Sofwave Medical Ltd. — Investor Presentation 2024

Nov 13, 2024

Q3 2024 Summary

November 2024

Sofwave - The Aesthetic Device Regeneration Company

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 the risk factors which are inherent to the Company's activity, third party decisions, including regulatory authorities and engagements with third parties, as well as by developments in the economic environment and the external factors which impact the Company's activity, which cannot be assessed in advance and are out of the Company's control. 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.

DISCLAIMER

Investor meeting November 2024

Presenters:

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

Q3 2024 in Numbers

\$13.5M Revenues +10.5% YoY Growth

~\$21.2M Cash As of Sep. 30, 2024

75.3% GM Non-GAAP

\$5.4M Recurring Revenues +72% YoY Growth

Over 385,000(*) Treatment (inception to date)

1-9/24 \$41.3M Revenues +18% YoY Growth

Q3 2024 Overview

• Solid Quarter of growth and utilization
• Our products and ROI are superior to competitive offerings and our value proposition is emerging as best in class
• Our focus on the core physicians had traction plus many customers paid cash or self-financed
• Expanded global launch Arm Lift Clearance and Sofwave plus Pure Impact to major KOL's is timely due to demand created by GLP-1 weight loss drugs
• Our execution has been solid: scalable, lean infrastructure in-place to support continued high growth and profitability

Market Conditions and Trends Q3 2024

• Geopolitical uncertainty and US Presidential Election (behind us) weighed on multiple aspects of the economy
• Market slowdown in non-core (general practitioner, spas and new providers) due to the impact of inflation/high-interest rates on the global economy: limited access to capital
• The core market remained solid; core doctors (dermatologists and plastic surgeons) demonstrated continued strong interest in new technology. Our 9 FDA clearances are most meaningful here
• Lower procedure price point and nonsurgical alternatives are driving non-invasive procedure growth in the plastic surgery segment
• Usage of GLP-1 Agonists and driving patient demand for noninvasive tightening, lifting, laxity and toning treatments

Foundational investment in clinical studies led to successful broad expansion of FDA clearances to 9

In-house digital team with focused efforts to grow digital presence and brand awareness driving procedure growth

Direct sales team in US to increase market coverage

• Added Practice Development Specialists to drive utilization and support user's best practices
• Continued expansion in global markets

Innovators and KOLs as early adopters

• Peer to peer influencers
• Core Physicians influence market acceptance

GLP-1 agonists accelerating faster growth of market for lifting, tightening and toning treatments

Positioned for Continued Growth

9 FDA Clearances

Today's Market Environment

Only Disruptive Products with Superior ROI Standout

• Providers compete for patients

• Patients are always looking for the latest and most effective treatments-even in tough economies
• New aesthetic devices are important for clinics that want to maintain a competitive edge. As the market becomes increasingly crowded, clinics that offer the latest technology are more likely to stand out
• The new weight loss drugs are driving demand for skin tightening and muscle toning treatments that offer superior results and benefits
• Undercapitalized new providers and certain Medspa's are likely compete with "me too" products and will drop prices
• Treatments that are safe, delegable have consistent outcome PLUS provide a higher profit margins are favored
  • Competitive technologies such as microneedling, RF are seen as generic and are experiencing both treatment price and margin erosion
• Providers demand brand awareness to offset cost of patient acquisition and retention
  • Costs of attracting new patients and retaining current patients are growing for providers

Driving Procedure Growth will Further Drive Customer ROI

Exponential Rise in Procedure Demand

Brand Awareness Efforts to B2C and B2B Driving Procedure Demand

US Dermatologist Sofwave procedures increased 43% YoY

❸ Increased Awareness creates patient demand and drive utilization

❶ Created with win/win partnership with our customers

❷ Sofwave reinvests significant % of every revenue \$ to create brand awareness and drive success

Focused on success of practices' business.

SOFWAVE SMART Connectivity platform enables automated functionality for practices

PRACTICE DEVELOPMENT MANAGERS EDUCATION

BRAND AWARENESS Global DTC advertising campaigns attract patients

PRACTICE ENHANCEMENT PROGRAMS With multi promotional options designed to fit practice needs.

Sofwave Partnership: Outstanding Value Proposition

GROWTH EXCEPTIONAL LOYALTY PROGRAMS

Offering Advantages And Savings To Practices And Their Patients.

PROVEN ROI SUCCESS

PROTECTION MINIMUM ADVERTISED PRICE (US and select markets) Pricing policy maintains brand and pricing integrity.

LOW COST OF OWNERSHIP WARRANTY PROGRAMS: PREMIUM CARE

15+ CLINICAL STUDIES 600+ STUDIED SUBJECTS 385K+ TREATMENTS PERFORMED

Adding Top Talent to the Global Sales Team

Miguel Pardos – Chief Commercial Officer Larry Laber – EVP North America Sales

An aesthetic energy-based medical device sales veteran with more than 20 years of experience in leading sales teams in North America

An aesthetic energy-based medical device global leader with more than 25 years of experience in the building global channel to market capability

GLP-1 Effect on Aesthetic Treatment Demand

Aesthetic Consumer Awareness and Usage of GLP-1 Dramatically Beyond Anything We Have Ever Seen Before

Used L24M: US 35%; UK 32%; and China 21%Source: BCG filler consumer survey in US, UK and China, Sept 2024 (N=1509); Copyright © 2024 by Boston

Consulting Group. All rights reserved

Medical Aesthetic Clinics Perspective: Offering Weight Loss to Patients is Now a Significant Part of our Business

• Data based on a survey of Spark MA marketing, a leading MA market research organization
• Almost 75% of MA clinics in the US offer GLP 1 treatments for weight loss

A High Degree of Patient Awareness on the Unwanted Side Effect of Very Aggressive Weight Loss

https://www.today.com/health/ozempic-face-rcna67737\

New Beauty Questionnaire Results of 4,000 "Beauty Pass" Members Regarding their Planned Treatments Following GLP 1 Weight Loss

Loose or sagging skin >62%

Muscle toning >45%

Stubborn cellulite >32%

SofWave SUPERB and SofWave Pure Impact : A Comprehensive Solution for Weight Loss Patients

Single Tx, Courtesy of Lehavit Akerman MD

Single Tx, Courtesy of Lehavit Akerman MD

Before and After – 6 Treatments Pure Impact

Courtesy of Gregory Mueller MD, Beverly Hills Ca

Financial Highlights

Revenue Growth

Continued strong YoY revenue increase with 10% in Q3.24 vs. Q3.23 and 18% growth in 1-9/24 vs. 1-9/23

Annual Growth (\$'m)

Quarterly Revenue Growth

Quarterly Revenue Growth YoY (\$m)

2020 2021 2022 2023 2024

Q3 2024 Geographical Split

North America EMEA APAC LATAM

GM% continues to improve together with the growth in pulse sales

G&A expenses for Q3/24 include \$0.5M legal expenses related to trademark litigation in the US

Operating loss exc. trademark litigation expenses decreased by 62% on a Non-IFRS basis

Financial Highlights Q3 2024 – P&L (\$'K)

	For the 3 months ended September 30,		Stock Based Compensation		Excluding Stock Based Compensation
	2024	2023	2024	2023	2024	2023
Revenues	13,507	12,226	-	-	13,507	12,226
COGS	3,351	3,306	14	32	3,337	3,274
Gross Profit	10,156	8,920	14	32	10,170	8,952
	75.2%	73.0%			75.3%	73.2%
R&D expenses	2,693	2,526	210	54	2,483	2,472
S&M expenses	6,994	6,169	51	131	6,943	6,038
G&A expenses	1,783	1,435	256	267	1,527	1,168
Operating Loss	(1,314)	(1,210)	531	484	(783)	(726)

GM% continues to improve together with the growth in pulse sales

S&M, R&D and G&A expenses continue to decrease as % of revenues

G&A expenses for 1-9/24 include \$0.5M legal expenses related to trademark litigation in the US

Both IFRS and Non-IFRS Operating loss continue to narrow substantially and decreased YoY by 55% and by 70% respectively

Operating loss exc. trademark litigation expenses decreased by 79% on a Non-IFRS basis

Financial Highlights 1-9/2024 – P&L (\$'K)

	For the 9 months ended September 30,		Stock Based Compensation		Excluding Stock Based Compensation
	2024	2023	2024	2023	2024	2023
Revenues	41,333	35,013	-	-	41,333	35,013
COGS	10,115	9,183	52	115	10,063	9,068
Gross Profit	31,218	25,830	52	115	31,270	25,945
	75.5%	73.8%			75.7%	74.1%
R&D expenses	8,028	8,640	492	454	7,536	8,186
S&M expenses	21,559	20,298	350	459	21,209	19,839
G&A expenses	5,115	4,718	806	831	4,309	3,887
Operating Loss	(3,484)	(7,826)	1,700	1,859	(1,784)	(5,967)

	September 30, 2024	Dec. 31, 2023
Cash and Cash Equivalents	21,249	24,422
Trade Receivables	6,009	7,824
Other Receivables	2,588	2,588
Inventory	5,400	4,936
Total Current Assets	35,246	39,770
Total Non-Current Assets	4,214	3,766
Total Assets	39,460	43,536
Total current liabilities	14,532	16,419
Total non-current liabilities	661	774
Shareholders' equity	24,267	26,343
Total liabilities and shareholders' equity	39,460	43,536

Financial Highlights – BS (\$'K)

Strong cash position with \$21.2M as of Sept. 30, 2024

Generated \$0.2M cash in Q3/24 vs. use of \$1.0M in Q3/23

Investment Highlights

Sofwave is delivering the next-generation patented energy based non-invasive aesthetic skin treatments disrupting an industry with outdated solutions
Rapid industry adoption achieving +18% growth in 1-9/24, scalable, lean infrastructure in-place to support continued high growth and profitability

Broad range of FDA clearances for lifting, laxity and wrinkle treatment on face and neck, cellulite, acne scars, arm laxity and muscle toning

Significant recurring revenue; over 30% of total revenue; over 385,000 treatments completed

Significant brand awareness growing social media following to over 900,000 followers