CONTROL BIONICS LIMITED — Investor Presentation 2021

Feb 24, 2021

4D and Half Year Management Presentation – 25[th] February, 2021

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4D and Half Year Management Presentation – 25[th] February, 2021

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Important notice

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This presentation has been prepared by Control Bionics Ltd (ACN 115 465 462) (‘Control Bionics’ or the ‘Company’). It contains general information about the Company and its subsidiaries and business, current as at the date of the presentation. It has been prepared by the Company with due care but no representation or warranty, express or implied, is provided in relation to the accuracy or completeness of the information. The information contained in this presentation is subject to change without notification. The Company is not responsible for updating, and it does not undertak ~~es~~ to update, the information contained in this presentation.

This presentation is provided for general information purposes only. It does not contain all of the information that a prospective investor may require in connection with an investment in the Company (including the risk factors that could affect its performance). It is not a prospectus, product disclosure statement, pathfinder document or any other disclosure document or other offering document or contract under Australian law or any other law. This presentation and its contents must not be distributed, transmitted or viewed by any person in any jurisdiction where the distribution, transmission or viewing of this presentation would be unlawful under the securities or other laws of that or any other jurisdiction.

Confidential

This presentation is strictly confidential and may not be reproduced, distributed or otherwise passed on, directly or indirectly, to any other person or published, in whole or in part, by any medium or for any purpose.

No offer of securities

This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of securities, or an offer, invitation or advertisement to sell or issue securities or other financial products in any jurisdiction.

Not financial product advice

This presentation does not constitute financial product or investment advice, a recommendation to acquire securities or accounting, legal or tax advice. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Recipients should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs, and seek appropriate independent professional advice (which may include legal and taxation) for their jurisdiction.

Past performance

Historical financial information and pro-forma financial information is given for illustrative purposes only and should not be relied upon as (and is not) an indication of the Company’s views on its future financial performance or condition. The Company’s past performance cannot be relied upon as an indicator of (and provides no guidance as to) the Company’s future performance.

Financial data

All dollar values are in Australian dollars ($ or A$) unless stated otherwise.

Effect of rounding

A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this presentation.

Forward-looking statements

This presentation may contain 'forward ‐ looking statements'. Forward ‐ looking statements include those containing words such as: 'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely', 'intend', 'should', 'could', 'may', 'target', 'plan', 'consider', 'foresee', 'aim', 'will' and other similar expressions. Forward ‐ looking statements may include indications, projections, forecasts and guidance on earnings or cashflow, or market or industry trends. Forward-looking statements speak only as of the date of this presentation. Forward ‐ looking statements, opinions and estimates are based on assumptions, qualifications and contingencies which are subject to change without notice and involve known and unknown risks and uncertainties and other factors which are beyond the Company’s control. This includes any statements about market and industry trends, which are based on interpretations of current market conditions. Forward ‐ looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual results, performance or achievements may differ materially from those expressed or implied in such statements and any projections, qualifications and assumptions on which those statements are based.

Forward-looking statements may assume the success of the Company’s business strategies. The success of any of these strategies is subject to uncertainties and contingencies beyond the Company’s control, and no assurance can be given that any of the strategies will be effective or that the anticipated benefits from the strategies will be realised in the period for which the forward ‐ looking statement may have been prepared or otherwise. Readers are cautioned not to place undue reliance on forward ‐ looking statements and, except as required by law or regulation, the Company assumes no obligation to update these forward ‐ looking statements.

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4D and Half Year Management Presentation – 25[th] February, 2021

Disclaimer

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Disclaimer

• To the maximum extent permitted by law, the Company (including its subsidiaries) and their respective directors, officers, employees, contractors, agents and advisers (together the ‘Relevant Persons’):

• Disclaims any obligations or undertaking to release any updates or revisions to the information set out in this presentation to reflect any change in expectations or assumptions;

• Does not make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of such information, or the likelihood of fulfilment of any forward-looking statement or any event or results expressed or implied in any forward-looking statement; and

• Disclaims all responsibility and liability for these forward-looking statements (including, without limitation, liability for negligence).

To the maximum extent permitted by law, each Relevant Person excludes all liability whatsoever for any loss or damage (whether foreseeable or not and whether direct, indirect or consequential) which may be suffered by any person as a consequence of any information in this presentation or any error in or omission from it, whether the loss or damage arises in tort (including negligence), contract, statute or otherwise.

Nature of information

Unless otherwise stated, the information in this presentation is based on the Company’s own information and estimates. However, it may contain information (including information derived from publicly available sources) that has not been independently verified by the Company. This presentation has not been subject to review or audit. It presents financial information on both a statutory basis (prepared in accordance with Australian accounting standards which comply with International Financial Reporting Standards (IFRS)) and non-IFRS basis.

Shares have not been, and will not be, registered under the U.S. Securities Act or the securities laws of any state of the United States and may not be offered, sold or resold, pledged or transferred in the United States except in accordance with U.S. Securities Act registration requirements or pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and any other applicable state securities laws.

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4D and Half Year Management Presentation – 25[th] February, 2021

Presenters

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Rob Wong CEO

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John Bell Chief Financial Officer

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Neale Java Chief Financial Officer (Incoming March 1, 2021)

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4D and Half Year Management Presentation – 25[th] February, 2021

Agenda

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11am-11.30am

• Company Overview

• Mission

• Products & Technology

• Market Overview

• Growth Strategy

• Half Year Highlights

• Financial Performance

• Growth Initiatives & Progress

• Q&A via webinar chat

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4D and Half Year Management Presentation – 25[th] February, 2021

Company Overview

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4D and Half Year Management Presentation – 25[th] February, 2021

Company Mission

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Control Bionics’ aim is to become the world’s leading provider of innovative augmentative communications and control devices for people with speech and movement disabilities

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4D and Half Year Management Presentation – 25[th] February, 2021

Technology and Products

Technology : NeuroNode

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Patented NeuroNode Technology

NeuroNode 3 (iOS)

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NeuroNode 3.0

“Communicate with confidence”

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NeuroNode Trilogy & Trilogy GridPad

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NeuroNode Trilogy - “Faster Speed, Less Fatigue, More Control” Power of 3

Average Revenue Per System $22,000 AUD

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4D and Half Year Management Presentation – 25[th] February, 2021

Market Overview

Customers

Channel to Market

• Speech Language Clinicians

• • ALS / MND • Rehabiltation Centres • Spinal Cord Injuries

• • Multiple Sclerosis Government & Private Funding

• • Cerebral Palsy • NDIS (Australia)

End users:

• Veterans Affairs (Australia and USA)

• • New York Education Department (USA)

• • Medicare/Medicaid (USA)

• • Private Health Insurers (USA)

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• Regulatory Environment

• • FDA approved

• USA • Accredited Medicare/Medicaid

• • TGA registered

• Australia • NDIS Accredited

• • Assistive Devices Program with the Ontario Ministry of Health registered

• Canada • ISED Grant of Equipment Certification in Canada for NeuroNode devices

• Europe • CE Mark certified •

• Japan JETRO No regulatory barriers

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4D and Half Year Management Presentation – 25[th] February, 2021

Growth Strategy – Geographic Expansion

USA Expansion

Australian Expansion

• Sales & marketing and corporate

• Sales, marketing, operations infrastructure for product development & manufacturing

• infrastructure investment

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Japan Market Entry

• Sales, marketing & channel development into the Japanese market

investment

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• Total Cases: approximately 82,000

• New Cases Each Year: 1,900

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• Total Cases: approximately 2,043,000

• New Cases Each Year: 44,330

• Total Cases: approximately 385,000

• New Cases Each Year: 10,320

New International Markets

• Canada expansion

• Potential market entry to Europe given CE Mark

• • Asia

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4D and Half Year Management Presentation – 25[th] February, 2021

Half Year FY 2021 Highlights

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4D and Half Year Management Presentation – 25[th] February, 2021

Highlights Half Year FY21

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• Successful IPO in December 2020 raising $15m created a strong balance sheet to fund global growth

• Solid Half Year performance with revenue up 22% at $2m and unit sales up 25%, despite significant COVID-19 impact, particularly in the USA

• Modest loss for the half (less IPO costs) at $0.29m (Avg per month $0.05m)

• Cash as at 31[st] December 2020 was $14.6m. No debt

• Developing demand globally for our products. Intend to invest for the long-term, but mindful of COVID-19 continuing flare-ups

• In December, commenced implementation of strategy outlined in the Prospectus

• Increasing sales, marketing and operational resources

• Japan: Positive relationship with JETRO and commenced product language conversion project – appointed BDM in Tokyo

• Initiated research and development projects to miniaturise NeuroNode tech and extension NeuroNode control functions such as wheelchair control

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4D and Half Year Management Presentation – 25[th] February, 2021

Revenue & Units Snapshot

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• Revenue $2m up by 22% over PCP

• Unit sales increased by 25%

• USA sales were flat (3% increase) for the half but understandable given COVID-19 impact. Australian sales up 84% due to good pipeline conversion accounting for 35% of revenues up from 23%.

• In December 2020 USA sales began to recover but Australian sale activity was hit by lock downs

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Revenue Share by Market for the Half Year as at Dec 2019 Revenue for the Half Year 2019 v 2020 AUD
$2,500,000 22%
Australia,
$2,005,390
23%
$2,000,000
$1,642,213
$1,500,000
$1,000,000
$500,000
$-
USA, 77%
2019 2020
Revenue by Market for the Half Year as at Dec 2020 Unit Sales for the Half Year 2019 v 2020
100 25%
89
90
80
71
Australia, 35%
70
60
50
40
30
USA, 65%
20
10
-
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4D and Half Year Management Presentation – 25[th] February, 2021

2019 2020

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Profit and Loss For the Half Year ended December 31[st] 2020

P&L	Half Year Dec 31st 2020 $000	Half Year Dec 31st 2019 $000
Revenue	2,005	1,642
Grants and other income	329	14
Cost of sales	(690)	(425)
Operating expenses (excl. IPO costs)	(1,940)	(1,775)
IPO Costs	(775)	-
Forex translation	16	22
Loss for the half year	(1,052)	(522)
Loss for the half year (excl. IPO Costs)	(292)	(544)

• Revenue

• 22% increase YOY for the half year

• Australia up by 84% and US up by 3% (despite COVID-19 impact)

• Grants and other income is COVID-19 Government support $0.33m

• Expenses

• IPO costs of $775,000 are a one off – this is the amount charged to P&L – the other $900,000 went to the capital account

• Marketing costs down due to trade show cancellations and general cost management.

• YOY travel and related costs down

• Going forward increase in expenses as we build resources and momentum in line with Prospectus use of funds strategy

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4D and Half Year Management Presentation – 25[th] February, 2021

Cash Flow Statement FOR THE HALF YEAR ENDED 31 DECEMBER 2020

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Cash Flow	For the Half Year Ended 31 Dec. 2020 $000	For the Half Year Ended 31 Dec 2019 $000
Cash flow used in operating activities	(1,602)	(644)
Cash used in investing activities	(131)	(44)
Cash generated from financing activities	14,872	1,045
Net increase in cash	13,138	356
Cash at beginning of period	1,428	799
Cash at end of period	14,567	1,155

• IPO proceeds

• COVID support and R&D rebate

• Increased trial stock

• Accounts receivable - some impact from increased insurance funded sales

4D and Half Year Management Presentation – 25[th] February, 2021

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Balance Sheet

Summary balance sheet	31 Dec 2020 $000	June 30 2020 $000
Current Assets	15,931	1,924
Other Assets	4,490	4,421
Total Assets	20,421	6,345
Total Liabilities	783	622
Net Assets	19,638	5,723

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• Strong Balance Sheet to execute growth strategy as described in the Prospectus even with current COVID-19 risks

• Zero debt

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4D and Half Year Management Presentation – 25[th] February, 2021

Update by Region

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USA

• First quarter revenue impacted by COVID-19, but also reduced cost exposure in marketing and travel.

• Some recovery in late Q2 with funding seasonality and growing awareness of Trilogy and Trilogy GridPad (Soft launched September 2020). Access to facilities improved, but exposed to snap COVID-19 lockdowns.

• Post IPO focussed on implementing long-term growth plan in line with Prospectus. Adding sales, marketing and operational resources

• Signed USA reseller agreement with Numotion extending sales reach Upper East States

Australia

• Sales first half strong given good pipeline conversion and IPO PR exposure

• Post IPO investment in sales people and marketing/PR

International /Japan

• Recruited International Market Development Director

• Commenced Japanese product conversion

• Continued working closely with JETRO in Japan

• Employed senior local market representative in Tokyo

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4D and Half Year Management Presentation – 25[th] February, 2021

Senior Management Changes

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• Jamie Lemsing appointed as International Market Development Manager February 2021

• Experienced ASX CFO, John Bell appointed on part time basis October 2020

• Brett Crowley appointed as Company Secretary October 2020

• Neale Java joined as full-time CFO in February 2021 (March 1 responsibility handover)

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4D and Half Year Management Presentation – 25[th] February, 2021

COVID-19 Update Half-Year FY 21

• COVID-19 impacted ability to reach specifying clinicians and our immune compromised clients globally

• In Q2 there was some easing of sales staff access in the USA, but correspondingly a tightening of conditions in Australia. COVID-19 stalled international access and sales

• USA remained challenging in terms of number of COVID cases continuing to increase

• We practice a high degree of hygiene throughout our business to keep staff and our clients safe, but the continued uncertainty caused by COVID-19 outbreaks and mutations means the risk of business interruption remains high

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4D and Half Year Management Presentation – 25[th] February, 2021

Outlook

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4D and Half Year Management Presentation – 25[th] February, 2021

Outlook

• Cautiously optimistic about sales in the next two quarters and especially beyond, but COVID-19 uncertainty can delay conversion and our ability

• to build pipeline

• Core interest in our NeuroNode systems is building with our users and clinicians are becoming more aware of our brand, systems and success stories

• Confident in our strategy to build presence in key markets around the world as per our Prospectus

• Intend to continue to expand sales, marketing and operational capabilities to ensure we are in a strong position when the impact of COVID-19 eases

• Continued investment in R&D projects

• Great team of passionate people

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Professor Justin Yerbury OAM – Is a Professorial Fellow in Neurodegenerative Disease at the University of Wollongong NSW. Professor Yerbury is recognised internationally as a true pioneer in his field. Despite the challenges of living with familial MND, he has been unstinting in his efforts to find a cure for the disease. He relies on NeuroNode Trilogy everyday.

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4D and Half Year Management Presentation – 25[th] February, 2021

Q & A via webinar platform

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4D and Half Year Management Presentation – 25[th] February, 2021

Life-Changing Connections

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4D and Half Year Management Presentation – 25[th] February, 2021

AUSTRALIA

+61 3 9897 3576 Suite G.03 171 Union Road Surrey Hills VIC 3127

USA

745 Center Street, Suite 303 Milford OH 45150 USA

Contacts: Investors Brett Crowley Company Secretary brettcrowley@controlbionics.com

Media Relations

Ben Henri MC Partners Ben.henri@mcpartners.com.au