1018-00003 · Client 1018 · Special Committee Process

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MINUTES OF THE ORGANIZATIONAL MEETING OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.

June 2, 2023

PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT

Date: June 2, 2023

Time: 10:00 a.m. Eastern Time

Location: Conference Room 12A, 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540 (also available by secure videoconference)

Project Code Name: Project Coriander

I. Call to Order and Attendance

The organizational meeting of the Special Committee (the "Committee" or "Special Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra" or the "Company"), was called to order by Diane Prescott at 10:00 a.m. Eastern Time on June 2, 2023, in Conference Room 12A at the Company's principal offices located at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540. The meeting was also made available by secure videoconference for participants joining remotely.

Members of the Special Committee Present:

• Diane Prescott, Independent Director

• James Okafor, Independent Director

• Dr. Helen Ng, Independent Director

All three members of the Special Committee were present throughout the duration of the meeting, either in person or by secure videoconference. A majority of the members of the Special Committee constitutes a quorum, and accordingly, a quorum was confirmed to be present for the transaction of business.

Also Present by Invitation:

• Renata Vasquez, Partner, Calderwood & Harkness LLP, 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103

• Sophie Tremblay, Associate, Calderwood & Harkness LLP

Recording Secretary:

These minutes were prepared by Daniel Obi, Associate, Calderwood & Harkness LLP, who attended the meeting in the capacity of recording secretary at the invitation of the Special Committee.

Excluded Persons:

It was noted for the record that the following directors of Penterra were excluded from the meeting and were not provided with notice of the meeting, consistent with the resolution of the Board of Directors dated June 2, 2023 (the "Board Resolution") establishing the Special Committee:

• Dr. Marcus Hale, Chairman of the Board and Chief Executive Officer of Penterra;

• Angela Whitmore, Director and Executive Vice President, Commercial Operations of Penterra; and

• Raymond Tusk, Director (appointee of Dr. Hale; determined to be non-independent for purposes of the proposed transaction).

It was further noted that Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra, was not present at the meeting, although Mr. Whittaker had facilitated logistical arrangements for the meeting at the direction of Ms. Prescott, including the reservation of Conference Room 12A and the establishment of secure videoconference access. Mr. Whittaker was not provided with any substantive materials relating to the Special Committee's deliberations.

II. Introductory Remarks

Ms. Prescott opened the meeting by welcoming the members of the Special Committee and the representatives of Calderwood & Harkness LLP. Ms. Prescott stated that the meeting had been convened for the purpose of organizing the Special Committee and establishing the governance framework and procedures necessary to carry out its mandate.

Ms. Prescott referenced the resolution of the Board of Directors of Penterra Pharmaceuticals Corp. (NYSE: PPHR), a Delaware corporation, which was adopted on June 2, 2023, by the unanimous vote of the six independent directors of the Board. The Board Resolution established the Special Committee and delegated to it certain authority in connection with the evaluation of a proposed related-party acquisition.

Ms. Prescott provided a summary of the background leading to the formation of the Special Committee, noting the following key facts for the record:

The Proposed Transaction. Penterra has received a proposal from its Chairman and Chief Executive Officer, Dr. Marcus Hale, to acquire Caliston BioSciences, Inc. ("Caliston"), a privately held Delaware corporation with principal offices at 88 Harbor Point Road, Cambridge, Massachusetts 02142. Caliston is a clinical-stage biopharmaceutical company focused on the development of novel kinase inhibitors for solid tumors.

Dr. Hale's Conflict of Interest. Dr. Marcus Hale holds a 28.5% equity interest in Caliston, which was acquired through personal investments totaling approximately $42 million across Caliston's Seed, Series A, and Series B financing rounds. In addition, Dr. Hale holds a board observer seat at Caliston, a position he has occupied since 2018. Records indicate that Dr. Hale has attended fourteen of sixteen Caliston board meetings during his tenure as observer. Dr. Hale's equity interest and board observer role create a material conflict of interest with respect to the proposed acquisition, as Dr. Hale stands on both sides of the transaction — as the proponent and advocate of the acquisition in his capacity as Penterra's Chairman and CEO, and as a significant equity holder of the target company who would receive material consideration in connection with the transaction.

Angela Whitmore's Conflict of Interest. In addition to Dr. Hale's conflict, Ms. Prescott noted a further conflict involving Angela Whitmore, a director and Executive Vice President, Commercial Operations of Penterra. Ms. Whitmore is the spouse of Dr. Evan Whitmore, who serves as Caliston's Head of Clinical Development and as a member of Caliston's board of directors. This spousal relationship creates an additional conflict of interest warranting the recusal of Ms. Whitmore from the Special Committee's deliberations.

Timeline of Events. Ms. Prescott summarized the timeline of events leading to the formation of the Special Committee:

• February 14, 2023: Dr. Hale first disclosed his equity interest in Caliston to the Penterra Board and proposed that Penterra acquire Caliston.

• March 8, 2023: The Board held a meeting at which the conflicts of interest arising from Dr. Hale's ownership stake and Ms. Whitmore's spousal relationship were discussed in detail. The Board determined that an independent evaluation process would be appropriate and necessary.

• April 12, 2023: The Board engaged Alcott, Barringer & Cole LLP (Victoria Shen, lead partner) to provide initial governance advice regarding the formation of a special committee and the establishment of appropriate procedures for evaluating the proposed transaction.

• May 15, 2023: The Board approved the formation of a Special Committee, effective upon the engagement of independent counsel separate from the Company's regular outside counsel.

• June 2, 2023: The Board Resolution was adopted, formally establishing the Special Committee and defining its mandate and authority.

Recused Directors. Ms. Prescott confirmed that Dr. Hale, Ms. Whitmore, and Mr. Tusk are recused from all Special Committee deliberations, materials, and communications relating to the proposed transaction. Mr. Tusk's recusal was based on his status as a Hale appointee and his determination by the Board to be non-independent for purposes of the proposed transaction.

Purpose of the Organizational Meeting. Ms. Prescott stated that the purpose of this organizational meeting was to: (i) formalize the Committee's structure, including the appointment of a Chair; (ii) engage independent legal counsel; (iii) adopt the Special Committee Charter; (iv) establish the independence protocol and information barrier policy; (v) discuss the engagement of an independent financial advisor; and (vi) plan initial workstreams for the Committee's evaluation process.

III. Appointment of Diane Prescott as Chair

Ms. Prescott invited discussion regarding the appointment of a Chair of the Special Committee.

Mr. Okafor nominated Diane Prescott to serve as Chair of the Special Committee. In support of the nomination, Mr. Okafor noted Ms. Prescott's extensive experience in corporate governance, including her prior service as Chief Executive Officer of Windbridge Health Systems, Inc., a publicly traded healthcare company, and her deep familiarity with board governance processes arising from her service on multiple public company boards. Mr. Okafor stated his belief that Ms. Prescott's experience and judgment made her the most appropriate candidate to lead the Special Committee's work.

Dr. Ng seconded the nomination, expressing her concurrence with Mr. Okafor's assessment and adding that Ms. Prescott's leadership would provide the Committee with the credibility and structure necessary to carry out its important mandate.

There being no further discussion, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), it was:

RESOLVED, that Diane Prescott is hereby appointed as Chair of the Special Committee. As Chair, Ms. Prescott shall serve as the primary point of contact between the Special Committee and its legal, financial, and other advisors; shall preside over all meetings of the Special Committee; and shall be authorized to communicate the Special Committee's recommendations, process updates, and other appropriate information to the full Board of Directors, subject to the information barrier and independence protocols adopted by the Committee.

IV. Engagement of Calderwood & Harkness LLP as Independent Counsel

Ms. Prescott introduced Renata Vasquez and Sophie Tremblay of Calderwood & Harkness LLP ("C&H") and invited Ms. Vasquez to address the Committee regarding C&H's qualifications and the proposed terms of engagement.

Firm Qualifications. Ms. Vasquez provided an overview of Calderwood & Harkness LLP's qualifications to serve as independent counsel to the Special Committee. Ms. Vasquez described the firm's extensive experience in advising independent board committees in connection with related-party transactions, conflicted controller transactions, management buyouts, and other situations involving potential fiduciary duty issues. Ms. Vasquez noted that the firm's M&A and corporate governance group has advised special committees in more than forty transactions over the past decade, including several in the life sciences and pharmaceutical sectors.

Engagement Terms. Ms. Vasquez presented the proposed engagement letter dated June 2, 2023, summarizing its principal terms as follows:

• Scope of Engagement: Calderwood & Harkness LLP will serve as independent counsel to the Special Committee in connection with the evaluation of the proposed acquisition of Caliston BioSciences, Inc.

• C&H Matter Number: 1025-00006.

• Engagement Team: Renata Vasquez, Partner (Responsible Partner); Bernard Crawford, Partner (Billing Partner); Sophie Tremblay, Associate (Lead Associate); Daniel Obi, Associate (Working Associate). Additional attorneys and staff may be assigned to the matter as necessary with the approval of the Special Committee.

• Fee Arrangement: Hourly billing at the following blended rates: $1,025 per hour for partners and $625 per hour for associates. Invoices to be rendered monthly and payable within thirty days.

• Evergreen Retainer: An initial retainer of $75,000, to be replenished as drawn.

• Fee Cap: No fee cap applies. The Special Committee is authorized to incur fees as reasonably necessary to fulfill its mandate, and C&H's fees will be paid by Penterra in accordance with the Board Resolution.

Conflicts Clearance. Ms. Vasquez confirmed that Calderwood & Harkness LLP had completed a comprehensive conflicts clearance review, as documented in a memorandum dated June 1, 2023. The conflicts review confirmed that C&H has no existing client relationships with any of the following parties that would create a conflict of interest:

• Caliston BioSciences, Inc.;

• Whitfield Graves LLP (counsel to Caliston);

• Fendowell Sinclair & Co. (financial advisor to Caliston);

• Ridgeline Ventures, LP (a Caliston stockholder);

• Meridian Life Sciences Fund III, LP (a Caliston stockholder);

• Dr. Marcus Hale, individually; and

• Any other known Caliston stockholder, officer, director, or advisor.

Ms. Vasquez stated that based on the results of the conflicts clearance review, C&H was satisfied that it could serve as independent counsel to the Special Committee without any actual or potential conflict of interest.

Discussion. The members of the Special Committee discussed C&H's qualifications, independence, and proposed fee arrangement. Mr. Okafor inquired about the firm's experience with Delaware entire fairness analyses and the MFW framework specifically. Ms. Vasquez confirmed that C&H has substantial experience advising special committees in transactions evaluated under the entire fairness standard and has been involved in structuring processes designed to invoke the MFW framework, where applicable, to shift the standard of review to business judgment. Dr. Ng asked whether C&H's engagement team had any personal relationships with Dr. Hale, Ms. Whitmore, or any Caliston insiders. Ms. Vasquez confirmed that no member of the engagement team has any such relationship.

After full discussion, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), it was:

RESOLVED, that the Special Committee hereby engages Calderwood & Harkness LLP as independent counsel to the Special Committee in connection with the evaluation of the proposed acquisition of Caliston BioSciences, Inc.;

RESOLVED FURTHER, that the Chair of the Special Committee is hereby authorized to execute and deliver the engagement letter dated June 2, 2023, on behalf of the Special Committee; and

RESOLVED FURTHER, that Alcott, Barringer & Cole LLP, Penterra's regular outside counsel (led by Victoria Shen, partner), is hereby recused from advising the Special Committee in order to preserve the independence and integrity of the Special Committee's process. It is acknowledged that Alcott, Barringer & Cole LLP may continue to advise the Penterra Board of Directors and management on non-conflicted corporate matters, subject to appropriate coordination protocols to be established between C&H and Alcott, Barringer & Cole LLP.

V. Discussion of Scope of Authority and Board Resolution

Ms. Vasquez directed the Committee's attention to the Board Resolution dated June 2, 2023, which had been drafted by Calderwood & Harkness LLP and adopted by the Board of Directors earlier that day. Ms. Vasquez reviewed the key terms of the Board Resolution in detail with the Committee members.

Authority Delegated to the Special Committee. Ms. Vasquez explained that the Board Resolution grants the Special Committee sole and exclusive authority with respect to the following matters:

(a) To evaluate the proposed transaction, including the strategic rationale, financial terms, and any other aspects of the proposed acquisition that the Special Committee deems relevant;

(b) To negotiate the terms of any transaction with Caliston and its representatives, including price, structure, representations and warranties, indemnification provisions, closing conditions, and all other material terms;

(c) To retain independent legal, financial, and other advisors at the expense of Penterra as the Special Committee, in its sole discretion, deems necessary or appropriate;

(d) To recommend to the full Board the approval or rejection of the proposed transaction, or any alternative transaction, on such terms as the Special Committee deems fair and in the best interests of Penterra and its stockholders; and

(e) To explore alternatives to the proposed transaction, including the express power to decline to proceed with the transaction (the "say no" power), and to recommend that Penterra pursue no transaction at all if the Special Committee determines that doing so is in the best interests of Penterra and its stockholders.

Applicable Legal Standards. Ms. Vasquez noted that the Board Resolution references Delaware General Corporation Law §§ 141(a) and 144, which provide the statutory framework for the delegation of authority to board committees and the treatment of interested director transactions, respectively. Ms. Vasquez explained that under Section 144 of the DGCL, a transaction involving a conflict of interest is not voidable solely because of the conflict if it is approved in good faith by a majority of disinterested directors after full disclosure of the material facts, or if it is approved in good faith by the stockholders, or if it is fair to the corporation at the time it is authorized. Ms. Vasquez noted, however, that under Delaware case law, the standard of review applicable to a transaction involving a conflicted director who is also the corporation's controlling stockholder or exercises significant influence may be the entire fairness standard, which requires the transaction to be entirely fair to the corporation in terms of both fair dealing and fair price.

"Say No" Power. There was considerable discussion among the Committee members regarding the importance of the "say no" power. Ms. Vasquez emphasized that the Special Committee's authority to decline to proceed with the proposed transaction is a critical element of a defensible process under Delaware law. Ms. Vasquez noted that Delaware courts have consistently held that a special committee must possess genuine bargaining power, including the ability to reject the proposed transaction, in order for the committee's approval to be accorded meaningful weight in a judicial review of the transaction. The Committee members expressed their understanding that the "say no" power is not merely a formality but reflects the Committee's genuine and independent authority to protect the interests of Penterra and its stockholders.

Recused Directors. Ms. Vasquez confirmed that the Board Resolution provides for the recusal of Dr. Hale, Ms. Whitmore, and Mr. Tusk from all deliberations and votes related to the proposed transaction. Ms. Vasquez noted that the recusal extends to all Committee meetings, materials, communications, and recommendations.

The Committee acknowledged its understanding of its mandate, the scope of its authority, and the fiduciary obligations owed by each member in carrying out the Committee's work. Each member affirmed his or her commitment to conducting a thorough, independent, and good faith evaluation of the proposed transaction.

VI. Adoption of the Special Committee Charter

Ms. Vasquez presented a draft Special Committee Charter (the "Charter") prepared by Calderwood & Harkness LLP for the Committee's consideration and adoption. Copies of the draft Charter had been distributed to the Committee members in advance of the meeting.

Ms. Vasquez reviewed the key provisions of the Charter with the Committee:

Decision-Making Process. All actions and decisions of the Special Committee shall be taken by the affirmative vote of a majority of the members of the Committee present at a meeting at which a quorum is present.

Quorum. A quorum for the transaction of business shall consist of a majority of the members of the Special Committee, which, as of the date of these minutes, means two of the three members.

Advisor Engagement Rights. The Charter confirms the Special Committee's authority to engage Calderwood & Harkness LLP as its independent legal counsel and to engage an independent financial advisor, as well as any other advisors the Committee deems necessary or appropriate, at the expense of Penterra. The selection and retention of advisors shall be within the sole discretion of the Special Committee.

Reporting Obligations. The Chair of the Special Committee shall report to the full Board of Directors (excluding the recused directors) on the Committee's process and status at appropriate intervals, as determined by the Chair in her discretion. Such reports shall be limited to general process updates and shall not include disclosure of privileged deliberations, negotiation strategy, confidential communications with advisors, or other information the Chair determines should be maintained in confidence to preserve the integrity of the Committee's process.

Duration. The Special Committee shall remain in existence until its formal recommendation regarding the proposed transaction is delivered to and accepted by the full Board of Directors, or until the proposed transaction is terminated, whichever occurs first. The Board retains the authority to extend or modify the Committee's mandate as circumstances may require.

Compensation. Members of the Special Committee shall receive additional compensation for their service on the Committee, in an amount to be determined by the independent directors of the Board (excluding the recused directors) at a subsequent meeting. Such compensation shall be payable in cash and shall be structured so as not to create any incentive for the Committee members to approve or reject the proposed transaction.

After discussion, and upon motion duly made by Dr. Ng, seconded by Mr. Okafor, and unanimously approved by all three members of the Special Committee (3-0), it was:

RESOLVED, that the Special Committee hereby adopts the Special Committee Charter in the form presented by Calderwood & Harkness LLP, a copy of which shall be appended to these minutes as Exhibit A.

VII. Discussion and Adoption of Independence Protocol and Information Barrier Policy

Ms. Vasquez and Ms. Tremblay presented the draft Independence Protocol and Information Barrier Policy (the "Protocol"), also prepared by Calderwood & Harkness LLP and dated June 2, 2023. The Protocol is designated under the project code name "Project Coriander." Copies of the draft Protocol had been distributed to the Committee members in advance of the meeting.

Ms. Vasquez emphasized that the Protocol is a critical component of the Special Committee's governance framework and is designed to ensure the independence, integrity, and defensibility of the Committee's process under Delaware law. Ms. Tremblay reviewed the key elements of the Protocol in detail:

Excluded Persons. Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk (collectively, the "Excluded Persons") are excluded from all Special Committee deliberations, materials, and communications. The Excluded Persons shall not attend or participate in any meeting of the Special Committee, shall not receive copies of any materials prepared for or by the Special Committee or its advisors, and shall not be consulted by any member of the Special Committee regarding the substance of the Committee's work.

Segregated Document Management Workspace. The Protocol establishes a segregated document management workspace on the Penterra document management system, designated "Project Coriander." Access to the Project Coriander workspace is restricted to the three members of the Special Committee and their authorized advisors at Calderwood & Harkness LLP (and, following engagement, the independent financial advisor). The Company's IT department shall ensure that access controls are implemented and that the Excluded Persons are unable to access the Project Coriander workspace. Mr. Whittaker, in his capacity as General Counsel, shall facilitate the establishment of the workspace but shall not have ongoing access to its contents.

Communication Guidelines. All communications related to the proposed transaction between Penterra management (including Dr. Hale and Ms. Whitmore in their management capacities) and the Special Committee shall be routed through Calderwood & Harkness LLP. Direct communications between the Excluded Persons and members of the Special Committee regarding the proposed transaction are prohibited. Communications regarding routine Company business unrelated to the proposed transaction are not restricted.

Inadvertent Disclosure Procedures. The Protocol establishes procedures for handling inadvertent disclosures of confidential Special Committee information. In the event that any Excluded Person inadvertently receives or accesses confidential Committee materials or information, the Excluded Person shall immediately notify Calderwood & Harkness LLP and shall not review, copy, distribute, or retain such materials. C&H shall document any such inadvertent disclosure and assess its impact on the integrity of the Committee's process.

Information Requests. All information requests from the Special Committee to Penterra management shall be channeled through Calderwood & Harkness LLP. This procedure is designed to preserve the independence of the Committee's process and to protect the attorney-client privilege and work product doctrine as applicable to the Committee's deliberations. C&H shall maintain a log of all information requests and responses.

Restrictions on Dr. Hale's Access. Without limiting the generality of the foregoing, the Protocol specifically prohibits Dr. Hale from accessing the Project Coriander workspace, from receiving or reviewing any materials prepared by or for the Special Committee or its advisors, and from communicating directly with any member of the Special Committee regarding the proposed transaction. Dr. Hale shall be informed in writing of these restrictions.

Discussion. The Committee members discussed the sufficiency of these protections at length. Mr. Okafor asked whether the Protocol was consistent with best practices in similar special committee processes. Ms. Vasquez confirmed that the Protocol is modeled on information barrier policies that have been upheld and recognized favorably by the Delaware Court of Chancery in litigated cases involving special committee processes. Dr. Ng inquired about the enforceability of the Protocol in the event of a breach. Ms. Vasquez explained that while the Protocol itself does not impose legal penalties, a breach of the Protocol could undermine the defensibility of the Committee's process in any subsequent litigation and could be relevant to a court's assessment of fair dealing under the entire fairness standard.

Ms. Vasquez further noted that the Protocol is designed to support the procedural prong of the entire fairness analysis — that is, fair dealing — and to position the Special Committee's process favorably under the framework established by the Delaware Supreme Court in Kahn v. M & F Worldwide Corp. (MFW) and its progeny. Ms. Vasquez noted that while the MFW framework was developed in the context of controlling stockholder squeeze-outs, its principles regarding the establishment of independent special committees with genuine bargaining authority are instructive in any transaction involving a conflicted fiduciary. She noted that Dr. Hale's 28.5% equity interest in Caliston, while significant, does not constitute a controlling interest in Penterra, and therefore the precise applicability of the MFW framework would need to be analyzed further in the Delaware Law Memorandum referenced below. Nevertheless, adherence to the procedural safeguards reflected in the Protocol would strengthen the Committee's process under any applicable standard of review.

After thorough discussion, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), it was:

RESOLVED, that the Special Committee hereby adopts the Independence Protocol and Information Barrier Policy (Project Coriander) in the form presented by Calderwood & Harkness LLP, dated June 2, 2023, a copy of which shall be appended to these minutes as Exhibit B.

VIII. Director Independence Questionnaires

Ms. Tremblay distributed Director Independence Questionnaires (the "Questionnaires") to each of the three members of the Special Committee: Diane Prescott, James Okafor, and Dr. Helen Ng.

Ms. Tremblay explained that the Questionnaires are designed to confirm the independence of each member of the Special Committee under applicable standards, including the independence requirements of the New York Stock Exchange listing standards and the standards for director independence under Delaware law. The Questionnaires require each member to disclose any relationships, financial interests, or other connections with the following persons and entities:

• Caliston BioSciences, Inc.;

• Dr. Marcus Hale (individually and in his capacity as Chairman and CEO of Penterra and as a Caliston stockholder);

• Angela Whitmore (individually and in her capacity as a director and officer of Penterra);

• Dr. Evan Whitmore (individually and in his capacity as an officer and director of Caliston);

• Ridgeline Ventures, LP (a Caliston stockholder);

• Meridian Life Sciences Fund III, LP (a Caliston stockholder); and

• Any other known Caliston stockholder, officer, director, advisor, or affiliate.

Ms. Tremblay noted that the Questionnaires also request information regarding any financial, familial, social, professional, or other relationships that could reasonably be perceived as impairing the member's ability to exercise independent judgment in connection with the evaluation of the proposed transaction.

Each member of the Special Committee was asked to complete and return the Questionnaire to Calderwood & Harkness LLP within five business days of the date of the meeting — that is, by June 9, 2023. Ms. Vasquez stated that upon receipt of the completed Questionnaires, C&H will prepare a summary memorandum analyzing the responses and confirming the independence of each member of the Committee for the record.

The Committee members acknowledged the importance of the independence confirmation process and each expressed his or her commitment to providing complete and accurate responses.

IX. Authorization to Engage an Independent Financial Advisor

Ms. Vasquez addressed the Committee regarding the engagement of an independent financial advisor. Ms. Vasquez explained that the engagement of a qualified, independent financial advisor is a critical element of the Special Committee's process. The financial advisor would be expected to conduct independent valuation analyses of Caliston, assist the Committee in evaluating the financial terms of any proposed transaction, and, if the Committee determines that such assistance is appropriate, deliver a fairness opinion to the Special Committee regarding the consideration to be paid in connection with the transaction.

Ms. Vasquez emphasized that the financial advisor must be independent of both Penterra and Caliston, and must have no material relationships with the officers, directors, or significant stockholders of either company. Ms. Vasquez noted that the independence of the financial advisor is an important factor that Delaware courts will consider in evaluating the Special Committee's process.

Candidate Identified. Ms. Vasquez reported that C&H had conducted a preliminary review of potential financial advisor candidates and recommended that the Committee consider Thorngate Partners LLC ("Thorngate"), located at 590 Madison Avenue, 22nd Floor, New York, New York 10022. Ms. Vasquez identified Gregory Ashford, Managing Director, as the proposed lead advisor at Thorngate. Ms. Vasquez noted that Thorngate has significant experience in life sciences mergers and acquisitions, including experience advising special committees, and has no prior engagements with Penterra, Caliston, Dr. Hale, or any of the other relevant parties. Ms. Vasquez noted that C&H would continue to evaluate other candidates as well to ensure that the Committee has considered multiple options.

Scope of Financial Advisory Engagement. The Committee discussed the anticipated scope of the financial advisor's engagement, which would include the following:

• Independent valuation analyses of Caliston using multiple methodologies, including discounted cash flow ("DCF") analysis, comparable public company analysis, comparable transactions analysis, and premiums paid analysis;

• Evaluation of the strategic rationale and financial merits of the proposed acquisition;

• Exploration of alternative acquisition targets or strategic alternatives available to Penterra (a "market check" or review of alternatives);

• Assistance in negotiating the financial terms of any proposed transaction; and

• If appropriate and if requested by the Special Committee, delivery of a fairness opinion to the Special Committee as to whether the consideration to be paid by Penterra in connection with the proposed transaction is fair, from a financial point of view, to Penterra.

Discussion. Mr. Okafor emphasized the importance of selecting a financial advisor with deep expertise in life sciences valuations, particularly given the clinical-stage nature of Caliston's business and the inherent uncertainties associated with valuing pre-revenue pharmaceutical assets. Dr. Ng concurred and noted that the financial advisor should have experience with risk-adjusted net present value ("rNPV") methodologies commonly used in the life sciences sector, in addition to the traditional valuation approaches identified by Ms. Vasquez.

After discussion, and upon motion duly made by Dr. Ng, seconded by Mr. Okafor, and unanimously approved by all three members of the Special Committee (3-0), it was:

RESOLVED, that the Special Committee hereby authorizes Calderwood & Harkness LLP to conduct further diligence on Thorngate Partners LLC and other potential financial advisor candidates and to report its findings to the Committee;

RESOLVED FURTHER, that the Chair of the Special Committee, acting on behalf of the Committee, is hereby authorized to negotiate and approve the terms of engagement of an independent financial advisor, subject to confirmation by the full Committee at a subsequent meeting; and

RESOLVED FURTHER, that Calderwood & Harkness LLP is hereby directed to prepare a letter to the selected financial advisor outlining the scope of the fairness opinion engagement, required valuation methodologies, and the independence requirements applicable to the engagement.

X. Discussion of Initial Workstreams and Upcoming Activities

Ms. Vasquez outlined the initial workstreams to be undertaken by Calderwood & Harkness LLP on behalf of the Special Committee in the period following the organizational meeting. The following workstreams were discussed:

1. Delaware Law Memorandum. C&H will prepare a comprehensive memorandum on Delaware law governing interested director transactions, with particular focus on the following topics: (i) DGCL § 144 and its requirements for the approval of interested director transactions; (ii) the entire fairness doctrine as developed by the Delaware Supreme Court and the Court of Chancery, including the two-pronged analysis of fair dealing and fair price; and (iii) the MFW framework (Kahn v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014)) and its applicability to the proposed transaction. Ms. Vasquez noted that the MFW framework, which provides for business judgment review of controlling stockholder transactions that are conditioned ab initio on both approval by a fully empowered special committee and an informed, uncoerced vote of the minority stockholders, was developed in the context of controlling stockholder squeeze-outs. The memorandum will analyze the extent to which the MFW framework or its principles are applicable to the proposed Caliston acquisition, noting that Dr. Hale's 28.5% equity interest in Caliston represents a significant but non-controlling stake in the target company, and that Dr. Hale's position as Chairman and CEO of Penterra presents a distinct set of fiduciary duty considerations.

2. Due Diligence. C&H will prepare and issue a comprehensive due diligence request list to Whitfield Graves LLP, counsel to Caliston. Ms. Vasquez identified Kenneth Pratt as the lead partner at Whitfield Graves LLP, located at One Federal Street, Suite 2600, Boston, Massachusetts 02110. The due diligence request list will cover, among other topics, Caliston's organizational documents, capitalization, intellectual property portfolio, clinical development programs, regulatory filings and correspondence with the FDA, material contracts, employment agreements, litigation and contingent liabilities, financial statements, tax matters, and any other matters that the Special Committee and its advisors determine to be material to the evaluation of the proposed transaction.

3. Related-Party Mapping. C&H will prepare a comprehensive memorandum mapping all relationships between Penterra insiders and Caliston stakeholders. This memorandum will include a detailed analysis of: (i) Dr. Hale's 28.5% equity interest in Caliston, including the timing, amount, and terms of each investment; (ii) Dr. Hale's board observer role at Caliston, including the nature and extent of his involvement in Caliston's governance and decision-making; (iii) the spousal relationship between Angela Whitmore (Penterra director and EVP, Commercial Operations) and Dr. Evan Whitmore (Caliston's Head of Clinical Development and Caliston board member); and (iv) any other relationships between Penterra directors, officers, or significant stockholders and Caliston stockholders, officers, directors, or advisors that may be relevant to the Special Committee's analysis.

4. Recusal Coordination. C&H will prepare and send a formal letter to Victoria Shen at Alcott, Barringer & Cole LLP establishing the recusal and coordination protocol between Penterra's regular outside counsel and the Special Committee's independent counsel. The letter will delineate the respective roles of each firm, the scope of the recusal, and the procedures for ensuring that no confidential Special Committee information is shared with Alcott, Barringer & Cole LLP or, through them, with any of the Excluded Persons.

5. Financial Advisor Selection. C&H will continue its diligence on Thorngate Partners LLC and any other financial advisor candidates identified, and will report its findings to the Committee in advance of the next meeting.

Proposed Transaction Overview. For the benefit of the record and to provide context for the Committee's initial deliberations, Ms. Vasquez provided a summary of the proposed transaction and the key characteristics of the target company:

• Transaction Structure: Penterra proposes to acquire 100% of the outstanding equity of Caliston BioSciences, Inc. via a one-step merger.

• Caliston Business Overview: Caliston is a clinical-stage biopharmaceutical company focused on the development of novel kinase inhibitors for solid tumors.

• Lead Asset: Caliston's lead development asset is CLT-4019, a selective CDK4/6 inhibitor for the treatment of HR+/HER2– metastatic breast cancer. CLT-4019 is currently in a Phase 2b clinical trial. The Investigational New Drug application (IND 158429) was filed in March 2020. Topline data from the Phase 2b trial is expected in the fourth quarter of 2023.

• Caliston Capitalization and Financial Position: Caliston's last private valuation was $680 million post-money, established at its Series C financing round in October 2021. Caliston has raised approximately $347 million in total equity financing across its Seed, Series A, Series B, and Series C rounds. As of March 31, 2023, Caliston had cash on hand of approximately $112.6 million, with an estimated cash runway through the first quarter of 2025 based on current burn rates. Caliston's net cash burn for fiscal year 2022 was approximately $78.4 million.

• Caliston Workforce: Caliston has approximately 94 employees.

Ms. Vasquez also provided a brief overview of Penterra's current financial profile for context:

• Penterra Financial Highlights (Fiscal Year 2022): Revenue of approximately $1.836 billion; EBITDA of approximately $412 million; net income of approximately $247 million; cash and cash equivalents of approximately $892 million.

• Market Capitalization: As of June 1, 2023, Penterra's market capitalization was approximately $4.72 billion, based on approximately 121.4 million shares of common stock outstanding (NYSE: PPHR).

Timeline Discussion. The Committee members discussed the anticipated timeline for the Special Committee's work. The members agreed on the importance of conducting a thorough and deliberate process and expressed no urgency to reach a conclusion prematurely. Ms. Prescott noted that the credibility of the Committee's process would depend in significant part on the Committee's willingness to take the time necessary to conduct a comprehensive evaluation, including a full review of Caliston's business, financials, and clinical programs, as well as a thorough analysis of valuation, strategic alternatives, and the fairness of the proposed terms. The Committee acknowledged that the timeline would be influenced by several factors, including the pace of due diligence, the availability of clinical data, and the progress of negotiations, if any.

XI. Scheduling of Future Meetings

The Committee discussed the expected cadence of meetings during the active evaluation period. The members anticipated that meetings would be held approximately every two to three weeks, with additional meetings to be called as needed, particularly during the due diligence review and any negotiation phases.

Ms. Prescott noted that she would work with C&H to coordinate the scheduling of future meetings and to ensure that meeting materials are distributed sufficiently in advance to allow the Committee members to prepare. Ms. Prescott also noted that she would call additional meetings on shorter notice if developments in the evaluation process warranted immediate attention.

The next meeting of the Special Committee was tentatively scheduled for late June 2023, with the expectation that the agenda for that meeting would include: (i) review of the completed Director Independence Questionnaires; (ii) engagement of the independent financial advisor; (iii) receipt of initial due diligence materials from Caliston; and (iv) review of the Delaware Law Memorandum.

XII. Adjournment

There being no further business to come before the Special Committee at this time, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), the meeting was adjourned at approximately 11:45 a.m. Eastern Time.

The foregoing minutes were prepared by Daniel Obi, Associate, Calderwood & Harkness LLP, and are a true and accurate record of the proceedings of the organizational meeting of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. held on June 2, 2023.

APPROVED:

________________________________________

Diane Prescott Chair, Special Committee of the Board of Directors Penterra Pharmaceuticals Corp.

Date: ________

Approved and adopted at the meeting of the Special Committee held on ____, 2023.

MINUTES OF THE ORGANIZATIONAL MEETING OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.
June 2, 2023
PRIVILEGED & CONFIDENTIAL ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
Date: June 2, 2023
Time: 10:00 a.m. Eastern Time
Location: Conference Room 12A, 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540 (also available by secure videoconference)
Project Code Name: Project Coriander
I. Call to Order and Attendance
The organizational meeting of the Special Committee (the "Committee" or "Special Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp., a Delaware corporation ("Penterra" or the "Company"), was called to order by Diane Prescott at 10:00 a.m. Eastern Time on June 2, 2023, in Conference Room 12A at the Company's principal offices located at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540. The meeting was also made available by secure videoconference for participants joining remotely.
Members of the Special Committee Present:
•  Diane Prescott, Independent Director
•  James Okafor, Independent Director
•  Dr. Helen Ng, Independent Director
All three members of the Special Committee were present throughout the duration of the meeting, either in person or by secure videoconference. A majority of the members of the Special Committee constitutes a quorum, and accordingly, a quorum was confirmed to be present for the transaction of business.
Also Present by Invitation:
•  Renata Vasquez, Partner, Calderwood & Harkness LLP, 1700 Market Street, Suite 3400, Philadelphia, Pennsylvania 19103
•  Sophie Tremblay, Associate, Calderwood & Harkness LLP
Recording Secretary:
These minutes were prepared by Daniel Obi, Associate, Calderwood & Harkness LLP, who attended the meeting in the capacity of recording secretary at the invitation of the Special Committee.
Excluded Persons:
It was noted for the record that the following directors of Penterra were excluded from the meeting and were not provided with notice of the meeting, consistent with the resolution of the Board of Directors dated June 2, 2023 (the "Board Resolution") establishing the Special Committee:
•  Dr. Marcus Hale, Chairman of the Board and Chief Executive Officer of Penterra;
•  Angela Whitmore, Director and Executive Vice President, Commercial Operations of Penterra; and
•  Raymond Tusk, Director (appointee of Dr. Hale; determined to be non-independent for purposes of the proposed transaction).
It was further noted that Lawrence Whittaker, General Counsel and Corporate Secretary of Penterra, was not present at the meeting, although Mr. Whittaker had facilitated logistical arrangements for the meeting at the direction of Ms. Prescott, including the reservation of Conference Room 12A and the establishment of secure videoconference access. Mr. Whittaker was not provided with any substantive materials relating to the Special Committee's deliberations.
II. Introductory Remarks
Ms. Prescott opened the meeting by welcoming the members of the Special Committee and the representatives of Calderwood & Harkness LLP. Ms. Prescott stated that the meeting had been convened for the purpose of organizing the Special Committee and establishing the governance framework and procedures necessary to carry out its mandate.
Ms. Prescott referenced the resolution of the Board of Directors of Penterra Pharmaceuticals Corp. (NYSE: PPHR), a Delaware corporation, which was adopted on June 2, 2023, by the unanimous vote of the six independent directors of the Board. The Board Resolution established the Special Committee and delegated to it certain authority in connection with the evaluation of a proposed related-party acquisition.
Ms. Prescott provided a summary of the background leading to the formation of the Special Committee, noting the following key facts for the record:
The Proposed Transaction. Penterra has received a proposal from its Chairman and Chief Executive Officer, Dr. Marcus Hale, to acquire Caliston BioSciences, Inc. ("Caliston"), a privately held Delaware corporation with principal offices at 88 Harbor Point Road, Cambridge, Massachusetts 02142. Caliston is a clinical-stage biopharmaceutical company focused on the development of novel kinase inhibitors for solid tumors.
Dr. Hale's Conflict of Interest. Dr. Marcus Hale holds a 28.5% equity interest in Caliston, which was acquired through personal investments totaling approximately $42 million across Caliston's Seed, Series A, and Series B financing rounds. In addition, Dr. Hale holds a board observer seat at Caliston, a position he has occupied since 2018. Records indicate that Dr. Hale has attended fourteen of sixteen Caliston board meetings during his tenure as observer. Dr. Hale's equity interest and board observer role create a material conflict of interest with respect to the proposed acquisition, as Dr. Hale stands on both sides of the transaction — as the proponent and advocate of the acquisition in his capacity as Penterra's Chairman and CEO, and as a significant equity holder of the target company who would receive material consideration in connection with the transaction.
Angela Whitmore's Conflict of Interest. In addition to Dr. Hale's conflict, Ms. Prescott noted a further conflict involving Angela Whitmore, a director and Executive Vice President, Commercial Operations of Penterra. Ms. Whitmore is the spouse of Dr. Evan Whitmore, who serves as Caliston's Head of Clinical Development and as a member of Caliston's board of directors. This spousal relationship creates an additional conflict of interest warranting the recusal of Ms. Whitmore from the Special Committee's deliberations.
Timeline of Events. Ms. Prescott summarized the timeline of events leading to the formation of the Special Committee:
•  February 14, 2023: Dr. Hale first disclosed his equity interest in Caliston to the Penterra Board and proposed that Penterra acquire Caliston.
•  March 8, 2023: The Board held a meeting at which the conflicts of interest arising from Dr. Hale's ownership stake and Ms. Whitmore's spousal relationship were discussed in detail. The Board determined that an independent evaluation process would be appropriate and necessary.
•  April 12, 2023: The Board engaged Alcott, Barringer & Cole LLP (Victoria Shen, lead partner) to provide initial governance advice regarding the formation of a special committee and the establishment of appropriate procedures for evaluating the proposed transaction.
•  May 15, 2023: The Board approved the formation of a Special Committee, effective upon the engagement of independent counsel separate from the Company's regular outside counsel.
•  June 2, 2023: The Board Resolution was adopted, formally establishing the Special Committee and defining its mandate and authority.
Recused Directors. Ms. Prescott confirmed that Dr. Hale, Ms. Whitmore, and Mr. Tusk are recused from all Special Committee deliberations, materials, and communications relating to the proposed transaction. Mr. Tusk's recusal was based on his status as a Hale appointee and his determination by the Board to be non-independent for purposes of the proposed transaction.
Purpose of the Organizational Meeting. Ms. Prescott stated that the purpose of this organizational meeting was to: (i) formalize the Committee's structure, including the appointment of a Chair; (ii) engage independent legal counsel; (iii) adopt the Special Committee Charter; (iv) establish the independence protocol and information barrier policy; (v) discuss the engagement of an independent financial advisor; and (vi) plan initial workstreams for the Committee's evaluation process.
III. Appointment of Diane Prescott as Chair
Ms. Prescott invited discussion regarding the appointment of a Chair of the Special Committee.
Mr. Okafor nominated Diane Prescott to serve as Chair of the Special Committee. In support of the nomination, Mr. Okafor noted Ms. Prescott's extensive experience in corporate governance, including her prior service as Chief Executive Officer of Windbridge Health Systems, Inc., a publicly traded healthcare company, and her deep familiarity with board governance processes arising from her service on multiple public company boards. Mr. Okafor stated his belief that Ms. Prescott's experience and judgment made her the most appropriate candidate to lead the Special Committee's work.
Dr. Ng seconded the nomination, expressing her concurrence with Mr. Okafor's assessment and adding that Ms. Prescott's leadership would provide the Committee with the credibility and structure necessary to carry out its important mandate.
There being no further discussion, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), it was:
RESOLVED, that Diane Prescott is hereby appointed as Chair of the Special Committee. As Chair, Ms. Prescott shall serve as the primary point of contact between the Special Committee and its legal, financial, and other advisors; shall preside over all meetings of the Special Committee; and shall be authorized to communicate the Special Committee's recommendations, process updates, and other appropriate information to the full Board of Directors, subject to the information barrier and independence protocols adopted by the Committee.
IV. Engagement of Calderwood & Harkness LLP as Independent Counsel
Ms. Prescott introduced Renata Vasquez and Sophie Tremblay of Calderwood & Harkness LLP ("C&H") and invited Ms. Vasquez to address the Committee regarding C&H's qualifications and the proposed terms of engagement.
Firm Qualifications. Ms. Vasquez provided an overview of Calderwood & Harkness LLP's qualifications to serve as independent counsel to the Special Committee. Ms. Vasquez described the firm's extensive experience in advising independent board committees in connection with related-party transactions, conflicted controller transactions, management buyouts, and other situations involving potential fiduciary duty issues. Ms. Vasquez noted that the firm's M&A and corporate governance group has advised special committees in more than forty transactions over the past decade, including several in the life sciences and pharmaceutical sectors.
Engagement Terms. Ms. Vasquez presented the proposed engagement letter dated June 2, 2023, summarizing its principal terms as follows:
•  Scope of Engagement: Calderwood & Harkness LLP will serve as independent counsel to the Special Committee in connection with the evaluation of the proposed acquisition of Caliston BioSciences, Inc.
•  C&H Matter Number: 1025-00006.
•  Engagement Team: Renata Vasquez, Partner (Responsible Partner); Bernard Crawford, Partner (Billing Partner); Sophie Tremblay, Associate (Lead Associate); Daniel Obi, Associate (Working Associate). Additional attorneys and staff may be assigned to the matter as necessary with the approval of the Special Committee.
•  Fee Arrangement: Hourly billing at the following blended rates: $1,025 per hour for partners and $625 per hour for associates. Invoices to be rendered monthly and payable within thirty days.
•  Evergreen Retainer: An initial retainer of $75,000, to be replenished as drawn.
•  Fee Cap: No fee cap applies. The Special Committee is authorized to incur fees as reasonably necessary to fulfill its mandate, and C&H's fees will be paid by Penterra in accordance with the Board Resolution.
Conflicts Clearance. Ms. Vasquez confirmed that Calderwood & Harkness LLP had completed a comprehensive conflicts clearance review, as documented in a memorandum dated June 1, 2023. The conflicts review confirmed that C&H has no existing client relationships with any of the following parties that would create a conflict of interest:
•  Caliston BioSciences, Inc.;
•  Whitfield Graves LLP (counsel to Caliston);
•  Fendowell Sinclair & Co. (financial advisor to Caliston);
•  Ridgeline Ventures, LP (a Caliston stockholder);
•  Meridian Life Sciences Fund III, LP (a Caliston stockholder);
•  Dr. Marcus Hale, individually; and
•  Any other known Caliston stockholder, officer, director, or advisor.
Ms. Vasquez stated that based on the results of the conflicts clearance review, C&H was satisfied that it could serve as independent counsel to the Special Committee without any actual or potential conflict of interest.
Discussion. The members of the Special Committee discussed C&H's qualifications, independence, and proposed fee arrangement. Mr. Okafor inquired about the firm's experience with Delaware entire fairness analyses and the MFW framework specifically. Ms. Vasquez confirmed that C&H has substantial experience advising special committees in transactions evaluated under the entire fairness standard and has been involved in structuring processes designed to invoke the MFW framework, where applicable, to shift the standard of review to business judgment. Dr. Ng asked whether C&H's engagement team had any personal relationships with Dr. Hale, Ms. Whitmore, or any Caliston insiders. Ms. Vasquez confirmed that no member of the engagement team has any such relationship.
After full discussion, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), it was:
RESOLVED, that the Special Committee hereby engages Calderwood & Harkness LLP as independent counsel to the Special Committee in connection with the evaluation of the proposed acquisition of Caliston BioSciences, Inc.;
RESOLVED FURTHER, that the Chair of the Special Committee is hereby authorized to execute and deliver the engagement letter dated June 2, 2023, on behalf of the Special Committee; and
RESOLVED FURTHER, that Alcott, Barringer & Cole LLP, Penterra's regular outside counsel (led by Victoria Shen, partner), is hereby recused from advising the Special Committee in order to preserve the independence and integrity of the Special Committee's process. It is acknowledged that Alcott, Barringer & Cole LLP may continue to advise the Penterra Board of Directors and management on non-conflicted corporate matters, subject to appropriate coordination protocols to be established between C&H and Alcott, Barringer & Cole LLP.
V. Discussion of Scope of Authority and Board Resolution
Ms. Vasquez directed the Committee's attention to the Board Resolution dated June 2, 2023, which had been drafted by Calderwood & Harkness LLP and adopted by the Board of Directors earlier that day. Ms. Vasquez reviewed the key terms of the Board Resolution in detail with the Committee members.
Authority Delegated to the Special Committee. Ms. Vasquez explained that the Board Resolution grants the Special Committee sole and exclusive authority with respect to the following matters:
(a) To evaluate the proposed transaction, including the strategic rationale, financial terms, and any other aspects of the proposed acquisition that the Special Committee deems relevant;
(b) To negotiate the terms of any transaction with Caliston and its representatives, including price, structure, representations and warranties, indemnification provisions, closing conditions, and all other material terms;
(c) To retain independent legal, financial, and other advisors at the expense of Penterra as the Special Committee, in its sole discretion, deems necessary or appropriate;
(d) To recommend to the full Board the approval or rejection of the proposed transaction, or any alternative transaction, on such terms as the Special Committee deems fair and in the best interests of Penterra and its stockholders; and
(e) To explore alternatives to the proposed transaction, including the express power to decline to proceed with the transaction (the "say no" power), and to recommend that Penterra pursue no transaction at all if the Special Committee determines that doing so is in the best interests of Penterra and its stockholders.
Applicable Legal Standards. Ms. Vasquez noted that the Board Resolution references Delaware General Corporation Law §§ 141(a) and 144, which provide the statutory framework for the delegation of authority to board committees and the treatment of interested director transactions, respectively. Ms. Vasquez explained that under Section 144 of the DGCL, a transaction involving a conflict of interest is not voidable solely because of the conflict if it is approved in good faith by a majority of disinterested directors after full disclosure of the material facts, or if it is approved in good faith by the stockholders, or if it is fair to the corporation at the time it is authorized. Ms. Vasquez noted, however, that under Delaware case law, the standard of review applicable to a transaction involving a conflicted director who is also the corporation's controlling stockholder or exercises significant influence may be the entire fairness standard, which requires the transaction to be entirely fair to the corporation in terms of both fair dealing and fair price.
"Say No" Power. There was considerable discussion among the Committee members regarding the importance of the "say no" power. Ms. Vasquez emphasized that the Special Committee's authority to decline to proceed with the proposed transaction is a critical element of a defensible process under Delaware law. Ms. Vasquez noted that Delaware courts have consistently held that a special committee must possess genuine bargaining power, including the ability to reject the proposed transaction, in order for the committee's approval to be accorded meaningful weight in a judicial review of the transaction. The Committee members expressed their understanding that the "say no" power is not merely a formality but reflects the Committee's genuine and independent authority to protect the interests of Penterra and its stockholders.
Recused Directors. Ms. Vasquez confirmed that the Board Resolution provides for the recusal of Dr. Hale, Ms. Whitmore, and Mr. Tusk from all deliberations and votes related to the proposed transaction. Ms. Vasquez noted that the recusal extends to all Committee meetings, materials, communications, and recommendations.
The Committee acknowledged its understanding of its mandate, the scope of its authority, and the fiduciary obligations owed by each member in carrying out the Committee's work. Each member affirmed his or her commitment to conducting a thorough, independent, and good faith evaluation of the proposed transaction.
VI. Adoption of the Special Committee Charter
Ms. Vasquez presented a draft Special Committee Charter (the "Charter") prepared by Calderwood & Harkness LLP for the Committee's consideration and adoption. Copies of the draft Charter had been distributed to the Committee members in advance of the meeting.
Ms. Vasquez reviewed the key provisions of the Charter with the Committee:
Decision-Making Process. All actions and decisions of the Special Committee shall be taken by the affirmative vote of a majority of the members of the Committee present at a meeting at which a quorum is present.
Quorum. A quorum for the transaction of business shall consist of a majority of the members of the Special Committee, which, as of the date of these minutes, means two of the three members.
Advisor Engagement Rights. The Charter confirms the Special Committee's authority to engage Calderwood & Harkness LLP as its independent legal counsel and to engage an independent financial advisor, as well as any other advisors the Committee deems necessary or appropriate, at the expense of Penterra. The selection and retention of advisors shall be within the sole discretion of the Special Committee.
Reporting Obligations. The Chair of the Special Committee shall report to the full Board of Directors (excluding the recused directors) on the Committee's process and status at appropriate intervals, as determined by the Chair in her discretion. Such reports shall be limited to general process updates and shall not include disclosure of privileged deliberations, negotiation strategy, confidential communications with advisors, or other information the Chair determines should be maintained in confidence to preserve the integrity of the Committee's process.
Duration. The Special Committee shall remain in existence until its formal recommendation regarding the proposed transaction is delivered to and accepted by the full Board of Directors, or until the proposed transaction is terminated, whichever occurs first. The Board retains the authority to extend or modify the Committee's mandate as circumstances may require.
Compensation. Members of the Special Committee shall receive additional compensation for their service on the Committee, in an amount to be determined by the independent directors of the Board (excluding the recused directors) at a subsequent meeting. Such compensation shall be payable in cash and shall be structured so as not to create any incentive for the Committee members to approve or reject the proposed transaction.
After discussion, and upon motion duly made by Dr. Ng, seconded by Mr. Okafor, and unanimously approved by all three members of the Special Committee (3-0), it was:
RESOLVED, that the Special Committee hereby adopts the Special Committee Charter in the form presented by Calderwood & Harkness LLP, a copy of which shall be appended to these minutes as Exhibit A.
VII. Discussion and Adoption of Independence Protocol and Information Barrier Policy
Ms. Vasquez and Ms. Tremblay presented the draft Independence Protocol and Information Barrier Policy (the "Protocol"), also prepared by Calderwood & Harkness LLP and dated June 2, 2023. The Protocol is designated under the project code name "Project Coriander." Copies of the draft Protocol had been distributed to the Committee members in advance of the meeting.
Ms. Vasquez emphasized that the Protocol is a critical component of the Special Committee's governance framework and is designed to ensure the independence, integrity, and defensibility of the Committee's process under Delaware law. Ms. Tremblay reviewed the key elements of the Protocol in detail:
Excluded Persons. Dr. Marcus Hale, Angela Whitmore, and Raymond Tusk (collectively, the "Excluded Persons") are excluded from all Special Committee deliberations, materials, and communications. The Excluded Persons shall not attend or participate in any meeting of the Special Committee, shall not receive copies of any materials prepared for or by the Special Committee or its advisors, and shall not be consulted by any member of the Special Committee regarding the substance of the Committee's work.
Segregated Document Management Workspace. The Protocol establishes a segregated document management workspace on the Penterra document management system, designated "Project Coriander." Access to the Project Coriander workspace is restricted to the three members of the Special Committee and their authorized advisors at Calderwood & Harkness LLP (and, following engagement, the independent financial advisor). The Company's IT department shall ensure that access controls are implemented and that the Excluded Persons are unable to access the Project Coriander workspace. Mr. Whittaker, in his capacity as General Counsel, shall facilitate the establishment of the workspace but shall not have ongoing access to its contents.
Communication Guidelines. All communications related to the proposed transaction between Penterra management (including Dr. Hale and Ms. Whitmore in their management capacities) and the Special Committee shall be routed through Calderwood & Harkness LLP. Direct communications between the Excluded Persons and members of the Special Committee regarding the proposed transaction are prohibited. Communications regarding routine Company business unrelated to the proposed transaction are not restricted.
Inadvertent Disclosure Procedures. The Protocol establishes procedures for handling inadvertent disclosures of confidential Special Committee information. In the event that any Excluded Person inadvertently receives or accesses confidential Committee materials or information, the Excluded Person shall immediately notify Calderwood & Harkness LLP and shall not review, copy, distribute, or retain such materials. C&H shall document any such inadvertent disclosure and assess its impact on the integrity of the Committee's process.
Information Requests. All information requests from the Special Committee to Penterra management shall be channeled through Calderwood & Harkness LLP. This procedure is designed to preserve the independence of the Committee's process and to protect the attorney-client privilege and work product doctrine as applicable to the Committee's deliberations. C&H shall maintain a log of all information requests and responses.
Restrictions on Dr. Hale's Access. Without limiting the generality of the foregoing, the Protocol specifically prohibits Dr. Hale from accessing the Project Coriander workspace, from receiving or reviewing any materials prepared by or for the Special Committee or its advisors, and from communicating directly with any member of the Special Committee regarding the proposed transaction. Dr. Hale shall be informed in writing of these restrictions.
Discussion. The Committee members discussed the sufficiency of these protections at length. Mr. Okafor asked whether the Protocol was consistent with best practices in similar special committee processes. Ms. Vasquez confirmed that the Protocol is modeled on information barrier policies that have been upheld and recognized favorably by the Delaware Court of Chancery in litigated cases involving special committee processes. Dr. Ng inquired about the enforceability of the Protocol in the event of a breach. Ms. Vasquez explained that while the Protocol itself does not impose legal penalties, a breach of the Protocol could undermine the defensibility of the Committee's process in any subsequent litigation and could be relevant to a court's assessment of fair dealing under the entire fairness standard.
Ms. Vasquez further noted that the Protocol is designed to support the procedural prong of the entire fairness analysis — that is, fair dealing — and to position the Special Committee's process favorably under the framework established by the Delaware Supreme Court in Kahn v. M & F Worldwide Corp. (MFW) and its progeny. Ms. Vasquez noted that while the MFW framework was developed in the context of controlling stockholder squeeze-outs, its principles regarding the establishment of independent special committees with genuine bargaining authority are instructive in any transaction involving a conflicted fiduciary. She noted that Dr. Hale's 28.5% equity interest in Caliston, while significant, does not constitute a controlling interest in Penterra, and therefore the precise applicability of the MFW framework would need to be analyzed further in the Delaware Law Memorandum referenced below. Nevertheless, adherence to the procedural safeguards reflected in the Protocol would strengthen the Committee's process under any applicable standard of review.
After thorough discussion, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), it was:
RESOLVED, that the Special Committee hereby adopts the Independence Protocol and Information Barrier Policy (Project Coriander) in the form presented by Calderwood & Harkness LLP, dated June 2, 2023, a copy of which shall be appended to these minutes as Exhibit B.
VIII. Director Independence Questionnaires
Ms. Tremblay distributed Director Independence Questionnaires (the "Questionnaires") to each of the three members of the Special Committee: Diane Prescott, James Okafor, and Dr. Helen Ng.
Ms. Tremblay explained that the Questionnaires are designed to confirm the independence of each member of the Special Committee under applicable standards, including the independence requirements of the New York Stock Exchange listing standards and the standards for director independence under Delaware law. The Questionnaires require each member to disclose any relationships, financial interests, or other connections with the following persons and entities:
•  Caliston BioSciences, Inc.;
•  Dr. Marcus Hale (individually and in his capacity as Chairman and CEO of Penterra and as a Caliston stockholder);
•  Angela Whitmore (individually and in her capacity as a director and officer of Penterra);
•  Dr. Evan Whitmore (individually and in his capacity as an officer and director of Caliston);
•  Ridgeline Ventures, LP (a Caliston stockholder);
•  Meridian Life Sciences Fund III, LP (a Caliston stockholder); and
•  Any other known Caliston stockholder, officer, director, advisor, or affiliate.
Ms. Tremblay noted that the Questionnaires also request information regarding any financial, familial, social, professional, or other relationships that could reasonably be perceived as impairing the member's ability to exercise independent judgment in connection with the evaluation of the proposed transaction.
Each member of the Special Committee was asked to complete and return the Questionnaire to Calderwood & Harkness LLP within five business days of the date of the meeting — that is, by June 9, 2023. Ms. Vasquez stated that upon receipt of the completed Questionnaires, C&H will prepare a summary memorandum analyzing the responses and confirming the independence of each member of the Committee for the record.
The Committee members acknowledged the importance of the independence confirmation process and each expressed his or her commitment to providing complete and accurate responses.
IX. Authorization to Engage an Independent Financial Advisor
Ms. Vasquez addressed the Committee regarding the engagement of an independent financial advisor. Ms. Vasquez explained that the engagement of a qualified, independent financial advisor is a critical element of the Special Committee's process. The financial advisor would be expected to conduct independent valuation analyses of Caliston, assist the Committee in evaluating the financial terms of any proposed transaction, and, if the Committee determines that such assistance is appropriate, deliver a fairness opinion to the Special Committee regarding the consideration to be paid in connection with the transaction.
Ms. Vasquez emphasized that the financial advisor must be independent of both Penterra and Caliston, and must have no material relationships with the officers, directors, or significant stockholders of either company. Ms. Vasquez noted that the independence of the financial advisor is an important factor that Delaware courts will consider in evaluating the Special Committee's process.
Candidate Identified. Ms. Vasquez reported that C&H had conducted a preliminary review of potential financial advisor candidates and recommended that the Committee consider Thorngate Partners LLC ("Thorngate"), located at 590 Madison Avenue, 22nd Floor, New York, New York 10022. Ms. Vasquez identified Gregory Ashford, Managing Director, as the proposed lead advisor at Thorngate. Ms. Vasquez noted that Thorngate has significant experience in life sciences mergers and acquisitions, including experience advising special committees, and has no prior engagements with Penterra, Caliston, Dr. Hale, or any of the other relevant parties. Ms. Vasquez noted that C&H would continue to evaluate other candidates as well to ensure that the Committee has considered multiple options.
Scope of Financial Advisory Engagement. The Committee discussed the anticipated scope of the financial advisor's engagement, which would include the following:
•  Independent valuation analyses of Caliston using multiple methodologies, including discounted cash flow ("DCF") analysis, comparable public company analysis, comparable transactions analysis, and premiums paid analysis;
•  Evaluation of the strategic rationale and financial merits of the proposed acquisition;
•  Exploration of alternative acquisition targets or strategic alternatives available to Penterra (a "market check" or review of alternatives);
•  Assistance in negotiating the financial terms of any proposed transaction; and
•  If appropriate and if requested by the Special Committee, delivery of a fairness opinion to the Special Committee as to whether the consideration to be paid by Penterra in connection with the proposed transaction is fair, from a financial point of view, to Penterra.
Discussion. Mr. Okafor emphasized the importance of selecting a financial advisor with deep expertise in life sciences valuations, particularly given the clinical-stage nature of Caliston's business and the inherent uncertainties associated with valuing pre-revenue pharmaceutical assets. Dr. Ng concurred and noted that the financial advisor should have experience with risk-adjusted net present value ("rNPV") methodologies commonly used in the life sciences sector, in addition to the traditional valuation approaches identified by Ms. Vasquez.
After discussion, and upon motion duly made by Dr. Ng, seconded by Mr. Okafor, and unanimously approved by all three members of the Special Committee (3-0), it was:
RESOLVED, that the Special Committee hereby authorizes Calderwood & Harkness LLP to conduct further diligence on Thorngate Partners LLC and other potential financial advisor candidates and to report its findings to the Committee;
RESOLVED FURTHER, that the Chair of the Special Committee, acting on behalf of the Committee, is hereby authorized to negotiate and approve the terms of engagement of an independent financial advisor, subject to confirmation by the full Committee at a subsequent meeting; and
RESOLVED FURTHER, that Calderwood & Harkness LLP is hereby directed to prepare a letter to the selected financial advisor outlining the scope of the fairness opinion engagement, required valuation methodologies, and the independence requirements applicable to the engagement.
X. Discussion of Initial Workstreams and Upcoming Activities
Ms. Vasquez outlined the initial workstreams to be undertaken by Calderwood & Harkness LLP on behalf of the Special Committee in the period following the organizational meeting. The following workstreams were discussed:
1. Delaware Law Memorandum. C&H will prepare a comprehensive memorandum on Delaware law governing interested director transactions, with particular focus on the following topics: (i) DGCL § 144 and its requirements for the approval of interested director transactions; (ii) the entire fairness doctrine as developed by the Delaware Supreme Court and the Court of Chancery, including the two-pronged analysis of fair dealing and fair price; and (iii) the MFW framework (Kahn v. M & F Worldwide Corp., 88 A.3d 635 (Del. 2014)) and its applicability to the proposed transaction. Ms. Vasquez noted that the MFW framework, which provides for business judgment review of controlling stockholder transactions that are conditioned ab initio on both approval by a fully empowered special committee and an informed, uncoerced vote of the minority stockholders, was developed in the context of controlling stockholder squeeze-outs. The memorandum will analyze the extent to which the MFW framework or its principles are applicable to the proposed Caliston acquisition, noting that Dr. Hale's 28.5% equity interest in Caliston represents a significant but non-controlling stake in the target company, and that Dr. Hale's position as Chairman and CEO of Penterra presents a distinct set of fiduciary duty considerations.
2. Due Diligence. C&H will prepare and issue a comprehensive due diligence request list to Whitfield Graves LLP, counsel to Caliston. Ms. Vasquez identified Kenneth Pratt as the lead partner at Whitfield Graves LLP, located at One Federal Street, Suite 2600, Boston, Massachusetts 02110. The due diligence request list will cover, among other topics, Caliston's organizational documents, capitalization, intellectual property portfolio, clinical development programs, regulatory filings and correspondence with the FDA, material contracts, employment agreements, litigation and contingent liabilities, financial statements, tax matters, and any other matters that the Special Committee and its advisors determine to be material to the evaluation of the proposed transaction.
3. Related-Party Mapping. C&H will prepare a comprehensive memorandum mapping all relationships between Penterra insiders and Caliston stakeholders. This memorandum will include a detailed analysis of: (i) Dr. Hale's 28.5% equity interest in Caliston, including the timing, amount, and terms of each investment; (ii) Dr. Hale's board observer role at Caliston, including the nature and extent of his involvement in Caliston's governance and decision-making; (iii) the spousal relationship between Angela Whitmore (Penterra director and EVP, Commercial Operations) and Dr. Evan Whitmore (Caliston's Head of Clinical Development and Caliston board member); and (iv) any other relationships between Penterra directors, officers, or significant stockholders and Caliston stockholders, officers, directors, or advisors that may be relevant to the Special Committee's analysis.
4. Recusal Coordination. C&H will prepare and send a formal letter to Victoria Shen at Alcott, Barringer & Cole LLP establishing the recusal and coordination protocol between Penterra's regular outside counsel and the Special Committee's independent counsel. The letter will delineate the respective roles of each firm, the scope of the recusal, and the procedures for ensuring that no confidential Special Committee information is shared with Alcott, Barringer & Cole LLP or, through them, with any of the Excluded Persons.
5. Financial Advisor Selection. C&H will continue its diligence on Thorngate Partners LLC and any other financial advisor candidates identified, and will report its findings to the Committee in advance of the next meeting.
Proposed Transaction Overview. For the benefit of the record and to provide context for the Committee's initial deliberations, Ms. Vasquez provided a summary of the proposed transaction and the key characteristics of the target company:
•  Transaction Structure: Penterra proposes to acquire 100% of the outstanding equity of Caliston BioSciences, Inc. via a one-step merger.
•  Caliston Business Overview: Caliston is a clinical-stage biopharmaceutical company focused on the development of novel kinase inhibitors for solid tumors.
•  Lead Asset: Caliston's lead development asset is CLT-4019, a selective CDK4/6 inhibitor for the treatment of HR+/HER2– metastatic breast cancer. CLT-4019 is currently in a Phase 2b clinical trial. The Investigational New Drug application (IND 158429) was filed in March 2020. Topline data from the Phase 2b trial is expected in the fourth quarter of 2023.
•  Caliston Capitalization and Financial Position: Caliston's last private valuation was $680 million post-money, established at its Series C financing round in October 2021. Caliston has raised approximately $347 million in total equity financing across its Seed, Series A, Series B, and Series C rounds. As of March 31, 2023, Caliston had cash on hand of approximately $112.6 million, with an estimated cash runway through the first quarter of 2025 based on current burn rates. Caliston's net cash burn for fiscal year 2022 was approximately $78.4 million.
•  Caliston Workforce: Caliston has approximately 94 employees.
Ms. Vasquez also provided a brief overview of Penterra's current financial profile for context:
•  Penterra Financial Highlights (Fiscal Year 2022): Revenue of approximately $1.836 billion; EBITDA of approximately $412 million; net income of approximately $247 million; cash and cash equivalents of approximately $892 million.
•  Market Capitalization: As of June 1, 2023, Penterra's market capitalization was approximately $4.72 billion, based on approximately 121.4 million shares of common stock outstanding (NYSE: PPHR).
Timeline Discussion. The Committee members discussed the anticipated timeline for the Special Committee's work. The members agreed on the importance of conducting a thorough and deliberate process and expressed no urgency to reach a conclusion prematurely. Ms. Prescott noted that the credibility of the Committee's process would depend in significant part on the Committee's willingness to take the time necessary to conduct a comprehensive evaluation, including a full review of Caliston's business, financials, and clinical programs, as well as a thorough analysis of valuation, strategic alternatives, and the fairness of the proposed terms. The Committee acknowledged that the timeline would be influenced by several factors, including the pace of due diligence, the availability of clinical data, and the progress of negotiations, if any.
XI. Scheduling of Future Meetings
The Committee discussed the expected cadence of meetings during the active evaluation period. The members anticipated that meetings would be held approximately every two to three weeks, with additional meetings to be called as needed, particularly during the due diligence review and any negotiation phases.
Ms. Prescott noted that she would work with C&H to coordinate the scheduling of future meetings and to ensure that meeting materials are distributed sufficiently in advance to allow the Committee members to prepare. Ms. Prescott also noted that she would call additional meetings on shorter notice if developments in the evaluation process warranted immediate attention.
The next meeting of the Special Committee was tentatively scheduled for late June 2023, with the expectation that the agenda for that meeting would include: (i) review of the completed Director Independence Questionnaires; (ii) engagement of the independent financial advisor; (iii) receipt of initial due diligence materials from Caliston; and (iv) review of the Delaware Law Memorandum.
XII. Adjournment
There being no further business to come before the Special Committee at this time, and upon motion duly made by Mr. Okafor, seconded by Dr. Ng, and unanimously approved by all three members of the Special Committee (3-0), the meeting was adjourned at approximately 11:45 a.m. Eastern Time.
The foregoing minutes were prepared by Daniel Obi, Associate, Calderwood & Harkness LLP, and are a true and accurate record of the proceedings of the organizational meeting of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. held on June 2, 2023.
APPROVED:
________________________________________
Diane Prescott Chair, Special Committee of the Board of Directors Penterra Pharmaceuticals Corp.
Date: ________
Approved and adopted at the meeting of the Special Committee held on ____, 2023.

MINUTES OF THE ORGANIZATIONAL MEETING OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.

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