Jeremy Feffer – Investor Relations-LifeSci Advisors, LLC Fred Colen – President and Chief Executive Officer Chris Clark – Chief Financial Officer

Jason Mills – Canaccord Genuity

Thank you, Lori. This time all participants are in a listen-only mode.

Following the presentation we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for your question.

[Operator Instructions] I would like to remind everyone that today's discussion includes forward-looking statements within the meaning of applicable U.S. and Canadian Securities Laws that reflect Neovasc's current views with respect to future events including the Company's plans and expectations relating to its business, financial results, capital structure, litigation and other matters.

Words such as expect, outlook, anticipate, exploring, may, might, will, should, estimate, continue, strategy, potential, intend, going to, believe, plan, opportunity, trend, growing, look forward, and similar words or expressions are meant to identify forward-looking statements. Any such statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

For more information on risks and uncertainties related to these forward-looking statements, please refer to the cautionary statement regarding forward-looking statements and Risk Factors section of Neovasc's Annual Report on Form 20-F and the discussion in Neovasc’s MD&A which are available on SEDAR and EDGAR. Now, I would like to turn the call over to Fred Colen, President and Chief Executive Officer of Neovasc.

Fred?

Thank you, Jeremy, and welcome everyone. With me this afternoon is Chris Clark, our CFO.

I will begin today's call with an update on our Tiara and Reducer programs. And then turn the call over to Chris for a quick summary of the financials for the first quarter of 2018 and an update on our capital structure.

We will then open the call up for your questions. Starting out with Tiara.

We believe that Tiara is increasingly being recognized as one of the leading devices exploring this new treatment option for patients who are unable or unsuited to receive an open heart surgical valve replacement. We are competing with clipping repair procedures and believe Tiara to be a better treatment option for many functional mitral valve regurgitation patients treated with clipping repair procedures today.

As a result, we are experiencing an increasing amount of interest from new clinical investigator sites for additional future enrollment in our ongoing European Tiara II CE Mark study. We are continuing to build on this momentum, as well of increasing interest in our Tiara program with presentations at leading conferences.

In two weeks there will be another presentation of the clinical results of Tiara patients at a Euro PCR Conference in Paris. In addition, we plan to provide Tiara clinical update at the ISMICS meeting and the TVT meeting next month.

These efforts are part of our multi tier strategy to combat heavy competition for suitable patients from the clipping repair procedures which I like to point out are fully reimbursed restoring the pure clinical outcome comparisons. In addition to a growing awareness of the Tiara, we also attribute actual enrollments in the Tiara trials to a growing belief in the survival of the company and the enhanced efficiencies we recently implemented at the participating sites, including an easy-to-use, local pre-screening process and tool.

We have also begun offering additional field clinical engineering support in Europe, which has allowed us to support on board additional sites, as well as reduce the time from when a site identifies a patients to when they are enrolled and scheduled to have the procedure. These efforts complement our initiative to recruit and qualify additional clinical sites in Germany, the UK, Spain, the Netherlands and Israel in the next several months but certainly before the end of 2018.

In the Tiara II clinical study we recently had four Tiara implants with good outcomes and great implantation times. The apical in/out procedure times for these most recent implants were nine minutes, nine minutes, ten minutes and twelve minutes.

The 30-day survival rate remains at 90% overall and is at 93% for the TIARA-II study. We believe this trial is on track to meet or exceed our goal of achieving fuller enrollment by the end of the third quarter of 2019.

We are adding additional, mitigating initiatives including direct clinical outcome comparisons for the Tiara II results to date, against clinical outcome result of clipping procedures to compete for suitable patients who can benefit from our Tiara device in this clinical study. An additional, strategic and focused activity for the company in the mitral valve space is the newly initiated development of the transfemoral, trans-septal version of Tiara mitral valve, which the company believes has the potential to lead to a breakthrough for the optimal treatment of severe mitral regurgitation by providing a safe and broadly usable implantation technique.

These development activities are taking place both into company’s Vancouver and New Brighton, Minnesota facilities. Outside of the development of the unique and innovative delivery system, the company will make a few minor but meaningful changes to our current Tiara valves in order to enable trans-septal delivery and deployment, as well as to further increase the suitable patient population while maintaining the core features and functionality of the current valves in order to leverage clinical and technical performance data.

The company has finalized a first set of transfemoral, trans-septal prototype delivery systems and has just now completed a first, small animal feasibility study. We are pleased to report that for the first time in the history of Tiara, we have been able to access the heart transseptally to pass two paths through the mitral valve annulus from the right side of the heart and to deploy a Tiara mitral valve.

Through these initial animal trials we were able to assess many key functions of the trans-septal system as it relates to the current imaging and implantation techniques of Tiara. Trackability, alignment to the annulus through actual and rotational position in order to align D-shape with the native anatomy.

We have identified a number of improvement opportunities for the trans-septal system and will now address those in the next few months followed by more feasibility animal work. We plan to share the outcome of this first animal study with some of our key supporting physicians during the Euro PCR Conference in private sessions to obtain their insights and feedback.

Turning to the Reducer. Based on achieving NUB 1 Status in Germany earlier this year, the additional recent publications and a general positive reception in the European market with positive experiences by many physicians from the treatment of their own patients with the Reducer, we are seeing an increase in adoption of the Reducer therapy in Europe.

The commercial progress for Reducer in the first 2018 quarter has been encouraging with a 29% increase in Reducer implants and a 30% increase in Reducer revenue, as compared to the first quarter of 2017. While we only have a very small sales organization in Europe, we are still planning on a doubling of Reducer implants in Europe during 2018, which includes an almost tripling of Reducer implants in Germany.

We continue to generate data in our REDUCER-I Observational post market real world study which is our multi-center, multi-country, three-arm study collecting long-term data from European patients. Currently, 157 patients have been enrolled across 19 centers that are active in Italy, Germany, Belgium, The Netherlands, the United Kingdom and Switzerland.

The study is expected to enroll up to 400 patients. The REDUCER is also benefiting from an increasing number of articles and presentations based on clinical data.

Just in the past month we were encouraged by five new independent articles in scientific publications. The articles included data from an additional 96 REDUCER patients in two separate single center studies, which are very encouraging.

The studies each highlight data that demonstrate real world clinical results and are very consistent with the randomized COSIRA trial outcomes. The TCTMD publication and the Editorial in journal of the American College of Cardiology points to a new option for the treatment of these Refractory Angina patients.

In our opinion, the case report for the first time powerfully demonstrates increased perfusion of the ischemic regions of the heart in a human in these published PET pictures from the University Hospital of Zurich. We expect further independent publications by physicians regarding their own experience and clinical results.

And very importantly, in two weeks at the Euro PCR Conference, there will be a dedicated Reducer symposium as well a broadcast with a Live REDUCER implantation by Dr. Javier Escaned into the EuroPCR Conference.

With that update on our programs let me now turn to call over to Chris to discuss our financial situation. Chris?

Thank you, Fred. Good afternoon everybody.

I remind everyone that our financial results are in U.S. dollars and preparing in compliance with IFRS.

I’m going to keep my comments brief. I’m referring to our full disclosure filed in SEDAR and EDGAR for a more fulsome of our first quarter 2018 results.

Starting with Reducer commercialization. While we experienced a 77% decrease in revenue compared to the first quarter of 2017 as we ended our contract manufacturing and consulting services businesses at the end of 2017, we are very pleased with the performance of our Reducer in 2018.

And we recorded our highest quarterly Reducer revenue in the first quarter 2018 at $340,000. Our margins for the first quarter of 2018 reflect and are expect it to reflect going forward the margins on the Reducer only, which were at 74% or $252,000, compared with the blended gross margin for all revenue segments of 45% or $673,000 for the same period in 2017.

We also believe there to be further upside potential for the REDUCER gross margin during the remainder of 2018. Our departmental expenses for the first quarter of 2018 decreased by $1.7 million to $6.8 million from $8.5 million for the same period in 2017.

Contributing to this decrease were a $1.24 million decrease in stock based compensation as both the size of the awards and the value of the awards declined in 2018, compared to the same period in 2017. A $812,000 reduction in litigation expenses as the matters facing the company either headed toward the conclusion or required less effort in 2017.

And $388,000 reduction in cash-based employee expenses, as we've reduced headcount from approximately a 150 to 90 staff. These decreases in expenses between the periods were all set by a onetime charge of $576,000 in the first quarter of 2018 for cost associated with the termination of staff during the period.

The overall loss for the first quarter of 2018 was $55.9 million, compared to $7.8 million for the same period in 2017. The change in the loss can be explained by three large non-cash charges: a $4.3 million charge for the unrealized loss from the derivative liabilities and convertible notes; $17.6 million charge for the realized loss on the exercise of warrants; and a $27.4 million charge for the amortization of the deferred loss from the derivative liabilities and convertible notes.

These accounting charges are better explained in the financial statements and do not impact the cash flow expectations in the coming quarters. Our basic and diluted loss per share for the first quarter basic and diluted of 2018 was $0.38 per share.

Excluding the $49.3 million of charges, I just mentioned, our loss per share was $0.04, compared to $0.07 per share for the same period in 2017. From a cash flow perspective, we spent approximately $5.9 million on operations and received approximately $691,000 from non-cash working capital adjustments as a balance sheet restructure during quarter, after the closure of our consulting services and contract manufacturing revenue line items.

Our total cash expenditure for the quarter was $5.245 million. We finished the first quarter of 2018 with $12.2 million dollars of cash.

And subsequent to the quarter, we received proceeds of $12.3 million from the investor initiated exercises of approximately $7.6 million Series C 1s. We believe this cumulative $24.5 million is sufficient to last the company at least one year at our current burn rate from the start – from the end of the last quarter.

We will need to raise additional capital in the next 12 months, with the current capital structure as described in our risk factors is a significant obstacle for achieving this. Circumstances still suggest a material uncertain about our ability to continue as a growing concern.

However, as we have disclosed that in our 2017 earnings call, we are actively taking steps to try and adjust the situation. To start, I'm pleased to inform you that today NASDAQ has confirmed that the company has maintained its market capitalization above $35 million for 20 consecutive training days and has regained compliance with the NASDAQ's market value listing rule.

As described in our annual report, on Form 20-F, we must still regain compliance with the NASDAQ $1 minimum bid price rule. Further to this we wish to remind everybody of our annual and special general meeting on June 4, 2018.

At this meeting we will seek shareholder approval to carry out a share consolidation of up to a one to 100 reserve split. We have consider the options and believe that the reverse split is the only choice to avoid being delisted from the NASDAQ capital market on the basis of our share price.

We must regain compliance with the $1 minimum bid requirement of the NASDAQ before July 2, 2018 or seek an extension. We strongly urge all shareholders to vote in favor of our proposal to execute a reverse split of the stock.

As a reminder, a reverse split does not have an effect on your relative holding in the company. As the number of shares your hold and the price of the stock will be adjusted in proportion to each other and to all other holders.

Finally, I wanted to give you an update on our current capital structure. As of today our issued and outstanding share capital is approximately 1.78 billion common shares.

And our fully diluted share capital, assuming all the remaining warrants were exercised reason the cash resist alternative net number is applicable. And all the debt is converted using the alternative net conversion is approximately 2.69 billion common shares.

However, there are two important observations. Firstly, there are only 1.85 million warrants with a cash alternative net number feature remaining.

97% of these types of warrants from the November 2017 financing have been exercised. Secondly, there's this distinction between the cashless exercise of warrants and the conversion of debt.

The former provides little benefit to the company on exercise, while the latter reduces the amount of debt on the balance sheet when converted. We will continue to update you as we endeavor to fix and right size the capital structure so that we can attract long-term investors who are looking to invest in the future growth of our key products, Reducer and the Tiara.

With that, I will turn the call back to Fred. Fred?

Thank you, Chris. We are making progress across the board with much of our strategic turn around initiatives starting to generate results.

I still see room for us to improve or make further adjustments in order to address the challenges ahead of us. I look forward to updating you on our progress.

As I have mentioned previously, we are committed to supporting a continuous flow of clinical presentations on our results as well updates on our ongoing studies. In two weeks is the EuroPCR conference.

On Tuesday May, 22, we have a separate Tiara II investigator meeting at 10:00 a.m. in the morning.

On Wednesday, May 23, there is a one hour EuroPCR dedicated Reducer symposium, starting at 12:15 p.m. in Room 252 A.

Later on that day at 3:10 p.m. there will be a transcatheter mitral valve replacement session with a Tiara representation in Room 252 B.

And finally, we have been informed that on Friday May 25, Dr. Javier Escaned will broadcast a live Reducer implantation case from Madrid into the Euro PCR Conference.

We are very excited about these presentations as well as other planned presentations of other conferences and how they are helping generate broad awareness for our programs. With that we will be happy to take a few questions.

Operator?

Hi this is Dylan on for Danielle. Just want to thanks for taking the question.

If we could start with the about $5.2 million cash burnt you guys have been targeting. Now do you have got another quarter under your belt, ramping Reducer and accelerating Tiara trials there.

I'm curious how sustainable you feel that is going forward? And what kind of risks you could see that might increase?

Or maybe decrease in the need for that cash?

So thanks Bill [ph] for your question. We are actually quite confident that we will be able to roughly stay within that kind of number on the – into the future and into the future quarters.

And the reason for that is that while we would be ramping more activities, for example, on the transseptal Tiara device, that is being offset by, a number one, higher revenues numbers coming in under Reducer side. And secondly, we continue to be able to draw on higher efficiencies in the organization that we have I still believe there's quite a bit of growth in terms of efficiency and effectiveness in the current organization.

So in other words, we should be able to do even more with the people that we have. So if you take into account a growing revenue number on the Reducer side, we also believe, there have to be still some improvement possible on the gross margin side for the Reducer.

That combined with overall efficiency gains in the organization, we believe that we should be able to offset pretty much the additional spend that we have to do – spend in terms of man hours, work and all the expenditures related to the trans-septal program. So, yes, we are confident to stay within roughly that kind of quarterly spend and in the quarters to come.

Okay. Great that makes sense.

And then I have another one on the transfemoral/transseptal version of Tiara that you're working on. It seems like a lot of players in the space are focusing on that transseptal version instead of trans-apical one.

Do you think, there's going to be a market for transapical? Or you have to have that transseptal delivery system to drive adoption?

And what kind of timeframe do you have around developing something like that? Thank you.

Yes. So I firmly believe that this required – this requires a stage program.

So I firmly believe that if you want to be successful in the mitral valve replacement space, you have to really make a first big step in terms of learning via the transapical approach. Then that to be followed with a transseptal delivery system as a second step, because you're able to learn from all of the things you've done before.

So, and then I think also play out in the marketplace in terms of availability of these system. So I believe that the transapical systems are going to go to the market first, and then after that, there will be a wave after that and that could be separated by several years in terms of a transseptal system.

So I think, we are well-positioned in terms of the approach itself, and probably even more importantly with the Tiara valve that we have. The Tiara valve that we have in itself is very suitable, we believe, will also a transseptal approach, without really making a huge amount of changes to the basic functionality of the Tiara valve.

And I would say that, not everybody has that kind of a position to start with. We are going to make a few minor changes to it, to make it deliverable transseptally and also try to increase the accretive patient population, but the basic design concepts that we have in the current Tiara are going to remain also in the transseptal version of it.

So we feel, we have a very good foundation from where we start today and with the clinical experience we are gathering on the transapical side to then move successfully and with more confidence roll into a transseptal version of it.

Thank you.

Now as it relates to timing, I think you ask that as well, Dylan.

Yes.

It's a bit too early for that. We want to first have a better idea, how exactly the delivery system and the valve needs to be shapes to make it all working properly.

So we're going to be busy with that for another few months. But certainly, later this year, we hope to be able to provide the audience with a – with an overview of a schedule and the remaining activities for the transseptal program.

Got it. It makes a lot of sense.

Thanks a lot for taking the questions. We appreciate it.

Great. Thanks Dylan.

Yes hi, can you hear me okay?

Yes Jason. I can hear you.

Superb. Thanks.

Thanks for the update. As usual, Fred, I had more of a 20,000-foot question for you to start.

Well obviously you guys are doing everything you can on a couple of front – multiple fronts, whether it be Tiara, Reducer, financial capital standpoint, reducing cash burn, there's a lot in your plate. So shareholders, obviously, look at Tiara, I think, as a top priority.

From your perspective, what can you, Chris and the team do to augment shareholder value the most over the next, call it six to twelve months?

Yes so I would answer that by a couple of – I think there are couple of things come to my mind. One is, we clearly want to regain trust and confidence with the community in general, meaning, the investment community and the medical community.

This company has gone through a lot. And there were a lot of people out there that didn't quite believe in the survival of this company.

I am convinced by now that this company will absolutely survive. And we are putting a lot of points on the board for people to see that in terms of progress with these programs, as well as the run rate that we have on the cash side.

We – Chris talked about it, we have about a year of one way in terms of available cash. And we can put additional points on the board, as it relates to these different programs to show some major progress, so that's number one.

And obviously, we are working hard on getting the consequence and the result of the different November financing behind us, and stabilize the stock and fulfill all of the NASDAQ requirements and provide for a stock that is going to be driven exclusively by the business results that we provide. Because that's the picture we need to get through, we're getting close, but we're not quite there, but we're getting very close.

The other part, Jason, is that we need to continue to put points on the board, as it relates to transapical clinical enrollments, there's no question about that, but also to really demonstrate great progress and success with our transfemoral Tiara program. And last but not least, on the Reducer side, I'm convinced, we're going to see – and continue to see a lot of enthusiasm in the marketplace for the Reducer.

And we are continuing to work on that also as it relates to potential strategic alliances. That takes time, no big company jumps on something from one-day to the next, but we are continuing to have good composition with several companies.

And I'm still optimistic that at some point in time, with continuous further enthusiasm and growth in the marketplace that can come to fruition as well. So there you have the, I would say, the key points, as to how we will continue to drive shareholder value.

And at the same time, drive value for patients that can benefit from these very promising product platforms.

Thanks. Fred that’s helpful color and a good perspective.

Just to dig in a little bit on couple of those points. One on Tiara, one on Reducer.

On Tiara, I know you've been to Europe and you've met with several of your old friends in the clinical community and you’ve had your regulatory folks working diligently over there. What can you tell investors to give them confidence that you're going to see, as I think, they want to see a pickup in enrollment?

Specifically to the Tiara II study. And secondly on Reducer, what do you think corporate – potential acquirers need to see to become more serious about negotiating a deal of Reducer which you, obviously, suggest that you're willing to sell at the right price?

So on the Tiara side, I can tell you that we are seeing more and more clinical investigator sites that want to participate in the study. That's one key clear driver for success.

Unfortunately, that takes quite a bit of time. We need to go through qualification of these sites.

And more importantly, when you do that in countries where we are under prove yet, like for example, in the Netherlands, or Spain or Israel, that takes even more time because you also have to get certain regulatory approval. So while we see in our clinics that contact us and say, we want to participate in this program.

We believe, this is a really good option for some of our patients. It takes time to get this additional clinical sites on board and actually then starting to produce enrolling numbers.

The other part of it and I talked about this is that, we are learning fast, as it relates to, who is our biggest competitors in this space for the right kind of patients, and I would say, from my experience, as you mentioned in talk and to positions in Europe and not just myself but a lot of people in the company, what we're finding out is that it's not so much over competitive mitral valve products that we are competing with. I can tell you that there are quite a few physicians out there that tell me, Fred, your program and you're Tiara device is on the top of the list for our research programs.

So we are getting very good feedback as it relates to how we stack up against all the mitral valve products in clinical trials. But really what we are finding out more.

More is that, we really have to compete against the clipping procedures, where these repair procedures are done with clipping. And that really is one that we are now focusing on in a multi-tiered strategy to go after.

The key part of it is, heads on comparison in terms of clinical data – clinical outcomes perspective for the clipping procedures as well as for the Tiara, so that we can demonstrate to physicians that we are well-positioned to compete against clipping procedures. So this is an evolving story, Jason.

As I said, and unfortunately, all of these things that I mentioned do take time to get to the bottom of and to really get an effective counter strategy in place. But I think, I'm pointing to that the key drivers here for success of the future.

As it relates to the Reducer – yes, as it relates to the Reducer side, it's a lot about awareness, additional clinical study results, which we are seeing coming out more and more. It's about more and more clinic signing up.

It is about reimbursement, that's a positive thing for us developing in Germany. We now have over 10 clinics in Germany that have completed, their enrolled – their reimbursement negotiations with the – with the insurance companies.

And they have successfully secured a reimbursement level that we believe is very satisfactory. That in itself, will then, obviously, drive not only enthusiasm but also additionally implementations on revenue.

And that's an ongoing thing throughout the year, because as we said, there are about 100 clinics in Germany that actually have used the Reducer and we now have over 10 to 15 in that range that actually have gone through the agreement for the reimbursement. And that's for a fixed schedule.

They don't all negotiate the pricing in the first quarter of the year. Though the schedule were the entire year for them to do that, so also that takes time.

I can also tell you that we are working hard to educate the key physicians in Europe and we see that having success, by for example, the editorial in the Jack publication, whereby physicians are beginning to see while here really is a new strategy – a new treatment strategy for the so-called no option patients. And that is and itself a very exciting opportunity and positive development for all those, as well.

And we actually believe that ultimately, will result in a positive recommendation that even in some of the European guidelines for the implementation of Reducer products. So you see journey there we’re on, it step-by-step building this up.

And the more we take – the more steps we take to a continuous positive momentum, the closer we going to get to a bigger company saying, oh well, these things are really starting to stack up and they started become really meaningful and we're getting to potential businesses here that are quite substantial. And therefore, we and all – we at some point in time leads to a more positive outcome, as it relates to the discussions that we're having.

That's very helpful. And one last one Fred and I'll get back in queue.

Just with respect to your commentary now a couple of times in this call about Tiara versus clipping procedures obviously, Abbott's been out there for a while and it had increasing success with the mitral clip. That having been said, I don't think it's controversial to say that the clinical results have been mixed.

Generally speaking to it quite a bit, but mixed. I'm just curious, are you noticing an increase in the usage of mitral clip and cases were [indiscernible] the clip had not been used, in other words the expanded utilization which is – would be having some sort of an impact broadly speaking on replacement, not just Tiara, but for everyone’s replacement trials.

Just curious, what you're seen in the field are hearing? And thanks for all the color.

Yes. We clearly do see a lot of enthusiasm for the clipping procedures.

And I think we all know that Abbott has a substantial business in that area. But again, the – we're talking here about reimbursed procedure, that is in itself is a big augment for the clipping procedure as opposed to anything else.

And we're looking at ways to compete against that. And we believe, there are or something we can do around that side.

But as it relates to the clinical outcome, which we believe is the most important factor here, because we certainly want to do what's best for the patient is, there's no question about the fact that the long-term outcomes for the clipping procedures are mixed. And I think the biggest driver in the continuous uptake of the clipping procedures, is the relatively small risk for a patient upfront within the third – within the first 30 days.

And I can tell you that, when you start looking at a direct heads on clinical outcomes comparison. The Tiara results laid a further out.

So the longer-term outcome perspective for a patient with Tiara mitral valve certainly looks a lot better than the laid outcomes for the clipping patients. Then when you look at the short-term risk for the patients in quite a bit of these clinical data that's out, then it's coming out to offer a clipping procedures, it looks like the 30-day mortality for clipping is around 5% or more.

And when you look at our Tiara II clinical data, I said it on the call , that our 30-day mortality rate is at the moment 7% and getting better. So we are actually very much in the ballpark in terms of short-term risk to the patient.

And yet at the same time, we can show that we have much better longer term outcomes for these patients. So I think, we have a real chance to have this discussion with the physicians over what's better for the patient, and to make some inroads on that side, which obviously will leads to quite a bit more implantation in our study.

So that's, I think gets to the core of it, Jason. And I hope I explained it well on the call here.

Yes thanks Fred.

Great then, I think we have pretty much utilized our time. So let me close the call for today by thanking all of you for your participation.

And we look forward to updating you again in the near future about how Neovasc is doing. So thank you very much for your attention.