Sofwave Medical Ltd. — Investor Presentation 2024

Aug 6, 2024

Breakthrough Ultrasound For Non-Invasive Skin Tightening

Q2 2024 Summary

August 2024

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 August 2024

Presenters:

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

Q2 2024 in Numbers

Q2/24 \$14.6M Revenues +18% YoY Growth

Q2/24 \$6.0M Recurring Revenues +83% YoY Growth

H1/24 \$27.8M Revenues +22% YoY Growth

Over 320,000(*) Treatment (inception to date)

(*) Company estimation

Q2 2024 Overview

• Solid Quarter of growth
• 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
• Pulses sales were exceptional and driven by expanding brand awareness, superior treatment outcomes driving increasing procedure demand
• 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 Q2 2024

• Globally, the core market remained solid; core doctors (dermatologists and plastic surgeons) demonstrated continued strong interest in new technology. Our 8 FDA Clearances are most meaningful here
• Lower procedure price point and nonsurgical alternatives are driving non-invasive procedure growth in the plastic surgery segment
• GLP-1 Agonists are everywhere and driving demand for tightening, lifting, laxity improvement and toning
• Geopolitical uncertainty and US Presidential Election weighing 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

Foundational investment in clinical studies led to successful broad expansion of FDA clearances to 8

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

Continued expansion of direct sales team in US to increasing market coverage across customer segments

• Added Practice Development Specialists to drive utilization and pulse sales
• Market expansion in EMEA, APAC and LA

Targeted KOLs as early adopters are respected technology + brand advocates:

• Core Physicians influence market acceptance
• Peer to peer influencers (FOMO)

Addressing a \$4.1B Total Addressable Market (TAM): GLP-1 Agonists Accelerating Faster Growth of Market Uniquely Positioned for Continued Growth

Today's Market Environment

Only Disruptive Products Stand out

• 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
  • "The phone is ringing": The growing brand awareness of Sofwave is driving patient demand for the Sofwave treatment across major markets

Extensive Competitive Advantage

Patient Satisfaction leads to Provide Success

Competitive Advantage: Sofwave's Fast ROI

High-Value Premium Treatment Benefits Both Providers and Patients

EXCELLENT SAFETY

PROFILE ENABLES

TREATMENT DELEGATION

4 TO 6-MONTH PRACTICE ROI VS > 1+ YEAR FOR COMPETITORS

FASTER ROI THAN COMPETITORS

PRACTICE DEVELOPMENT MANAGERS

Focused on success of practices' business.

SOFWAVE SMART Connectivity platform enables automated functionality for practices

BRAND AWARENESS Global DTC advertising campaigns attract patients

PRACTICE ENHANCEMENT PROGRAMS

With multi promotional options designed to fit practice needs.

EDUCATION

The BEST Value Proposition in the Industry

Sofwave's establishes "win-win" partnership with provider

GROWTH EXCEPTIONAL LOYALTY PROGRAMS Offering Advantages And Savings To Practices And Their Patients.

PROVEN ROI SUCCESS

PROTECTION MINIMUM ADVERTISED PRICE Pricing policy maintains brand and pricing integrity.

LOW COST OF OWNERSHIP WARRANTY PROGRAMS: PREMIUM CARE

15+ CLINICAL STUDIES 600+ STUDIED SUBJECTS 320K+ TREATMENTS PERFORMED

Instagram		Facebook
381k Followers 32.1k Engagements 0.8% Engagement Rate (Per Impression) 680k Accounts Reached		391k Followers 99.4k Engagements 10.2M Accounts Reached 1.9M Video Views
TikTok		YouTube	LinkedIn
102,949 Followers 21k Engagements 750,661 Video Views	49,443 Subscribers 42.4k Watch Hours 6.6M Video Views		8,422 Followers 23k Engagements 17.9% Engagement Rate

Driving Brand Awareness - Social Media Growth 932K Total Followers

Case Study - Global Got Lift Day

Awareness Skyrocketed

515 User Generated Posts

45,150 social media interactions

1.3m Global social reach

623 user generated content (tags) CTR of 3.39% (exceeding the industry standard of 1.5%)

79% + post engagement (APAC)

Brand Awareness – Media Coverage

100+ Global Online Placements and Print

577 million Media impressions

24million Social Media Reach

484K Social Interactions

5981 social media Mentions

Driving Procedure Growth will Further Drive System Demand

Exponential Rise in Procedure Demand

Brand Awareness Efforts to B2C and B2B Drives Console Demand

❸Increased Awareness will Drive Utilization and attract new providers

❹FOMO will drive new placements based on patient demand and patient retention

❶ Created with win/win partnership with our customers

❷Sofwave reinvests annuity stream to create brand awareness and drive success

Upper Arm Laxity Treatment: Unique Business Opportunity

Multicenter Clinical Study that led to FDA clearance for treatment of upper arm laxity

• Multi center study with 98 arms treated (49 women participants)
• 93% of patients had a visible improvement in skin laxity and quality as evaluated by 3 blinded evaluators
• Significant improvement in Upper Inner Arm Crepiness/Laxity Grading
• Significant reduction in arm circumference and diameter (measured photographically)

Significant improvement in skin laxity, skin quality and arm circumference

| 19

Upper arm laxity and much more

Quote of Roy Geronemus MD and Suzan Kilmer MD two of the investigators that participated in the study

Suzanne Kilmer, MD, founder of the Laser & Skin Surgery Center of Northern California (Sacramento, Calif.), has three devices in her practice and they are always in use. "Patients are always looking for a no-downtime tightening device that works, and if you have that, they are willing to pay for it," she said. "We have a large practice with at least a few physicians and RNs working at any given time doing different treatments, and Sofwave runs almost all day. It is a robust workhorse platform with no moving parts, it is easy to learn and use, and designed to be safe for delegation to ancillary staff. Demand is high because it is safe and effective non-invasive technology, which any aesthetic practice can use."

Dr. Geronemus explained. "On the upper arm there is thin, sensitive skin so this is paramount. With the areas where you have more laxity, you are much more likely to get a preferential outcome hitting that sweet spot. Patients can be treated regardless of age or skin type."

Relevant Marketing Campaigns Drive Pulse Utilization

• Sofwave has novel upper Arm Laxity FDA clearance
• Arm laxity is a growing concern with weight loss and aging patients
• Sofwave is rapidly becoming recognized as best in breed noninvasive solution for arms
• Easy treatment bundle sale for providers to their highly satisfied existing Sofwave patients
• Despite "one and done" clearance for both face and arm applications- treatment satisfaction is so high- that patients are requesting additional treatments at more frequent intervals

Financial Highlights

Revenue Growth

Continued strong YoY revenue increase with 18% in Q2.24 vs. Q2.23 and 22% growth in H1/24 vs. H1/23

Q2 Revenue Growth (\$'m)

Annual Growth (\$'m)

Quarterly Revenue Growth

Quarterly Revenue Growth YOY (\$m)

2020 2021 2022 2023 2024

Q2 2024 Geographical Split

North America EMEA APAC LATAM

Re-confirming Company will achieve operating break-even in 2024

Both IFRS and Non-IFRS Operating loss continue to narrow substantially and decreased YoY by 56% and by 73% respectively

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

Financial Highlights Q2 2024 – P&L (\$'K)

	For the 3 months ended June 30,		Stock Based Compensation		Excluding Stock Based Compensation
	2024	2023	2024	2023	2024	2023
Revenues	14,642	12,380	-	-	14,642	12,380
COGS	3,494	3,141	17	41	3,477	3,100
Gross Profit	11,148	9,239	17	41	11,165	9,280
	76.1%	74.6%			76.3%	75.0%
R&D expenses	2,687	3,130	134	214	2,553	2,916
S&M expenses	8,036	7,398	189	84	7,847	7,314
G&A expenses	1,637	1,587	280	304	1,357	1,283
Operating Loss	(1,212)	(2,876)	620	643	(592)	(2,233)

Re-confirming Company will achieve operating break-even in 2024

Both IFRS and Non-IFRS Operating loss continue to narrow substantially and decreased YoY by 66% and by 80% respectively

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

Financial Highlights H1 2024 – P&L (\$'K)

	For the 6 months ended	June 30,	Stock Based Compensation		Excluding Stock Based Compensation
	2024	2023	2024	2023	2024	2023
Revenues	27,826	22,787	-	-	27,826	22,787
COGS	6,764	5,877	39	83	6,725	5,794
Gross Profit	21,062	16,910	39	83	21,101	16,993
	75.7%	74.2%			75.8%	74.6%
R&D expenses	5,335	6,114	282	400	5,053	5,714
S&M expenses	14,565	14,129	262	328	14,303	13,801
G&A expenses	3,332	3,283	550	564	2,782	2,719
Operating Loss	(2,170)	(6,616)	1,133	1,375	(1,037)	(5,241)

	June. 30, 2024	Dec. 31, 2023
Cash and Cash Equivalents	21,081	24,422
Trade Receivables	7,743	7,824
Other Receivables	2,304	2,588
Inventory	4,616	4,936
Total Current Assets	35,744	39,770
Total Non-Current Assets	4,241	3,766
Total Assets	39,985	43,536
Total current liabilities	14,260	16,419
Total non-current liabilities	680	774
Shareholders' equity	25,045	26,343
Total liabilities and shareholders' equity	39,985	43,536

Financial Highlights – BS (\$'K)

Strong cash position with \$21.1m as of June 30, 2024

Cash burn in Q2/24 reduced to \$2.2M vs. \$3.7M in Q2/23

Final Payment to the Israeli Chief Scientist Office completed- \$2.1M was paid between 2020-2024

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 +22% growth in H1/24, 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 and arm laxity

Significant recurring revenue; over 30% of total revenue; over 325,000 treatments completed

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