CALDERWOOD & HARKNESS LLP Attorneys at Law
1735 Market Street, Suite 3100 Philadelphia, PA 19103
Telephone: (215) 574-8000 Facsimile: (215) 574-8001 www.calderwoodharkness.com
June 22, 2022
Gerald Meskill Supervisory Revenue Agent / Team Manager Internal Revenue Service Large Business & International Division Exam Team ID LB&I-NE-TP-2022-00641
Re: Penterra Pharmaceuticals Corp. — EIN 22-3741856 IRS Examination of Federal Income Tax Returns (Forms 1120) for Tax Years Ending December 31, 2017, December 31, 2018, December 31, 2019, and December 31, 2020 Confirmation of Opening Conference
Dear Mr. Meskill:
I. Purpose and Authorization
This letter confirms that Calderwood & Harkness LLP ("C&H") has been engaged as outside tax counsel to represent Penterra Pharmaceuticals Corp. ("PPC") in connection with the examination of PPC's federal income tax returns (Forms 1120) for the tax years ending December 31, 2017, December 31, 2018, December 31, 2019, and December 31, 2020 (collectively, the "Examination"). We write in response to the initial contact letter (IRS Letter 2205-A) dated May 16, 2022, which notified PPC of the opening of this Examination and identified the tax years subject to review.
Pursuant to an engagement letter executed between C&H and PPC on June 2, 2022, C&H has been retained as PPC's authorized outside counsel for all matters arising from or relating to the Examination. In accordance with this engagement, IRS Form 2848 (Power of Attorney and Declaration of Representative) was filed with the Internal Revenue Service on June 8, 2022, authorizing the following individuals to represent PPC before the IRS in connection with this Examination:
1. Leonard Cross, Responsible Partner, Tax Department, Calderwood & Harkness LLP (admitted to practice in the States of New York and New Jersey, and the District of Columbia);
2. Sylvia Hartwell, Billing Partner, Tax Department, Calderwood & Harkness LLP (admitted to practice in the State of New York and the District of Columbia);
3. Garrett Simmons, Lead Associate, Tax Department, Calderwood & Harkness LLP (admitted to practice in the State of New York); and
4. Leila Nazari, Working Associate, Tax Department, Calderwood & Harkness LLP (admitted to practice in the States of New York and New Jersey).
A copy of the executed Form 2848, as filed on June 8, 2022, is enclosed with this letter for your reference and records.
We respectfully request that all future communications regarding the Examination—including, without limitation, all Information Document Requests ("IDRs"), notices, correspondence, and scheduling matters—be directed to the undersigned, Leonard Cross, at Calderwood & Harkness LLP, 1735 Market Street, Suite 3100, Philadelphia, PA 19103, with a courtesy copy to Garrett Simmons at the same address. Contact information for both individuals is set forth in Section VI of this letter. We appreciate your cooperation in ensuring that all communications flow through C&H as PPC's authorized representatives.
II. Confirmation of Opening Conference
We write to confirm our understanding that an opening conference for the Examination is to be scheduled in the near term. C&H proposes that the opening conference be held during the week of June 27 through July 1, 2022, or at such other date and time as may be convenient for the Examination team. We are prepared to accommodate the team's scheduling preferences, and we ask that you or a member of your team contact the undersigned at your earliest convenience to confirm a mutually agreeable date and time.
We anticipate that the following individuals will attend the opening conference on behalf of PPC:
• Leonard Cross, Partner, Tax Department, Calderwood & Harkness LLP;
• Garrett Simmons, Lead Associate, Tax Department, Calderwood & Harkness LLP; and
• Marcus Whitfield, Vice President of Global Tax, Penterra Pharmaceuticals Corp.
We respectfully request confirmation of the IRS attendees for the opening conference. Based on the initial contact letter, we anticipate that the attendees from the IRS Examination team will include Supervisory Revenue Agent Gerald Meskill and Lead Revenue Agent Patricia Dunleavy, along with any additional team members assigned to the Examination. To the extent that specialists, international examiners, or other IRS personnel will participate in the opening conference or are otherwise assigned to the Examination, we would appreciate advance notice of their identities and roles so that we may prepare accordingly.
It is our understanding that the opening conference will address the following matters, among others:
(a) the scope of the Examination, including the specific issues and items to be reviewed for each of the tax years under examination;
(b) the anticipated schedule for the issuance of IDRs and the expected timetable for the Examination;
(c) the general procedures governing the Examination, including protocols for document production, taxpayer interviews (if any), and on-site visits (if any); and
(d) any initial document requests that the Examination team intends to issue at or shortly following the opening conference.
We are prepared to discuss these and any other procedural matters that the Examination team may wish to raise at the opening conference.
III. Identification of Taxpayer and Returns Under Examination
For the record and to facilitate the efficient administration of the Examination, we set forth below certain identifying information regarding the taxpayer and the returns under examination:
Taxpayer: Penterra Pharmaceuticals Corp.
Employer Identification Number (EIN): 22-3741856
Entity Type: Corporation organized under the laws of the State of Delaware; publicly traded on the Nasdaq Stock Market (ticker symbol: PPCA)
Headquarters Address: 2200 Independence Boulevard, Princeton Junction, New Jersey 08550
Returns Under Examination: United States Corporation Income Tax Returns (Forms 1120) for the following tax years:
• Tax year ending December 31, 2017
• Tax year ending December 31, 2018
• Tax year ending December 31, 2019
• Tax year ending December 31, 2020
Fiscal Year-End: December 31
We note that PPC was not a participant in the IRS Compliance Assurance Process ("CAP") for any of the tax years at issue. Accordingly, the Examination will proceed under the standard Large Business & International Division examination procedures.
PPC's independent auditor and tax return preparer for the tax years under examination is Crestfield & Associates LLP. The engagement partner at Crestfield & Associates LLP responsible for PPC's tax compliance during the relevant periods is Martin Ogilvy, CPA. Should the Examination team require coordination with Crestfield & Associates LLP on any matter, we ask that such requests be channeled through C&H so that we may facilitate appropriate communication and ensure consistency in all responses.
IV. Key PPC Contacts
The primary client contact for the Examination on behalf of PPC is:
Marcus Whitfield Vice President of Global Tax Penterra Pharmaceuticals Corp. 2200 Independence Boulevard Princeton Junction, NJ 08550
Mr. Whitfield oversees PPC's internal tax function and will serve as the principal liaison between PPC's in-house tax department and C&H throughout the course of the Examination. PPC's General Counsel is Deborah Staines, who may be contacted through PPC's headquarters at the address set forth above.
Notwithstanding the identification of the above contacts, we respectfully reiterate our request that all IDRs, substantive communications, notices, and correspondence from the IRS Examination team be directed to C&H as PPC's authorized representatives pursuant to the Form 2848 on file. C&H will coordinate with PPC's internal personnel—including Mr. Whitfield, Ms. Staines, and other PPC employees—as appropriate to ensure timely and complete responses to all Examination inquiries. Direct contact between the Examination team and PPC employees should be arranged through C&H in advance, consistent with established IRS procedures.
V. Preliminary Matters and Cooperation
C&H and PPC are fully committed to cooperating with the Internal Revenue Service throughout the Examination process. PPC recognizes its obligations as a taxpayer under examination and intends to respond promptly, thoroughly, and in good faith to all IDRs and other requests issued by the Examination team. All such responses will be coordinated and submitted through C&H.
In order to facilitate the efficient and timely resolution of the Examination, we respectfully request that the IRS Examination team provide reasonable advance notice of IDRs, together with clearly articulated descriptions of the documents and information sought and reasonable response deadlines. Where appropriate, we welcome the opportunity to discuss the scope and timing of IDRs with the Examination team prior to formal issuance, so as to minimize the potential for misunderstandings and to ensure that PPC's responses are fully responsive to the team's needs. We believe that early and open communication on these matters will be of mutual benefit and will contribute to an efficient and constructive examination process.
C&H will serve as the central point of contact for all document production and will maintain a detailed and organized record of all documents and information produced to the Examination team, including production logs, indices, and Bates-numbered or otherwise identified materials, as applicable. We are prepared to discuss preferred formats and methods of production at the opening conference.
Finally, we wish to note and expressly reserve all applicable privileges and protections with respect to any documents or communications that may be responsive to IDRs or other requests issued during the Examination. Without limitation, PPC reserves the attorney-client privilege, the work-product doctrine, the tax practitioner privilege under Section 7525 of the Internal Revenue Code, and any other applicable privilege or protection. In the event that documents or communications responsive to an IDR are withheld on the basis of privilege or protection, C&H will identify such documents and prepare a privilege log in accordance with established practice. The reservation of privileges set forth herein is not intended to limit PPC's cooperation with the Examination in any respect; rather, it is intended to preserve PPC's rights as recognized under applicable law.
VI. Contact Information
For purposes of the Examination, the primary contacts at C&H are as follows:
Leonard Cross Partner, Tax Department Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Direct Telephone: (215) 574-8042
Email: leonard.cross@calderwoodharkness.com
Garrett Simmons Lead Associate, Tax Department Calderwood & Harkness LLP 1735 Market Street, Suite 3100 Philadelphia, PA 19103 Direct Telephone: (215) 574-8117
Email: garrett.simmons@calderwoodharkness.com
For reference, Calderwood & Harkness LLP's firm headquarters is located at 600 Lexington Avenue, New York, NY 10022.
This matter has been assigned C&H Matter Number 1018-00009. We respectfully request that this matter number be referenced in all future correspondence directed to C&H in connection with the Examination.
VII. Closing
We appreciate the IRS Examination team's cooperation and professionalism in connection with the opening of this Examination, and we are grateful for the team's willingness to schedule the opening conference at a mutually convenient time. We look forward to a productive, professional, and constructive examination process and are committed to working collaboratively with the Examination team toward the efficient resolution of all matters.
We respectfully request written confirmation of the date and time of the opening conference at your earliest convenience. Please direct such confirmation, along with any questions or additional information regarding this letter, to Leonard Cross at the contact information set forth above.
Thank you for your attention to this matter.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Leonard Cross Partner, Tax Department 1735 Market Street, Suite 3100 Philadelphia, PA 19103
cc: (via email and U.S. Mail)
Marcus Whitfield, Vice President of Global Tax, Penterra Pharmaceuticals Corp. Deborah Staines, General Counsel, Penterra Pharmaceuticals Corp. Sylvia Hartwell, Calderwood & Harkness LLP Garrett Simmons, Calderwood & Harkness LLP Leila Nazari, Calderwood & Harkness LLP
Enclosure:
Copy of executed IRS Form 2848 (Power of Attorney and Declaration of Representative), filed June 8, 2022