Aptose Biosciences Inc. (APS) Earnings Call Transcript & Summary

Good morning, all. I'd like to call to order this Annual Meeting of Shareholders of Aptose Biosciences Incorporated. I'm Dr. William Rice, Chairman of the Board of Directors, President and Chief Executive Officer of Aptose, and I'll be serving as the chair of today's meeting. Other directors include Dr. Denis Burger, our Lead Independent Director; Mr. Warren Whitehead; Ms. Carol Ashe; Mr. -- Dr. Mark Vincent and Dr. Erich Platzer. Other officers of the company also joining us online today are Dr. Rafael Bejar, Senior Vice President and Chief Medical Officer as well as Dr. Philippe Ledru, our Senior Vice President and Chief Commercial Officer. It's my pleasure to welcome the shareholders and employees of Aptose and other invited guests to the meeting. As in the past few years, Aptose has opted for a virtual-only Annual Shareholders Meeting. By conducting our meeting online, Aptose aims to provide shareholders with a safe and convenient opportunity to participate without incurring significant travel costs or being restricted by time constraints. We have ensured that this virtual meeting offers registered shareholders and duly appointed and registered proxy holders the same opportunities to participate as in past in-person meetings. Instructions on how to ask questions and the voting procedure will appear on your screens. As with any technology, unexpected glitches may occur, but our service providers for this platform at Lumi are prepared to assist with any unanticipated clinical difficulties. We will conduct the votes on the matters before us by a poll. On a poll, every registered shareholder or duly appointed and registered proxy holder entitled to vote has 1 vote in respect of each share entitled to be voted on the matter and held or represented by that registered shareholder or duly appointed and registered proxyholder. You already may have voted your shares. If you already have voted in advance of the meeting, we thank you. And if you do not wish to change your vote, then you need to take no further action. For those of you who have not yet voted, you only may vote during this meeting. Voting during the meeting only can be done through the virtual voting platform on the webcast and the polls are now open. Registered shareholders and proxy holders who have obtained a control number are now able to cast their votes. Voting can be completed at any time from now until the end of the formal business of the meeting, at which time the polls will close. We encourage you to vote now, and we thank all of you for voting. Also registered shareholders and duly appointed and registered proxy holders can submit questions at any time during the meeting through the virtual platform of our webcast. We will address questions at a general Q&A session at the end of the formal part of the meeting, provided that only questions regarding procedural matters or questions directly related to the motions before the meeting may be addressed during the meeting. To emphasize, we only will answer questions, which are related to the formal business matters presented at today's meeting. The Secretary will receive the questions, judge them for relevance and at the appropriate time will read them aloud so that everyone may be aware of the questions being considered. If we have questions that are similar in topic, we may paraphrase, group the questions and mention that we have received similar questions. However, please note that we may be unable to address all questions. I also wish to welcome all guests who are not registered shareholders or holding proxies of registered shareholders. As a reminder, as with any in-person meeting, only registered shareholders and duly appointed proxy holders are permitted to vote or ask questions. I now would like to outline the format of today's meeting, which will deal only with the formal business of the meeting as outlined in the proxy statement that all will be received, including voting on resolutions. After we conclude the formal portion of the meeting, we'll be pleased to answer any questions you may have or respond to your comments regarding the business matters addressed during the formal part of the meeting. As we are scheduled to hold a key opinion leader and clinical update event on June 2, just 2 days from now, we will not provide a corporate update at the end of today's meeting. I now will ask Mr. Charles-Antoine Soulière of McCarthy Tétrault, Aptose's Corporate Counsel, to act as Secretary of the meeting; and Mr. Paul Allen of Computershare to act as scrutineer. The Secretary has confirmed that the notice calling the meeting, including the proxy statement, financial statements and other documents were mailed on May 2, 2022, to shareholders of record as of April 18, 2022. The Secretary has placed with me before this meeting, copies of such notice, the proxy statement and the forms of proxy together with the confirmations and mailing of these documents. I direct that the confirmations of proof of mailing of notice be kept by the secretary with the records of the meeting. Our corporate bylaws provide that the meeting may be held by electronic means. Our corporate bylaws also require a quorum comprised of 2 persons being present at the opening of the meeting who are entitled to vote either as shareholders or as proxy holders and holding or representing 25% of the votes. I would ask the Secretary of the meeting to summarize the scrutineer's report on attendance.

Thank you, Bill. The scrutineer's preliminary report now has been received and it shows that there are shareholders and proxy holders present or represented at this meeting, representing 49,308,535 shares or 53% of the issued and outstanding shares.

Thank you, Mr. Secretary. I have before me, and I adopt the scrutineers' preliminary report on attendance, whether in person or by proxy, through the online webcast platform, which confirms that a quorum is present. I direct that a copy of the final report on attendance be filed with the records of the meeting. As notice of the meeting has been properly given and a quorum is present, accordingly, I now declare today's meeting to be properly constituted for the transaction of the business for which it has been called. The formal business of this meeting consists of: one, presenting the financial statements for fiscal year 2021; two, electing directors; three, appointing the independent registered public accounting firm of the corporation; four, amending the corporation stock incentive plan; and five, advising on the compensation of the corporate's named executive officers. To expedite the formal part of this meeting, Dr. Bejar will move, and I will second all motions. While this procedure will facilitate the handling of formal matters, registered shareholders or duly appointed and registered proxy holders may address the meeting when there is a call to discuss a motion before the meeting. Should you like to address the chair on any motion, please type in your question or comment in the message section once it opens during the discussion period. If there is any relevant discussion or question, the Secretary will read the question aloud. All motions will be moved and seconded once the formal matters of the meeting have been presented. As I said, the annual meeting was called to consider 5 matters. The first item of business is to provide you with Aptose's audited financial statements for the year ended December 31, 2021. The table copy of the audited consolidated financial statements and the auditor's report thereon are available for inspection at the hyperlink provided on the meeting platform. I direct the Secretary to make a copy available for review by any shareholder who so requests. With the consent of the meeting, the reading of such statements and report will be dispensed. I do wish to recognize and advise the meeting that members of the independent registered public accounting firm of Aptose, KPMG LLP, are in attendance online. I do not propose to ask shareholders to approve the financial statements tabled. However, I will be pleased to receive any questions concerning the financial statements.

Bill, I confirm that there are no questions at this time.

Thank you, Mr. Secretary. As there are no questions at this time on the audited financial statements for the year ended December 31, 2021, I will proceed to the second item of business. The second item of business is the election of directors for the current year. The proxy statement contains the name of management's proposed nominees to the Board of Directors, who are Ms. Carol Ashe, Dr. Denis Burger, Dr. Erich Platzer, Dr. William Rice, Dr. Mark Vincent; and Mr. Warren Whitehead. I understand that these nominees have consented to act as directors. Mr. Secretary, are there additional nominations?

There are no additional nominations.

Thank you, Charles. There being no further nominations, I declare the nominations closed. The third item of business is the appointment of KPMG LLP as the independent registered public accounting firm of Aptose for the fiscal year ending December 31, 2022. The fourth item of business is considering, and if deemed appropriate, adopting a resolution, the text of which is set out in the proxy statement approving an amendment to the corporation's 2021 stock incentive plan, which I will refer to as the 2021 incentive plan, to increase the number of shares reserved for issuance thereunder by 3 million. All other provisions of the 2021 incentive plan would remain in full force in effect as adopted during last year's meeting. As described in the proxy statement, if you approve this amendment to the 2021 incentive plan today, the maximum number of common shares in the capital of Aptose authorizing reserve for issuance under the 2021 incentive plan, subject to equitable adjustment in the event of any change in capitalization would be fixed at a limit of up to 9,343,242 common shares. For a more detailed description of the 2021 incentive plan and the proposed amendment please refer to the proxy statement. The fifth item of business is considering and if deemed appropriate, adopting a nonbinding advisory resolution, the text of which is set out in the proxy statement, approving the compensation paid to Aptose's named executive officers. Because this vote is advisory, the results will not be binding on Aptose or the Board. However, this proposal, commonly known as a say-on-pay provision gives shareholders the opportunity to endorse or not endorse Aptose's executive compensation programs and the results will be taken into consideration when future decisions regarding executive compensation are made. Now that all formal matters of business have been presented, Dr. Bejar, please make the motions for the formal matters of the meeting.

Mr. Chair, first, I move that the persons that have been nominated be individually elected as directors of Aptose for the ensuing year or until their successors are elected or appointed. Second, I move that KPMG LLP be appointed as independent registered public accounting firm of Aptose for the fiscal year ending December 31, 2022. Third, I move that the amendment to the 2021 incentive plan be approved. In view to accelerate the process, I would like to dispense with the reading of the 2021 incentive plan amending resolution and that for the purposes of this meeting, the 2021 incentive plan amending resolution be approved as if it had been read in its entirety. And fourth, I move that the compensation paid to Aptose's named executive officers be approved.

Thank you, Dr. Bejar. I second all of Dr. Bejar's motions. Mr. Secretary, are there any questions or discussions on these motions?

Well, there is no discussion at this time.

Thank you. As there is no discussion, I now call for a vote on the motions before the meeting. As previously mentioned, voting today will be conducted by an electronic ballot. The polls have been opened since the beginning of the meeting. At the end at this point, all registered holders and duly appointed and registered proxy holders who have properly logged on with their control numbers and user name and wish to vote should select the vote tab on the webcast platform. There, they will be able to see on the screen, the motions brought forth at this meeting. The voting will remain open for an additional 1 minute. Once the electronic balloting closes, the voting page will disappear, and your votes automatically will be submitted. We will pause now for 1 moment. [Voting]

Now before announcing the voting results, Mr. Secretary, is there any other business that any shareholder or proxy holder present wishes to bring to the attention of the meeting?

There is no proposal for other business.

Thank you, Mr. Secretary. If there is no further business, I now declare the polls closed, and we will proceed to present the voting results. I now ask the Secretary to provide the preliminary results of the scrutineers' tabulation of today's votes.

Thank you, Mr. Chair. The scrutineer confirms the following preliminary vote results. Each of the 6 directors nominee received the required percentage of votes for. The percentage of required votes are favorable to the appointment of KPMG as an dependent registered public accounting firm of Aptose for the fiscal year ending December 31, 2022. The percentage of required votes are favorable to the adoption of the amendment of 2021 incentive plan and a majority of votes are favorable to the nonbinding advisory resolution on the compensation of Aptose's named executive officers.

Thank you, Mr. Soulière. I declare each of the resolutions considered at today's meeting in respect to those matters as carried. The exact number of votes cast in respect of each matter will be filed on SEDAR and EDGAR. We now will take a few moments to answer any questions that may have been received during today's meeting.

There are no questions at this time.

Thank you, Mr. Secretary. As there are no questions, I would like to take this opportunity to thank our shareholders for their continued support over the past year. All shareholders and proxy holders for your attendance today and all of our employees for their commitment and their diligence. And we look forward to reporting our ongoing process during the upcoming year. I also would like to remind you again that we will have an opportunity to provide you with a clinical update through our key opinion leader event on June 2. Finally, we wish to express our sincere gratitude to the patients, their families and their caregivers, our dedicated employees and our supportive shareholders. We wish you a good day and a wonderful year ahead. Thank you.