accordance with the settlement instructions provided by the Representatives, and such delivery has been confirmed by DTC on or before 10:00 a.m., Eastern Time, on the Closing Date.
(b) Execution and Delivery of Lock-Up Agreement. Each Selling Stockholder has duly executed and delivered a new lock-up agreement dated as of October 17, 2023 (the "New Lock-Up Agreement") in favor of the Representatives, pursuant to which each Selling Stockholder has agreed not to, directly or indirectly, offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale of, or otherwise dispose of, or enter into any hedging or similar transaction with respect to, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for shares of Common Stock beneficially owned by such Selling Stockholder (other than the Firm Shares and, if applicable, Option Shares sold in the offering) for a period of 90 days following the date of the Prospectus Supplement, through and including January 15, 2024, without the prior written consent of the Representatives, subject to customary exceptions set forth in the New Lock-Up Agreement.
(c) Cooperation. Each Selling Stockholder has cooperated fully with the Company and the Underwriters in connection with the preparation of the Registration Statement, the Prospectus Supplement, and any amendments or supplements thereto, and in connection with the marketing and closing of the offering, including by providing such information, documents, and certifications as have been reasonably requested by the Company, the Underwriters, and their respective counsel.
(d) Payment of Underwriting discount. Each Selling Stockholder acknowledges and confirms that the Underwriters are entitled to deduct from the proceeds of the sale of the Firm Shares (and, if applicable, Option Shares) an underwriting discount of $1.04 per share, representing 2.50% of the public offering price of $41.60 per share, and that the net proceeds per share payable to the Selling Stockholders (before deduction of certain expenses) equal $40.56 per share. Each Selling Stockholder has authorized the Custodian (as defined in the Custody Agreement) to release from the custodial account the portion of the aggregate underwriting discount allocable to such Selling Stockholder's Firm Shares for payment to the Underwriters at the Closing.
5. Certification Regarding Conditions to Closing
Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that, to the knowledge of such Selling Stockholder (after reasonable inquiry), all conditions precedent to the obligations of the Underwriters to purchase and pay for the Firm Shares at the Closing, as set forth in Section 7 of the Underwriting Agreement, that are required to be satisfied by the Selling Stockholders or that relate to actions or circumstances within the control of, or knowledge of, the Selling Stockholders, have been duly satisfied as of the date hereof.
In addition, each Selling Stockholder certifies as follows:
(a) No Stop Order. To the knowledge of each Selling Stockholder, no stop order suspending the effectiveness of the Registration Statement on Form S-3 (File No. 333-274851) has been issued by the SEC, and no proceedings for that purpose or pursuant to Section 8A of the Securities Act have been initiated, pending, or, to the knowledge of such Selling Stockholder, threatened by the SEC as of the date hereof.
(b) No Material Adverse Effect. To the knowledge of each Selling Stockholder, no Material Adverse Effect (as defined in Section 1(a) of the Underwriting Agreement) has occurred with respect to the Company or its subsidiaries since the date of the most recent audited and unaudited financial statements of the Company included or incorporated by reference in the Prospectus Supplement, whether or not arising in the ordinary course of business. Each Selling Stockholder acknowledges that this certification is being made based on such Selling Stockholder's knowledge as a stockholder of the Company and not in any capacity as an officer, director, or employee of the Company (except to the extent that any individual Selling Stockholder also serves in such capacity).
6. Certification Regarding No Encumbrances
Each Selling Stockholder, acting through his, her, or its duly authorized attorney-in-fact, hereby certifies that, as of the Closing Date, October 17, 2023, each Selling Stockholder has good and valid title to all shares of Common Stock being sold by such Selling Stockholder pursuant to the Underwriting Agreement, free and clear of all liens, encumbrances, equities, claims, security interests, pledges, mortgages, charges, restrictions on transfer, community property interests, preemptive rights, rights of first refusal, or other defects of title of any nature whatsoever, other than restrictions arising under federal and state securities laws. No shares of Common Stock being sold by any Selling Stockholder at the Closing are subject to any voting trust, voting agreement, stockholders' agreement, proxy, or other arrangement or understanding with respect to the voting, sale, transfer, or other disposition thereof that would impair or restrict the sale and delivery of such shares as contemplated by the Underwriting Agreement.
Upon delivery of the Firm Shares (and, if applicable, Option Shares) in book-entry form through the facilities of DTC and payment of the purchase price therefor by the several Underwriters in accordance with the terms of the Underwriting Agreement, each Underwriter will receive good and valid title to the shares of Common Stock purchased by such Underwriter, free and clear of all liens, encumbrances, equities, claims, security interests, pledges, mortgages, charges, restrictions on transfer, or other defects of title of any nature whatsoever, other than restrictions arising under federal and state securities laws and any liens, encumbrances, or defects of title created by or through the actions of such Underwriter.
7. Share Ownership Confirmation
The following table sets forth certain information with respect to the beneficial ownership of Common Stock by each Selling Stockholder, including (i) the number of shares of Common Stock beneficially owned prior to the offering, (ii) the number of Firm Shares being offered at the Closing, (iii) the number of Option Shares subject to the over-allotment option, and (iv) the number of shares of Common Stock to be beneficially owned after the offering assuming full exercise of the over-allotment option. Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and the information is not necessarily indicative of beneficial ownership for any other purpose.
Each Selling Stockholder confirms that the information set forth in the table above is accurate and complete in all material respects as of the Closing Date. The pre-offering beneficial ownership figures set forth above include shares held directly by each Selling Stockholder and do not include shares that may be deemed beneficially owned by such Selling Stockholder by reason of the beneficial ownership of shares by other Selling Stockholders or by reason of shared voting or dispositive power, except to the extent reported in the Prospectus Supplement. The post-offering beneficial ownership figures assume the sale of all Firm Shares and the full exercise of the over-allotment option and the sale of all Option Shares, and do not reflect any shares of Common Stock that may be acquired or disposed of by any Selling Stockholder after the date hereof.
8. Reliance
This Certificate is furnished to the Underwriters, namely Ridgeline Securities LLC, Broadmark Capital Inc., Linden Groves & Co., and Harborview Partners LLC, and to the Company, Penterra Pharmaceuticals Corp., in connection with the Closing under the Underwriting Agreement. This Certificate may be relied upon by the Underwriters and the Company, and by their respective counsel — Caldwell, Pearce & Strauss LLP (counsel to the Underwriters) and Calderwood & Harkness LLP (counsel to the Company) — in connection with the consummation of the transactions contemplated by the Underwriting Agreement, including the purchase and sale of the Firm Shares at the Closing and any subsequent purchase and sale of Option Shares, and in rendering the opinions and negative assurance letters required to be delivered at the Closing pursuant to the Underwriting Agreement.
The undersigned acknowledges that the Underwriters are entering into the Underwriting Agreement and purchasing the Firm Shares in reliance upon, among other things, the certifications, representations, and warranties of the Selling Stockholders contained in this Certificate, the Underwriting Agreement, and the Representation Letter, and that the accuracy of such certifications, representations, and warranties is a condition precedent to the obligations of the Underwriters under the Underwriting Agreement.
[Signature Page Follows]
[SIGNATURE PAGE TO SELLING STOCKHOLDER CERTIFICATE]
IN WITNESS WHEREOF, the undersigned has executed this Selling Stockholder Certificate as of October 17, 2023.
SELLING STOCKHOLDERS:
By: ________
Name: David Orenstein
Title: Attorney-in-Fact for each of the following Selling Stockholders, pursuant to the Power of Attorney and Custody Agreement dated October 12, 2023:
— Dr. Elena Castellano — Dr. Riccardo Castellano — Dr. Marco Castellano — Castellano Family Holdings LLC
CASTELLANO FAMILY HOLDINGS LLC
By: ________
Name: David Orenstein
Title: Attorney-in-Fact
Address for Notices:
c/o Penterra Pharmaceuticals Corp. 400 Meridian Parkway, Suite 1200 Princeton, New Jersey 08540
Attention: General Counsel
Telephone: (609) 555-4200
With a copy (which shall not constitute notice) to:
Whitfield & Garza LLP 590 Madison Avenue, 28th Floor New York, New York 10022
Attention: Patricia Velázquez, Esq.
Telephone: (212) 555-7800 Facsimile: (212) 555-7801
Email: pvelazquez@whitfieldgarza.com
Selling Stockholder | Shares Beneficially Owned Pre-Offering | Firm Shares Offered | Over-Allotment Shares | Shares Beneficially Owned Post-Offering (Full Exercise)
Dr. Elena Castellano | 14,200,000 | 3,000,000 | 450,000 | 10,750,000
Dr. Riccardo Castellano | 12,800,000 | 2,500,000 | 375,000 | 9,925,000
Dr. Marco Castellano | 4,500,000 | 500,000 | 75,000 | 3,925,000
Castellano Family Holdings LLC | 8,600,000 | 250,000 | 37,500 | 8,312,500
Total | 40,100,000 | 6,250,000 | 937,500 | 32,912,500

SELLING STOCKHOLDER CERTIFICATE

SELLING STOCKHOLDERS:

CASTELLANO FAMILY HOLDINGS LLC

Record

Parties

Dates

Amounts