Sofwave Medical Ltd.

Investor Presentation • Mar 9, 2022

2H Earnings Call

Breakthrough Ultrasound Technology For Noninvasive Skin Tightening

March 2022

DISCLAIMER

This presentation (the "Presentation") is for informational purposes only and does not constitute or form any part of any offer or solicitation to buy or subscribe for securities of Sofwave Medical Ltd. (the "Company" or "Sofwave") and should not be regarded as a recommendation or an opinion on such matters. The information included in this Presentation is not comprehensive and does not include all the information with respect to the Company and its business required for any decision concerning an investment in the Company's securities. This Presentation includes forecasts, estimates, assessments, expectations and other information, intent or belief pertaining to future events and/or matters, which constitute "forward-looking statements" as defined in the Securities Law 5728-1968, which is based on current expectations, projections and assumptions about future events. Actual results may differ materially due to variety of factors, some of which the Company has no control over and cannot be reasonably foreseen at this date, including, but not limited to: dependency on third parties engaged by or who contracts the Company and its services, change in the overall economy; the duration and severity of the COVID-19 (coronavirus) pandemic and its impact on the Company and on local and global economy and the Company's ability to manage and develop its business. Such information may not materialize, in whole or in part, or may materialize in a manner significantly different to that forecast. Therefore, actual future results, performances or achievements of the Company may differ materially from what is or may be expressed or implied in this Presentation. Certain information and factual statements (including markets or trends) contained herein are based on or derived from publicly available documents or independent third party sources the accuracy of such information and the assumptions on which such information is based have not been independently verified. The past performance information contained herein is not indicative of future results and there can be no assurance that the Company will achieve comparable results or that the Company will be able to implement its investment strategy or achieve any investment objective.

2H Earnings Call

Presenters:

• Lou Scafuri, CEO
• Shimon Eckhouse, Co-Founder and Chairman
• •Assaf Korner, CFO

SofWave

Innovative Technology serving an unmet need

Developed devices based on patent protected high intensity low divergence, multiple ultrasound beam technology for non-invasive skin tightening and lifting of the eyebrow, submental (beneath the chin) and neck facial areas

Clinical Validation

Completed first product development including pre-clinical research and clinical trials in the US and Europe with leading aesthetic doctors. FDA and CE mark cleared.

Extensive KOL and Distribution Network

Solid KOL support. Initial direct sales force with strong traction in the US. Major distributor signed up for European and APAC markets.

Disruptive Product

Demonstrated combination of excellent clinical efficacy and safety with minimal down-time to patients.

Superior Business Model

Fast, easy procedure that can be delegated to non-physician staff.

Proven track record-Strong Management Team

Experienced team with track record of aesthetic medical device commercial success and high investor value creating

Fast growing market

In 2021, Global Medical Aesthetic market sales are expected to grow 19% to \$13B

2021 in Numbers

2021 Highlights

• Achieved 409% revenue growth despite global pandemic and supply chain challenges
• Expended FDA clearance with "Lift" indication
• Significant recurring revenue; over 10% of total revenue; over 25,000 treatments
• Significant brand awareness; over 140,000 followers in social media
• Recent regulatory clearances including Korea, Canada and Australia
• Expanded widespread acceptance by global KOLs

Market Condition Update

• COVID Delta Variant impacted both physician buying decisions and patient volume in late Q4 2021
  • Since Feb 2022, COVID concerns are diminishing in NA and Western Europe
• US Inflation and geopolitical risks have not impacted buying decisions to date
• •Increased patient demand for treatments- many clinics are overbooked
• Provider confidence necessary for capital equipment purchases continues to improve
• Demand for energy-based skin tightening treatments is a high growth segment

P&L (\$ 'K)

					Excluding
	For the	year	Stock Compensation Based		Stock Compensation Based
	2021	2020	2021	2020	2021	2020
Revenues	21 839	4 291			21 839	4 291
COGS	, 603 5	, 1 665			, 603 5	, 1 665
Gross Profit	, 16 236	, 2 626	-	-	, 16 236	, 2 626
	, 74 3%	, 61 2%			, 74 3%	, 61 2%
R&D expenses	8 236 ,	4 588 ,	1 170 ,	986	7 066 ,	3 602 ,
S&M expenses	10 194 ,	3 065 ,	1 543 ,	629	8 651 ,	2 436 ,
G&A expenses	6 808 ,	1 524 ,	2 322 ,	321	4 486 ,	1 203 ,
Other income	(135)	-	-	-	(135)	-
Operating Loss	(8 867) ,	(6 551) ,	(5 035) ,	(1 936) ,	(3 832) ,	(4 615) ,
Financial (income) , net expenses	(1 720) ,	5 136 ,			(1 720) ,	5 136 ,
Before Loss Tax	(7 147) ,	(11 687) ,	(5 035) ,	(1 936) ,	(2 112) ,	(9 751) ,
Tax income	(321)	-			(321)	-
Net Loss	(6 826) ,	(11 687) ,	(5 035) ,	(1 936) ,	(1 791) ,	(9 751) ,

• GM improved sharply from 61.2% in 2020 to 74.3% in 2021 due to the increase in unit volume as well as significant increase in pulse revenue to \$2.6 M

• Operating loss excluding stock-based compensation decreased to \$3.8 million vs. \$4.6M in 2020

BS (\$'K)

	December 31 ,
	2021	2020
Current assets:
Cash and cash equivalents	46 209 ,	2 644 ,
Trade receivables	6 319 ,	1 468 ,
Other receivables	2 579 ,	282
Inventory	2 018 ,	117
Total current assets	125 57 ,	4 511 ,
Total non-current assets	3 644 ,	309
Total assets	60 769 ,	4 820 ,
Total liabilities current	11 895 ,	2 203 ,
Total liabilities non-current	2 172 ,	1 084 ,
Shareholders' equity	46 702 ,	1 533 ,
Total liabilities and shareholders' equity	60 769 ,	4 820 ,

• Well capitalized with \$46.2M in cash as of December 31, 2021

• Major investment in inventory including raw material to address the global supply chain challenges

Quarterly Revenue Growth (K'\$)

* Quarterly numbers unaudited

Smart Science: Unique Technology and Mode of Action

Why is it better?

• Excellent safety and comfort due to proprietary transducer array cooling technology and epidermal protection
• Excellent efficiency due to a unique array of volumetric, cylindrical-shaped thermal zones parallel to the skin surface.
• Significantly larger coagulation zone volume and skin area coverage than any other energy-based method
• The only ablative technology that tightens the skin in the "right direction" , parallel to the skin surface
  • Excellent effectiveness,
  • Excellent safety
  • Shorter treatment time
  • Better patient comfort

Our Science: Demonstrating our unique Collagen and elastin growth in humans

• Performing human biopsies and histology

• Show short-term and long-term growth of Collagen and Elastin

Short term connective tissue growth induced by Sofwave

Expert Grading of Baseline Vs. 1 Month Post Treatment Submental Punch Biopsies (0= No change from Baseline, 1= Minimal increase from Baseline, 2=Moderate increase from Baseline, 3=Strong increase from Baseline)

Courtesy of David H. McDaniel, M.D., FAAD

Before & 10 months after one treatment; Masson's trichrome staining

Connective tissue (elastin, collagen and HA) are stained blue. Significant increase in connective tissue density and structured order

Courtesy of Virginia Benitez Roig, MD

Sofwave pipeline:

Extending our science, and product line technology beyond Face and Neck

• Dedicated Handpieces for various applications using current platform
  • Treatment of loose skin on body, hands, legs, knees
  • Cellulite
  • Acne scars
• New body platform

Treating loose skin on hands, single treatment 6 weeks follow up

Pre treatment 6 weeks post TX

Photos Courtesy of Anne Buinewitcz, MD

Skin Tightening Results-Single Treatment, Abdomen

Before 5 Weeks Post TX

Photos courtesy of Dinko Kaliterna MD

Opportunities

• Recent "Lift" indication FDA Clearance has generated increased interest in Sofwave
• Brand Awareness is accelerating and demonstrated by >50K/month website visits and >140K social media followers
• KOLs are eager to work with Sofwave: Early Adopters are the best target
  • Sales of multi-units to chains are in process
  • The non-core business (Medispa) is flourishing- expanding our marketing efforts in this segment
• Rapidly expanding direct sales effort in US to increase market coverage
  • Strong presence planned at upcoming "live" tradeshows
  • Concluding pending distributor agreements in key EMEA markets to accelerate EMEA market penetration

Investment Summary

• Highly differentiated technology platform with a strong pipeline, answering a large unmet need for non-invasive skin tightening served by sub-optimal solutions in a \$1.8B market growing at 15% annually
• Strong efficacy and safety profile validated in extensive clinical trials and solid global KOL support
• High patient satisfaction fast and comfortable treatment with minimal to zero down-time
• Attractive physician business model, great ROI, fast procedure, can be delegated to staff
• Very fast growth in revenue , ~\$4.3M in 2020, \$21.8M in 2021
• Expanded widespread acceptance by global KOLs
• Continuing to build the foundation to capture ~4% market shares with estimated 2023 revenue of >\$90M and GM >80%