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

Good morning, all. I'd like to call to order this Annual and Special Meeting of Shareholders of Aptose Biosciences, Inc. 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. Joining me today online are other directors and officers, including Mr. Fletcher Payne, Senior Vice President, Chief Financial Officer and Chief Business Officer. It's my pleasure to welcome shareholders and employees of Aptose as well as other invited guests to this meeting. This year, Aptose has opted for a virtual-only shareholders' meeting. By conducting our meeting online, Aptose aims to provide shareholders with convenient opportunity to participate without incurring significant travel costs or being restricted by time constraints. We have ensured 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 technical 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 as 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 proxy holder. 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 do not need to take any further action. For those who have not yet voted, you may only vote during this meeting. Voting during the meeting can only be done through our virtual voting platform on the webcast and the polls are now open. Registered shareholders and proxy holders who have obtained a control number can now cast their votes. Voting can be completed 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 our webcast virtual platform. We will address questions at the general Q&A session at the end of the formal part of the meeting, providing the 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 that 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 question being considered. If we have similar topics, we may paraphrase, [ group up ] the questions and mention that we have received similar questions. However, please note that we may be unable to address all questions. 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. Now I'd 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 of you received, including voting on resolutions. After we conclude the formal portion of the meeting, we'll be pleased to answer your questions or respond to your comments regarding the business matters addressed during the formal part of the 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. Timothy Lee 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 6, 2025 to shareholders of record as of April 22, 2025. 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 of mailing of these documents. I direct that the confirmations of proof of mailing of the notice be kept by the Secretary with the records of the meeting. Our corporate bylaws provide that the meeting may be held electronically. Our corporate bylaws also require a quorum comprised of 2 persons be present at the opening of the meeting who are entitled to vote either as shareholders or as proxy holders and holding or representing 33.33% of the votes. I would ask the secretary of the meeting to summarize the scrutineer's report on attendance, please.

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 1,477,794 shares or 57.90% of the issued and outstanding shares.

Thank you. 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 the 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 the fiscal year 2024; two, electing 7 directors; three, passing an advisory resolution on the compensation of the company's named executive officers; four, passing an ordinary resolution approving amendments to the company's 2021 Stock Incentive Plan to increase the number of common shares reserved for issuance; five, passing a special resolution approving the adoption of an amendment to the company's articles to effect a reverse stock split; and six, passing a resolution approving one or more adjournments of the meeting, if necessary or appropriate, if a quorum is present, to permit further solicitation of proxies if there are not sufficient votes at the time of the meeting to approve Proposal #4 or 5, each as outlined in the proxy statement or to permit the company to complete the search for and obtain shareholder approval for the appointment of a successor auditor. To expedite the formal part of the meeting, Mr. Payne will move, and I will second all motions. While this procedure will facilitate the handling of the 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. The Secretary will read the question aloud if there is any relevant discussion or question. All motions will be moved and seconded once the formal matters of the meeting have been presented. The first item of business is to provide you with Aptose's audited financial statements for the year ended December 31, 2024. 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 request. The reading of such statements and reports will be dispensed. 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. Mr. Secretary, are there any questions?

There is no discussion at this time.

Thank you. As there are no questions at this time on the audited financial statements for the year that ended December 31, 2024, 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 names of management's proposed nominees to the Board of Directors, which are: one, Ms. Carol G. Ashe; two, Dr. Denis Burger; three, Dr. Erich Platzer; four, Dr. Bernd R. Seizinger; five, Dr. William G. Rice; six, Dr. Mark D. Vincent; and seven, Mr. Warren Whitehead. I understand that these nominees have consented to act as directors. Mr. Secretary, were there additional nominations in accordance with the advanced notice bylaws.

There are no additional nominations.

Thank you. The third item of business is considering and if deemed appropriate, adopting an advisory nonbinding 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 proposal, gives shareholders the opportunity to endorse or not endorse Aptose's executive compensation programs. And the results will be taken into consideration on future decisions regarding executive compensation are made. The fourth item of business is approving the amendment of Aptose's 2021 Stock Incentive Plan to increase the total number of shares reserved for issuance under the plan from 23,406 to 481,172. As described in the proxy statement, the TSX requires that approval of this amendment must receive a majority of votes cast by our shareholders, excluding the votes attached to the 6,744 shares held directly or indirectly by insiders of Aptose. For a more detailed description of the Stock Incentive Plan amendment proposal background and TSX rules, please refer to the proxy statement. The fifth item of business is the approval of amendments to Aptose's articles to effect a Reverse Stock Split of Aptose's outstanding shares to be effective at a future date at the discretion of the Board. As described in the proxy statement, the Board unanimously approved, subject to shareholder approval a reverse stock split by which Aptose's outstanding shares would be combined into a lesser number of shares at a ratio of not less than 1 for 2 and not more than 1 for 20 to be determined and implemented by the Board at any time prior to December 31, 2025, if at all. The Canada Business Corporation Act requires that the Reverse Stock Split resolution be approved by a special resolution of the shareholders, meaning not less than 2/3 of the votes cast by shareholders present virtually or by proxy at this meeting. In addition to shareholders' approval, the Reverse Stock Split also requires the approval of the TSX. The TSX already has conditionally approved the proposed Reverse Stock Split, subject to Aptose fulfilling all of TSX' applicable conditions. For additional information on the proposed Reverse Stock Split, including the rationale, anticipated benefits and criteria the Board will consider in determining whether and when to proceed, please refer to the proxy statement. The sixth item of business is considering and if deemed appropriate, approving the proposal to adjourn the meeting to another time and place if necessary or advisable to solicit additional proxies in the event there are not sufficient votes to approve the 2021 Stock Incentive Plan amendment proposal, Proposal #4, or the Reverse Stock Split proposal, Proposal #5. Additionally, Aptose is seeking approval of a resolution approving an adjournment of the meeting to permit the company to complete the search for a successor auditor. As described in the proxy statement, KPMG LLP informed Aptose that it will not stand for reappointment as the company's independent registered public accounting firm to serve as independent auditor and accordingly, the Audit Committee has commenced a process to identify and make a recommendation with respect to the appointment by the shareholders of a successor independent auditor. As Chair of the meeting, following approval of the adjournment proposal by the shareholders, I propose to adjourn this meeting to a future date and time to be publicly announced at a later date in order for the company to provide notice to shareholders of the identity of the public accounting firm recommended by the Board of Directors to serve as the company's independent auditor. For a more detailed description of the proposed adjournment, please refer to the proxy statement. Now that all formal matters of the business have been presented, would Mr. Payne 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 director of Aptose for the ensuing year or until the successors are elected or appointed. Second, I move that the advisory resolution regarding compensation paid to Aptose named executive officers to be approved. Fourth, I move that Stock Incentive Plan amendment proposal be approved. Fifth, I move that the Reverse Stock Split proposal be approved and; sixth, I move that multiple adjournment proposals be approved.

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

There is no discussion at this time.

As there is no discussion, I'll now call for a vote on the motions before the meeting. As previously mentioned, voting today will be conducted by electronic ballot. 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. [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. 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 7 director nominees received the required percentage of votes for. The majority of votes are favorable to the approval of the nonbinding advisory resolution on the compensation of Aptose's named executive officers. The percentage of required votes are favorable to the approval of the Stock Incentive Plan amendment proposal. The percentage of required votes are favorable to the approval of the Reverse Stock Split proposal. And the percentage of required votes are favorable to the approval of the adjournment proposal.

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. As the adjournment of this meeting to permit Aptose to complete the search for a successor auditor has been approved, I now declare this meeting to be adjourned. Once I, in my capacity as Chair of this meeting, have determined the date and time of the adjourning meeting, Aptose will issue a press release with details of the rescheduled meeting and will disseminate to shareholders' information regarding the identity of the proposed independent registered public accounting firm to serve as Aptose's independent auditor until the close of the next Annual Meeting of Shareholders. At the continued meeting, shareholders will be asked to vote on the appointment of such successor independent auditor, and the authorization of the Board of Directors of Aptose to fix remuneration of the successor auditor. That adjourned meeting will be held virtually. We now will take a few moments to answer any questions received during today's meeting.

There are no further questions at this time.

Thank you. As there are no questions, I would like to take this opportunity to thank our current 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 diligence and we look forward to reporting our ongoing progress during the upcoming year. We will continue the process to name a successor auditor and we'll issue a press release providing the details of the continued meeting in the near future. 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 very good day and a wonderful year ahead. Thank you.