1018-00001 · Client 1018 · Underwriting Agreement & Ancillary

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UNDERWRITING AGREEMENT

Execution Version

October 12, 2023

6,250,000 Shares of Common Stock (par value $0.001 per share)

PENTERRA PHARMACEUTICALS CORP.

a Delaware corporation

Secondary Offering by the Selling Stockholders Named in Schedule I Hereto

Pursuant to the Shelf Registration Statement on Form S-3 (File No. 333-274851) Declared Effective August 22, 2023

Prospectus Supplement dated October 12, 2023 Filed Pursuant to Rule 424(b)(5)

Supplementing the Base Prospectus Included in the Registration Statement

Representatives of the Underwriters:

Ridgeline Securities LLC Broadmark Capital Inc.

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Ridgeline Securities LLC 383 Madison Avenue New York, New York 10017

Broadmark Capital Inc. 200 Park Avenue New York, New York 10166

As Representatives of the Several Underwriters Named in Schedule II Hereto

Ladies and Gentlemen:

Penterra Pharmaceuticals Corp., a Delaware corporation (the "Company" or "PPC"), the selling stockholders named in Schedule I hereto (the "Selling Stockholders"), and the several underwriters named in Schedule II hereto (the "Underwriters"), for whom Ridgeline Securities LLC and Broadmark Capital Inc. are acting as representatives (the "Representatives"), hereby confirm their respective agreements as set forth below. This Underwriting Agreement (this "Agreement") relates to the proposed sale by the Selling Stockholders of 6,250,000 shares of common stock, par value $0.001 per share ("Common Stock"), of the Company (the "Firm Shares"), together with up to 937,500 additional shares of Common Stock subject to the over-allotment option described herein (the "Option Shares" and, together with the Firm Shares, the "Shares"). The Company will not receive any proceeds from the sale of the Shares by the Selling Stockholders.

The Shares are being offered and sold pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-274851), which was declared effective by the Securities and Exchange Commission (the "SEC" or the "Commission") on August 22, 2023 (the "Registration Statement"), as supplemented by a prospectus supplement dated October 12, 2023 (the "Prospectus Supplement"), filed with the Commission pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Act"), which supplements the base prospectus included in the Registration Statement (the "Base Prospectus").

SECTION 1: INTRODUCTORY PROVISIONS AND DEFINITIONS

1.1 Definitions. As used in this Agreement, the following terms shall have the meanings set forth below:

"Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Aggregate Net Proceeds" means, with respect to the Firm Shares, $253,500,000 (representing 6,250,000 Firm Shares multiplied by the Net Proceeds Per Share of $40.56), and with respect to any Option Shares purchased, the product of the number of Option Shares purchased and the Net Proceeds Per Share.

"Agreement" means this Underwriting Agreement, including all schedules and exhibits hereto.

"Auditors" means Graystone & Whitmore LLP, an independent registered public accounting firm registered with the Public Company Accounting Oversight Board.

"Base Prospectus" means the base prospectus included in the Registration Statement on Form S-3 (File No. 333-274851), as filed with the Commission.

"Closing Date" means October 17, 2023 (the third business day following the date of pricing of the Shares, i.e., T+3), or such other date as the Representatives and the Selling Stockholders may agree upon in writing.

"Commission" or "SEC" means the Securities and Exchange Commission.

"Common Stock" means the common stock, par value $0.001 per share, of the Company.

"Company" means Penterra Pharmaceuticals Corp., a corporation organized under the laws of the State of Delaware.

"DTC" means The Depository Trust Company.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Firm Shares" means the 6,250,000 shares of Common Stock to be sold by the Selling Stockholders to the Underwriters pursuant to Section 2.1 of this Agreement.

"Issuer Free Writing Prospectus" means the pricing term sheet dated October 12, 2023, relating to the Shares, filed with the Commission pursuant to Rule 433 under the Act, and any other "issuer free writing prospectus" (as defined in Rule 433 under the Act) relating to the Shares.

"Lock-Up" means, as the context requires, (a) the lock-up agreements entered into by the Selling Stockholders in connection with the Company's initial public offering on April 17, 2023, as waived with respect to the Shares, or (b) the new 90-day lock-up agreements to be entered into by the Selling Stockholders in connection with this offering, as more fully described in Sections 5 and 6 of this Agreement and Exhibit A hereto.

"Nasdaq" means The Nasdaq Global Select Market.

"Net Proceeds Per Share" means $40.56 per share, being the Public Offering Price of $41.60 per share less the Underwriting discount of $1.04 per share.

"Officer's Certificate" means the certificate described in Section 7.2 of this Agreement.

"Option Closing Date" means the closing date for the purchase of Option Shares, if any, which shall be no later than November 16, 2023, or such other date as the Representatives and the Selling Stockholders may agree upon in writing.

"Option Shares" means up to 937,500 additional shares of Common Stock (representing 15% of the Firm Shares) that the Selling Stockholders have granted the Underwriters the option to purchase pursuant to Section 2.2 of this Agreement.

"Preliminary Prospectus Supplement" means the preliminary prospectus supplement dated October 2, 2023, relating to the Shares, filed with the Commission pursuant to Rule 424 under the Act.

"Pricing Disclosure Package" means the Preliminary Prospectus Supplement, together with the Issuer Free Writing Prospectus (Pricing Term Sheet) dated October 12, 2023, and any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Pricing Disclosure Package.

"Prospectus" means the Base Prospectus as supplemented by the Prospectus Supplement.

"Prospectus Supplement" means the final prospectus supplement dated October 12, 2023, relating to the Shares, filed with the Commission pursuant to Rule 424(b)(5) under the Act.

"Public Offering Price" means $41.60 per share of Common Stock.

"Registration Statement" means the registration statement on Form S-3 (File No. 333-274851) filed by the Company with the Commission under the Act, including all amendments thereto, which was declared effective by the Commission on August 22, 2023, including the Base Prospectus included therein and all exhibits and documents incorporated by reference therein.

"Representatives" means Ridgeline Securities LLC and Broadmark Capital Inc., acting as representatives of the several Underwriters.

"Secretary's Certificate" means the certificate described in Section 7.3 of this Agreement.

"Selling Stockholders" means the persons and entities listed on Schedule I hereto, namely, Dr. Elena Castellano, Dr. Riccardo Castellano, Dr. Marco Castellano, and Castellano Family Holdings LLC.

"Shares" means, collectively, the Firm Shares and, to the extent the over-allotment option is exercised, the Option Shares.

"Transfer Agent" means Pinnacle Trust & Transfer Co., in its capacity as transfer agent and registrar for the Common Stock.

"Underwriters" means the several underwriters listed on Schedule II hereto, namely, Ridgeline Securities LLC, Broadmark Capital Inc., Linden Groves & Co., and Harborview Partners LLC.

"Underwriting discount" means $1.04 per share, representing 2.50% of the Public Offering Price.

1.2 Background Recitals

The Company has filed with the Commission, and the Commission has declared effective, a shelf registration statement on Form S-3 (File No. 333-274851) on August 22, 2023, for the registration of securities of the Company for offering and sale from time to time in accordance with Rule 415 under the Act. The Company has filed the Prospectus Supplement with the Commission pursuant to Rule 424(b)(5) under the Act on October 12, 2023 in connection with the offering and sale of the Shares.

The Selling Stockholders desire to sell an aggregate of 6,250,000 shares of Common Stock in a registered secondary offering to the public through the Underwriters as described in the Prospectus. The Company will not receive any of the proceeds from the sale of the Shares by the Selling Stockholders. The Selling Stockholders entered into lock-up agreements in connection with the Company's initial public offering on April 17, 2023 (the "IPO"), pursuant to which each Selling Stockholder agreed not to sell, transfer, pledge, or otherwise dispose of any shares of Common Stock for a period of 180 days from the date of the final prospectus for the IPO (which 180-day period was scheduled to expire on October 14, 2023). Each of Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co., acting as joint book-running managers of the IPO, has executed and delivered a written waiver of such lock-up agreements, effective as of October 12, 2023, solely with respect to the Shares being sold in this offering (such waivers having been received on September 29, 2023).

The Selling Stockholders have granted the Underwriters an option, exercisable for a period of 30 days from the date hereof, to purchase up to 937,500 additional Option Shares on the terms and subject to the conditions set forth herein. The Underwriters propose to offer the Shares to the public as set forth in the Prospectus, at the Public Offering Price of $41.60 per share.

SECTION 2: PURCHASE AND SALE OF SHARES

2.1 Agreement to Sell and Purchase Firm Shares

Subject to the terms and conditions set forth herein, each Selling Stockholder, severally and not jointly, agrees to sell to the several Underwriters, and each Underwriter, severally and not jointly, agrees to purchase from each Selling Stockholder, at the Public Offering Price less the Underwriting discount (that is, $41.60 per share minus $1.04 per share, equaling $40.56 per share), the number of Firm Shares set forth opposite such Selling Stockholder's name in Schedule I hereto and the number of Firm Shares set forth opposite such Underwriter's name in Schedule II hereto.

The total number of Firm Shares to be purchased by the Underwriters from the Selling Stockholders is 6,250,000 shares. The aggregate purchase price for the Firm Shares (exclusive of the Underwriting discount, which shall be retained by the Underwriters from the Public Offering Price) shall be $253,500,000, representing 6,250,000 shares multiplied by the Net Proceeds Per Share of $40.56. The total Underwriting discount on the Firm Shares shall be $6,500,000, representing 6,250,000 shares multiplied by $1.04 per share. The obligation of each Underwriter to purchase the Firm Shares shall be subject to the conditions set forth in Section 7 of this Agreement.

The Selling Stockholders shall be obligated to sell, and each Underwriter shall be obligated to purchase, the number of Firm Shares allocated to such Underwriter in Schedule II hereto from each Selling Stockholder in proportion to such Selling Stockholder's allocation of Firm Shares as set forth in Schedule I hereto.

2.2 Over-Allotment Option

The Selling Stockholders hereby grant to the several Underwriters an option (the "Over-Allotment Option") to purchase up to an additional 937,500 Option Shares (representing 15% of the Firm Shares), at the Net Proceeds Per Share of $40.56 (being the Public Offering Price of $41.60 per share less the Underwriting discount of $1.04 per share), exercisable in whole or in part at any time and from time to time during a period of 30 calendar days from the date of this Agreement. The Over-Allotment Option may be exercised from October 12, 2023 through and including November 11, 2023.

The Representatives may exercise the Over-Allotment Option by giving written notice to the Selling Stockholders (or to David Orenstein, as their attorney-in-fact) specifying the aggregate number of Option Shares to be purchased and the date on which such Option Shares are to be delivered (each, an "Option Closing Date"), which date shall be no earlier than two business days and no later than five business days after the date on which such notice is given. If the Over-Allotment Option is exercised after the Closing Date, the Option Closing Date shall be the date specified in the notice of exercise, but in no event later than November 16, 2023.

The Option Shares shall be allocated among the Selling Stockholders as follows:

If the Over-Allotment Option is exercised in part, the Option Shares to be sold by each Selling Stockholder shall be in the same proportion as such Selling Stockholder's maximum Option Shares bear to the total maximum Option Shares (subject to rounding to avoid fractional shares, with any adjustments to be determined by the Representatives).

The maximum aggregate public offering price of the Option Shares, if the Over-Allotment Option is exercised in full, shall be $38,985,000 (937,500 shares multiplied by $41.60 per share). The maximum Underwriting discount on the Option Shares shall be $975,000 (937,500 shares multiplied by $1.04 per share). The maximum aggregate net proceeds to the Selling Stockholders from the sale of Option Shares shall be $38,010,000 (937,500 shares multiplied by $40.56 per share). Each Underwriter's obligation to purchase Option Shares shall be in the same proportion as such Underwriter's allocation of Firm Shares as set forth in Schedule II hereto bears to the total number of Firm Shares.

2.3 Payment and Delivery

Payment for the Firm Shares shall be made by the Underwriters by wire transfer of immediately available funds in United States dollars to the account or accounts designated by the Selling Stockholders (or by David Orenstein, as their attorney-in-fact), against delivery of the Firm Shares through the book-entry facilities of DTC, at 10:00 a.m. (New York City time) on the Closing Date, October 17, 2023, or at such other time and date as shall be agreed upon in writing by the Representatives and the Selling Stockholders. Payment for any Option Shares shall be made in the same manner on the applicable Option Closing Date (which, if the Over-Allotment Option is exercised in full, shall be no later than November 16, 2023).

All Shares shall be delivered in book-entry form through the facilities of DTC. The Common Stock is identified by CUSIP number 70831X 10 5. Pinnacle Trust & Transfer Co. shall act as transfer agent and registrar for the Common Stock and shall facilitate the delivery of the Shares through DTC in accordance with DTC's customary procedures.

The Selling Stockholders shall bear the cost of any transfer taxes applicable to the sale and delivery of the Shares to the Underwriters. The Selling Stockholders shall cause certificates representing the Shares (or, as applicable, book-entry positions evidencing the Shares) to be made available for checking by the Representatives at least 24 hours prior to the Closing Date or the applicable Option Closing Date at the offices of DTC or its designated custodian.

2.4 Allocation Among Underwriters

The Firm Shares to be purchased by each Underwriter, the percentage allocation, and the corresponding Underwriting discount allocable to each Underwriter are as follows:

In the event the Over-Allotment Option is exercised, each Underwriter shall purchase its pro rata share of the Option Shares in the same proportion as such Underwriter's allocation of Firm Shares bears to the total number of Firm Shares, unless otherwise agreed in writing by the Representatives.

SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby represents and warrants to each Underwriter and each Selling Stockholder, as of the date hereof and as of the Closing Date (and, if applicable, each Option Closing Date), as follows:

3.1 Organization and Good Standing

The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company has the requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus. The Company's registered agent in the State of Delaware is Registered Agents Inc., located at 251 Little Falls Drive, Wilmington, Delaware 19808. The Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, properties, financial condition, or results of operations of the Company (a "Material Adverse Effect"). The Company's principal executive offices are located at 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540. The Company and its subsidiaries do not own or control, directly or indirectly, any corporation, association, or other entity other than the subsidiaries listed in the exhibits to the Registration Statement.

3.2 Capitalization. The authorized capital stock of the Company consists of 500,000,000 shares of Common Stock, par value $0.001 per share, and 50,000,000 shares of preferred stock, par value $0.001 per share, of which no shares of preferred stock are issued and outstanding. As of the date hereof, 120,000,000 shares of Common Stock are issued and outstanding. All outstanding shares of Common Stock have been duly authorized, are validly issued, fully paid, and nonassessable, and have been issued in compliance with all applicable federal and state securities laws. No shares of Common Stock are held in the treasury of the Company. The Common Stock is listed and traded on the Nasdaq Global Select Market under the ticker symbol "PNTR." Except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, there are no outstanding options, warrants, rights, or other securities convertible into or exchangeable for shares of Common Stock, and there are no contracts, commitments, understandings, or arrangements by which the Company is obligated to issue additional shares of its capital stock. The Company has not declared or paid any dividends on the Common Stock since the date of the Company's IPO, except as disclosed in the Prospectus.

3.3 Registration Statement and Prospectus

The Registration Statement on Form S-3 (File No. 333-274851) was filed with the Commission and was declared effective by the Commission on August 22, 2023. At the time the Registration Statement became effective, at the time of each amendment thereto, and at the date hereof, the Registration Statement complied and complies in all material respects with the requirements of the Act and the rules and regulations of the Commission thereunder. The Prospectus Supplement was timely filed with the Commission pursuant to Rule 424(b)(5) under the Act on October 12, 2023. At the time of filing, and at the date hereof, the Prospectus Supplement complied and complies in all material respects with the requirements of the Act and the rules and regulations of the Commission thereunder.

The Registration Statement, the Prospectus (including the Prospectus Supplement and the Base Prospectus), and the Pricing Disclosure Package, at their respective effective dates or dates of filing, as applicable, did not contain and do 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 light of the circumstances under which they were made, not misleading. Each Issuer Free Writing Prospectus listed on Schedule III hereto does not conflict with the information contained in the Registration Statement, the Pricing Disclosure Package, or the Prospectus, and each such Issuer Free Writing Prospectus, when considered together with the Pricing Disclosure Package, did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

The Company is not an "ineligible issuer" as defined in Rule 405 under the Act. The Company has not distributed and will not distribute, prior to the later of the Closing Date and the completion of the Underwriters' distribution of the Shares, any offering material in connection with the offering and sale of the Shares other than the Registration Statement, the Preliminary Prospectus Supplement, the Prospectus, and any Issuer Free Writing Prospectus to which the Representatives have consented.

3.4 No Material Adverse Change

Since the date of the most recent financial statements included in the Pricing Disclosure Package and the Prospectus (the Company's unaudited condensed consolidated financial statements for the six months ended June 30, 2023, reflecting revenue of $312.6 million and net income of $67.8 million for such period, and the audited consolidated financial statements for the fiscal year ended December 31, 2022, reflecting revenue of $387.4 million and net income of $42.1 million for such year), there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the business, properties, management, financial position, stockholders' equity, or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Disclosure Package and the Prospectus.

3.5 Financial Statements

The financial statements included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, together with the related schedules and notes thereto, present fairly in all material respects the financial condition, results of operations, and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated, and have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited interim financial statements, as permitted by Form 10-Q under the Exchange Act). The audited financial statements have been audited, and the unaudited interim financial statements have been reviewed, by Graystone & Whitmore LLP, an independent registered public accounting firm, as stated in their respective reports included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, and the Prospectus. No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, or the Prospectus. All disclosures contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, and the Prospectus regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable.

3.6 Compliance with Laws; Permits

The Company and each of its subsidiaries are in compliance in all material respects with all applicable federal, state, local, and foreign laws, rules, regulations, orders, judgments, and decrees, including, without limitation, the Federal Food, Drug, and Cosmetic Act, the regulations of the United States Food and Drug Administration (the "FDA"), the Public Health Service Act, and all applicable regulations and requirements of the FDA and comparable foreign regulatory authorities. The Company's lead product, NEUVANTA® (tavropitant), was approved by the FDA in February 2023, and the Company is in compliance in all material respects with all post-approval commitments and requirements related thereto. Each of the Company's pipeline candidates is in the stage of clinical development described in the Pricing Disclosure Package and the Prospectus, including those currently in Phase II and Phase III clinical trials, and the Company possesses all permits, licenses, registrations, certificates, authorizations, consents, and approvals (collectively, "Permits") issued by the appropriate federal, state, local, or foreign regulatory authorities that are necessary to own, lease, and operate its properties and to conduct its business as described in the Pricing Disclosure Package and the Prospectus. The Company is in compliance in all material respects with the terms and conditions of all such Permits, and no event has occurred that allows, or after notice or lapse of time would allow, revocation, suspension, or termination of any such Permit.

3.7 Authorization. The Company has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. All corporate action required to be taken by the Company for the authorization, execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby has been duly and validly taken, including the resolutions adopted by the Board of Directors of the Company on September 8, 2023 (the "Board Resolutions"), authorizing the Company's cooperation with and facilitation of the secondary offering by the Selling Stockholders. This Agreement has been duly authorized, executed, and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

3.8 No Conflicts

The execution, delivery, and performance of this Agreement by the Company, and the consummation of the transactions contemplated hereby (including the Company's facilitation of the sale of the Shares by the Selling Stockholders), do not and will not (a) violate or conflict with the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws of the Company, each as currently in effect; (b) result in a breach or violation of, or constitute a default under (or an event that, with the giving of notice or lapse of time or both, would result in a default under), or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement, lease, license agreement, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties may be bound or affected; or (c) result in any violation of any statute, law, rule, regulation, order, judgment, or decree of any court, regulatory body, administrative agency, or governmental body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, except, in the case of clauses (b) and (c), as would not, individually or in the aggregate, have a Material Adverse Effect. No consent, approval, authorization, order, registration, filing, or qualification of or with any court or governmental agency or body is required for the execution, delivery, and performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except such as have been obtained or made and such as may be required under state securities or Blue Sky laws in connection with the offer and sale of the Shares by the Underwriters.

3.9 No Litigation

There is no action, suit, proceeding, inquiry, arbitration, or investigation before or by any court, public board, governmental agency, self-regulatory organization, or body pending or, to the knowledge of the Company, threatened against or affecting the Company, any of its subsidiaries, or any of their respective officers or directors in their capacities as such, that (a) is required to be disclosed in the Registration Statement, the Pricing Disclosure Package, or the Prospectus and is not so disclosed, or (b) could reasonably be expected to result in a Material Adverse Effect or could reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Agreement. There are no current or pending actions, suits, or proceedings that are required by the Act to be described in the Registration Statement, the Pricing Disclosure Package, or the Prospectus that are not so described.

3.10 intellectual Property

The Company and its subsidiaries own or have adequate rights to use all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade dress, copyrights, licenses, inventions, trade secrets, technology, know-how, and other intellectual property (collectively, "intellectual Property") described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus as being owned or licensed by the Company or its subsidiaries or that are material to the conduct of the business of the Company and its subsidiaries, taken as a whole. To the knowledge of the Company, no third party is infringing, misappropriating, or otherwise violating any intellectual Property owned by the Company or its subsidiaries. Neither the Company nor any of its subsidiaries has received any written notice of any claim of infringement, misappropriation, or violation of any intellectual Property of any third party, and no such claims are pending or, to the knowledge of the Company, threatened, except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.

3.11 Tax Matters

The Company and each of its subsidiaries have filed (or have obtained extensions of time within which to file) all federal, state, local, and foreign tax returns that are required to be filed and have paid all taxes that are due and payable, except for taxes that are being contested in good faith and for which adequate reserves have been established in the financial statements of the Company in accordance with U.S. GAAP. The Company's employer identification number (EIN) is 82-4039571. No federal, state, local, or foreign tax deficiency has been determined adversely to the Company or any of its subsidiaries that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

3.12 Insurance. The Company and its subsidiaries maintain insurance of the types and in the amounts that the Company reasonably believes is adequate for its business, including, but not limited to, insurance covering all real and personal property owned or leased by the Company or its subsidiaries against all risks customarily insured against, and directors' and officers' liability insurance provided by Atlantic Omnivrel Insurance Co. with coverage limits and terms that are customary for companies of similar size and in similar industries. All policies of insurance insuring the Company or its subsidiaries or their respective businesses, assets, employees, officers, and directors are in full force and effect, all premiums with respect thereto have been paid to the extent due, and the Company is in compliance in all material respects with the terms of such policies. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

3.13 Transfer Agent

Pinnacle Trust & Transfer Co. has been duly appointed as transfer agent and registrar for the Common Stock. The Transfer Agent is a participant in, or has access to, DTC's Fast Automated Securities Transfer program, and the Shares are eligible for book-entry delivery and settlement through DTC.

3.14 Issuer Free Writing Prospectus

Each Issuer Free Writing Prospectus, including the Pricing Term Sheet dated October 12, 2023, has been filed with the Commission in accordance with the Act and complied when filed and complies at the date hereof with Rule 433 under the Act. The Company has not made any offer relating to the Shares that would constitute a "free writing prospectus" (as defined in Rule 405 under the Act) that is required to be filed with the Commission and has not been so filed. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Shares or until any earlier date that the Company notified or notifies the Representatives, did not, does not, and will not include any information that conflicts with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein.

3.15 Shelf Eligibility

The Company meets the requirements for use of Form S-3 under the Act, including the requirements of General Instruction I.B.1 thereof. The Company's Central Index Key (CIK) Number with the Commission is 0001987654. At the time the Registration Statement was initially filed with the Commission and at the time of each amendment thereto, the Company met the eligibility requirements of Form S-3. The Registration Statement is an "automatic shelf registration statement" within the meaning of Rule 405 under the Act, or the Company met the requirements for use of Form S-3 as a well-known seasoned issuer or otherwise satisfied the applicable eligibility conditions. No notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company.

SECTION 4: REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS

Each Selling Stockholder, severally and not jointly, represents and warrants to the Company and each Underwriter, as of the date hereof and as of the Closing Date (and, if applicable, each Option Closing Date), as follows:

4.1 Title and Ownership

Such Selling Stockholder is the beneficial and record owner of the shares of Common Stock set forth opposite such Selling Stockholder's name in Schedule I hereto, free and clear of all liens, pledges, encumbrances, security interests, charges, claims, restrictions, equities, and defects of any kind whatsoever (other than restrictions under the lock-up agreements entered into in connection with the Company's IPO on April 17, 2023, which restrictions have been validly waived with respect to the Shares as described in Section 4.4 below, and restrictions under applicable federal and state securities laws). Upon delivery of and payment for the Shares as provided herein, the Underwriters will receive good and valid title to the Shares, free and clear of all such liens, pledges, encumbrances, security interests, charges, claims, restrictions, equities, and defects.

The pre-offering holdings of each Selling Stockholder are as follows:

The combined pre-offering holdings of the Selling Stockholders represent approximately 33.4% of the 120,000,000 shares of Common Stock outstanding as of the date hereof.

4.2 Authorization; Power of Attorney

Such Selling Stockholder has full right, power, and authority to sell, assign, transfer, and deliver the Shares to be sold by such Selling Stockholder hereunder and to enter into, execute, and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly authorized, executed, and delivered by such Selling Stockholder (or by David Orenstein as attorney-in-fact, as applicable) and constitutes a valid and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting creditors' rights generally and by general principles of equity.

Each Selling Stockholder has duly executed and delivered a Power of Attorney and Custody Agreement dated October 12, 2023 (the "POA and Custody Agreement"), appointing David Orenstein, Esq. (General Counsel and Corporate Secretary of the Company), as such Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact"), with full power and authority to execute and deliver this Agreement on behalf of such Selling Stockholder, to make any elections permitted herein, and to take all actions necessary or desirable in connection with the sale of the Shares, and appointing Pinnacle Trust & Transfer Co. as custodian of such Selling Stockholder's Shares. The POA and Custody Agreement is in full force and effect and has not been revoked, amended, or modified.

With respect to Castellano Family Holdings LLC (EIN: 87-2165438), such entity is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action on the part of Castellano Family Holdings LLC.

4.3 No Conflicts

The sale of the Shares by such Selling Stockholder and the execution, delivery, and performance of this Agreement by such Selling Stockholder (or by David Orenstein as Attorney-in-Fact) do not and will not (a) violate or conflict with any provision of the organizational documents of such Selling Stockholder (to the extent such Selling Stockholder is an entity); (b) result in a breach or violation of, or constitute a default under (or an event that, with the giving of notice or lapse of time or both, would result in a default under), any indenture, mortgage, deed of trust, loan agreement, lease, license agreement, or other agreement or 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 any violation of any statute, law, rule, regulation, order, judgment, or decree of any court, regulatory body, administrative agency, or governmental body having jurisdiction over such Selling Stockholder or any of such Selling Stockholder's properties, except, in the case of clauses (b) and (c), as would not materially and adversely affect the ability of such Selling Stockholder to consummate the transactions contemplated hereby.

4.4 Lock-Up Waiver

The lock-up agreement entered into by such Selling Stockholder in connection with the Company's IPO on April 17, 2023 (providing for a 180-day lock-up period expiring October 14, 2023) has been validly waived by each of Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co. (collectively, the "IPO Underwriter Representatives"), effective as of October 12, 2023, solely with respect to the Shares being sold by such Selling Stockholder in this offering (and the Option Shares subject to the Over-Allotment Option). Such waivers were executed and delivered on September 29, 2023, and are in full force and effect as of the date hereof. No additional consents, approvals, or waivers are required from any person or entity in connection with the sale of the Shares by such Selling Stockholder in this offering. Such Selling Stockholder acknowledges that, other than with respect to the Shares sold or to be sold in this offering, the lock-up agreement entered into in connection with the IPO remains in full force and effect until its scheduled expiration on October 14, 2023.

4.5 Accuracy of Information

All information furnished or to be furnished by or on behalf of such Selling Stockholder specifically for use in the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus, including, without limitation, the information regarding such Selling Stockholder's name, share ownership, relationship with the Company, and the nature of any position, office, or other material relationship that such Selling Stockholder has had within the past three years with the Company, is and will be true, correct, and complete in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

4.6 No Stabilization

Such Selling Stockholder has not taken, and will not take, directly or indirectly, any action designed to, or that could reasonably be expected to, cause or result in any stabilization or manipulation of the price of the Common Stock in violation of Regulation M under the Exchange Act or otherwise.

4.7 Selling Stockholder Representation Letter

Such Selling Stockholder has delivered to the Company and the Underwriters a Selling Stockholder Representation Letter dated October 12, 2023 (the "Representation Letter"), in the form previously agreed among the parties, and all representations and agreements set forth therein are true, correct, and complete in all material respects as of the date hereof and will be true, correct, and complete in all material respects as of the Closing Date and each Option Closing Date, if any.

SECTION 5: COVENANTS OF THE COMPANY

The Company covenants and agrees with each Underwriter and each Selling Stockholder as follows:

5.1 Compliance with Securities Laws

The Company shall comply with all requirements imposed upon it by the Act, the Exchange Act, and the rules and regulations of the Commission thereunder, to the extent applicable to the Company in connection with the offering, issuance, and sale of the Shares. Without limiting the generality of the foregoing, the Company shall timely file all reports, schedules, forms, statements, and other documents required to be filed by it under the Exchange Act (including any reports on Form 10-Q, Form 10-K, Form 8-K, and proxy statements) and shall not terminate its status as a reporting company under the Exchange Act. The Company shall comply with all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations of the Commission thereunder.

5.2 Prospectus Amendments and Supplements

The Company shall advise the Representatives promptly, and confirm such advice in writing, of (a) the filing of any amendment or supplement to the Registration Statement or the Prospectus, (b) any request by the Commission for any amendment to the Registration Statement or any supplement to or additional information with respect to the Prospectus or for any additional information, (c) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose, (d) the issuance by any state securities authority of any order suspending the qualification of the Shares for offering or sale in any jurisdiction, or the initiation or threatening of any proceeding for that purpose, and (e) the receipt of any notice with respect to the suspension of the qualification of the Common Stock for listing on Nasdaq. The Company shall use its reasonable best efforts to prevent the issuance of any such stop order or suspension and, if any such stop order or suspension is issued, to obtain the withdrawal thereof at the earliest possible time.

If at any time prior to the completion of the distribution of the Shares (as determined by the Representatives) the Prospectus shall not be available for delivery in compliance with the Act or the Prospectus is required to be amended or supplemented due to the occurrence of any event as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company shall promptly prepare and file with the Commission an amendment or supplement to the Prospectus so that the statements therein, as so amended or supplemented, will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall furnish to the Representatives such number of copies thereof as the Representatives may reasonably request.

5.3 Blue Sky Compliance

The Company shall cooperate with the Representatives and counsel for the Underwriters in connection with the registration or qualification (or obtaining an exemption from registration or qualification) of the Shares for offer and sale under the securities or "Blue Sky" laws of such jurisdictions as the Representatives may request, and shall do any and all such acts and things as may be reasonably necessary or advisable to enable each Underwriter to consummate the disposition of the Shares in such jurisdictions; provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where it is not presently qualified or where qualifying would subject it to any new or additional taxation or to general service of process in any jurisdiction where it is not presently subject to such taxation or service of process.

5.4 Earnings Statement

The Company shall make generally available to its security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company commencing after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder.

5.5 Use of Proceeds

The Company acknowledges and agrees that it will not receive any proceeds from the sale of the Shares by the Selling Stockholders. All proceeds from the sale of the Shares, net of the Underwriting discount, shall be delivered directly to the Selling Stockholders (or to their Attorney-in-Fact or custodian, as applicable).

5.6 Listing. The Company shall use its best efforts to maintain the listing of the Common Stock on the Nasdaq Global Select Market (ticker symbol: PNTR) and shall use its best efforts to effect the listing of the Shares on Nasdaq prior to the Closing Date, subject to official notice of issuance. The Company shall comply with all applicable requirements of Nasdaq for the continued listing of the Common Stock.

5.7 No Stabilization by Company

The Company will not take, directly or indirectly, any action designed to, or that could reasonably be expected to, cause or result in any stabilization or manipulation of the price of the Common Stock in violation of Regulation M under the Exchange Act or otherwise, except as expressly permitted by the Act and the Exchange Act.

5.8 Payment of Expenses

The Company agrees to pay all costs and expenses incident to the performance of the obligations of the Company under this Agreement and in connection with the offering, including, without limitation, the following:

(a) all fees and expenses in connection with the preparation, printing, filing, and distribution of the Registration Statement (including any amendments thereto and exhibits thereto), the Preliminary Prospectus Supplement, the Prospectus, and any Issuer Free Writing Prospectus;

(b) all fees and expenses in connection with the registration or qualification of the Shares under the state securities or Blue Sky laws of the various states and any filing fees required by the Financial Industry Regulatory Authority, Inc. ("FINRA");

(d) all fees and disbursements of the Company's independent registered public accounting firm, Graystone & Whitmore LLP, including fees relating to the comfort letter and the bring-down comfort letter (estimated at $175,000);

(e) all fees and expenses in connection with the listing of the Shares on Nasdaq ($45,000);

(f) all printing and engraving expenses incurred in connection with the offering, including charges of Apex Financial Printing Inc. (estimated at $35,000);

(g) all transfer agent and registrar fees and expenses of Pinnacle Trust & Transfer Co.;

(h) all SEC registration fees ($0, previously paid in connection with the Registration Statement);

(i) all miscellaneous expenses (estimated at $25,000); and

(j) all other costs and expenses incident to the performance of the Company's obligations hereunder that are not otherwise specifically provided for in this Agreement.

The total estimated expenses of the Company in connection with this offering are approximately $765,000. It is understood and agreed that, except as provided in this Section 5.8 and Sections 8 and 9.2 of this Agreement, the Underwriters shall pay their own costs and expenses, including the fees and disbursements of their counsel, Caldwell, Pearce & Strauss LLP, and the Selling Stockholders shall bear the cost of the Underwriting discount.

5.9 Reporting. The Company shall, on or before the first business day following the date of this Agreement, file a Current Report on Form 8-K with the Commission under the Exchange Act reporting the entry into this Underwriting Agreement and disclosing the material terms of the offering. The Company shall provide a copy of such Form 8-K to the Representatives prior to filing.

SECTION 6: COVENANTS OF THE SELLING STOCKHOLDERS

Each Selling Stockholder, severally and not jointly, covenants and agrees with the Company and each Underwriter as follows:

6.1 New Lock-Up Agreement

Each Selling Stockholder agrees to enter into a new lock-up agreement (the "Secondary Lock-Up") with the Representatives, substantially in the form attached hereto as Exhibit A, restricting the direct or indirect sale, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to purchase, or other transfer or disposition of (or entering into any transaction that is designed to, or might reasonably be expected to, result in the disposition of), any shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock beneficially owned by such Selling Stockholder and retained after the offering (including shares subject to the Over-Allotment Option that are not purchased by the Underwriters), for a period of 90 days commencing on the Closing Date (October 17, 2023) and expiring at the close of business on January 15, 2024 (the "Secondary Lock-Up Period").

The restrictions set forth in the Secondary Lock-Up shall be subject to the following customary exceptions, provided that any transferee agrees in writing to be bound by the terms of the Secondary Lock-Up for the remainder of the Secondary Lock-Up Period:

(a) transfers of shares as a bona fide gift or gifts;

(b) transfers to any member of the immediate family of such Selling Stockholder (for purposes hereof, "immediate family" means any relationship by blood, marriage, or adoption not more remote than first cousin);

(c) transfers to any trust for the direct or indirect benefit of such Selling Stockholder or such Selling Stockholder's immediate family members;

(d) transfers to any corporation, partnership, limited liability company, or other entity all of the beneficial ownership interests of which are held by such Selling Stockholder or such Selling Stockholder's immediate family members;

(e) distributions to limited partners, members, or stockholders of such Selling Stockholder;

(f) transfers by will or intestacy;

(g) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act, provided that such plan does not provide for the transfer of Common Stock during the Secondary Lock-Up Period; and

(h) transfers to the Company in connection with the exercise of options or warrants to acquire shares of Common Stock or the vesting of restricted stock units, solely to satisfy tax withholding obligations.

In addition, the Secondary Lock-Up shall not apply to any shares of Common Stock acquired in open market transactions after the date hereof, provided that no filing under Section 16 of the Exchange Act shall be required or shall be made voluntarily in connection with subsequent sales of Common Stock acquired in such open market transactions.

The post-offering holdings of each Selling Stockholder subject to the Secondary Lock-Up are as follows:

The Representatives may, in their sole discretion and at any time, release any shares subject to the Secondary Lock-Up, in whole or in part, with or without conditions; provided, however, that if such release occurs with respect to a Selling Stockholder, the Representatives shall use reasonable efforts to provide the Company with notice of such release at least three business days prior to the effective date thereof.

6.2 Delivery of Shares

Each Selling Stockholder agrees to deliver, or cause to be delivered, the Shares to be sold by such Selling Stockholder hereunder in book-entry form through the facilities of DTC on the Closing Date (or the applicable Option Closing Date, with respect to Option Shares) against payment of the purchase price therefor. Each Selling Stockholder shall cooperate with Pinnacle Trust & Transfer Co., as transfer agent, and with DTC to ensure timely delivery and settlement of the Shares. Each Selling Stockholder shall cause its shares of Common Stock to be available for checking by the Representatives at least 24 hours prior to the Closing Date (or the applicable Option Closing Date) at the offices of DTC or its designated custodian.

6.3 Notification. Each Selling Stockholder shall promptly notify the Company and the Representatives of (a) any event or circumstance occurring prior to the Closing Date (or any Option Closing Date) that would cause any representation or warranty of such Selling Stockholder contained in this Agreement to be untrue or inaccurate in any material respect, (b) any material change in the information set forth in Schedule I hereto with respect to such Selling Stockholder, and (c) the receipt by such Selling Stockholder of any notice or communication from any governmental authority or regulatory body relating to the Shares or the transactions contemplated by this Agreement.

6.4 Tax Cooperation

Each Selling Stockholder shall promptly provide to the Company, the Underwriters, and the Transfer Agent any tax certifications, forms, or documentation that may be required in connection with the sale and delivery of the Shares, including, without limitation, a duly executed Internal Revenue Service Form W-9 (Request for Taxpayer Identification Number and Certification) or, if applicable, the appropriate Form W-8, certifying such Selling Stockholder's status under the Internal Revenue Code of 1986, as amended. Each Selling Stockholder acknowledges and agrees that the Company and the Underwriters may withhold from the proceeds payable to such Selling Stockholder any amounts required to be withheld under applicable tax laws to the extent a valid tax certification or form has not been timely provided.

SECTION 7: CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS

The obligations of the several Underwriters to purchase and pay for the Firm Shares on the Closing Date and the Option Shares on any Option Closing Date, as the case may be, shall be subject to the accuracy of the representations and warranties of the Company and the Selling Stockholders contained herein, the performance by the Company and the Selling Stockholders of their respective covenants and obligations hereunder, and the following additional conditions:

7.1 Accuracy of Representations and Warranties

The representations and warranties of the Company set forth in Section 3 of this Agreement, and the representations and warranties of each Selling Stockholder set forth in Section 4 of this Agreement, shall be true and correct in all material respects as of the date hereof and as of the Closing Date (and, with respect to Option Shares, as of the applicable Option Closing Date), with the same force and effect as though expressly made on and as of such date (except to the extent that any such representation or warranty is expressly made as of a specified date, in which case such representation or warranty shall be true and correct in all material respects as of such specified date).

7.2 Officer's Certificate

The Representatives shall have received from the Company an Officer's Certificate, dated the Closing Date (and, with respect to Option Shares, dated the applicable Option Closing Date), in the form of Exhibit B hereto, signed by Dr. Marco Castellano, Chief Executive Officer, and Lisa Hargrove, Chief Financial Officer, certifying on behalf of the Company that: (a) the representations and warranties of the Company set forth in this Agreement are true and correct in all material respects as of the Closing Date (or applicable Option Closing Date); (b) the Company has complied with all covenants and agreements and satisfied all conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date (or applicable Option Closing Date); and (c) since the date of the most recent financial statements included in the Pricing Disclosure Package and the Prospectus, there has been no Material Adverse Effect and no event or circumstance that could reasonably be expected to result in a Material Adverse Effect.

7.3 Secretary's Certificate

The Representatives shall have received from the Company a Secretary's Certificate, dated the Closing Date, in the form of Exhibit C hereto, signed by David Orenstein, General Counsel and Corporate Secretary, certifying: (a) the names and true signatures of the officers of the Company authorized to sign this Agreement and each other document to be delivered by the Company in connection herewith; (b) attached thereto as exhibits, true and complete copies of (i) the Amended and Restated Certificate of Incorporation of the Company, as currently in effect, certified by the Secretary of State of the State of Delaware, (ii) the Amended and Restated Bylaws of the Company, as currently in effect, and (iii) the resolutions adopted by the Board of Directors of the Company on September 8, 2023, authorizing the Company's cooperation with and facilitation of the secondary offering and the execution and delivery of this Agreement and the performance of the Company's obligations hereunder; and (c) such other matters as the Representatives may reasonably request.

7.4 Good Standing Certificate

The Representatives shall have received a certificate of good standing (or equivalent certificate) for the Company issued by the Secretary of State of the State of Delaware, dated no earlier than October 16, 2023.

7.5 Legal Opinions

The Representatives shall have received the following legal opinions, each dated the Closing Date (and, with respect to Option Shares, dated the applicable Option Closing Date):

(a) A written opinion and negative assurance letter of Calderwood & Harkness LLP, counsel for the Company, addressed to the Underwriters, signed by Jennifer Kwon, in form a

UNDERWRITING AGREEMENT
Execution Version
October 12, 2023
6,250,000 Shares of Common Stock (par value $0.001 per share)
of
PENTERRA PHARMACEUTICALS CORP.
a Delaware corporation
Secondary Offering by the Selling Stockholders Named in Schedule I Hereto
Pursuant to the Shelf Registration Statement on Form S-3 (File No. 333-274851) Declared Effective August 22, 2023
Prospectus Supplement dated October 12, 2023 Filed Pursuant to Rule 424(b)(5)
Supplementing the Base Prospectus Included in the Registration Statement
Representatives of the Underwriters:
Ridgeline Securities LLC Broadmark Capital Inc.
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Ridgeline Securities LLC 383 Madison Avenue New York, New York 10017
Broadmark Capital Inc. 200 Park Avenue New York, New York 10166
As Representatives of the Several Underwriters Named in Schedule II Hereto
Ladies and Gentlemen:
Penterra Pharmaceuticals Corp., a Delaware corporation (the "Company" or "PPC"), the selling stockholders named in Schedule I hereto (the "Selling Stockholders"), and the several underwriters named in Schedule II hereto (the "Underwriters"), for whom Ridgeline Securities LLC and Broadmark Capital Inc. are acting as representatives (the "Representatives"), hereby confirm their respective agreements as set forth below. This Underwriting Agreement (this "Agreement") relates to the proposed sale by the Selling Stockholders of 6,250,000 shares of common stock, par value $0.001 per share ("Common Stock"), of the Company (the "Firm Shares"), together with up to 937,500 additional shares of Common Stock subject to the over-allotment option described herein (the "Option Shares" and, together with the Firm Shares, the "Shares"). The Company will not receive any proceeds from the sale of the Shares by the Selling Stockholders.
The Shares are being offered and sold pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-274851), which was declared effective by the Securities and Exchange Commission (the "SEC" or the "Commission") on August 22, 2023 (the "Registration Statement"), as supplemented by a prospectus supplement dated October 12, 2023 (the "Prospectus Supplement"), filed with the Commission pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the "Act"), which supplements the base prospectus included in the Registration Statement (the "Base Prospectus").
SECTION 1: INTRODUCTORY PROVISIONS AND DEFINITIONS
1.1 Definitions.  As used in this Agreement, the following terms shall have the meanings set forth below:
"Act" means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Aggregate Net Proceeds" means, with respect to the Firm Shares, $253,500,000 (representing 6,250,000 Firm Shares multiplied by the Net Proceeds Per Share of $40.56), and with respect to any Option Shares purchased, the product of the number of Option Shares purchased and the Net Proceeds Per Share.
"Agreement" means this Underwriting Agreement, including all schedules and exhibits hereto.
"Auditors" means Graystone & Whitmore LLP, an independent registered public accounting firm registered with the Public Company Accounting Oversight Board.
"Base Prospectus" means the base prospectus included in the Registration Statement on Form S-3 (File No. 333-274851), as filed with the Commission.
"Closing Date" means October 17, 2023 (the third business day following the date of pricing of the Shares, i.e., T+3), or such other date as the Representatives and the Selling Stockholders may agree upon in writing.
"Commission" or "SEC" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $0.001 per share, of the Company.
"Company" means Penterra Pharmaceuticals Corp., a corporation organized under the laws of the State of Delaware.
"DTC" means The Depository Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Firm Shares" means the 6,250,000 shares of Common Stock to be sold by the Selling Stockholders to the Underwriters pursuant to Section 2.1 of this Agreement.
"Issuer Free Writing Prospectus" means the pricing term sheet dated October 12, 2023, relating to the Shares, filed with the Commission pursuant to Rule 433 under the Act, and any other "issuer free writing prospectus" (as defined in Rule 433 under the Act) relating to the Shares.
"Lock-Up" means, as the context requires, (a) the lock-up agreements entered into by the Selling Stockholders in connection with the Company's initial public offering on April 17, 2023, as waived with respect to the Shares, or (b) the new 90-day lock-up agreements to be entered into by the Selling Stockholders in connection with this offering, as more fully described in Sections 5 and 6 of this Agreement and Exhibit A hereto.
"Nasdaq" means The Nasdaq Global Select Market.
"Net Proceeds Per Share" means $40.56 per share, being the Public Offering Price of $41.60 per share less the Underwriting discount of $1.04 per share.
"Officer's Certificate" means the certificate described in Section 7.2 of this Agreement.
"Option Closing Date" means the closing date for the purchase of Option Shares, if any, which shall be no later than November 16, 2023, or such other date as the Representatives and the Selling Stockholders may agree upon in writing.
"Option Shares" means up to 937,500 additional shares of Common Stock (representing 15% of the Firm Shares) that the Selling Stockholders have granted the Underwriters the option to purchase pursuant to Section 2.2 of this Agreement.
"Preliminary Prospectus Supplement" means the preliminary prospectus supplement dated October 2, 2023, relating to the Shares, filed with the Commission pursuant to Rule 424 under the Act.
"Pricing Disclosure Package" means the Preliminary Prospectus Supplement, together with the Issuer Free Writing Prospectus (Pricing Term Sheet) dated October 12, 2023, and any other free writing prospectus that the parties hereto shall hereafter expressly agree in writing to treat as part of the Pricing Disclosure Package.
"Prospectus" means the Base Prospectus as supplemented by the Prospectus Supplement.
"Prospectus Supplement" means the final prospectus supplement dated October 12, 2023, relating to the Shares, filed with the Commission pursuant to Rule 424(b)(5) under the Act.
"Public Offering Price" means $41.60 per share of Common Stock.
"Registration Statement" means the registration statement on Form S-3 (File No. 333-274851) filed by the Company with the Commission under the Act, including all amendments thereto, which was declared effective by the Commission on August 22, 2023, including the Base Prospectus included therein and all exhibits and documents incorporated by reference therein.
"Representatives" means Ridgeline Securities LLC and Broadmark Capital Inc., acting as representatives of the several Underwriters.
"Secretary's Certificate" means the certificate described in Section 7.3 of this Agreement.
"Selling Stockholders" means the persons and entities listed on Schedule I hereto, namely, Dr. Elena Castellano, Dr. Riccardo Castellano, Dr. Marco Castellano, and Castellano Family Holdings LLC.
"Shares" means, collectively, the Firm Shares and, to the extent the over-allotment option is exercised, the Option Shares.
"Transfer Agent" means Pinnacle Trust & Transfer Co., in its capacity as transfer agent and registrar for the Common Stock.
"Underwriters" means the several underwriters listed on Schedule II hereto, namely, Ridgeline Securities LLC, Broadmark Capital Inc., Linden Groves & Co., and Harborview Partners LLC.
"Underwriting discount" means $1.04 per share, representing 2.50% of the Public Offering Price.
1.2 Background Recitals
The Company has filed with the Commission, and the Commission has declared effective, a shelf registration statement on Form S-3 (File No. 333-274851) on August 22, 2023, for the registration of securities of the Company for offering and sale from time to time in accordance with Rule 415 under the Act. The Company has filed the Prospectus Supplement with the Commission pursuant to Rule 424(b)(5) under the Act on October 12, 2023 in connection with the offering and sale of the Shares.
The Selling Stockholders desire to sell an aggregate of 6,250,000 shares of Common Stock in a registered secondary offering to the public through the Underwriters as described in the Prospectus. The Company will not receive any of the proceeds from the sale of the Shares by the Selling Stockholders. The Selling Stockholders entered into lock-up agreements in connection with the Company's initial public offering on April 17, 2023 (the "IPO"), pursuant to which each Selling Stockholder agreed not to sell, transfer, pledge, or otherwise dispose of any shares of Common Stock for a period of 180 days from the date of the final prospectus for the IPO (which 180-day period was scheduled to expire on October 14, 2023). Each of Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co., acting as joint book-running managers of the IPO, has executed and delivered a written waiver of such lock-up agreements, effective as of October 12, 2023, solely with respect to the Shares being sold in this offering (such waivers having been received on September 29, 2023).
The Selling Stockholders have granted the Underwriters an option, exercisable for a period of 30 days from the date hereof, to purchase up to 937,500 additional Option Shares on the terms and subject to the conditions set forth herein. The Underwriters propose to offer the Shares to the public as set forth in the Prospectus, at the Public Offering Price of $41.60 per share.
SECTION 2: PURCHASE AND SALE OF SHARES
2.1 Agreement to Sell and Purchase Firm Shares
Subject to the terms and conditions set forth herein, each Selling Stockholder, severally and not jointly, agrees to sell to the several Underwriters, and each Underwriter, severally and not jointly, agrees to purchase from each Selling Stockholder, at the Public Offering Price less the Underwriting discount (that is, $41.60 per share minus $1.04 per share, equaling $40.56 per share), the number of Firm Shares set forth opposite such Selling Stockholder's name in Schedule I hereto and the number of Firm Shares set forth opposite such Underwriter's name in Schedule II hereto.
The total number of Firm Shares to be purchased by the Underwriters from the Selling Stockholders is 6,250,000 shares. The aggregate purchase price for the Firm Shares (exclusive of the Underwriting discount, which shall be retained by the Underwriters from the Public Offering Price) shall be $253,500,000, representing 6,250,000 shares multiplied by the Net Proceeds Per Share of $40.56. The total Underwriting discount on the Firm Shares shall be $6,500,000, representing 6,250,000 shares multiplied by $1.04 per share. The obligation of each Underwriter to purchase the Firm Shares shall be subject to the conditions set forth in Section 7 of this Agreement.
The Selling Stockholders shall be obligated to sell, and each Underwriter shall be obligated to purchase, the number of Firm Shares allocated to such Underwriter in Schedule II hereto from each Selling Stockholder in proportion to such Selling Stockholder's allocation of Firm Shares as set forth in Schedule I hereto.
2.2 Over-Allotment Option
The Selling Stockholders hereby grant to the several Underwriters an option (the "Over-Allotment Option") to purchase up to an additional 937,500 Option Shares (representing 15% of the Firm Shares), at the Net Proceeds Per Share of $40.56 (being the Public Offering Price of $41.60 per share less the Underwriting discount of $1.04 per share), exercisable in whole or in part at any time and from time to time during a period of 30 calendar days from the date of this Agreement. The Over-Allotment Option may be exercised from October 12, 2023 through and including November 11, 2023.
The Representatives may exercise the Over-Allotment Option by giving written notice to the Selling Stockholders (or to David Orenstein, as their attorney-in-fact) specifying the aggregate number of Option Shares to be purchased and the date on which such Option Shares are to be delivered (each, an "Option Closing Date"), which date shall be no earlier than two business days and no later than five business days after the date on which such notice is given. If the Over-Allotment Option is exercised after the Closing Date, the Option Closing Date shall be the date specified in the notice of exercise, but in no event later than November 16, 2023.
The Option Shares shall be allocated among the Selling Stockholders as follows:
If the Over-Allotment Option is exercised in part, the Option Shares to be sold by each Selling Stockholder shall be in the same proportion as such Selling Stockholder's maximum Option Shares bear to the total maximum Option Shares (subject to rounding to avoid fractional shares, with any adjustments to be determined by the Representatives).
The maximum aggregate public offering price of the Option Shares, if the Over-Allotment Option is exercised in full, shall be $38,985,000 (937,500 shares multiplied by $41.60 per share). The maximum Underwriting discount on the Option Shares shall be $975,000 (937,500 shares multiplied by $1.04 per share). The maximum aggregate net proceeds to the Selling Stockholders from the sale of Option Shares shall be $38,010,000 (937,500 shares multiplied by $40.56 per share). Each Underwriter's obligation to purchase Option Shares shall be in the same proportion as such Underwriter's allocation of Firm Shares as set forth in Schedule II hereto bears to the total number of Firm Shares.
2.3 Payment and Delivery
Payment for the Firm Shares shall be made by the Underwriters by wire transfer of immediately available funds in United States dollars to the account or accounts designated by the Selling Stockholders (or by David Orenstein, as their attorney-in-fact), against delivery of the Firm Shares through the book-entry facilities of DTC, at 10:00 a.m. (New York City time) on the Closing Date, October 17, 2023, or at such other time and date as shall be agreed upon in writing by the Representatives and the Selling Stockholders. Payment for any Option Shares shall be made in the same manner on the applicable Option Closing Date (which, if the Over-Allotment Option is exercised in full, shall be no later than November 16, 2023).
All Shares shall be delivered in book-entry form through the facilities of DTC. The Common Stock is identified by CUSIP number 70831X 10 5. Pinnacle Trust & Transfer Co. shall act as transfer agent and registrar for the Common Stock and shall facilitate the delivery of the Shares through DTC in accordance with DTC's customary procedures.
The Selling Stockholders shall bear the cost of any transfer taxes applicable to the sale and delivery of the Shares to the Underwriters. The Selling Stockholders shall cause certificates representing the Shares (or, as applicable, book-entry positions evidencing the Shares) to be made available for checking by the Representatives at least 24 hours prior to the Closing Date or the applicable Option Closing Date at the offices of DTC or its designated custodian.
2.4 Allocation Among Underwriters
The Firm Shares to be purchased by each Underwriter, the percentage allocation, and the corresponding Underwriting discount allocable to each Underwriter are as follows:
In the event the Over-Allotment Option is exercised, each Underwriter shall purchase its pro rata share of the Option Shares in the same proportion as such Underwriter's allocation of Firm Shares bears to the total number of Firm Shares, unless otherwise agreed in writing by the Representatives.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Underwriter and each Selling Stockholder, as of the date hereof and as of the Closing Date (and, if applicable, each Option Closing Date), as follows:
3.1 Organization and Good Standing
The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. The Company has the requisite corporate power and authority to own, lease, and operate its properties and to conduct its business as described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus. The Company's registered agent in the State of Delaware is Registered Agents Inc., located at 251 Little Falls Drive, Wilmington, Delaware 19808. The Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership or leasing of its properties or the conduct of its business requires such qualification, except where the failure to be so qualified would not, individually or in the aggregate, have a material adverse effect on the business, properties, financial condition, or results of operations of the Company (a "Material Adverse Effect"). The Company's principal executive offices are located at 400 Meridian Parkway, Suite 1200, Princeton, New Jersey 08540. The Company and its subsidiaries do not own or control, directly or indirectly, any corporation, association, or other entity other than the subsidiaries listed in the exhibits to the Registration Statement.
3.2 Capitalization.  The authorized capital stock of the Company consists of 500,000,000 shares of Common Stock, par value $0.001 per share, and 50,000,000 shares of preferred stock, par value $0.001 per share, of which no shares of preferred stock are issued and outstanding. As of the date hereof, 120,000,000 shares of Common Stock are issued and outstanding. All outstanding shares of Common Stock have been duly authorized, are validly issued, fully paid, and nonassessable, and have been issued in compliance with all applicable federal and state securities laws. No shares of Common Stock are held in the treasury of the Company. The Common Stock is listed and traded on the Nasdaq Global Select Market under the ticker symbol "PNTR." Except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, there are no outstanding options, warrants, rights, or other securities convertible into or exchangeable for shares of Common Stock, and there are no contracts, commitments, understandings, or arrangements by which the Company is obligated to issue additional shares of its capital stock. The Company has not declared or paid any dividends on the Common Stock since the date of the Company's IPO, except as disclosed in the Prospectus.
3.3 Registration Statement and Prospectus
The Registration Statement on Form S-3 (File No. 333-274851) was filed with the Commission and was declared effective by the Commission on August 22, 2023. At the time the Registration Statement became effective, at the time of each amendment thereto, and at the date hereof, the Registration Statement complied and complies in all material respects with the requirements of the Act and the rules and regulations of the Commission thereunder. The Prospectus Supplement was timely filed with the Commission pursuant to Rule 424(b)(5) under the Act on October 12, 2023. At the time of filing, and at the date hereof, the Prospectus Supplement complied and complies in all material respects with the requirements of the Act and the rules and regulations of the Commission thereunder.
The Registration Statement, the Prospectus (including the Prospectus Supplement and the Base Prospectus), and the Pricing Disclosure Package, at their respective effective dates or dates of filing, as applicable, did not contain and do 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 light of the circumstances under which they were made, not misleading. Each Issuer Free Writing Prospectus listed on Schedule III hereto does not conflict with the information contained in the Registration Statement, the Pricing Disclosure Package, or the Prospectus, and each such Issuer Free Writing Prospectus, when considered together with the Pricing Disclosure Package, did not and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.
The Company is not an "ineligible issuer" as defined in Rule 405 under the Act. The Company has not distributed and will not distribute, prior to the later of the Closing Date and the completion of the Underwriters' distribution of the Shares, any offering material in connection with the offering and sale of the Shares other than the Registration Statement, the Preliminary Prospectus Supplement, the Prospectus, and any Issuer Free Writing Prospectus to which the Representatives have consented.
3.4 No Material Adverse Change
Since the date of the most recent financial statements included in the Pricing Disclosure Package and the Prospectus (the Company's unaudited condensed consolidated financial statements for the six months ended June 30, 2023, reflecting revenue of $312.6 million and net income of $67.8 million for such period, and the audited consolidated financial statements for the fiscal year ended December 31, 2022, reflecting revenue of $387.4 million and net income of $42.1 million for such year), there has been no material adverse change, or any development that could reasonably be expected to result in a material adverse change, in the business, properties, management, financial position, stockholders' equity, or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth or contemplated in the Pricing Disclosure Package and the Prospectus.
3.5 Financial Statements
The financial statements included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, and the Prospectus, together with the related schedules and notes thereto, present fairly in all material respects the financial condition, results of operations, and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated, and have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited interim financial statements, as permitted by Form 10-Q under the Exchange Act). The audited financial statements have been audited, and the unaudited interim financial statements have been reviewed, by Graystone & Whitmore LLP, an independent registered public accounting firm, as stated in their respective reports included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, and the Prospectus. No other financial statements or supporting schedules are required to be included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, or the Prospectus. All disclosures contained or incorporated by reference in the Registration Statement, the Pricing Disclosure Package, and the Prospectus regarding "non-GAAP financial measures" (as such term is defined by the rules and regulations of the Commission) comply with Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act, to the extent applicable.
3.6 Compliance with Laws; Permits
The Company and each of its subsidiaries are in compliance in all material respects with all applicable federal, state, local, and foreign laws, rules, regulations, orders, judgments, and decrees, including, without limitation, the Federal Food, Drug, and Cosmetic Act, the regulations of the United States Food and Drug Administration (the "FDA"), the Public Health Service Act, and all applicable regulations and requirements of the FDA and comparable foreign regulatory authorities. The Company's lead product, NEUVANTA® (tavropitant), was approved by the FDA in February 2023, and the Company is in compliance in all material respects with all post-approval commitments and requirements related thereto. Each of the Company's pipeline candidates is in the stage of clinical development described in the Pricing Disclosure Package and the Prospectus, including those currently in Phase II and Phase III clinical trials, and the Company possesses all permits, licenses, registrations, certificates, authorizations, consents, and approvals (collectively, "Permits") issued by the appropriate federal, state, local, or foreign regulatory authorities that are necessary to own, lease, and operate its properties and to conduct its business as described in the Pricing Disclosure Package and the Prospectus. The Company is in compliance in all material respects with the terms and conditions of all such Permits, and no event has occurred that allows, or after notice or lapse of time would allow, revocation, suspension, or termination of any such Permit.
3.7 Authorization.  The Company has full corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. All corporate action required to be taken by the Company for the authorization, execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby has been duly and validly taken, including the resolutions adopted by the Board of Directors of the Company on September 8, 2023 (the "Board Resolutions"), authorizing the Company's cooperation with and facilitation of the secondary offering by the Selling Stockholders. This Agreement has been duly authorized, executed, and delivered by the Company and constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).
3.8 No Conflicts
The execution, delivery, and performance of this Agreement by the Company, and the consummation of the transactions contemplated hereby (including the Company's facilitation of the sale of the Shares by the Selling Stockholders), do not and will not (a) violate or conflict with the Amended and Restated Certificate of Incorporation or the Amended and Restated Bylaws of the Company, each as currently in effect; (b) result in a breach or violation of, or constitute a default under (or an event that, with the giving of notice or lapse of time or both, would result in a default under), or result in the creation or imposition of any lien, charge, or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement, lease, license agreement, or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries or any of their respective properties may be bound or affected; or (c) result in any violation of any statute, law, rule, regulation, order, judgment, or decree of any court, regulatory body, administrative agency, or governmental body having jurisdiction over the Company or any of its subsidiaries or any of their respective properties, except, in the case of clauses (b) and (c), as would not, individually or in the aggregate, have a Material Adverse Effect. No consent, approval, authorization, order, registration, filing, or qualification of or with any court or governmental agency or body is required for the execution, delivery, and performance of this Agreement by the Company or the consummation by the Company of the transactions contemplated hereby, except such as have been obtained or made and such as may be required under state securities or Blue Sky laws in connection with the offer and sale of the Shares by the Underwriters.
3.9 No Litigation
There is no action, suit, proceeding, inquiry, arbitration, or investigation before or by any court, public board, governmental agency, self-regulatory organization, or body pending or, to the knowledge of the Company, threatened against or affecting the Company, any of its subsidiaries, or any of their respective officers or directors in their capacities as such, that (a) is required to be disclosed in the Registration Statement, the Pricing Disclosure Package, or the Prospectus and is not so disclosed, or (b) could reasonably be expected to result in a Material Adverse Effect or could reasonably be expected to materially and adversely affect the ability of the Company to perform its obligations under this Agreement. There are no current or pending actions, suits, or proceedings that are required by the Act to be described in the Registration Statement, the Pricing Disclosure Package, or the Prospectus that are not so described.
3.10 intellectual Property
The Company and its subsidiaries own or have adequate rights to use all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade dress, copyrights, licenses, inventions, trade secrets, technology, know-how, and other intellectual property (collectively, "intellectual Property") described in the Registration Statement, the Pricing Disclosure Package, and the Prospectus as being owned or licensed by the Company or its subsidiaries or that are material to the conduct of the business of the Company and its subsidiaries, taken as a whole. To the knowledge of the Company, no third party is infringing, misappropriating, or otherwise violating any intellectual Property owned by the Company or its subsidiaries. Neither the Company nor any of its subsidiaries has received any written notice of any claim of infringement, misappropriation, or violation of any intellectual Property of any third party, and no such claims are pending or, to the knowledge of the Company, threatened, except as disclosed in the Registration Statement, the Pricing Disclosure Package, and the Prospectus.
3.11 Tax Matters
The Company and each of its subsidiaries have filed (or have obtained extensions of time within which to file) all federal, state, local, and foreign tax returns that are required to be filed and have paid all taxes that are due and payable, except for taxes that are being contested in good faith and for which adequate reserves have been established in the financial statements of the Company in accordance with U.S. GAAP. The Company's employer identification number (EIN) is 82-4039571. No federal, state, local, or foreign tax deficiency has been determined adversely to the Company or any of its subsidiaries that has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.12 Insurance.  The Company and its subsidiaries maintain insurance of the types and in the amounts that the Company reasonably believes is adequate for its business, including, but not limited to, insurance covering all real and personal property owned or leased by the Company or its subsidiaries against all risks customarily insured against, and directors' and officers' liability insurance provided by Atlantic Omnivrel Insurance Co. with coverage limits and terms that are customary for companies of similar size and in similar industries. All policies of insurance insuring the Company or its subsidiaries or their respective businesses, assets, employees, officers, and directors are in full force and effect, all premiums with respect thereto have been paid to the extent due, and the Company is in compliance in all material respects with the terms of such policies. The Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.
3.13 Transfer Agent
Pinnacle Trust & Transfer Co. has been duly appointed as transfer agent and registrar for the Common Stock. The Transfer Agent is a participant in, or has access to, DTC's Fast Automated Securities Transfer program, and the Shares are eligible for book-entry delivery and settlement through DTC.
3.14 Issuer Free Writing Prospectus
Each Issuer Free Writing Prospectus, including the Pricing Term Sheet dated October 12, 2023, has been filed with the Commission in accordance with the Act and complied when filed and complies at the date hereof with Rule 433 under the Act. The Company has not made any offer relating to the Shares that would constitute a "free writing prospectus" (as defined in Rule 405 under the Act) that is required to be filed with the Commission and has not been so filed. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the completion of the public offer and sale of the Shares or until any earlier date that the Company notified or notifies the Representatives, did not, does not, and will not include any information that conflicts with the information contained in the Registration Statement or the Prospectus, including any document incorporated by reference therein.
3.15 Shelf Eligibility
The Company meets the requirements for use of Form S-3 under the Act, including the requirements of General Instruction I.B.1 thereof. The Company's Central Index Key (CIK) Number with the Commission is 0001987654. At the time the Registration Statement was initially filed with the Commission and at the time of each amendment thereto, the Company met the eligibility requirements of Form S-3. The Registration Statement is an "automatic shelf registration statement" within the meaning of Rule 405 under the Act, or the Company met the requirements for use of Form S-3 as a well-known seasoned issuer or otherwise satisfied the applicable eligibility conditions. No notice of objection of the Commission to the use of the Registration Statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Act has been received by the Company.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS
Each Selling Stockholder, severally and not jointly, represents and warrants to the Company and each Underwriter, as of the date hereof and as of the Closing Date (and, if applicable, each Option Closing Date), as follows:
4.1 Title and Ownership
Such Selling Stockholder is the beneficial and record owner of the shares of Common Stock set forth opposite such Selling Stockholder's name in Schedule I hereto, free and clear of all liens, pledges, encumbrances, security interests, charges, claims, restrictions, equities, and defects of any kind whatsoever (other than restrictions under the lock-up agreements entered into in connection with the Company's IPO on April 17, 2023, which restrictions have been validly waived with respect to the Shares as described in Section 4.4 below, and restrictions under applicable federal and state securities laws). Upon delivery of and payment for the Shares as provided herein, the Underwriters will receive good and valid title to the Shares, free and clear of all such liens, pledges, encumbrances, security interests, charges, claims, restrictions, equities, and defects.
The pre-offering holdings of each Selling Stockholder are as follows:
The combined pre-offering holdings of the Selling Stockholders represent approximately 33.4% of the 120,000,000 shares of Common Stock outstanding as of the date hereof.
4.2 Authorization; Power of Attorney
Such Selling Stockholder has full right, power, and authority to sell, assign, transfer, and deliver the Shares to be sold by such Selling Stockholder hereunder and to enter into, execute, and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly authorized, executed, and delivered by such Selling Stockholder (or by David Orenstein as attorney-in-fact, as applicable) and constitutes a valid and binding obligation of such Selling Stockholder, enforceable against such Selling Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting creditors' rights generally and by general principles of equity.
Each Selling Stockholder has duly executed and delivered a Power of Attorney and Custody Agreement dated October 12, 2023 (the "POA and Custody Agreement"), appointing David Orenstein, Esq. (General Counsel and Corporate Secretary of the Company), as such Selling Stockholder's attorney-in-fact (the "Attorney-in-Fact"), with full power and authority to execute and deliver this Agreement on behalf of such Selling Stockholder, to make any elections permitted herein, and to take all actions necessary or desirable in connection with the sale of the Shares, and appointing Pinnacle Trust & Transfer Co. as custodian of such Selling Stockholder's Shares. The POA and Custody Agreement is in full force and effect and has not been revoked, amended, or modified.
With respect to Castellano Family Holdings LLC (EIN: 87-2165438), such entity is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action on the part of Castellano Family Holdings LLC.
4.3 No Conflicts
The sale of the Shares by such Selling Stockholder and the execution, delivery, and performance of this Agreement by such Selling Stockholder (or by David Orenstein as Attorney-in-Fact) do not and will not (a) violate or conflict with any provision of the organizational documents of such Selling Stockholder (to the extent such Selling Stockholder is an entity); (b) result in a breach or violation of, or constitute a default under (or an event that, with the giving of notice or lapse of time or both, would result in a default under), any indenture, mortgage, deed of trust, loan agreement, lease, license agreement, or other agreement or 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 any violation of any statute, law, rule, regulation, order, judgment, or decree of any court, regulatory body, administrative agency, or governmental body having jurisdiction over such Selling Stockholder or any of such Selling Stockholder's properties, except, in the case of clauses (b) and (c), as would not materially and adversely affect the ability of such Selling Stockholder to consummate the transactions contemplated hereby.
4.4 Lock-Up Waiver
The lock-up agreement entered into by such Selling Stockholder in connection with the Company's IPO on April 17, 2023 (providing for a 180-day lock-up period expiring October 14, 2023) has been validly waived by each of Ridgeline Securities LLC, Broadmark Capital Inc., and Morningstar Zanthor & Co. (collectively, the "IPO Underwriter Representatives"), effective as of October 12, 2023, solely with respect to the Shares being sold by such Selling Stockholder in this offering (and the Option Shares subject to the Over-Allotment Option). Such waivers were executed and delivered on September 29, 2023, and are in full force and effect as of the date hereof. No additional consents, approvals, or waivers are required from any person or entity in connection with the sale of the Shares by such Selling Stockholder in this offering. Such Selling Stockholder acknowledges that, other than with respect to the Shares sold or to be sold in this offering, the lock-up agreement entered into in connection with the IPO remains in full force and effect until its scheduled expiration on October 14, 2023.
4.5 Accuracy of Information
All information furnished or to be furnished by or on behalf of such Selling Stockholder specifically for use in the Registration Statement, the Pricing Disclosure Package, the Prospectus, or any Issuer Free Writing Prospectus, including, without limitation, the information regarding such Selling Stockholder's name, share ownership, relationship with the Company, and the nature of any position, office, or other material relationship that such Selling Stockholder has had within the past three years with the Company, is and will be true, correct, and complete in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
4.6 No Stabilization
Such Selling Stockholder has not taken, and will not take, directly or indirectly, any action designed to, or that could reasonably be expected to, cause or result in any stabilization or manipulation of the price of the Common Stock in violation of Regulation M under the Exchange Act or otherwise.
4.7 Selling Stockholder Representation Letter
Such Selling Stockholder has delivered to the Company and the Underwriters a Selling Stockholder Representation Letter dated October 12, 2023 (the "Representation Letter"), in the form previously agreed among the parties, and all representations and agreements set forth therein are true, correct, and complete in all material respects as of the date hereof and will be true, correct, and complete in all material respects as of the Closing Date and each Option Closing Date, if any.
SECTION 5: COVENANTS OF THE COMPANY
The Company covenants and agrees with each Underwriter and each Selling Stockholder as follows:
5.1 Compliance with Securities Laws
The Company shall comply with all requirements imposed upon it by the Act, the Exchange Act, and the rules and regulations of the Commission thereunder, to the extent applicable to the Company in connection with the offering, issuance, and sale of the Shares. Without limiting the generality of the foregoing, the Company shall timely file all reports, schedules, forms, statements, and other documents required to be filed by it under the Exchange Act (including any reports on Form 10-Q, Form 10-K, Form 8-K, and proxy statements) and shall not terminate its status as a reporting company under the Exchange Act. The Company shall comply with all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations of the Commission thereunder.
5.2 Prospectus Amendments and Supplements
The Company shall advise the Representatives promptly, and confirm such advice in writing, of (a) the filing of any amendment or supplement to the Registration Statement or the Prospectus, (b) any request by the Commission for any amendment to the Registration Statement or any supplement to or additional information with respect to the Prospectus or for any additional information, (c) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation or threatening of any proceeding for that purpose, (d) the issuance by any state securities authority of any order suspending the qualification of the Shares for offering or sale in any jurisdiction, or the initiation or threatening of any proceeding for that purpose, and (e) the receipt of any notice with respect to the suspension of the qualification of the Common Stock for listing on Nasdaq. The Company shall use its reasonable best efforts to prevent the issuance of any such stop order or suspension and, if any such stop order or suspension is issued, to obtain the withdrawal thereof at the earliest possible time.
If at any time prior to the completion of the distribution of the Shares (as determined by the Representatives) the Prospectus shall not be available for delivery in compliance with the Act or the Prospectus is required to be amended or supplemented due to the occurrence of any event as a result of which the Prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, the Company shall promptly prepare and file with the Commission an amendment or supplement to the Prospectus so that the statements therein, as so amended or supplemented, will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall furnish to the Representatives such number of copies thereof as the Representatives may reasonably request.
5.3 Blue Sky Compliance
The Company shall cooperate with the Representatives and counsel for the Underwriters in connection with the registration or qualification (or obtaining an exemption from registration or qualification) of the Shares for offer and sale under the securities or "Blue Sky" laws of such jurisdictions as the Representatives may request, and shall do any and all such acts and things as may be reasonably necessary or advisable to enable each Underwriter to consummate the disposition of the Shares in such jurisdictions; provided, however, that the Company shall not be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction where it is not presently qualified or where qualifying would subject it to any new or additional taxation or to general service of process in any jurisdiction where it is not presently subject to such taxation or service of process.
5.4 Earnings Statement
The Company shall make generally available to its security holders and to the Representatives as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company commencing after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Act and Rule 158 thereunder.
5.5 Use of Proceeds
The Company acknowledges and agrees that it will not receive any proceeds from the sale of the Shares by the Selling Stockholders. All proceeds from the sale of the Shares, net of the Underwriting discount, shall be delivered directly to the Selling Stockholders (or to their Attorney-in-Fact or custodian, as applicable).
5.6 Listing.  The Company shall use its best efforts to maintain the listing of the Common Stock on the Nasdaq Global Select Market (ticker symbol: PNTR) and shall use its best efforts to effect the listing of the Shares on Nasdaq prior to the Closing Date, subject to official notice of issuance. The Company shall comply with all applicable requirements of Nasdaq for the continued listing of the Common Stock.
5.7 No Stabilization by Company
The Company will not take, directly or indirectly, any action designed to, or that could reasonably be expected to, cause or result in any stabilization or manipulation of the price of the Common Stock in violation of Regulation M under the Exchange Act or otherwise, except as expressly permitted by the Act and the Exchange Act.
5.8 Payment of Expenses
The Company agrees to pay all costs and expenses incident to the performance of the obligations of the Company under this Agreement and in connection with the offering, including, without limitation, the following:
(a) all fees and expenses in connection with the preparation, printing, filing, and distribution of the Registration Statement (including any amendments thereto and exhibits thereto), the Preliminary Prospectus Supplement, the Prospectus, and any Issuer Free Writing Prospectus;
(b) all fees and expenses in connection with the registration or qualification of the Shares under the state securities or Blue Sky laws of the various states and any filing fees required by the Financial Industry Regulatory Authority, Inc. ("FINRA");
(c) all fees and disbursements of the Company's counsel, Calderwood & Harkness LLP (estimated at $485,000);
(d) all fees and disbursements of the Company's independent registered public accounting firm, Graystone & Whitmore LLP, including fees relating to the comfort letter and the bring-down comfort letter (estimated at $175,000);
(e) all fees and expenses in connection with the listing of the Shares on Nasdaq ($45,000);
(f) all printing and engraving expenses incurred in connection with the offering, including charges of Apex Financial Printing Inc. (estimated at $35,000);
(g) all transfer agent and registrar fees and expenses of Pinnacle Trust & Transfer Co.;
(h) all SEC registration fees ($0, previously paid in connection with the Registration Statement);
(i) all miscellaneous expenses (estimated at $25,000); and
(j) all other costs and expenses incident to the performance of the Company's obligations hereunder that are not otherwise specifically provided for in this Agreement.
The total estimated expenses of the Company in connection with this offering are approximately $765,000. It is understood and agreed that, except as provided in this Section 5.8 and Sections 8 and 9.2 of this Agreement, the Underwriters shall pay their own costs and expenses, including the fees and disbursements of their counsel, Caldwell, Pearce & Strauss LLP, and the Selling Stockholders shall bear the cost of the Underwriting discount.
5.9 Reporting.  The Company shall, on or before the first business day following the date of this Agreement, file a Current Report on Form 8-K with the Commission under the Exchange Act reporting the entry into this Underwriting Agreement and disclosing the material terms of the offering. The Company shall provide a copy of such Form 8-K to the Representatives prior to filing.
SECTION 6: COVENANTS OF THE SELLING STOCKHOLDERS
Each Selling Stockholder, severally and not jointly, covenants and agrees with the Company and each Underwriter as follows:
6.1 New Lock-Up Agreement
Each Selling Stockholder agrees to enter into a new lock-up agreement (the "Secondary Lock-Up") with the Representatives, substantially in the form attached hereto as Exhibit A, restricting the direct or indirect sale, offer to sell, contract or agreement to sell, hypothecation, pledge, grant of any option to purchase, or other transfer or disposition of (or entering into any transaction that is designed to, or might reasonably be expected to, result in the disposition of), any shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock beneficially owned by such Selling Stockholder and retained after the offering (including shares subject to the Over-Allotment Option that are not purchased by the Underwriters), for a period of 90 days commencing on the Closing Date (October 17, 2023) and expiring at the close of business on January 15, 2024 (the "Secondary Lock-Up Period").
The restrictions set forth in the Secondary Lock-Up shall be subject to the following customary exceptions, provided that any transferee agrees in writing to be bound by the terms of the Secondary Lock-Up for the remainder of the Secondary Lock-Up Period:
(a) transfers of shares as a bona fide gift or gifts;
(b) transfers to any member of the immediate family of such Selling Stockholder (for purposes hereof, "immediate family" means any relationship by blood, marriage, or adoption not more remote than first cousin);
(c) transfers to any trust for the direct or indirect benefit of such Selling Stockholder or such Selling Stockholder's immediate family members;
(d) transfers to any corporation, partnership, limited liability company, or other entity all of the beneficial ownership interests of which are held by such Selling Stockholder or such Selling Stockholder's immediate family members;
(e) distributions to limited partners, members, or stockholders of such Selling Stockholder;
(f) transfers by will or intestacy;
(g) the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act, provided that such plan does not provide for the transfer of Common Stock during the Secondary Lock-Up Period; and
(h) transfers to the Company in connection with the exercise of options or warrants to acquire shares of Common Stock or the vesting of restricted stock units, solely to satisfy tax withholding obligations.
In addition, the Secondary Lock-Up shall not apply to any shares of Common Stock acquired in open market transactions after the date hereof, provided that no filing under Section 16 of the Exchange Act shall be required or shall be made voluntarily in connection with subsequent sales of Common Stock acquired in such open market transactions.
The post-offering holdings of each Selling Stockholder subject to the Secondary Lock-Up are as follows:
The Representatives may, in their sole discretion and at any time, release any shares subject to the Secondary Lock-Up, in whole or in part, with or without conditions; provided, however, that if such release occurs with respect to a Selling Stockholder, the Representatives shall use reasonable efforts to provide the Company with notice of such release at least three business days prior to the effective date thereof.
6.2 Delivery of Shares
Each Selling Stockholder agrees to deliver, or cause to be delivered, the Shares to be sold by such Selling Stockholder hereunder in book-entry form through the facilities of DTC on the Closing Date (or the applicable Option Closing Date, with respect to Option Shares) against payment of the purchase price therefor. Each Selling Stockholder shall cooperate with Pinnacle Trust & Transfer Co., as transfer agent, and with DTC to ensure timely delivery and settlement of the Shares. Each Selling Stockholder shall cause its shares of Common Stock to be available for checking by the Representatives at least 24 hours prior to the Closing Date (or the applicable Option Closing Date) at the offices of DTC or its designated custodian.
6.3 Notification.  Each Selling Stockholder shall promptly notify the Company and the Representatives of (a) any event or circumstance occurring prior to the Closing Date (or any Option Closing Date) that would cause any representation or warranty of such Selling Stockholder contained in this Agreement to be untrue or inaccurate in any material respect, (b) any material change in the information set forth in Schedule I hereto with respect to such Selling Stockholder, and (c) the receipt by such Selling Stockholder of any notice or communication from any governmental authority or regulatory body relating to the Shares or the transactions contemplated by this Agreement.
6.4 Tax Cooperation
Each Selling Stockholder shall promptly provide to the Company, the Underwriters, and the Transfer Agent any tax certifications, forms, or documentation that may be required in connection with the sale and delivery of the Shares, including, without limitation, a duly executed Internal Revenue Service Form W-9 (Request for Taxpayer Identification Number and Certification) or, if applicable, the appropriate Form W-8, certifying such Selling Stockholder's status under the Internal Revenue Code of 1986, as amended. Each Selling Stockholder acknowledges and agrees that the Company and the Underwriters may withhold from the proceeds payable to such Selling Stockholder any amounts required to be withheld under applicable tax laws to the extent a valid tax certification or form has not been timely provided.
SECTION 7: CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS
The obligations of the several Underwriters to purchase and pay for the Firm Shares on the Closing Date and the Option Shares on any Option Closing Date, as the case may be, shall be subject to the accuracy of the representations and warranties of the Company and the Selling Stockholders contained herein, the performance by the Company and the Selling Stockholders of their respective covenants and obligations hereunder, and the following additional conditions:
7.1 Accuracy of Representations and Warranties
The representations and warranties of the Company set forth in Section 3 of this Agreement, and the representations and warranties of each Selling Stockholder set forth in Section 4 of this Agreement, shall be true and correct in all material respects as of the date hereof and as of the Closing Date (and, with respect to Option Shares, as of the applicable Option Closing Date), with the same force and effect as though expressly made on and as of such date (except to the extent that any such representation or warranty is expressly made as of a specified date, in which case such representation or warranty shall be true and correct in all material respects as of such specified date).
7.2 Officer's Certificate
The Representatives shall have received from the Company an Officer's Certificate, dated the Closing Date (and, with respect to Option Shares, dated the applicable Option Closing Date), in the form of Exhibit B hereto, signed by Dr. Marco Castellano, Chief Executive Officer, and Lisa Hargrove, Chief Financial Officer, certifying on behalf of the Company that: (a) the representations and warranties of the Company set forth in this Agreement are true and correct in all material respects as of the Closing Date (or applicable Option Closing Date); (b) the Company has complied with all covenants and agreements and satisfied all conditions on its part to be performed or satisfied under this Agreement at or prior to the Closing Date (or applicable Option Closing Date); and (c) since the date of the most recent financial statements included in the Pricing Disclosure Package and the Prospectus, there has been no Material Adverse Effect and no event or circumstance that could reasonably be expected to result in a Material Adverse Effect.
7.3 Secretary's Certificate
The Representatives shall have received from the Company a Secretary's Certificate, dated the Closing Date, in the form of Exhibit C hereto, signed by David Orenstein, General Counsel and Corporate Secretary, certifying: (a) the names and true signatures of the officers of the Company authorized to sign this Agreement and each other document to be delivered by the Company in connection herewith; (b) attached thereto as exhibits, true and complete copies of (i) the Amended and Restated Certificate of Incorporation of the Company, as currently in effect, certified by the Secretary of State of the State of Delaware, (ii) the Amended and Restated Bylaws of the Company, as currently in effect, and (iii) the resolutions adopted by the Board of Directors of the Company on September 8, 2023, authorizing the Company's cooperation with and facilitation of the secondary offering and the execution and delivery of this Agreement and the performance of the Company's obligations hereunder; and (c) such other matters as the Representatives may reasonably request.
7.4 Good Standing Certificate
The Representatives shall have received a certificate of good standing (or equivalent certificate) for the Company issued by the Secretary of State of the State of Delaware, dated no earlier than October 16, 2023.
7.5 Legal Opinions
The Representatives shall have received the following legal opinions, each dated the Closing Date (and, with respect to Option Shares, dated the applicable Option Closing Date):
(a) A written opinion and negative assurance letter of Calderwood & Harkness LLP, counsel for the Company, addressed to the Underwriters, signed by Jennifer Kwon, in form a

UNDERWRITING AGREEMENT

PENTERRA PHARMACEUTICALS CORP.

SECTION 1: INTRODUCTORY PROVISIONS AND DEFINITIONS

SECTION 2: PURCHASE AND SALE OF SHARES

SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE COMPANY

SECTION 4: REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS

SECTION 5: COVENANTS OF THE COMPANY

SECTION 6: COVENANTS OF THE SELLING STOCKHOLDERS

SECTION 7: CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS

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