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PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT — PROJECT CORIANDER

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

September 14, 2023

2:00 p.m. Eastern Time

Conference Room 12A Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540

and via Secure Videoconference (Project Coriander)

1. Call to Order and Attendance

The meeting of the Special Committee (the "Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp. ("Penterra" or the "Company") was called to order at 2:00 p.m. Eastern Time on Thursday, September 14, 2023, by Diane Prescott, Chair of the Special Committee.

The meeting was held in person in Conference Room 12A at the Company's principal offices at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540. Certain attendees participated via a secure, encrypted videoconference platform, consistent with the Committee's information security protocols for Project Coriander.

Special Committee Members Present:

The following independent members of the Special Committee were present throughout the meeting, constituting the full membership of the Committee:

• Diane Prescott, Chair of the Special Committee (independent director of Penterra; former Chief Executive Officer of Windbridge Health Systems, Inc.);

• James Okafor, Member of the Special Committee (independent director of Penterra; retired Managing Director of Fielding Capital Partners, LLC); and

• Dr. Helen Ng, Member of the Special Committee (independent director of Penterra; Professor of Pharmacology, Wexford University).

All three members of the Special Committee were present. Ms. Prescott confirmed that a quorum of the Committee had been established pursuant to Section 3.1 of the Special Committee Charter adopted by the Board on June 2, 2023 (the "Charter"), which provides that a quorum shall consist of a majority of the members of the Committee then serving, provided that all members have been given proper notice of the meeting. Notice of the meeting had been delivered to all Committee members via encrypted electronic communication on September 11, 2023, in compliance with Section 3.2 of the Charter.

Independent Legal Counsel Present (Calderwood & Harkness LLP):

The following representatives of Calderwood & Harkness LLP ("C&H"), independent legal counsel to the Special Committee, were present at the meeting:

• Renata Vasquez, Responsible Partner; and

• Sophie Tremblay, Lead Associate.

Independent Financial Advisor Present (Thorngate Partners LLC):

The following representative of Thorngate Partners LLC ("Thorngate"), independent financial advisor to the Special Committee, was present at the meeting:

• Gregory Ashford, Managing Director.

Absent / Excluded (per Information Barrier Protocol):

It was noted for the record that the following members of the Board of Directors were not present at, and did not receive notice of, the meeting, and did not have access to any of the meeting materials, agenda, presentations, or memoranda distributed in connection therewith, consistent with the Independence Protocol & Information Barrier Policy (the "Information Barrier Policy") established by the Board on June 2, 2023:

• Dr. Marcus Hale, Chairman of the Board and Chief Executive Officer of Penterra, who holds a 28.5% equity interest in Caliston BioSciences, Inc. ("Caliston") and is therefore a conflicted party with respect to the proposed transaction;

• Angela Whitmore, Director and Executive Vice President, Commercial Operations of Penterra, whose spouse, Dr. Evan Whitmore, serves as Caliston's Head of Clinical Development and is a member of Caliston's board of directors; and

• Raymond Tusk, Director of Penterra, who was designated as a non-participating director by the Board in its Resolution of June 2, 2023, due to his prior business relationships with Dr. Hale and his limited partnership interest in Hale Family Partners, L.P.

The exclusion of the foregoing directors was consistent with the Information Barrier Policy and the Board Resolution of June 2, 2023, which expressly delegated to the Special Committee the exclusive authority to evaluate, negotiate, and determine whether to recommend to the full Board the proposed acquisition of Caliston BioSciences, Inc. (the "Proposed Transaction").

Minutes Recorded By:

It was noted that minutes of the meeting were prepared by Daniel Obi, Working Associate, Calderwood & Harkness LLP. Mr. Obi was not present in the meeting room and did not participate in the meeting. The minutes were prepared from detailed contemporaneous notes taken by Sophie Tremblay, Lead Associate, Calderwood & Harkness LLP, who was present throughout the meeting.

2. Approval of Prior Meeting Minutes

Ms. Prescott asked whether the members of the Committee had reviewed the minutes of the Special Committee meeting held on August 22, 2023 (the "August 22 Minutes"), which had been circulated to Committee members via the segregated Project Coriander workspace on September 8, 2023. At the August 22, 2023 meeting, the Committee had, among other actions, directed Thorngate Partners to conduct a market check of alternative acquisition targets to determine whether any superior alternatives to the Proposed Transaction existed in the marketplace. Each Committee member confirmed that she or he had reviewed the August 22 Minutes.

Mr. Okafor moved that the August 22 Minutes be approved as a true and correct record of the proceedings of the August 22, 2023 meeting. Dr. Ng seconded the motion. There being no further discussion, the motion was put to a vote, and the August 22 Minutes were unanimously approved by all three members of the Special Committee present, with no abstentions or dissents.

3. Reminder of Confidentiality and Privilege

Before proceeding to the substantive agenda items, Ms. Vasquez of Calderwood & Harkness LLP addressed the Committee regarding confidentiality and privilege. Ms. Vasquez reminded the members of the Committee that all deliberations, materials, communications, memoranda, presentations, and discussions occurring at or in connection with the meeting are subject to the attorney-client privilege and the work-product doctrine. Ms. Vasquez emphasized that the protections of these doctrines apply to the full scope of the Committee's work in connection with Project Coriander and must be diligently maintained.

Ms. Vasquez confirmed that all materials relating to the meeting, including the agenda, the Thorngate Partners presentation, and any supporting memoranda, were stored exclusively on the segregated Project Coriander workspace within the Company's document management system. Access to the Project Coriander workspace is restricted to the three members of the Special Committee and their authorized advisors — specifically, the designated professionals at Calderwood & Harkness LLP and Thorngate Partners LLC — and no other personnel of the Company, including information technology staff, have access to the workspace without the prior express written approval of the Chair of the Special Committee.

Ms. Vasquez reiterated that no information discussed at the meeting, or reflected in any materials distributed in connection therewith, was to be shared, disclosed, or communicated in any manner, whether orally, in writing, or electronically, with Dr. Marcus Hale, Angela Whitmore, Raymond Tusk, or any other person outside the authorized group defined in the Information Barrier Policy. This prohibition extends to informal conversations, social communications, and any other context, regardless of the medium or setting. Ms. Vasquez further noted that any suspected breach of the Information Barrier Policy should be reported immediately to her or to Ms. Tremblay.

Each member of the Committee acknowledged understanding of, and agreement to comply with, these confidentiality and privilege obligations.

4. Thorngate Partners LLC — Presentation of Market Check Results

Ms. Prescott then turned the floor over to Mr. Ashford of Thorngate Partners for a presentation on the results of the market check that the Committee had commissioned at its August 22, 2023 meeting.

4.1 Background and Scope of Market Check

Mr. Ashford began by reminding the Committee of the background and mandate for the market check. He recalled that at the August 22, 2023 meeting, the Special Committee had directed Thorngate Partners to explore whether alternative acquisition targets existed in the marketplace that could deliver comparable or superior strategic value to Penterra relative to the Proposed Transaction — the acquisition of Caliston BioSciences, Inc. The Committee's objective in commissioning the market check was to ensure that it had a fulsome understanding of the available alternatives before proceeding with any negotiation of the Proposed Transaction, and to create a record consistent with the Committee's fiduciary obligations under Delaware law.

Mr. Ashford stated that the market check had been conducted over a period of approximately three weeks, from August 22, 2023 through September 12, 2023. During that period, the Thorngate team — consisting of Mr. Ashford, two vice presidents, and an analyst dedicated to the engagement — reviewed the competitive landscape of clinical-stage oncology companies with assets in therapeutic areas comparable to those of Caliston's lead program, CLT-4019. Specifically, the review focused on companies with assets in the following categories: selective kinase inhibitors, CDK4/6 inhibitors, programs targeting HR+/HER2– breast cancer (both early-stage and metastatic settings), and adjacent solid tumor indications where Caliston's pipeline assets (CLT-5227 and CLT-6034) could have relevance.

Mr. Ashford noted that the review encompassed both privately held and publicly traded companies, with no geographic limitation imposed on the screen, although all candidates identified were domiciled in the United States or Western Europe.

4.2 Methodology. Mr. Ashford then described the methodology employed by Thorngate Partners in conducting the market check. Thorngate identified and initially screened approximately 14 potential alternative acquisition targets based on the following criteria:

(a) the company possessed one or more clinical-stage or late-preclinical assets in oncology, with a primary focus on small-molecule kinase inhibitors and related modalities;

(b) the company's pipeline demonstrated meaningful complementarity with Penterra's existing oncology and immunology portfolio, such that an acquisition would advance Penterra's strategic positioning in its core therapeutic areas;

(c) the company's estimated valuation fell within a range that was comparable to, or more favorable than, the proposed aggregate equity value of the Caliston transaction (reference point: $925 million); and

(d) based on publicly available information and Thorngate's market intelligence, the company appeared to be potentially available for a strategic transaction, meaning that there was no publicly known impediment to a potential acquisition (such as a recently completed financing that would make a near-term sale unlikely, or a known ongoing exclusive sale process with another party).

Mr. Ashford emphasized that the market check was conducted on a "passive" or "desktop" basis — that is, Thorngate did not make direct outreach to any of the 14 screened companies or their advisors, and did not engage in any form of active solicitation. This approach was consistent with the explicit instruction of the Special Committee at the August 22, 2023 meeting, which had directed that the market check be conducted without active solicitation in order to preserve confidentiality regarding Penterra's strategic intentions and to avoid triggering any premature market speculation. Thorngate relied instead on publicly available data (including SEC filings, clinical trial registry databases, published scientific literature, and public company investor presentations), proprietary databases maintained by Thorngate, industry conference materials, and Thorngate's institutional knowledge of the oncology transaction market derived from its extensive deal experience in the pharmaceutical and biotechnology sectors.

Mr. Ashford acknowledged that a passive market check is inherently more limited than a full auction process or an active outreach process, and he stated that this limitation was understood by the Committee when the market check was authorized. He noted, however, that Thorngate's familiarity with the relevant market segment, combined with the depth of publicly available clinical and financial data in the oncology space, provided a reasonable basis for the conclusions reached.

4.3 Summary of Findings

Mr. Ashford proceeded to present the summary findings of the market check. Of the approximately 14 companies initially identified and screened, Thorngate determined that five warranted closer review based on pipeline relevance, stage of development, and potential strategic synergies with Penterra's existing portfolio. The remaining nine companies were eliminated during the initial screening phase for reasons including insufficient pipeline relevance, stage of development too early to support a meaningful comparison, valuation well in excess of the reference range, or other factors that made them clearly inferior alternatives.

Mr. Ashford distributed to the Committee a detailed written summary of each of the five candidates that received closer review. Consistent with the Committee's confidentiality protocols, each candidate was identified by a code name rather than its actual corporate name. For each candidate, the summary addressed: (i) therapeutic area and target, (ii) lead asset and current stage of clinical development, (iii) additional pipeline assets, (iv) estimated enterprise value or equity value based on publicly available information and Thorngate's analysis, and (v) a qualitative assessment of strategic fit with Penterra's oncology portfolio.

After reviewing the summary materials, Mr. Ashford presented Thorngate's conclusions. He stated that none of the five closely reviewed candidates presented a superior alternative to the proposed acquisition of Caliston BioSciences, Inc. He elaborated on the basis for this conclusion as follows:

• Candidates A and B each possessed lead assets that were in Phase 1 clinical trials. While both assets showed early promise based on preliminary safety and pharmacokinetic data, both were at a significantly earlier stage of development than Caliston's CLT-4019, which is currently in a Phase 2b clinical trial with topline data expected in the fourth quarter of 2023. The earlier development stage of Candidates A and B translated into materially higher binary development risk — that is, a materially greater probability of clinical failure — relative to CLT-4019. Mr. Ashford noted that the probability of success from Phase 1 to registration in oncology is historically in the range of 5–10%, whereas the probability of success from Phase 2b to registration is meaningfully higher, particularly for a program with encouraging interim data such as CLT-4019. As a result, the risk-adjusted net present value ("rNPV") of the lead assets of Candidates A and B did not compare favorably with CLT-4019, even assuming lower acquisition prices.

• Candidate C possessed a lead asset at a comparable stage of development to CLT-4019 (late Phase 2 / preparation for pivotal trial). However, the implied valuation of Candidate C, based on its most recent financing round, public comparable company analysis, and reported investor expectations, was estimated at approximately $1.2 billion to $1.4 billion, representing a significant premium to the proposed $925 million aggregate equity value for Caliston. Mr. Ashford stated that Thorngate's analysis indicated that the risk-adjusted net present value of Candidate C's pipeline did not proportionally exceed that of Caliston's pipeline, meaning that an acquisition of Candidate C would require Penterra to pay a materially higher price without a commensurate increase in risk-adjusted expected value. Accordingly, Candidate C did not represent a value-superior alternative.

• Candidate D possessed a pipeline of oncology assets, including a late-preclinical kinase inhibitor program. However, upon closer review, Thorngate determined that Candidate D's pipeline was not sufficiently complementary to Penterra's existing oncology portfolio. Specifically, Candidate D's programs were focused on hematological malignancies rather than solid tumors, and the potential for synergy with Penterra's existing solid tumor programs, commercial infrastructure, and regulatory expertise was limited. As a result, Thorngate concluded that an acquisition of Candidate D would not advance Penterra's strategic objectives as effectively as the acquisition of Caliston.

• Candidate E had recently entered into exclusive discussions with another strategic acquiror, as reported in public filings and corroborated by Thorngate's market intelligence. As a result, Candidate E was not available for a transaction with Penterra on any reasonable timeline. Mr. Ashford noted that even if Candidate E were available, its lead asset was in a distinct therapeutic sub-area and would not have addressed the same competitive and strategic considerations as CLT-4019.

Based on the foregoing analysis, Mr. Ashford stated that it was Thorngate Partners' professional conclusion that no superior alternative acquisition target had been identified in the market check. Mr. Ashford noted that this conclusion was subject to the inherent limitations of a passive market check, but that Thorngate was confident in the thoroughness and rigor of its analysis within those parameters.

4.4 Committee Discussion of Market Check Results

Following Mr. Ashford's presentation, the Committee engaged in a detailed discussion of the market check results.

Mr. Okafor asked about the depth and breadth of the screening methodology, and specifically whether Thorngate had considered companies outside the CDK4/6 inhibitor class but within the broader kinase inhibitor space. Mr. Okafor noted that Penterra's oncology strategy encompasses kinase inhibitor targets beyond CDK4/6, and he wanted to ensure that the market check had not been unduly narrow in its scope. Mr. Ashford confirmed that the screen was broader than CDK4/6 inhibitors alone. He stated that the initial universe of 14 companies included companies with assets targeting a range of kinase targets relevant to solid tumors, including but not limited to CDK4/6, CDK2, PI3K-alpha, FGFR, and RAS-MAPK pathway targets. He noted that the emphasis on CDK4/6 reflected the particular strategic relevance of Caliston's CLT-4019 to Penterra's portfolio, but that the screen was designed to capture a range of potential alternatives across the broader kinase inhibitor landscape.

Dr. Ng inquired whether any of the screened candidates had assets that could directly address the same HR+/HER2– metastatic breast cancer indication that CLT-4019 is being developed to treat. Dr. Ng noted that this specific indication was a central element of the strategic rationale for the Proposed Transaction, and she wanted to understand whether the market offered any alternative paths to gaining a competitive position in that therapeutic niche. Mr. Ashford responded that of the 14 companies initially screened, only two had assets in clinical or late-preclinical development targeting the HR+/HER2– metastatic breast cancer indication. Both of those companies were among the five candidates that received closer review (identified as Candidate A and Candidate C in the summary materials). As discussed, neither Candidate A nor Candidate C represented a superior alternative to Caliston — Candidate A due to its significantly earlier stage of development and associated higher risk, and Candidate C due to its materially higher implied valuation without a proportionally superior risk-adjusted expected value.

Ms. Prescott asked whether the market check results had any impact on Thorngate's preliminary valuation assessment of Caliston, which had been presented to the Committee at its August 3, 2023 meeting. Mr. Ashford stated that the market check reinforced and was consistent with Thorngate's earlier preliminary valuation range for Caliston. He reminded the Committee of the key elements of Thorngate's preliminary valuation analysis as presented on August 3, 2023:

• discounted Cash Flow ("DCF") Analysis — CLT-4019 Alone: $780 million to $1,020 million (risk-adjusted, using probability-weighted scenarios for Phase 2b outcomes and a discount rate of 12.0%–14.0%).

• discounted Cash Flow ("DCF") Analysis — Full Caliston Pipeline (including CLT-4019, CLT-5227, and CLT-6034): $870 million to $1,180 million.

• Comparable Transactions Analysis: $820 million to $1,050 million (based on precedent transactions involving clinical-stage oncology assets with similar therapeutic focus and development stage).

• Premiums Paid Analysis: $884 million to $986 million (based on premiums paid in precedent acquisitions of private clinical-stage pharmaceutical companies by public acquirors).

Mr. Ashford noted that the proposed $925 million aggregate equity value for the Proposed Transaction fell within or near the midpoint of each of these valuation ranges, and that the market check had not revealed any data or market conditions that would cause Thorngate to revise its preliminary valuation parameters. He stated that Thorngate's preliminary view remained that the proposed $925 million equity value was within a range that could potentially be supported as fair from a financial point of view, subject to further analysis and refinement as additional information became available, including CLT-4019 Phase 2b topline data.

The Committee then discussed the significance of CLT-4019's advanced clinical stage — specifically, its Phase 2b status with topline data expected in the fourth quarter of 2023 — relative to the alternatives identified in the market check. The members observed that the advanced stage of development meaningfully reduced the binary risk associated with the asset, as Phase 2b data would provide substantial clinical evidence of efficacy and safety that earlier-stage programs could not yet offer. This reduced risk profile supported a premium valuation relative to Phase 1 assets and was consistent with the Committee's view that CLT-4019's de-risked development status was a key element of the strategic rationale for the Proposed Transaction.

5. Discussion of Proceeding with Caliston Negotiation

5.1 Strategic Rationale

Following the discussion of the market check results, Ms. Prescott turned the Committee's attention to the question of whether, in light of the market check findings and the totality of the information available to the Committee, it was appropriate to proceed with negotiation of the Proposed Transaction.

Ms. Vasquez framed the discussion in terms of the Committee's fiduciary obligations under the laws of the State of Delaware. She reminded the Committee that, pursuant to the Board Resolution of June 2, 2023 and the Charter, the Committee possesses the exclusive authority to evaluate, negotiate, and determine whether to recommend the Proposed Transaction to the full Board. Critically, the Committee also possesses the power to decline to proceed with the Proposed Transaction entirely — that is, the "say no" power — if the Committee determines, in the exercise of its business judgment, that the transaction is not in the best interests of Penterra and its stockholders. Ms. Vasquez emphasized that the Committee's consideration of whether to proceed with negotiations should be informed by, but not limited to, the market check results, and that the Committee should consider the full range of strategic, financial, and legal factors relevant to its determination.

The Committee then discussed the strategic rationale for acquiring Caliston, focusing on the following key considerations:

(a) CLT-4019 as a Differentiated Asset. CLT-4019 is a selective CDK4/6 inhibitor being developed for the treatment of HR+/HER2– metastatic breast cancer, a large and growing indication in which existing CDK4/6 inhibitors (palbociclib, ribociclib, abemaciclib) have demonstrated significant clinical and commercial value. The Committee noted that CLT-4019 is designed to offer an improved selectivity profile, which could translate into a differentiated safety and tolerability profile, potentially supporting a competitive advantage in a market expected to exceed $15 billion globally by 2028.

(b) Complementarity with Penterra's Existing Oncology Pipeline. The acquisition of Caliston would complement and strengthen Penterra's existing oncology portfolio, which includes several programs in solid tumors but currently lacks a CDK4/6 inhibitor or a late-stage breast cancer program. The Committee observed that the addition of CLT-4019 would fill a meaningful gap in Penterra's oncology pipeline and would leverage Penterra's existing commercial infrastructure in breast cancer.

(c) Additional Pipeline Optionality. Caliston's preclinical candidates CLT-5227 (a next-generation oral SERD) and CLT-6034 (a selective CDK2 inhibitor) provide additional pipeline optionality and potential for future value creation. While these candidates are at earlier stages of development and carry correspondingly higher risk, they represent additional shots on goal in the breast cancer and solid tumor space and could benefit from Penterra's development and regulatory capabilities.

(d) Penterra's Financial Capacity. The Committee noted that Penterra has sufficient financial resources to fund the Proposed Transaction without placing undue strain on the Company's balance sheet or its ability to fund its existing pipeline and commercial operations.

5.2 Financing Considerations

The Committee then engaged in a brief discussion of Penterra's capacity to fund the cash component of the Proposed Transaction. As currently proposed, the aggregate equity consideration for the acquisition of Caliston is $925 million, of which 75% ($693,750,000) would be payable in cash at closing and 25% ($231,250,000) would be payable in newly issued shares of Penterra common stock (ticker: PPHR).

With respect to the cash component, the Committee noted that the anticipated sources of funding would include approximately $400 million from Penterra's existing cash on hand. As reported in Penterra's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the Company had cash, cash equivalents, and short-term investments of approximately $892 million as of that date. The remaining approximately $293,750,000 of the cash component was expected to be funded through a draw on Penterra's existing $1.5 billion senior unsecured revolving credit facility with Greystone National Bank, N.A., as administrative agent. As of June 1, 2023, the undrawn availability under the facility was approximately $1.1 billion. The facility bears interest at SOFR plus 150 basis points and matures in March 2026. The Committee was advised that Penterra's treasury team had preliminarily confirmed that a draw of this magnitude would be consistent with the financial covenants under the credit agreement.

With respect to the stock component, the Committee noted that the issuance of approximately 5,903,497 newly issued shares of Penterra common stock (based on the 30-day volume-weighted average price ("VWAP") of $39.17 as of June 1, 2023, the reference date used in the preliminary term sheet) would require approval by Penterra's stockholders under the applicable rules of the New York Stock Exchange governing the issuance of shares representing greater than 1% of outstanding shares in connection with an acquisition. The Committee noted that obtaining stockholder approval would be an additional condition to the consummation of the transaction and would need to be addressed in the definitive merger agreement.

5.3 Related-Party Considerations

Ms. Vasquez then reminded the Committee of the related-party dimensions of the Proposed Transaction, which had been a central reason for the formation of the Special Committee and the adoption of the Information Barrier Policy.

Ms. Vasquez stated that Dr. Marcus Hale, Penterra's Chairman of the Board and Chief Executive Officer, holds a 28.5% equity interest in Caliston BioSciences, Inc. Dr. Hale acquired this interest through a personal investment of approximately $42 million, made in connection with Caliston's Series B and Series C financing rounds. At the proposed aggregate equity value of $925 million, Dr. Hale's 28.5% interest would have an implied value of approximately $263,625,000, representing an implied personal gain of approximately $221,625,000. Dr. Hale therefore has a material personal financial interest in the consummation of the Proposed Transaction that is different from, and potentially adverse to, the interests of Penterra and its stockholders.

Additionally, Ms. Vasquez noted that Angela Whitmore, a member of Penterra's Board of Directors and the Company's Executive Vice President, Commercial Operations, is the spouse of Dr. Evan Whitmore. Dr. Evan Whitmore serves as Caliston's Head of Clinical Development and is a member of Caliston's board of directors. This familial relationship creates an additional conflict of interest that requires careful management.

Ms. Vasquez reiterated that these conflicts of interest underscore the critical importance of the Special Committee process, including the Committee's retention of independent legal counsel and an independent financial advisor, the maintenance of the Information Barrier Policy, and the eventual delivery of a fairness opinion from Thorngate Partners. Ms. Vasquez noted that, given the presence of a controlling or conflicted fiduciary on the buy side, the Proposed Transaction would likely be subject to the entire fairness standard of review under Delaware law, pursuant to which the court examines both the fairness of the process and the fairness of the price. Ms. Vasquez referenced Section 144 of the Delaware General Corporation Law and the well-established entire fairness doctrine as articulated by the Delaware Supreme Court. She stated that the Special Committee process, if properly conducted, could serve as powerful evidence of procedural fairness and could potentially shift the burden of proof on the entire fairness question, depending on the specific facts and circumstances at the time of any challenge.

The Committee discussed the functioning of the Information Barrier Policy to date and noted with satisfaction that no breaches had been reported. Ms. Vasquez confirmed that Calderwood & Harkness LLP had been monitoring compliance with the Information Barrier Policy and had not identified any instances of unauthorized disclosure of Project Coriander materials or information.

5.4 Resolution to Proceed

After thorough discussion, the Committee turned to the question of whether to authorize the continuation of the process and the commencement of negotiations with Caliston BioSciences. Ms. Prescott summarized the key considerations that had been discussed, including the market check results (which demonstrated the absence of a superior alternative target), the preliminary valuation analyses (which indicated that the proposed $925 million equity value fell within a range that could potentially be supported as fair from a financial point of view), and the strategic rationale for the Proposed Transaction (including the differentiated clinical profile of CLT-4019, the complementarity with Penterra's existing pipeline, and the additional optionality provided by Caliston's preclinical candidates).

Upon motion by Mr. Okafor, seconded by Dr. Ng, the Committee unanimously determined that, based on the results of the market check, the preliminary valuation analyses, the strategic rationale, and the totality of the information available to the Committee, it was appropriate to proceed with the negotiation of the proposed acquisition of Caliston BioSciences, Inc.

The Committee expressly emphasized, and directed that the minutes reflect, that this determination to proceed with negotiations does not constitute approval of the Proposed Transaction, and that the Committee reserves its right, in the exercise of its fiduciary duties, to decline to recommend the Proposed Transaction to the full Board at any point in the process, for any reason or no reason. The Committee further noted that its ultimate determination regarding the Proposed Transaction will be informed by, among other things, the outcome of the negotiations, the final terms of any definitive agreement, the delivery of a fairness opinion from Thorngate Partners, any developments in CLT-4019's clinical program (including Phase 2b topline data), and any other material information that becomes available during the course of the process.

6. Authorization to Prepare Negotiation Strategy and Commence Negotiations

6.1 Negotiation Strategy Memorandum

Having determined to proceed with negotiations, the Committee turned to the question of how the negotiation process should be organized and conducted. Ms. Prescott noted the importance of a disciplined and well-documented negotiation process, both to protect the interests of Penterra's stockholders and to establish a strong record of procedural fairness.

The Committee directed Calderwood & Harkness LLP, acting through Ms. Vasquez and Ms. Tremblay, to prepare a comprehensive negotiation strategy memorandum (the "Negotiation Strategy Memorandum") setting forth the Committee's recommended positions on the key terms of the Proposed Transaction. The Committee specified that the Negotiation Strategy Memorandum should address the following topics, at a minimum:

(a) Price. The Committee's recommended position on the aggregate equity consideration, taking into account the preliminary valuation ranges presented by Thorngate Partners and the 36.03% premium that the proposed $925 million equity value represents over the October 2021 Series C post-money valuation of $680 million. The memorandum should address the Committee's range of acceptable prices, including an opening position and a walk-away price.

(b) Consideration Structure. The Committee's recommended position on the cash/stock mix, including the rationale for the proposed 75% cash / 25% stock structure and any alternative structures that the Committee might consider.

(c) Contingent Value Rights. The Committee's recommended position on the proposed Contingent Value Rights ("CVR") structure, including the milestones, payment amount, and other terms. The reference point for the CVR is the proposed $125 million CVR contingent upon the receipt of approval from the United States Food and Drug Administration ("FDA") for CLT-4019 on or before December 31, 2026. The memorandum should address the Committee's view on whether the CVR terms are appropriate and whether any modifications should be sought.

(d) Termination Fee Provisions. The Committee's recommended position on termination fee provisions, including both a reverse termination fee payable by Penterra in the event that Penterra fails to consummate the transaction under specified circumstances, and a company termination fee payable by Caliston in the event that Caliston terminates the merger agreement to accept a superior proposal or under other specified circumstances.

(e) Representations and Warranties Scope. The Committee's recommended position on the scope, specificity, and survival period of the representations and warranties to be made by Caliston in the definitive merger agreement, including representations regarding intellectual property, clinical trial data integrity, regulatory compliance, material contracts, and capitalization.

(f) Indemnification and Escrow Terms. The Committee's recommended position on indemnification provisions and escrow terms, including the size, duration, and release mechanics of any escrow arrangement.

(g) Key Protective Provisions — Dr. Hale's Voting and Recusal Obligations. The Committee's recommended position on the provisions governing Dr. Hale's obligations as a stockholder of Caliston and as a director and officer of Penterra, including any voting commitments, recusal obligations, and standstill provisions that should be included in the definitive merger agreement or in a related agreement.

The Committee directed that the Negotiation Strategy Memorandum be delivered to the members of the Special Committee for review and approval prior to the commencement of any negotiation sessions. The Committee stated that it expected to have an opportunity to discuss the memorandum with C&H and Thorngate Partners before any substantive engagement with the other side.

6.2 Authorization to Commence Negotiation Sessions

The Committee further authorized Calderwood & Harkness LLP to commence negotiation sessions with Whitfield Graves LLP ("WG"), counsel to Caliston BioSciences, Inc. Ms. Vasquez informed the Committee that Kenneth Pratt, a partner at Whitfield Graves, is serving as lead partner on the Caliston engagement, and that Ms. Vasquez had been in preliminary communications with Mr. Pratt regarding logistics and scheduling. The Committee also authorized Calderwood & Harkness LLP to coordinate, as appropriate, with Fendowell Sinclair & Co., Caliston's financial advisor, through Sandra Wu, Managing Director.

Ms. Vasquez noted that she anticipated the first substantive negotiation session could be scheduled for late September 2023, following the Committee's review and approval of the Negotiation Strategy Memorandum. She stated that the initial session would likely focus on the key economic terms — principally price, consideration structure, and the CVR — with subsequent sessions addressing the legal terms of the definitive merger agreement.

The Committee gave the following instructions regarding the conduct of the negotiations:

(a) All negotiation positions on material terms must be approved by the Special Committee before being communicated to Caliston or its advisors. Calderwood & Harkness LLP was not authorized to make concessions on any material terms — including, without limitation, price, consideration structure, CVR terms, or termination fee amounts — without the prior express approval of the Committee.

(b) Calderwood & Harkness LLP was authorized to engage in preliminary or procedural discussions with Whitfield Graves LLP without prior Committee approval, provided that such discussions do not involve the communication of substantive negotiation positions on material terms.

(c) Following each negotiation session, Calderwood & Harkness LLP shall promptly report to the members of the Special Committee, either by written memorandum or by conference call, on the substance and outcome of the session.

The Committee also requested that Thorngate Partners, through Mr. Ashford, remain available to support the negotiation process on an ongoing basis. Specifically, Thorngate was requested to provide real-time valuation guidance as terms are discussed during the negotiation sessions, to enable the Committee to evaluate counterproposals and alternative structures against the valuation framework established in Thorngate's preliminary analyses.

7. Next Steps and Scheduling

Ms. Vasquez outlined the anticipated next steps in the process for the Committee's consideration and planning:

1. Preparation and Circulation of Negotiation Strategy Memorandum. Calderwood & Harkness LLP would prepare the Negotiation Strategy Memorandum and circulate it to the members of the Special Committee within approximately 10 days of the meeting date, with a target delivery date of September 25, 2023.

2. Initial Negotiation Session. The initial substantive negotiation session with Whitfield Graves LLP would be targeted for late September 2023, following the Committee's review of the Negotiation Strategy Memorandum. Scheduling would depend on the availability of counsel and the Committee's approval of the negotiation strategy.

3. Committee Meetings During Negotiation Process. The Committee would reconvene as needed during the negotiation process, with meetings to be scheduled on reasonable notice. Ms. Vasquez noted that the pace of meetings would depend on the pace of negotiations, and that more frequent meetings might be required as the negotiations progress and key issues crystallize.

4. Ongoing Valuation Refinement. Thorngate Partners would continue to refine its valuation analyses as new information becomes available, including any updates on CLT-4019 Phase 2b clinical data, market developments, or other factors that could affect the valuation of Caliston. Mr. Ashford noted that the expected timing of CLT-4019 topline Phase 2b data in Q4 2023 could be a significant value driver and that the Committee should be prepared to reassess the economic terms of the Proposed Transaction in light of those data.

Ms. Prescott noted that the next regularly scheduled meeting of the Special Committee would be convened following the initial negotiation session with Whitfield Graves LLP, at which time the Committee would receive a comprehensive report from Calderwood & Harkness LLP on the progress and substance of the negotiations. Ms. Prescott asked Committee members to keep their schedules flexible in late September and early October 2023 to accommodate the anticipated pace of the process.

8. Executive Session

At approximately 3:45 p.m. Eastern Time, Ms. Prescott noted that the Committee wished to enter into executive session with its independent legal counsel. Mr. Ashford of Thorngate Partners was thanked for his presentation and participation and was excused from the meeting. Mr. Ashford departed Conference Room 12A and disconnected from the secure videoconference.

The three members of the Special Committee and the representatives of Calderwood & Harkness LLP (Ms. Vasquez and Ms. Tremblay) then held a brief executive session. During the executive session, the Committee and counsel discussed attorney-client privileged matters relating to the negotiation strategy and the Committee's assessment of key risk areas. The substance of the executive session is protected by the attorney-client privilege and the work-product doctrine and is not reflected in detail in these minutes.

No formal actions were taken during the executive session.

9. Adjournment

Following the conclusion of the executive session, Ms. Prescott asked whether there was any further business to come before the Committee. There being no further business, Dr. Ng moved that the meeting be adjourned. Mr. Okafor seconded the motion. The motion was adopted unanimously.

Ms. Prescott declared the meeting adjourned at approximately 4:05 p.m. Eastern Time.

CERTIFICATION

The undersigned, as Chair of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., hereby certifies that the foregoing minutes are a true and correct record of the proceedings of the meeting of the Special Committee held on September 14, 2023.

SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS PENTERRA PHARMACEUTICALS CORP.

By: ________

Name: Diane Prescott

Title: Chair, Special Committee

Date: ________

Prepared by: Daniel Obi, Working Associate, Calderwood & Harkness LLP, from notes of Sophie Tremblay, Lead Associate, Calderwood & Harkness LLP.

Date of Preparation: September 18, 2023

C&H Matter Number: 1025-00006

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT — PROJECT CORIANDER

These minutes and all attachments hereto constitute attorney-client privileged communications and attorney work product prepared in connection with the representation of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. by Calderwood & Harkness LLP. These minutes are not to be disclosed, distributed, or made available to any person outside the authorized group defined in the Independence Protocol & Information Barrier Policy adopted June 2, 2023, without the prior written consent of the Chair of the Special Committee and Calderwood & Harkness LLP.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT — PROJECT CORIANDER
MINUTES OF THE MEETING OF THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS OF PENTERRA PHARMACEUTICALS CORP.
September 14, 2023
2:00 p.m. Eastern Time
Conference Room 12A Penterra Pharmaceuticals Corp. 400 Innovation Drive, Suite 1200 Princeton, New Jersey 08540
and via Secure Videoconference (Project Coriander)
1. Call to Order and Attendance
The meeting of the Special Committee (the "Committee") of the Board of Directors (the "Board") of Penterra Pharmaceuticals Corp. ("Penterra" or the "Company") was called to order at 2:00 p.m. Eastern Time on Thursday, September 14, 2023, by Diane Prescott, Chair of the Special Committee.
The meeting was held in person in Conference Room 12A at the Company's principal offices at 400 Innovation Drive, Suite 1200, Princeton, New Jersey 08540. Certain attendees participated via a secure, encrypted videoconference platform, consistent with the Committee's information security protocols for Project Coriander.
Special Committee Members Present:
The following independent members of the Special Committee were present throughout the meeting, constituting the full membership of the Committee:
•  Diane Prescott, Chair of the Special Committee (independent director of Penterra; former Chief Executive Officer of Windbridge Health Systems, Inc.);
•  James Okafor, Member of the Special Committee (independent director of Penterra; retired Managing Director of Fielding Capital Partners, LLC); and
•  Dr. Helen Ng, Member of the Special Committee (independent director of Penterra; Professor of Pharmacology, Wexford University).
All three members of the Special Committee were present. Ms. Prescott confirmed that a quorum of the Committee had been established pursuant to Section 3.1 of the Special Committee Charter adopted by the Board on June 2, 2023 (the "Charter"), which provides that a quorum shall consist of a majority of the members of the Committee then serving, provided that all members have been given proper notice of the meeting. Notice of the meeting had been delivered to all Committee members via encrypted electronic communication on September 11, 2023, in compliance with Section 3.2 of the Charter.
Independent Legal Counsel Present (Calderwood & Harkness LLP):
The following representatives of Calderwood & Harkness LLP ("C&H"), independent legal counsel to the Special Committee, were present at the meeting:
•  Renata Vasquez, Responsible Partner; and
•  Sophie Tremblay, Lead Associate.
Independent Financial Advisor Present (Thorngate Partners LLC):
The following representative of Thorngate Partners LLC ("Thorngate"), independent financial advisor to the Special Committee, was present at the meeting:
•  Gregory Ashford, Managing Director.
Absent / Excluded (per Information Barrier Protocol):
It was noted for the record that the following members of the Board of Directors were not present at, and did not receive notice of, the meeting, and did not have access to any of the meeting materials, agenda, presentations, or memoranda distributed in connection therewith, consistent with the Independence Protocol & Information Barrier Policy (the "Information Barrier Policy") established by the Board on June 2, 2023:
•  Dr. Marcus Hale, Chairman of the Board and Chief Executive Officer of Penterra, who holds a 28.5% equity interest in Caliston BioSciences, Inc. ("Caliston") and is therefore a conflicted party with respect to the proposed transaction;
•  Angela Whitmore, Director and Executive Vice President, Commercial Operations of Penterra, whose spouse, Dr. Evan Whitmore, serves as Caliston's Head of Clinical Development and is a member of Caliston's board of directors; and
•  Raymond Tusk, Director of Penterra, who was designated as a non-participating director by the Board in its Resolution of June 2, 2023, due to his prior business relationships with Dr. Hale and his limited partnership interest in Hale Family Partners, L.P.
The exclusion of the foregoing directors was consistent with the Information Barrier Policy and the Board Resolution of June 2, 2023, which expressly delegated to the Special Committee the exclusive authority to evaluate, negotiate, and determine whether to recommend to the full Board the proposed acquisition of Caliston BioSciences, Inc. (the "Proposed Transaction").
Minutes Recorded By:
It was noted that minutes of the meeting were prepared by Daniel Obi, Working Associate, Calderwood & Harkness LLP. Mr. Obi was not present in the meeting room and did not participate in the meeting. The minutes were prepared from detailed contemporaneous notes taken by Sophie Tremblay, Lead Associate, Calderwood & Harkness LLP, who was present throughout the meeting.
2. Approval of Prior Meeting Minutes
Ms. Prescott asked whether the members of the Committee had reviewed the minutes of the Special Committee meeting held on August 22, 2023 (the "August 22 Minutes"), which had been circulated to Committee members via the segregated Project Coriander workspace on September 8, 2023. At the August 22, 2023 meeting, the Committee had, among other actions, directed Thorngate Partners to conduct a market check of alternative acquisition targets to determine whether any superior alternatives to the Proposed Transaction existed in the marketplace. Each Committee member confirmed that she or he had reviewed the August 22 Minutes.
Mr. Okafor moved that the August 22 Minutes be approved as a true and correct record of the proceedings of the August 22, 2023 meeting. Dr. Ng seconded the motion. There being no further discussion, the motion was put to a vote, and the August 22 Minutes were unanimously approved by all three members of the Special Committee present, with no abstentions or dissents.
3. Reminder of Confidentiality and Privilege
Before proceeding to the substantive agenda items, Ms. Vasquez of Calderwood & Harkness LLP addressed the Committee regarding confidentiality and privilege. Ms. Vasquez reminded the members of the Committee that all deliberations, materials, communications, memoranda, presentations, and discussions occurring at or in connection with the meeting are subject to the attorney-client privilege and the work-product doctrine. Ms. Vasquez emphasized that the protections of these doctrines apply to the full scope of the Committee's work in connection with Project Coriander and must be diligently maintained.
Ms. Vasquez confirmed that all materials relating to the meeting, including the agenda, the Thorngate Partners presentation, and any supporting memoranda, were stored exclusively on the segregated Project Coriander workspace within the Company's document management system. Access to the Project Coriander workspace is restricted to the three members of the Special Committee and their authorized advisors — specifically, the designated professionals at Calderwood & Harkness LLP and Thorngate Partners LLC — and no other personnel of the Company, including information technology staff, have access to the workspace without the prior express written approval of the Chair of the Special Committee.
Ms. Vasquez reiterated that no information discussed at the meeting, or reflected in any materials distributed in connection therewith, was to be shared, disclosed, or communicated in any manner, whether orally, in writing, or electronically, with Dr. Marcus Hale, Angela Whitmore, Raymond Tusk, or any other person outside the authorized group defined in the Information Barrier Policy. This prohibition extends to informal conversations, social communications, and any other context, regardless of the medium or setting. Ms. Vasquez further noted that any suspected breach of the Information Barrier Policy should be reported immediately to her or to Ms. Tremblay.
Each member of the Committee acknowledged understanding of, and agreement to comply with, these confidentiality and privilege obligations.
4. Thorngate Partners LLC — Presentation of Market Check Results
Ms. Prescott then turned the floor over to Mr. Ashford of Thorngate Partners for a presentation on the results of the market check that the Committee had commissioned at its August 22, 2023 meeting.
4.1 Background and Scope of Market Check
Mr. Ashford began by reminding the Committee of the background and mandate for the market check. He recalled that at the August 22, 2023 meeting, the Special Committee had directed Thorngate Partners to explore whether alternative acquisition targets existed in the marketplace that could deliver comparable or superior strategic value to Penterra relative to the Proposed Transaction — the acquisition of Caliston BioSciences, Inc. The Committee's objective in commissioning the market check was to ensure that it had a fulsome understanding of the available alternatives before proceeding with any negotiation of the Proposed Transaction, and to create a record consistent with the Committee's fiduciary obligations under Delaware law.
Mr. Ashford stated that the market check had been conducted over a period of approximately three weeks, from August 22, 2023 through September 12, 2023. During that period, the Thorngate team — consisting of Mr. Ashford, two vice presidents, and an analyst dedicated to the engagement — reviewed the competitive landscape of clinical-stage oncology companies with assets in therapeutic areas comparable to those of Caliston's lead program, CLT-4019. Specifically, the review focused on companies with assets in the following categories: selective kinase inhibitors, CDK4/6 inhibitors, programs targeting HR+/HER2– breast cancer (both early-stage and metastatic settings), and adjacent solid tumor indications where Caliston's pipeline assets (CLT-5227 and CLT-6034) could have relevance.
Mr. Ashford noted that the review encompassed both privately held and publicly traded companies, with no geographic limitation imposed on the screen, although all candidates identified were domiciled in the United States or Western Europe.
4.2 Methodology.  Mr. Ashford then described the methodology employed by Thorngate Partners in conducting the market check. Thorngate identified and initially screened approximately 14 potential alternative acquisition targets based on the following criteria:
(a) the company possessed one or more clinical-stage or late-preclinical assets in oncology, with a primary focus on small-molecule kinase inhibitors and related modalities;
(b) the company's pipeline demonstrated meaningful complementarity with Penterra's existing oncology and immunology portfolio, such that an acquisition would advance Penterra's strategic positioning in its core therapeutic areas;
(c) the company's estimated valuation fell within a range that was comparable to, or more favorable than, the proposed aggregate equity value of the Caliston transaction (reference point: $925 million); and
(d) based on publicly available information and Thorngate's market intelligence, the company appeared to be potentially available for a strategic transaction, meaning that there was no publicly known impediment to a potential acquisition (such as a recently completed financing that would make a near-term sale unlikely, or a known ongoing exclusive sale process with another party).
Mr. Ashford emphasized that the market check was conducted on a "passive" or "desktop" basis — that is, Thorngate did not make direct outreach to any of the 14 screened companies or their advisors, and did not engage in any form of active solicitation. This approach was consistent with the explicit instruction of the Special Committee at the August 22, 2023 meeting, which had directed that the market check be conducted without active solicitation in order to preserve confidentiality regarding Penterra's strategic intentions and to avoid triggering any premature market speculation. Thorngate relied instead on publicly available data (including SEC filings, clinical trial registry databases, published scientific literature, and public company investor presentations), proprietary databases maintained by Thorngate, industry conference materials, and Thorngate's institutional knowledge of the oncology transaction market derived from its extensive deal experience in the pharmaceutical and biotechnology sectors.
Mr. Ashford acknowledged that a passive market check is inherently more limited than a full auction process or an active outreach process, and he stated that this limitation was understood by the Committee when the market check was authorized. He noted, however, that Thorngate's familiarity with the relevant market segment, combined with the depth of publicly available clinical and financial data in the oncology space, provided a reasonable basis for the conclusions reached.
4.3 Summary of Findings
Mr. Ashford proceeded to present the summary findings of the market check. Of the approximately 14 companies initially identified and screened, Thorngate determined that five warranted closer review based on pipeline relevance, stage of development, and potential strategic synergies with Penterra's existing portfolio. The remaining nine companies were eliminated during the initial screening phase for reasons including insufficient pipeline relevance, stage of development too early to support a meaningful comparison, valuation well in excess of the reference range, or other factors that made them clearly inferior alternatives.
Mr. Ashford distributed to the Committee a detailed written summary of each of the five candidates that received closer review. Consistent with the Committee's confidentiality protocols, each candidate was identified by a code name rather than its actual corporate name. For each candidate, the summary addressed: (i) therapeutic area and target, (ii) lead asset and current stage of clinical development, (iii) additional pipeline assets, (iv) estimated enterprise value or equity value based on publicly available information and Thorngate's analysis, and (v) a qualitative assessment of strategic fit with Penterra's oncology portfolio.
After reviewing the summary materials, Mr. Ashford presented Thorngate's conclusions. He stated that none of the five closely reviewed candidates presented a superior alternative to the proposed acquisition of Caliston BioSciences, Inc. He elaborated on the basis for this conclusion as follows:
•  Candidates A and B each possessed lead assets that were in Phase 1 clinical trials. While both assets showed early promise based on preliminary safety and pharmacokinetic data, both were at a significantly earlier stage of development than Caliston's CLT-4019, which is currently in a Phase 2b clinical trial with topline data expected in the fourth quarter of 2023. The earlier development stage of Candidates A and B translated into materially higher binary development risk — that is, a materially greater probability of clinical failure — relative to CLT-4019. Mr. Ashford noted that the probability of success from Phase 1 to registration in oncology is historically in the range of 5–10%, whereas the probability of success from Phase 2b to registration is meaningfully higher, particularly for a program with encouraging interim data such as CLT-4019. As a result, the risk-adjusted net present value ("rNPV") of the lead assets of Candidates A and B did not compare favorably with CLT-4019, even assuming lower acquisition prices.
•  Candidate C possessed a lead asset at a comparable stage of development to CLT-4019 (late Phase 2 / preparation for pivotal trial). However, the implied valuation of Candidate C, based on its most recent financing round, public comparable company analysis, and reported investor expectations, was estimated at approximately $1.2 billion to $1.4 billion, representing a significant premium to the proposed $925 million aggregate equity value for Caliston. Mr. Ashford stated that Thorngate's analysis indicated that the risk-adjusted net present value of Candidate C's pipeline did not proportionally exceed that of Caliston's pipeline, meaning that an acquisition of Candidate C would require Penterra to pay a materially higher price without a commensurate increase in risk-adjusted expected value. Accordingly, Candidate C did not represent a value-superior alternative.
•  Candidate D possessed a pipeline of oncology assets, including a late-preclinical kinase inhibitor program. However, upon closer review, Thorngate determined that Candidate D's pipeline was not sufficiently complementary to Penterra's existing oncology portfolio. Specifically, Candidate D's programs were focused on hematological malignancies rather than solid tumors, and the potential for synergy with Penterra's existing solid tumor programs, commercial infrastructure, and regulatory expertise was limited. As a result, Thorngate concluded that an acquisition of Candidate D would not advance Penterra's strategic objectives as effectively as the acquisition of Caliston.
•  Candidate E had recently entered into exclusive discussions with another strategic acquiror, as reported in public filings and corroborated by Thorngate's market intelligence. As a result, Candidate E was not available for a transaction with Penterra on any reasonable timeline. Mr. Ashford noted that even if Candidate E were available, its lead asset was in a distinct therapeutic sub-area and would not have addressed the same competitive and strategic considerations as CLT-4019.
Based on the foregoing analysis, Mr. Ashford stated that it was Thorngate Partners' professional conclusion that no superior alternative acquisition target had been identified in the market check. Mr. Ashford noted that this conclusion was subject to the inherent limitations of a passive market check, but that Thorngate was confident in the thoroughness and rigor of its analysis within those parameters.
4.4 Committee Discussion of Market Check Results
Following Mr. Ashford's presentation, the Committee engaged in a detailed discussion of the market check results.
Mr. Okafor asked about the depth and breadth of the screening methodology, and specifically whether Thorngate had considered companies outside the CDK4/6 inhibitor class but within the broader kinase inhibitor space. Mr. Okafor noted that Penterra's oncology strategy encompasses kinase inhibitor targets beyond CDK4/6, and he wanted to ensure that the market check had not been unduly narrow in its scope. Mr. Ashford confirmed that the screen was broader than CDK4/6 inhibitors alone. He stated that the initial universe of 14 companies included companies with assets targeting a range of kinase targets relevant to solid tumors, including but not limited to CDK4/6, CDK2, PI3K-alpha, FGFR, and RAS-MAPK pathway targets. He noted that the emphasis on CDK4/6 reflected the particular strategic relevance of Caliston's CLT-4019 to Penterra's portfolio, but that the screen was designed to capture a range of potential alternatives across the broader kinase inhibitor landscape.
Dr. Ng inquired whether any of the screened candidates had assets that could directly address the same HR+/HER2– metastatic breast cancer indication that CLT-4019 is being developed to treat. Dr. Ng noted that this specific indication was a central element of the strategic rationale for the Proposed Transaction, and she wanted to understand whether the market offered any alternative paths to gaining a competitive position in that therapeutic niche. Mr. Ashford responded that of the 14 companies initially screened, only two had assets in clinical or late-preclinical development targeting the HR+/HER2– metastatic breast cancer indication. Both of those companies were among the five candidates that received closer review (identified as Candidate A and Candidate C in the summary materials). As discussed, neither Candidate A nor Candidate C represented a superior alternative to Caliston — Candidate A due to its significantly earlier stage of development and associated higher risk, and Candidate C due to its materially higher implied valuation without a proportionally superior risk-adjusted expected value.
Ms. Prescott asked whether the market check results had any impact on Thorngate's preliminary valuation assessment of Caliston, which had been presented to the Committee at its August 3, 2023 meeting. Mr. Ashford stated that the market check reinforced and was consistent with Thorngate's earlier preliminary valuation range for Caliston. He reminded the Committee of the key elements of Thorngate's preliminary valuation analysis as presented on August 3, 2023:
•  discounted Cash Flow ("DCF") Analysis — CLT-4019 Alone: $780 million to $1,020 million (risk-adjusted, using probability-weighted scenarios for Phase 2b outcomes and a discount rate of 12.0%–14.0%).
•  discounted Cash Flow ("DCF") Analysis — Full Caliston Pipeline (including CLT-4019, CLT-5227, and CLT-6034): $870 million to $1,180 million.
•  Comparable Transactions Analysis: $820 million to $1,050 million (based on precedent transactions involving clinical-stage oncology assets with similar therapeutic focus and development stage).
•  Premiums Paid Analysis: $884 million to $986 million (based on premiums paid in precedent acquisitions of private clinical-stage pharmaceutical companies by public acquirors).
Mr. Ashford noted that the proposed $925 million aggregate equity value for the Proposed Transaction fell within or near the midpoint of each of these valuation ranges, and that the market check had not revealed any data or market conditions that would cause Thorngate to revise its preliminary valuation parameters. He stated that Thorngate's preliminary view remained that the proposed $925 million equity value was within a range that could potentially be supported as fair from a financial point of view, subject to further analysis and refinement as additional information became available, including CLT-4019 Phase 2b topline data.
The Committee then discussed the significance of CLT-4019's advanced clinical stage — specifically, its Phase 2b status with topline data expected in the fourth quarter of 2023 — relative to the alternatives identified in the market check. The members observed that the advanced stage of development meaningfully reduced the binary risk associated with the asset, as Phase 2b data would provide substantial clinical evidence of efficacy and safety that earlier-stage programs could not yet offer. This reduced risk profile supported a premium valuation relative to Phase 1 assets and was consistent with the Committee's view that CLT-4019's de-risked development status was a key element of the strategic rationale for the Proposed Transaction.
5. Discussion of Proceeding with Caliston Negotiation
5.1 Strategic Rationale
Following the discussion of the market check results, Ms. Prescott turned the Committee's attention to the question of whether, in light of the market check findings and the totality of the information available to the Committee, it was appropriate to proceed with negotiation of the Proposed Transaction.
Ms. Vasquez framed the discussion in terms of the Committee's fiduciary obligations under the laws of the State of Delaware. She reminded the Committee that, pursuant to the Board Resolution of June 2, 2023 and the Charter, the Committee possesses the exclusive authority to evaluate, negotiate, and determine whether to recommend the Proposed Transaction to the full Board. Critically, the Committee also possesses the power to decline to proceed with the Proposed Transaction entirely — that is, the "say no" power — if the Committee determines, in the exercise of its business judgment, that the transaction is not in the best interests of Penterra and its stockholders. Ms. Vasquez emphasized that the Committee's consideration of whether to proceed with negotiations should be informed by, but not limited to, the market check results, and that the Committee should consider the full range of strategic, financial, and legal factors relevant to its determination.
The Committee then discussed the strategic rationale for acquiring Caliston, focusing on the following key considerations:
(a) CLT-4019 as a Differentiated Asset. CLT-4019 is a selective CDK4/6 inhibitor being developed for the treatment of HR+/HER2– metastatic breast cancer, a large and growing indication in which existing CDK4/6 inhibitors (palbociclib, ribociclib, abemaciclib) have demonstrated significant clinical and commercial value. The Committee noted that CLT-4019 is designed to offer an improved selectivity profile, which could translate into a differentiated safety and tolerability profile, potentially supporting a competitive advantage in a market expected to exceed $15 billion globally by 2028.
(b) Complementarity with Penterra's Existing Oncology Pipeline. The acquisition of Caliston would complement and strengthen Penterra's existing oncology portfolio, which includes several programs in solid tumors but currently lacks a CDK4/6 inhibitor or a late-stage breast cancer program. The Committee observed that the addition of CLT-4019 would fill a meaningful gap in Penterra's oncology pipeline and would leverage Penterra's existing commercial infrastructure in breast cancer.
(c) Additional Pipeline Optionality. Caliston's preclinical candidates CLT-5227 (a next-generation oral SERD) and CLT-6034 (a selective CDK2 inhibitor) provide additional pipeline optionality and potential for future value creation. While these candidates are at earlier stages of development and carry correspondingly higher risk, they represent additional shots on goal in the breast cancer and solid tumor space and could benefit from Penterra's development and regulatory capabilities.
(d) Penterra's Financial Capacity. The Committee noted that Penterra has sufficient financial resources to fund the Proposed Transaction without placing undue strain on the Company's balance sheet or its ability to fund its existing pipeline and commercial operations.
5.2 Financing Considerations
The Committee then engaged in a brief discussion of Penterra's capacity to fund the cash component of the Proposed Transaction. As currently proposed, the aggregate equity consideration for the acquisition of Caliston is $925 million, of which 75% ($693,750,000) would be payable in cash at closing and 25% ($231,250,000) would be payable in newly issued shares of Penterra common stock (ticker: PPHR).
With respect to the cash component, the Committee noted that the anticipated sources of funding would include approximately $400 million from Penterra's existing cash on hand. As reported in Penterra's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, the Company had cash, cash equivalents, and short-term investments of approximately $892 million as of that date. The remaining approximately $293,750,000 of the cash component was expected to be funded through a draw on Penterra's existing $1.5 billion senior unsecured revolving credit facility with Greystone National Bank, N.A., as administrative agent. As of June 1, 2023, the undrawn availability under the facility was approximately $1.1 billion. The facility bears interest at SOFR plus 150 basis points and matures in March 2026. The Committee was advised that Penterra's treasury team had preliminarily confirmed that a draw of this magnitude would be consistent with the financial covenants under the credit agreement.
With respect to the stock component, the Committee noted that the issuance of approximately 5,903,497 newly issued shares of Penterra common stock (based on the 30-day volume-weighted average price ("VWAP") of $39.17 as of June 1, 2023, the reference date used in the preliminary term sheet) would require approval by Penterra's stockholders under the applicable rules of the New York Stock Exchange governing the issuance of shares representing greater than 1% of outstanding shares in connection with an acquisition. The Committee noted that obtaining stockholder approval would be an additional condition to the consummation of the transaction and would need to be addressed in the definitive merger agreement.
5.3 Related-Party Considerations
Ms. Vasquez then reminded the Committee of the related-party dimensions of the Proposed Transaction, which had been a central reason for the formation of the Special Committee and the adoption of the Information Barrier Policy.
Ms. Vasquez stated that Dr. Marcus Hale, Penterra's Chairman of the Board and Chief Executive Officer, holds a 28.5% equity interest in Caliston BioSciences, Inc. Dr. Hale acquired this interest through a personal investment of approximately $42 million, made in connection with Caliston's Series B and Series C financing rounds. At the proposed aggregate equity value of $925 million, Dr. Hale's 28.5% interest would have an implied value of approximately $263,625,000, representing an implied personal gain of approximately $221,625,000. Dr. Hale therefore has a material personal financial interest in the consummation of the Proposed Transaction that is different from, and potentially adverse to, the interests of Penterra and its stockholders.
Additionally, Ms. Vasquez noted that Angela Whitmore, a member of Penterra's Board of Directors and the Company's Executive Vice President, Commercial Operations, is the spouse of Dr. Evan Whitmore. Dr. Evan Whitmore serves as Caliston's Head of Clinical Development and is a member of Caliston's board of directors. This familial relationship creates an additional conflict of interest that requires careful management.
Ms. Vasquez reiterated that these conflicts of interest underscore the critical importance of the Special Committee process, including the Committee's retention of independent legal counsel and an independent financial advisor, the maintenance of the Information Barrier Policy, and the eventual delivery of a fairness opinion from Thorngate Partners. Ms. Vasquez noted that, given the presence of a controlling or conflicted fiduciary on the buy side, the Proposed Transaction would likely be subject to the entire fairness standard of review under Delaware law, pursuant to which the court examines both the fairness of the process and the fairness of the price. Ms. Vasquez referenced Section 144 of the Delaware General Corporation Law and the well-established entire fairness doctrine as articulated by the Delaware Supreme Court. She stated that the Special Committee process, if properly conducted, could serve as powerful evidence of procedural fairness and could potentially shift the burden of proof on the entire fairness question, depending on the specific facts and circumstances at the time of any challenge.
The Committee discussed the functioning of the Information Barrier Policy to date and noted with satisfaction that no breaches had been reported. Ms. Vasquez confirmed that Calderwood & Harkness LLP had been monitoring compliance with the Information Barrier Policy and had not identified any instances of unauthorized disclosure of Project Coriander materials or information.
5.4 Resolution to Proceed
After thorough discussion, the Committee turned to the question of whether to authorize the continuation of the process and the commencement of negotiations with Caliston BioSciences. Ms. Prescott summarized the key considerations that had been discussed, including the market check results (which demonstrated the absence of a superior alternative target), the preliminary valuation analyses (which indicated that the proposed $925 million equity value fell within a range that could potentially be supported as fair from a financial point of view), and the strategic rationale for the Proposed Transaction (including the differentiated clinical profile of CLT-4019, the complementarity with Penterra's existing pipeline, and the additional optionality provided by Caliston's preclinical candidates).
Upon motion by Mr. Okafor, seconded by Dr. Ng, the Committee unanimously determined that, based on the results of the market check, the preliminary valuation analyses, the strategic rationale, and the totality of the information available to the Committee, it was appropriate to proceed with the negotiation of the proposed acquisition of Caliston BioSciences, Inc.
The Committee expressly emphasized, and directed that the minutes reflect, that this determination to proceed with negotiations does not constitute approval of the Proposed Transaction, and that the Committee reserves its right, in the exercise of its fiduciary duties, to decline to recommend the Proposed Transaction to the full Board at any point in the process, for any reason or no reason. The Committee further noted that its ultimate determination regarding the Proposed Transaction will be informed by, among other things, the outcome of the negotiations, the final terms of any definitive agreement, the delivery of a fairness opinion from Thorngate Partners, any developments in CLT-4019's clinical program (including Phase 2b topline data), and any other material information that becomes available during the course of the process.
6. Authorization to Prepare Negotiation Strategy and Commence Negotiations
6.1 Negotiation Strategy Memorandum
Having determined to proceed with negotiations, the Committee turned to the question of how the negotiation process should be organized and conducted. Ms. Prescott noted the importance of a disciplined and well-documented negotiation process, both to protect the interests of Penterra's stockholders and to establish a strong record of procedural fairness.
The Committee directed Calderwood & Harkness LLP, acting through Ms. Vasquez and Ms. Tremblay, to prepare a comprehensive negotiation strategy memorandum (the "Negotiation Strategy Memorandum") setting forth the Committee's recommended positions on the key terms of the Proposed Transaction. The Committee specified that the Negotiation Strategy Memorandum should address the following topics, at a minimum:
(a) Price. The Committee's recommended position on the aggregate equity consideration, taking into account the preliminary valuation ranges presented by Thorngate Partners and the 36.03% premium that the proposed $925 million equity value represents over the October 2021 Series C post-money valuation of $680 million. The memorandum should address the Committee's range of acceptable prices, including an opening position and a walk-away price.
(b) Consideration Structure. The Committee's recommended position on the cash/stock mix, including the rationale for the proposed 75% cash / 25% stock structure and any alternative structures that the Committee might consider.
(c) Contingent Value Rights. The Committee's recommended position on the proposed Contingent Value Rights ("CVR") structure, including the milestones, payment amount, and other terms. The reference point for the CVR is the proposed $125 million CVR contingent upon the receipt of approval from the United States Food and Drug Administration ("FDA") for CLT-4019 on or before December 31, 2026. The memorandum should address the Committee's view on whether the CVR terms are appropriate and whether any modifications should be sought.
(d) Termination Fee Provisions. The Committee's recommended position on termination fee provisions, including both a reverse termination fee payable by Penterra in the event that Penterra fails to consummate the transaction under specified circumstances, and a company termination fee payable by Caliston in the event that Caliston terminates the merger agreement to accept a superior proposal or under other specified circumstances.
(e) Representations and Warranties Scope. The Committee's recommended position on the scope, specificity, and survival period of the representations and warranties to be made by Caliston in the definitive merger agreement, including representations regarding intellectual property, clinical trial data integrity, regulatory compliance, material contracts, and capitalization.
(f) Indemnification and Escrow Terms. The Committee's recommended position on indemnification provisions and escrow terms, including the size, duration, and release mechanics of any escrow arrangement.
(g) Key Protective Provisions — Dr. Hale's Voting and Recusal Obligations. The Committee's recommended position on the provisions governing Dr. Hale's obligations as a stockholder of Caliston and as a director and officer of Penterra, including any voting commitments, recusal obligations, and standstill provisions that should be included in the definitive merger agreement or in a related agreement.
The Committee directed that the Negotiation Strategy Memorandum be delivered to the members of the Special Committee for review and approval prior to the commencement of any negotiation sessions. The Committee stated that it expected to have an opportunity to discuss the memorandum with C&H and Thorngate Partners before any substantive engagement with the other side.
6.2 Authorization to Commence Negotiation Sessions
The Committee further authorized Calderwood & Harkness LLP to commence negotiation sessions with Whitfield Graves LLP ("WG"), counsel to Caliston BioSciences, Inc. Ms. Vasquez informed the Committee that Kenneth Pratt, a partner at Whitfield Graves, is serving as lead partner on the Caliston engagement, and that Ms. Vasquez had been in preliminary communications with Mr. Pratt regarding logistics and scheduling. The Committee also authorized Calderwood & Harkness LLP to coordinate, as appropriate, with Fendowell Sinclair & Co., Caliston's financial advisor, through Sandra Wu, Managing Director.
Ms. Vasquez noted that she anticipated the first substantive negotiation session could be scheduled for late September 2023, following the Committee's review and approval of the Negotiation Strategy Memorandum. She stated that the initial session would likely focus on the key economic terms — principally price, consideration structure, and the CVR — with subsequent sessions addressing the legal terms of the definitive merger agreement.
The Committee gave the following instructions regarding the conduct of the negotiations:
(a) All negotiation positions on material terms must be approved by the Special Committee before being communicated to Caliston or its advisors. Calderwood & Harkness LLP was not authorized to make concessions on any material terms — including, without limitation, price, consideration structure, CVR terms, or termination fee amounts — without the prior express approval of the Committee.
(b) Calderwood & Harkness LLP was authorized to engage in preliminary or procedural discussions with Whitfield Graves LLP without prior Committee approval, provided that such discussions do not involve the communication of substantive negotiation positions on material terms.
(c) Following each negotiation session, Calderwood & Harkness LLP shall promptly report to the members of the Special Committee, either by written memorandum or by conference call, on the substance and outcome of the session.
The Committee also requested that Thorngate Partners, through Mr. Ashford, remain available to support the negotiation process on an ongoing basis. Specifically, Thorngate was requested to provide real-time valuation guidance as terms are discussed during the negotiation sessions, to enable the Committee to evaluate counterproposals and alternative structures against the valuation framework established in Thorngate's preliminary analyses.
7. Next Steps and Scheduling
Ms. Vasquez outlined the anticipated next steps in the process for the Committee's consideration and planning:
1.  Preparation and Circulation of Negotiation Strategy Memorandum. Calderwood & Harkness LLP would prepare the Negotiation Strategy Memorandum and circulate it to the members of the Special Committee within approximately 10 days of the meeting date, with a target delivery date of September 25, 2023.
2.  Initial Negotiation Session. The initial substantive negotiation session with Whitfield Graves LLP would be targeted for late September 2023, following the Committee's review of the Negotiation Strategy Memorandum. Scheduling would depend on the availability of counsel and the Committee's approval of the negotiation strategy.
3.  Committee Meetings During Negotiation Process. The Committee would reconvene as needed during the negotiation process, with meetings to be scheduled on reasonable notice. Ms. Vasquez noted that the pace of meetings would depend on the pace of negotiations, and that more frequent meetings might be required as the negotiations progress and key issues crystallize.
4.  Ongoing Valuation Refinement. Thorngate Partners would continue to refine its valuation analyses as new information becomes available, including any updates on CLT-4019 Phase 2b clinical data, market developments, or other factors that could affect the valuation of Caliston. Mr. Ashford noted that the expected timing of CLT-4019 topline Phase 2b data in Q4 2023 could be a significant value driver and that the Committee should be prepared to reassess the economic terms of the Proposed Transaction in light of those data.
Ms. Prescott noted that the next regularly scheduled meeting of the Special Committee would be convened following the initial negotiation session with Whitfield Graves LLP, at which time the Committee would receive a comprehensive report from Calderwood & Harkness LLP on the progress and substance of the negotiations. Ms. Prescott asked Committee members to keep their schedules flexible in late September and early October 2023 to accommodate the anticipated pace of the process.
8. Executive Session
At approximately 3:45 p.m. Eastern Time, Ms. Prescott noted that the Committee wished to enter into executive session with its independent legal counsel. Mr. Ashford of Thorngate Partners was thanked for his presentation and participation and was excused from the meeting. Mr. Ashford departed Conference Room 12A and disconnected from the secure videoconference.
The three members of the Special Committee and the representatives of Calderwood & Harkness LLP (Ms. Vasquez and Ms. Tremblay) then held a brief executive session. During the executive session, the Committee and counsel discussed attorney-client privileged matters relating to the negotiation strategy and the Committee's assessment of key risk areas. The substance of the executive session is protected by the attorney-client privilege and the work-product doctrine and is not reflected in detail in these minutes.
No formal actions were taken during the executive session.
9. Adjournment
Following the conclusion of the executive session, Ms. Prescott asked whether there was any further business to come before the Committee. There being no further business, Dr. Ng moved that the meeting be adjourned. Mr. Okafor seconded the motion. The motion was adopted unanimously.
Ms. Prescott declared the meeting adjourned at approximately 4:05 p.m. Eastern Time.
CERTIFICATION
The undersigned, as Chair of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp., hereby certifies that the foregoing minutes are a true and correct record of the proceedings of the meeting of the Special Committee held on September 14, 2023.
SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS PENTERRA PHARMACEUTICALS CORP.
By: ________
Name: Diane Prescott
Title: Chair, Special Committee
Date: ________
Prepared by: Daniel Obi, Working Associate, Calderwood & Harkness LLP, from notes of Sophie Tremblay, Lead Associate, Calderwood & Harkness LLP.
Date of Preparation: September 18, 2023
C&H Matter Number: 1025-00006
PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT — PROJECT CORIANDER
These minutes and all attachments hereto constitute attorney-client privileged communications and attorney work product prepared in connection with the representation of the Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp. by Calderwood & Harkness LLP. These minutes are not to be disclosed, distributed, or made available to any person outside the authorized group defined in the Independence Protocol & Information Barrier Policy adopted June 2, 2023, without the prior written consent of the Chair of the Special Committee and Calderwood & Harkness LLP.

PRIVILEGED AND CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / WORK PRODUCT — PROJECT CORIANDER

CERTIFICATION

SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS PENTERRA PHARMACEUTICALS CORP.

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