CONTROL BIONICS LIMITED — Investor Presentation 2024

Jun 26, 2024

27 June 2024

Dear Investor

It is with great excitement that we present the first edition of Control Bionics' Investor Newsletter — a platform crafted exclusively to keep you abreast of the latest developments and advancements within our company.

It has certainly been an eventful couple of months and in this maiden issue, we are delighted to offer you an insider's perspective into our journey of innovation and growth.

I am very pleased with our progress this quarter having delivered on all four key milestones as follows:

• DROVE TGA approval

• NeuroStrip® customer trials start

• NeuroStrip® App v1.0 release

• NeuroStrip® launch at AI For Good conference in Geneva

Our share price also had a high of 6.9c on Thursday, 20 June following the DROVE TGA approval announcement. This was a 60% increase on the recent placement price of 4.3c and was accompanied by a record volume in ASX trade of some 17 million shares, nearly 9 times more than our next biggest trading day in terms of volume.

As we embark on this journey together, we extend our appreciation for your support and belief in our company as we improve the quality of life for individuals with communication challenges and extend our innovation into new fields such as medicine, rehabilitation, and sports science.

Warm regards,

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Jeremy Steele CEO and Managing Director, Control Bionics

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Potential Upside: US HCPCS Code Change On Track

Control Bionics has a promising development that could significantly speed up our path to profitability.

Almost two years ago, the company applied to the Centers for Medicare and Medicaid Services (‘CMS’) for a new Healthcare

Common Procedures Coding System (‘HCPCS’) code so our core product, the NeuroNode, could be billed as a standalone device.

On 28 May, our application had progressed to the final stage, a public hearing for any questions or objections to the Preliminary HCPCS Coding Recommendation. We are pleased to report there were no objections to our application .

While the developments so far are favourable, we will learn if our application is successful in August with any changes effective 1 October 2024.

If successful in securing a new US HCPCS code for the NeuroNode, this is likely to have the following material effects :

1. Lifting the price of two of the technology solutions we offer into the US market, resulting in a direct flow through to earnings for the US.

2. Allowing us to pursue a new wholesale strategy selling to resellers/partners as it now becomes viable to revenue share with competitors who can resell a standalone NeuroNode device as an add-on to a new sale. This is because our NeuroNode can provide an upgrade to their customers’ existing systems and our competitors benefit from a new revenue stream, better customer experience, and a major EBIT boost.

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TGA Approval For DROVE: Our Autonomous Wheelchair Module

On June 20, Control Bionics received TGA approval for our DROVE Autonomous Wheelchair Module, now listed as a Class 1 Medical Device in Australia.

This means we can now start commercial sales of DROVE in Australia. We are also progressing well on our FDA application, supported by the ALS Association in the US.

Following nearly 12 months of rigorous testing, DROVE is set for commercial launch in the coming weeks and presents a new promising revenue growth opportunity for investors.

Our DROVE module integrates with existing wheelchairs, offering users autonomous navigation and greater independence. I’m very proud of our team’s dedication as DROVE is an Australian designed and made innovation that was many years in the making.

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NeuroStrip Launches At The UN’s AI For Good Summit In Geneva

On 31 May, I was invited to be a keynote speaker at the United Nation’s “AI for Good Summit” in Switzerland.

This prestigious event brings together global leaders in artificial intelligence to discuss the latest advancements and applications of AI for the benefit of humanity.

My speech focused on “Unveiling the future of surface electromyography” where I showcased AI for assistive technology, and the impact and potential of our cutting-edge innovations in this field.

I also gave a live demo of our latest device, NeuroStrip®, highlighting its revolutionary capabilities as a universal physiological measuring device with the capabilities of providing high fidelity data into AI models.

The event gave us a tremendous opportunity to showcase our technology and to put our brand on the world stage. We received several approaches by both small and large companies that may lead to future partnership opportunities.

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US and European Trip Updates

The AI for Good conference provided a great springboard to actively engage with suppliers and potential distributors in Europe. Whilst in the US, I met with a number of customers about the advancement of our technology as well as the preliminary approval for the HCPCS code.

In the US, James Schorey (CTO) and I met with the Apple Accessibility team in Cupertino at Apple HQ. Apple have for many years approached Accessibility with a very similar mindset to Control Bionics. We had a really positive meeting, demonstrating how our technology works with Apple devices and there are a number of items we agreed to work on in the coming months .

The European meetings are a strategic part of our plan to expand our market presence and foster growth in the European region.

I had a number of promising discussions with potential distributors of the NeuroNode in Europe, and we are hopeful of some announcements of partnerships in the coming months .

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NeuroStrip Customer Trials Start

James and I also visited with Steve Bennett from Neuro Bounce, who is our first customer trial for the NeuroStrip.

Steve (in the picture with me) showed how he is using our technology to train athletes to improve the activation of the muscles to increase jump height. The trials have been really successful, and Steve is very keen to work with us in perfecting our hardware and software and is eagerly wanting to put the NeuroStrip® into his facilities.

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Material Increase In Orders from US School Districts

We are pleased to announce a significant increase in orders following the recent signing of contracts with multiple school districts in the

United States. Our US subsidiary has secured rolling, multi-year contracts with both the Los Angeles United School District and Chicago Public Schools, resulting in a substantial boost in our Q4 revenue.

In the fourth quarter of FY24, revenue from school districts in the US surged to almost US$55,000, compared to US$9,000 in the corresponding period of FY23. This remarkable growth underscores the strong demand for our assistive technology solutions in educational settings.

Additionally, we are at the final stage of signing a contract with a third significant school district located on the East Coast. We will provide further details and announce the contract once it is finalised.

This strategic expansion into the educational sector is part of our broader plan to diversify our payor mix in the US market. By partnering with school districts, we aim to provide students with disabilities access to our innovative communication and mobility solutions, thereby enhancing their learning experience and overall quality of life.

Media Spotlight: Control Bionics Featured in Stockhead

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We recently had a Feature Report in Stockhead, a leading news publication dedicated to connecting investors with emerging ASX-listed companies.

The article compared the benefits of our assistive technology to Elon Musk’s NeuraLink, a topical question amongst investors. It also talks about the launch of NeuroStrip® at the AI for Good conference, its applications and future potential.

Appointment of New Investor Relations and Corporate Advisor

Last month we appointed Lynx Advisors (“Lynx”) as Corporate Advisors to the company.

Boutique, professional and nimble in nature, Lynx brings extensive experience in the small capital markets space, raising capital, giving strategic advice, and providing investor relation services.

Lynx also chose to take all their fees in shares, showing their confidence in our company.

For any investor queries, please contact Joe Durak at Lynx Advisors on 0414 465 582 or joe@lynxadvisors.com.au.

Successful $1.17m Capital Raise

Lynx Advisors also acted as lead manager to our recent capital raise in May where we secured $1.17m. The placement was strongly supported by both existing and new professional and sophisticated investors.

This new funding will help us achieve our global growth strategy with a focus through FY25 as follows:

• Grow each of the three operating businesses (US, Australia, Japan) such that the selling operations in each market are EBITDA positive.

• Deliver first commercial sales of DROVE autonomous wheelchair controller.

• Build NeuroNode Only business globally.

• Identify and execute on opportunities for more rapid scaling.

• Commercialise the NeuroStrip® and associated App.

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We Released A New Investor Deck

A Positive Investment Research Report

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Our new investor presentation focused on our growth strategy and its many levers including new products, markets, partners, and applications.

Our corporate advisor, Lynx, also recently released a positive and in-depth Initiation Report on our company which was also updated following our recent capital raise.

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Control Bionics will be showcasing at Australia’s largest investment conference for the Tech Sector, TechKnow.

I will be presenting on 31 July 2024 at the Rydges Melbourne. Visit our stall and hear me speak!

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What We Can Look Forward To In Q1 2025

• First sales of DROVE

• New partnerships for standalone NeuroNode strategy in Japan and Europe

• Clinical trials commence in the US for DROVE

• First commercial sales of NeuroStrip®, in sports and rehab segments

• Prototype for first reuseable NeuroStrip®, finalised