Arcturus Therapeutics Holdings Inc. (ARCT) Earnings Call Transcript & Summary

Good morning, and welcome to the 2022 Annual Meeting of Stockholders of Arcturus Therapeutics Holdings, Inc. Due to the ongoing COVID-19 pandemic, we are holding this year's annual meeting as an entirely virtual meeting. Stockholders who require technical assistance during the meeting can call Continental's technical support line at the phone number posted on the meeting login page. I'm Joe Payne, the President and CEO as well as a member of the Board of Directors. It is now 9:00 a.m. Pacific Time on June 21, 2022, and this meeting will please come to order. Also participating in this meeting are Dr. Padmanabh Chivukula, our Chief Scientific Officer and Chief Operating Officer of the company; Mr. Jeffrey Baumel and Mr. Grant Levine of Dentons US LLP, counsel to the company; Keri-Ann Cuadros of Continental Stock Transfer & Trust Company, who has been appointed as inspector of election for the meeting; and Brian Valenzuela of Ernst & Young LLP, independent registered accountants of the company. Member of our Board of -- members of our Board of Directors are also participating in this virtual meeting. I would now like to proceed with the formal business of the meeting. As a preliminary matter, we note that stockholders may submit questions through the virtual meeting website at any time during the meeting. The company will, at its discretion, provide answers to properly raised and appropriate questions on the Investor Relations section of its website after the meeting. And Mr. Valenzuela may also respond to properly raised and appropriate questions directed to Ernst & Young. I will act as Chairperson of the meeting. Dr. Pad Chivukula will act as secretary of the meeting. The matters of -- on which the stockholders at today's meeting are voting are: one, to elect Dr. Peter Farrell, Joseph E. Payne, Andy Sassine, James Barlow, Dr. Edward W. Holmes, Dr. Magda Marquet and Dr. Jing L. Marantz to the Board of Directors to serve until our next Annual Meeting of Stockholders. Two, to approve on a nonbinding advisory basis the resolution approving named executive officer compensation referred to as Say-on-Pay. Three, to approve an amendment to the amended and restated 2019 Omnibus Equity Incentive Plan, which we refer to as the 2019 plan, to, among other things, increase the maximum number of shares of common stock available to 2019 plan participants by 3,750,000 shares and increase the annual compensation nonexecutive directors are eligible to receive thereunder, also known as the amendment. Four, to approve on a nonbinding advisory basis the preferred frequency of future stockholder advisory votes on executive compensation referred to as Say-on-Frequency. And five, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

I present the list of Arcturus' stockholders as of the close of business on April 29, 2022, which is the record date for this meeting. The stockholders on this list are entitled to vote at this meeting. This list has been certified by Continental Stock Transfer & Trust Company, the transfer agent for the company's common stock.

The list of stockholders is open for inspection by any stockholder participating in this meeting and is available on the virtual meeting website. Continental Stock Transfer & Trust Company has also certified that each stockholder entitled to vote at this meeting has been sent a notice of this meeting. The initial order of business is to determine the presence of a quorum. Pursuant to action taken by the Board of Directors, only stockholders of record of our common stock as of April 29, 2022, are entitled to notice of and to vote at this annual meeting. Keri-Ann Cuadros has been appointed as inspector of election and has executed the required oath.

Mr. Chairman, I wish to report that I have examined the list of stockholders entitled to vote at this meeting and have determined that the number of shares outstanding common stock at the record date is 26,418,965. Holders of at least 33 1/3% of the voting power of the company's outstanding common stock entitled to vote at this meeting must be present in person or represented by proxy for us to hold and transact business at this meeting. Thus, the holders of at least 8,806,322 shares must be present in person or represented by proxy at this meeting to have a quorum. The number of votes represented at this meeting in person or by proxy is 20,945,705, which constitutes a 79.28% of the total number of shares of common stock outstanding and entitled to vote as of the record date.

I hereby determine that the number of votes represented at this meeting in person or by proxy constitutes a quorum for the conduct of business at this meeting. The first matter to be voted on today is the election of Dr. Peter Farrell; myself, Joseph E. Payne; Andy Sassine; James Barlow; Dr. Edward W. Holmes; Dr. Magda Marquet; and Dr. Jing L. Marantz to the Board of Directors as set forth more fully in proposal #1 of the proxy statement. A motion to approve proposal #1 is now in order.

I hereby move to approve proposal #1.

I second the motion and hereby declare this motion duly made. The second matter to be voted on today is the approval, on a nonbinding advisory basis, of the resolution approving named executive officer compensation as set forth more fully in proposal #2 of the proxy statement. A motion to approve proposal #2 is now in order.

I hereby move to approve proposal #2.

I second the motion and hereby declare this motion duly made. The third matter to be voted on today is the approval of the amendment as set forth more fully in proposal #3 of the proxy statement. A motion to approve proposal #3 is now in order.

I hereby move to approve proposal #3.

I second the motion and hereby declare this motion duly made. The fourth matter to be voted on today is the approval on a nonbinding advisory basis of the preferred frequency of future stockholder advisory votes on executive compensation, referred to as Say-on-Frequency, as set forth more fully in proposal #4 of the proxy statement. A motion to approve proposal #4 is now in order.

I hereby move to approve proposal #4.

I second the motion and hereby declare this motion duly made. The fifth matter to be voted on today is the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022, and set forth more fully in proposal #5 of the proxy statement. A motion to approve proposal #5 is now in order.

I hereby move to approve proposal #5.

I second the motion and hereby declare this motion duly made. It is now ordered that the polls be opened for voting on proposals 1, 2, 3, 4 and 5, with each proposal as described more fully in the proxy statement. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote do not need to take any further action. We will declare the polls closed in 1 minute. [Voting]

The votes are in, and I declare the polls closed. The inspector will now report on the votes properly made prior to the meeting. The inspector will provide the company with a final report tomorrow that reflects any votes properly made at this meeting. I understand that the inspector is now ready to provide a preliminary report. Ms. Cuadros, will you please provide the preliminary report?

As given in the proxy statement, the election of each of Dr. Peter Farrell, Joseph E. Payne, Andy Sassine, James Barlow, Dr. Edward W. Holmes, Dr. Magda Marquet and Dr. Jing L. Marantz to the Board of Directors, pursuant to proposal #1, requires a plurality of the votes cast by the holders of shares present in person or represented by proxy at this meeting and entitled to vote thereon. As each of the nominees has received sufficient votes in favor of his or her election, I hereby declare that proposal #1 has been approved. As given in the proxy statement, the approval on a nonbinding advisory basis of the resolution approving named executive officer compensation pursuant to proposal #2 requires the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote thereon. A preliminary examination shows 17,271,355 votes received in favor of proposal #2, and so I hereby declare that proposal #2 has been approved on a preliminary basis. As given in the proxy statement, the approval of the amendment pursuant to proposal #3 requires the affirmative vote of a majority of the shares present or in person or represented by proxy at the meeting and entitled to vote thereon. A preliminary examination shows 9,375,429 votes received in favor of proposal #3, and so I hereby declare that proposal #3 has been approved on a preliminary basis. As given in the proxy statement regarding proposal 4, also referred to as the Say-on-Frequency proposal, the frequency of future nonbinding advisory votes on executive compensation shall take place once every year, once every 2 years or once every 3 years. The option which received the highest number of votes of the shares present in person or represented by proxy at the annual meeting and entitled to vote thereon shall be approved. A preliminary examination shows 12,516,033 votes received for 1 year and 16,300 votes received for 2 years and 5,006,920 votes received for 3 years, respectively. As such, I declare that 1 year as the preferred frequency of future Say-on-Pay advisory votes pursuant to this proposal 4 has been approved on a preliminary basis. As given in the proxy statement, the ratification of the appointment of Ernst & Young pursuant to proposal #5 requires the affirmative vote of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote thereon. A preliminary examination shows 20,933,534 votes received in favor of proposal #5. And so I hereby declare that proposal #5 has been approved on a preliminary basis.

Thank you, Ms. Cuadros. You have now heard the preliminary report of the inspector, and I declare that proposals numbers 2, 3 and 5 have passed on a preliminary basis and have been duly approved by the stockholders of the company on a preliminary basis; that the election of all nominees to the Board of Directors pursuant to proposal 1 has passed on a preliminary basis and has duly approved -- and has duly approved by the stockholders of the company on a preliminary basis; and also that 1 year as the preferred frequency of future Say-on-Pay votes pursuant to proposal 4 has passed on a preliminary basis and been duly approved by the stockholders of the company on a preliminary basis. I hereby request that the preliminary report of the inspector be filed with the minutes of this meeting and that the final report of the inspector will be provided to the company by June 21, 2022. This completes the stockholder voting to be conducted at this meeting. Since there are no other matters to come before the meeting, a motion to adjourn the meeting is now in order.

I move that the meeting be adjourned.

The motion has been carried. The meeting is adjourned. Thank you, everybody.