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Item 9A. Controls and Procedures

2025-03-27 compared with 2024-03-05 · 87 added, 49 removed, 105 unchanged (56% of the section changed)

2 unchanged sentences

Our management, including our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)), as of the end of the period covered by this Annual Report on Form 10-K.

Based upon that evaluation, our interim Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), concluded that, as of December 31, 2023, our disclosure controls and procedures were effective to provide reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Based upon that evaluation, our Chief Executive Officer (our principal executive officer) and Chief Financial Officer (our principal financial officer), concluded that, as of December 31, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (b) such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

6 unchanged sentences

Other Information

Trading Plans

During the three months ended December 31, 2024, none of our directors or officers adopted , modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

Chief Financial Officer Transition

On March 25, 2025, our Board appointed Tuan Nguyen as our Chief Financial Officer, effective as of March 28, 2025.

Nguyen, age 49, has almost two decades of experience in biopharma working on small molecules and AAV gene therapies.

Most recently, from March 2022 to March 2025, he served as Chief Financial Officer of Kinevant Sciences, a clinical-stage biopharmaceutical company dedicated to treating rare inflammatory and autoimmune diseases.

Prior to this, from May 2020 to March 2022, he was Vice President of Finance at Adverum Biotechnologies, a clinical-stage company that aims to establish gene therapy as a new standard of care for highly prevalent ocular diseases.

Prior to that he held various senior finance leadership roles at Intarcia Therapeutics, FibroGen, and UCB.

He has helped raise over $2 billion in dilutive and non dilutive capital.

Nguyen earned his MBA with dual concentration in Finance and Entrepreneurship, Innovation, & Change from Emory University.

In connection with his appointment as our Chief Financial Officer, on March 25, 2025, we , through Arbutus Biopharma, Inc., our wholly-owned subsidiary (our Subsidiary), entered into an employment agreement with Mr.

Nguyen (the Nguyen Employment Agreement), pursuant to which he will receive an annual base salary of $475,000 and will be eligible to receive a discretionary annual performance bonus, with a target annual value equal to 40% of his annual base salary.

Nguyen will also receive an initial option grant of 750,000 common shares under the 2016 Plan.

During his employment, Mr.

Nguyen will be eligible to participate in our employee benefit plans and programs.

In connection with the commencement of his employment, Mr.

Nguyen will be required to enter into our standard Non-Disclosure, Invention Assignment and Restrictive Covenant Agreement.

In addition, in the event Mr.

Nguyen’s employment is terminated without “cause” or Mr.

Nguyen resigns for “good reason” (each as defined in the Nguyen Employment Agreement), then, subject to Mr.

Nguyen’s timely execution and non-revocation of a release of claims and continued compliance with applicable restrictive covenants, Mr.

Nguyen will be entitled to receive (i) continued payment of his base salary for six months following the date of his termination, payable in accordance with customary payroll procedures and (ii) monthly reimbursement of COBRA premiums (less active employee rates) for six months following the date of his termination (or, if earlier, until the date Mr.

Nguyen becomes eligible for coverage under a subsequent employer’s group health insurance plan).

The foregoing description of the Nguyen Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the Nguyen Employment Agreement, a copy of which will be filed as an exhibit to our Quarterly Report on Form 10-Q for the three months ending March 31, 2025.

There are no arrangements or understandings between Mr.

Nguyen and any other persons pursuant to which Mr.

Nguyen was selected to be Chief Financial Officer.

There are no family relationships between Mr.

Nguyen and any of our directors or executive officers, and Mr.

Nguyen has no direct or indirect interest in any transaction or proposed transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Nguyen succeeds David C.

Hastings, who will cease serving as our Chief Financial Officer effective as of the end of the day on March 27, 2025.

Hastings was terminated from the Company without cause.

Chief Medical Officer Termination and Consulting Agreement

Karen Sims, M.D., Ph.D., our former Chief Medical Officer, was terminated without cause, effective as of March 25, 2025.

General Counsel and Chief Compliance Officer Termination

Christopher Naftzger, our former General Counsel and Chief Compliance Officer, was terminated without cause, effective as of March 25, 2025.

McElhaugh Separation Agreement

On March 25, 2025, we, through our Subsidiary, entered into a Separation Agreement and General Release (the Separation Agreement) with Michael J.

McElhaugh, our former President and Chief Executive Officer, which sets forth the terms of Mr.

McElhaugh’s separation from the Company.

In addition to what Mr.

McElhaugh is entitled to pursuant to the terms of his existing employment agreement, as amended, pursuant to the terms of, and subject to compliance with, the Separation Agreement, the post-termination exercise period of any vested options to purchase our common shares held by Mr.

McElhaugh as of the date of his termination will be extended from the current term of such options as set forth in the applicable award agreement (the McElhaugh Current Term) to the earlier of:

(i) the McElhaugh Current Term;

and (ii) February 23, 2026.

The foregoing description of the Separation Agreement does not purport to be complete and is qualified in its entirety by reference to the Separation Agreement, a copy of which will be filed as an exhibit to our Quarterly Report on Form 10-Q for the three months ending March 31, 2025.

Corporate Restructuring

On March 25, 2025, our Board committed to a course of action to (i) reduce our workforce by 57%, resulting in a total workforce after reductions of 19 employees, (ii) exit our corporate headquarters in Warminster, PA, and (iii) discontinue in-house scientific research.

The determination to proceed with these actions was made as a result of our Board’s determination and plan to restructure our organization to optimize overall business performance.

In connection with these actions, we expect to incur a one-time restructuring charge in the first quarter of 2025 of approximately $11 million to $13 million, consisting of:

(i) $5.9 million to $6.3 million of employee severance and benefits cash expenditures;

(ii) $1.5 million to $2.2 million of non-cash stock-based compensation expenses for employee equity award modifications;

and (iii), in connection with the decision to exit our corporate headquarters, (a) $3.9 million to $4.2 million of non-cash impairment charges for laboratory equipment, leasehold improvements and our right-of-use asset and (b) $0.3 million to $0.4 million of cash lease-related operating expenses.

Substantially all of the termination severance payments and other employee benefits costs are expected to be paid during the second quarter of 2025, with the remainder to be paid in the second half of 2025.

Termination of Open Market Sale Agreement

On March 25, 2025, we provided notice of our termination, effective March 26, 2025, of that certain Open Market Sale Agreement, dated December 20, 2018, as amended (the Sale Agreement), with Jefferies LLC as placement agent (the Placement Agent).

Pursuant to the terms of the Sale Agreement, we could offer for sale to the public our common shares from time to time in “at the market” offerings through the Placement Agent.

We are not subject to any termination penalties related to the termination of the Sale Agreement.

Following such termination, we may not offer or sell any additional shares of our common stock under the Sale Agreement or any related prospectus or prospectus supplement.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

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10.5† Consent Agreement of the University of British Columbia to Inex/Alnylam Sublicense Agreement dated January 8, 2007 (incorporated herein by reference to Exhibit 4.20 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2010, filed with the SEC on June 3, 2011).

10.6# Tekmira 2011 Omnibus Share Compensation Plan approved by shareholders on June 22, 2011 (incorporated herein by reference to Exhibit 4.25 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2011, filed with the SEC on March 27, 2012).

Settlement Agreement and General Release, by and among Tekmira Pharmaceuticals Corporation, Protiva Biotherapeutics Inc., Alnylam Pharmaceuticals, Inc., and AlCana Technologies, Inc., dated November 12, 2012 (incorporated herein by reference to Exhibit 4.26 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2012, filed with the SEC on March 27, 2013).

2 unchanged sentences

and each of the stockholders of Enantigen Therapeutics, Inc., dated as of October 1, 2014 (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed with the SEC on May 6, 2015).

10.10# Executive Employment Agreement, dated effective as of July 11, 2015, between OnCore Biopharma, Inc.

and Michael J.

Sofia (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 7, 2015).

Amended 2011 Omnibus Share Compensation Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on August 4, 2016).

4 unchanged sentences

7, LLC dated October 7, 2016 (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 3, 2016).

10.14 Acknowledgment of Commencement Date in connection with Lease Agreement between the Company and ARE-PA Region No.

7, LLC dated August 9, 2016 and as amended on October, 7, 2016 (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the SEC on November 3, 2016).

10.15** Tenant Estoppel Certificate between Arbutus Biopharma, Inc.

and Novitia Equities, LLC dated October 23, 2023.

10.16** Subordination,Non-Disturbance and Attornment Agreement by and among, the Company, Univest Bank and Trust Co., and Veterans Circle Group, LLC dated December 12, 2023.

10.12 Subordination, Non-Disturbance and Attornment Agreement by and among, the Company, Univest Bank and Trust Co., and Veterans Circle Group, LLC dated December 12, 2023 (incorporated herein by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 5, 2024).

Master Contribution And Share Subscription Agreement, by and between the Company, Genevant Sciences Ltd.

1 unchanged sentence

(incorporated herein by reference Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the SEC on May 4, 2018).

10.18 Open Market Sale AgreementSM, dated December 20, 2018, by and between the Company and Jefferies LLC (incorporated herein by reference to Exhibit 1.1 of the Current Report on Form 8-K, filed with the SEC on December 20, 2018).

10.19 Amendment No.

1 to the Open Market Sale AgreementSM, dated December 20, 2019, by and between the Company and Jefferies LLC (incorporated herein by reference to Exhibit 1.3 to the Registrant’s Registration Statement on Form S-3, filed with the SEC on December 20, 2019).

10.20 Amendment No.

2 to the Open Market Sale AgreementSM, dated August 7, 2020, by and between the Company and Jefferies LLC (incorporated herein by reference to Exhibit 1.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on August 7, 2020).

10.21# Amendment No.

3 to the Open Market Sale AgreementSM, dated March 4, 2021, by and between Arbutus Biopharma Corporation and Jefferies LLC (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on March 4, 2021.)

Executive Employment Agreement, dated June 11, 2018, by and between the Company and David Hastings (incorporated herein by reference to Exhibit 10.52 of the Registrant’s Annual Report on Form 10-K for the year end December 31, 2018, filed with the SEC on March 7, 2019).

10.23**# Executive Employment Agreement, dated July 10, 2015, by and between the Company and Michael McElhaugh, as amended by the First Amendment to Executive Employment Agreement, dated April 20, 2016, the Second Amendment to Executive Employment Agreement dated December 11, 2018, the Third Amendment to the Executive Employment Agreement dated November 1, 2022 and the Fourth Amendment to the Executive Employment Agreement.

Executive Employment Agreement, dated July 10, 2015, by and between the Company and Michael McElhaugh, as amended by the First Amendment to Executive Employment Agreement, dated April 20, 2016, the Second Amendment to Executive Employment Agreement, dated December 11, 2018, the Third Amendment to the Executive Employment Agreement, dated November 1, 2022, and the Fourth Amendment to the Executive Employment Agreement, dated January 1, 2024 (incorporated herein by reference to Exhibit 10.23 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 5, 2024).

Purchase and Sale Agreement, dated July 2, 2019, by and between the Company and OCM IP Healthcare Portfolio LP (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed with the SEC on August 5, 2019).

1 unchanged sentence

Form of Arbutus Biopharma Corporation Option Agreement (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed with the SEC on August 5, 2019).

10.27# Option Agreement, dated June 24, 2019 by and between the Company and William H.

Collier (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, filed with the SEC on August 5, 2019).

Cross License Agreement, dated April 11, 2018, by and between the Company and Genevant Sciences Ltd.

7 unchanged sentences

Technology Transfer and Exclusive License Agreement, dated December 13, 2021, by and between the Company and Qilu Pharmaceutical Co., Ltd.

(incorporated herein by reference to Exhibit 10.

41 to the Registrant’s Quarterly Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 3, 2022).

(incorporated herein by reference to Exhibit 10.41 to the Registrant’s Quarterly Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 3, 2022).

Form of Arbutus Biopharma Corporation Restricted Stock Unit Agreement.

(incorporated herein by reference to Exhibit 10.41 of the Registrant’s Annual Report on Form 10-K for the year end December 31, 2022, filed with the SEC on March 2, 2023).

10.34**# Separation and Release Agreement, dated effective as of July 7, 2023, between Arbutus Biopharma Corporation and Elizabeth A.

10.35**# Consulting Agreement, dated effective July 7, 2023, by and between Elizabeth A.

Howard and Arbutus Biopharma Corporation.

Executive Employment Agreement, dated effective as of July 10, 2023, between Arbutus Biopharma, Inc.

5 unchanged sentences

Arbutus Biopharma Corporation 2016 Omnibus Share and Incentive Plan, as supplemented and amended (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on May 24, 2024) .

10.40# Separation and Release Agreement, dated December 31, 2023, by and between William Collier and Arbutus Biopharma Corporation (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on January 4, 2024).

10.41# Consulting Agreement, effective December 31, 2023, by and between William Collier and Arbutus Biopharma Corporation (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K, filed with the SEC on January 4, 2024).

Executive Employment Agreement, dated effective as of July 11, 2015, between OnCore Biopharma, Inc.

and Michael J.

Sofia (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 7, 2015).

First Amendment to Executive Employment Agreement, dated October 11, 2024, by and between Michael J.

Sofia and Arbutus Biopharma, Inc.

(incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the SEC on October 11 , 2024).

19** Insider Trading Policy .

21.1** List of Subsidiaries.

23.1** Consent of Ernst and Young LLP, an Independent Registered Public Accounting Firm.

31.1** Certification of Interim President and Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.1** Certification of President and Chief Executive Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2** Certification of Chief Financial Officer pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 .

32.1** Certification of Interim President and Chief Executive Officer pursuant to 18 U.S.C.

32.1** Certification of President and Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

1 unchanged sentence

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

97** Arbutus Biopharma Corporation Incentive Compensation Recovery Policy.

97 Arbutus Biopharma Corporation Incentive Compensation Recovery Policy (incorporated herein by reference to Exhibit 97 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 5, 2024).

101.INS** XBRL Instance Document

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ARBUTUS BIOPHARMA CORPORATION

/s/ Michael J.

Interim President and Chief Executive Officer

/s/ Lindsay Androski

Lindsay Androski

President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 27, 2025.

Signatures Capacity in Which Signed

/s/ Frank Torti, M.D.

Director (Chairman)

Frank Torti, M.D.

/s/ Michael J.

McElhaugh Interim President and Chief Executive Officer and Director

McElhaugh (Principal Executive Officer)

/s/ Lindsay Androski President, Chief Executive Officer and Director (Chairperson)

Lindsay Androski (Principal Executive Officer)

Hastings Chief Financial Officer

Hastings (Principal Financial Officer and Principal Accounting Officer)

/s/ Daniel Burgess Director

Daniel Burgess

/s/ Richard C.

Henriques Director

/s/ Keith Manchester, M.D.

Keith Manchester, M.D.

/s/ James Meyers Director

/s/ Melissa V.

Rewolinski, Ph.D.

/s/ Robert Alan Beardsley Director

Robert Alan Beardsley

/s/ Joseph Bishop Director

Joseph Bishop

/s/ Matthew Gline Director

Matthew Gline

/s/ Anuj Hasija Director

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures