Velan Inc. (VLN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. And welcome. [Foreign Language] For the purposes of the meeting today, voting on all matters will be conducted by electronic ballot. The electronic ballots shall already be open, and I will inform you before they close. Having the polls already open should give you sufficient time to vote and should avoid delays. As a reminder, if you have already filed a proxy or a voting instruction form and do not wish to change your vote, it is not necessary to vote at today's meeting. With the consent of the meeting, Mathias Jalali and Isabel of TSX Trust Company, Velan's registrar and transfer agent, will act as scrutineers at the meeting to tabulate the votes of any polls taken at this meeting and to report thereon to me and the secretary. The purpose of today's meeting is to consider and if thought advisable, to pass with or without variation a special resolution to approve a proposed plan of arrangement person with to Section 192 of the Canada Business Corporations Act between Velan on the first part, 14714750 Canada, Inc. and Flowserve US Inc. on the second part. Under the terms of the arrangement, 14714750 Canada, Inc. will, among other things, acquire all of the issued and outstanding shares of Velan for $13 per share. The full details concerning the arrangement are contained in Velan's Management Information Circular dated March 30, 2023. That was distributed to all shareholders prior to today's meeting and the full text of the special resolution is set forth in Appendix B to the circular. The Secretary has provided me with proof that the note is calling this meeting together with Velan's Management Information Circular and related materials were mailed to all shareholders as of the record date for the meeting in accordance with the provisions of the Canada Business Corporation Act. Velan's bylaws in the interim court order granted in respect of the holding of this meeting. I direct that proof of service be annex to the minutes of the meeting. These meeting materials are available under Velan's profile on SEDAR at www.sedar.com and on Velan's website at www.velan.com. Thus, there is an objection, I will dispense with the reading of the notice of the meeting. Before proceeding with the business of the meeting, I would like to take a moment to discuss the voting procedure. Each shareholder of Velan, as of March 27, 2023, record date is entitled to vote for each share held. Each subordinate voting share carries one vote per subordinate voting share and each multiple voting share carries the 5 votes for multiple voting share for all matters coming before shareholders at this meeting. Only shareholders as of the record date will be entitled to vote at this meeting. To vote, each shareholder must have previously validly submitted voting instructions or a form of proxy or designated a representative to attend the virtual meeting on his or her behalf. Registered shareholders are entitled to vote at this virtual meeting provided that they have logged in to the virtual meeting and accepted the terms and conditions thereof. As mentioned previously, we will conduct a vote on the arrangement resolution by way of an electronic ballot. Such ballots are already opened, and you can already register your votes. If you have already filed a proxy or a voting instruction form and do not wish to change your vote, it is not necessary to vote at this time. At this point, I will review the preliminary scrutineers' report, which the scrutineers have delivered to me. The preliminary scrutineers' report shows that there are at least 2 shareholders of Velan, represented virtually or by proxy at this meeting, which represent not less than 10% of the votes attached to all of the issued shares entitled to vote at the meeting. The scrutineers have certified that in accordance with Velan's bylaws, a quorum of shareholders is present at the meeting. I would like to ask that the scrutineers please prepare their formal report and delivered to the secretary before the end of the meeting. I would also direct the secretary to retain such report in the records of the meeting. With the appropriate notice of the meeting having been given and a quorum being present, I declare the meeting duly constituted and ready for the transaction of business as set out in the notice of the meeting. It is now time to consider, and if thought advisable, to approve a special resolution authorizing the proposed arrangement of Velan under Section 192 of the Canada Business Corporations Act as described earlier. An arrangement agreement dated February 9, 2023, as amended on February 27, 2023, was entered into between Velan on the long and 14714750 Canada Inc. and Flowserve US Inc. On the other hand, after careful consideration of the terms of the arrangement, including consultation with its legal and financial advisers and on the unanimous recommendation of the Special Committee of the Board of Directors of Velan, the Board of Directors at Velan has unanimously, with the directors affiliated to Velan Holding the company's control and shareholder and holder of the multiple voting shares having abstained from voting, determined that the arrangement is in the best interest of Velan and the shareholders and is fair to the shareholders as a result. The Board of Directors unanimously with the directors affiliated to the Velan Holding and in abstained from voting recommends that shareholders vote for the arrangement resolution. In order to be approved, the arrangement resolution must be passed by an affirmative vote of at least 2/3 of the votes casted by the shareholders present or represented by proxy at this meeting and entitled to vote and by a simple majority of the votes cast at the meeting by shareholders virtually present or represented by proxy and entitled to vote at the meeting by each of the holders of subordinate voting shares and the holders of multiple voting shares, voting by class and excluding for this purpose, any person required to be excluded person to Section 8.12 of the Canadian Securities Administrators Multilateral Instrument 61-101. The full text of the arrangement resolution is set out in Appendix B of Velan's Management Information Circular. Unless there is an objection, I will dispense with the reading of the arrangement resolution. I will now ask Emanuel Nataf, a shareholder of Velan to move the special resolution of shareholders approving the arrangement resolution attached as Appendix B to Velan's management information circular.

Mr. Chair, my name is Emanuel Nataf, and I am a shareholder of Velan. I move for the adoption of the special resolution attached as Appendix B to Velan's management information circular in respect of the approval of the arrangement.

Thank you. I ask to train another shareholder of Velan to second the motion.

Mr. Chair, my name is Duke Tran. I'm a shareholder of Velan. I second the motion.

Are there any questions with regard to this motion? Seeing no questions, the meeting will now proceed to a vote on the arrangement resolution. As we mentioned, voting today will be conducted by electronic ballot. The polls are already open, and at this point, all registered shareholders and duly appointed proxy holders, who have properly logged in with their control number and wish to vote are able to see on the screen the motion to adopt the resolution. If you have already filed a proxy or a voting instruction form and do not wish to change your vote, it is not necessary to vote at this time. If not already done at this time, please register your votes by accessing the voting page and selecting the For or Against button next to the motion to adopt the arrangement resolution. Each registered shareholder or proxy nominee as one last moment to submit his or her Valley. Once the electronic balloting closes, your votes will automatically be submitted. [Voting]

I now declare the balloting closed for this motion, and I direct the scrutineers to advise the Secretary when they have completed the counting of the votes and are ready to present their report. I have received the scrutineer's report on voting on the arrangement resolution, and I declare that the motion has been duly carried by the required special majority of the votes cast by the shareholders present or represented by proxy and entitled to vote at this meeting and by the required simple majority of votes cast at the meeting by each of the holders of subordinate boning shares and holders of multiple voting shares, voting by class, virtually presented or represented by proxy and entitled to vote at the meeting. And excluding for this purpose, any person required to be excluded person to Section 8.12 of the Canadian Securities Administrators Multilateral Instrument 61-101. The exact number of votes cast in favor of or against the special resolution will be publicly disclosed by Velan later today under Vela's profile on SEDAR at www.sedar.com or on Velan's website at www.velan.com. I direct the secretary to attach the report of the scrutineers to the minutes of this meeting. As the business of this meeting has been concluded, I declare the meeting to be terminated. I would like to take a brief moment to thank our shareholders for their support over the years and for their approval of this important transaction. I would also like to thank, in particular, all the employees of Velan for their precious work to make Velan what it is and get us to this transaction. Finally, thank you all for taking the time to attend the meeting today.