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29thAnnualROTHConferenceMarch2017
SafeHarborStatement
Certainma;ersdiscussedinthispresenta?onandoralstatementsmadefrom?meto?mebyrepresenta?vesoftheCompanymaycons?tuteforward-lookingstatementswithinthemeaningofthePrivateSecuri?esLi?ga?onReformActof1995andtheFederalsecuri?eslaws.AlthoughtheCompanybelievesthattheexpecta?onsreflectedinsuchforward-lookingstatementsarebaseduponreasonableassump?ons,itcangivenoassurancethatitsexpecta?onswillbeachieved.
Forward-lookinginforma?onissubjecttocertainrisks,trendsanduncertain?esthatcouldcauseactualresultstodiffermateriallyfromthoseprojected.ManyofthesefactorsarebeyondtheCompany’sabilitytocontrolorpredict.ImportantfactorsthatmaycauseactualresultstodiffermateriallyandthatcouldimpacttheCompanyandthestatementscontainedinthispresenta?oncanbefoundintheCompany’sfilingswiththeSecuri?esandExchangeCommissionincludingtheCompany’sReportonForm10-KforthequarterendedDecember31,2016.Forforward-lookingstatementsinthispresenta?on,theCompanyclaimstheprotec?onofthesafeharborforforward-lookingstatementscontainedinthePrivateSecuri?esLi?ga?onReformActof1995.TheCompanyassumesnoobliga?ontoupdateorsupplementanyforward-lookingstatementsasaresultofnewinforma?on,futureevents,orotherwise.
3
CompanySnapshot
Core OEM
Advanced Energy
• Privatelabelelectrosurgicalmanufacturing
• Customers:Largemedical
technologycompanies
• J-Plasma
• PlazXact• Futurenewproducts• Directandchannelpartners
• Electrosurgical• Cauteries• Ligh?ngSolu?ons• Soldthroughdistribu?on
2016Revenue:$3.5M
2016Revenue:$27.8M 2016Revenue:$5.3M
CoreProductExamples OEMProductExamples
AdvancedEnergyProductExamples
• Advancedenergy-basedmedicaldevicecompany• Specializesindeveloping,manufacturingandmarke?ngofelectrosurgicalproducts
ExperiencedManagementTeam
Execu=ve JoinedBovie Representa=vePreviousExperience
RobGershonChiefExecu+veOfficer December2013
JayEwersChiefFinancialOfficer June2014
ToddHornsbyVicePresidentofSales August2014
ShawnRomanVicePresidentofResearch&
DevelopmentOctober2014
4
RobSaronPresidentandDirector January1978
MosheCitronowiczSeniorVicePresident October1993
YearsofRelevantExperience
28Yrs.
34Yrs.
15+Yrs.
15Yrs.
35Yrs.
30Yrs. KCRTechnologies Sequen=alInforma=onSystems
JackMcCarthyChiefCommercializa+onOfficer March2014 28Yrs.
InvestmentHighlights
5
GrowingCoreandOEMBusinessesinElectrosurgerywithGlobalFootprint
Transforma?onalJ-Plasma®SurgicalProductTarge?ngLargeandGrowingMarkets
RobustR&DPipeline
StrongDirectSalesforceandChannelPartnersforAdvancedEnergySegment
HighlyExperiencedManagementTeam
HighGrowth(+24%in2016)andExpandingGrossMargin(up640bpin2016)
StrongMomentuminCoreBusiness
• Boviehasuniquebrandposi?onwithglobalnamerecogni?on
• Long-standingrela?onshipswith“Big7”distributors• Newproduct&privatelabellaunchesdriveincrementalgrowth
• Ac?velytarge?ngnewmarketopportuni?es(e.g.,animalhealth)
• Predictablerevenuegenerator
6
7
AdvancingOEMBusiness
• InboundOEMrequestsfromindustry’stopmanufacturers
• Staggeredcustomercontractstosmoothrevenueinflows
• Benefitsfromjointdevelopmentac?vi?es
• Designanddevelopspecstoaddresspartners’innova?ons
• Producefinishedproducts
2,038,000
97,000
1,947,038
695,171GYNProcedures
GYNOncology
SurgicalPlas?csProcedures
Aesthe?cPlas?csProceduresTotalGYN/Oncologymarket:$43m
Futuresurgicalspecial?es:-Thoracic-Urology-Cardiac
Sources:CDC,NIH,APGO,ASPS,ASAPS,AHA,ASPS*Assumes$375ASPfordisposablehandpiece,and$25,000ASPperJ-Plasmagenerator 8
-SurgicalOncology
Ini=alTargetedSpecial=es>$2BillionTAM*--U.S.Only
SignificantMarketGrowthOpportuni?es
J-Plasma PlazXact
1,414,900
190,600
27,60022,700
1,257,600
Knee Shoulder Elbow Ankle
FuturePoten=alMarketApplica=on
Arthroplas=cProceduresfor:
U.S.andEUOrthopedicArthroplastyProcedureVolumes
Sources:MeddevicetrackerreportdatedAugust2016Note:2016Eprocedurevolumes
• Revolu?onarytechnologyionizesheliumtocreatestreamofplasma• Precisecuqng,coagula?onandabla?onwithlimitedthermalspread
- Stable,thin,focusedstreamofionizedheliumgas- Widerangeofcontrol- Noconduc?vecurrentsthroughthepa?entduringsurgery
• Allowssurgeonstosafelyperformproceduresonorarounddelicatestructuressuchas:
-FallopianTubes -Ureters -Bowel
-Esophagus -Ovaries-LymphNodes
• Protectedby38patents:
- 15USand5foreignissued
- 14USand6foreignpending
RecognizedasanInnova?onoftheYearby
TheSocietyofLaparoendoscopic
Surgeons(SLS)3YearsinaRow
9
J-Plasma®:Transforma?onalProduct
J-Plasma®EnergyStreamforLimitedThermalDamage*
• Clinicalstudycomparedlevelsofunintendedthermaldamagetoperitoneal?ssue(membraneliningtheabdominalcavity)amongotherenergy-basedsurgicaltoolsvsJ-Plasma®
• Redareasrepresentthe
depthofthermalorenergydamageeachtoollesbelowthe?ssuesurface;blueareasrepresentunaffected?ssue
• J-Plasma®demonstratedfar
lowestamountofcollateralthermalinjurytohealthy?ssuesurroundingtheopera?vesite
*Reference:PedrosoJ,Gu?errezM,VolkerW.J-Plasma,monopolarpencil,argonbeamandCO2laserelectrosurgery:compara?veevalua?onofthermalspreadinaporcine?ssuemodel(whitepaper).BovieMedicalCorpora?on.June2014 10
J-Plasma®Demonstra=onVideo
11
J-Plasma®:Compe==veAdvantages
Compara?veCaseStudy:J-Plasma®inEndometriosis600,000proceduresperyearinUS
KeyDifferences CO2Laser J-Plasma®Trea=ngpoten=allesions Treatsvisiblelesionsonly
Treatsvisibleandpoten?allesions
Tac=lefeedback Notac?lecuqngfeedbackormaneuverability
Directtac?lecuqngfeedbackandmaneuverability
Controlofenergy Requireslasersafetybackstop
Controlledenergy:streamdistancelimitedtosurgicalsite
ORrequirements Mul?plespecializedORrequirements(privileges,goggles,
techs,wetdrapes,etc.)
Noaddi?onalORresourcesrequired
Price Es?matedCapitalASP:$100,000+
Es?mateddisposablehandpieceASP:$425+
Es?matedCapitalASP:$25,000
Es?mateddisposablehandpieceASP:$375
12
13
ArthroscopicAblator
• Sterile,single-usedeviceforcuqng,coagula?ngandabla?onofsos?ssue• Orthopedicsportsmedicinefocus• Efficient?pdesigntranslatesintothefollowingadvantages:
– Lowpowerrequirementtoini?ateabla?on– Lowerpower=lowerheat=saferforthepa?ent– Compa?blewithanygenerator
• FDAclearanceAugust2016
PlazXact™
14
CurrentGrowthChannelPartners
• Privatelyheldmedicaldevicecompanywithdeepexperience,exper?seandrela?onshipsintheplas?csurgery/aesthe?csspace
• Non-exclusive4yearAgreementsignedJune30,2016
Plas=cSurgery/Aesthe=cs:J-Plasma®
• Medicaltechcompanyprovidessurgicaldevicesandequipmentforminimallyinvasiveprocedures;directsellingpresencein17countries
• GlobalsaleschannelpartnershipagreementsignedforBVX’sPlazXact™Ablator,tobemarketedastheUltrAblatorBipolar®seriesstar?ngMarch2017
Minimallyinvasive&orthopedicsurgery:PlazXact™
15
ClinicalResearchPipelineforJ-Plasma
LymphoceleReduc?on
PediatricHeartSurgery
DermalResurfacing
GYNOncology
VulvarDysplasia
ChronicWoundReduc?on
GeneralSurgeryOncology
Studies in Progress Planned Studies
Es=matedTimingCategory
2017
2017
2017–2018
Targe?ngNewSpecial?es:MedicalAdvisoryBoard
• Comprisedofsurgeonthought-leaderstoadviseonadvancedenergyproductlaunchesincludingJ-Plasma®applica?onforspecialtyprocedures
• Ini?altargetspecial?esincluding:urology,cardiacandthoracic.Progressinrobo?cs
• Expecttohave6-9surgeonmembers
16
Dr.HusamBalkhy,Director,MinimallyInvasive&RobotCardiacSurgery,DuhossoisCenterforAdvancedMedicine
Dr.RobertJ.Cerfolio,Sec?onChief,ThoracicSurgeryUniversityofAlabamaHospital
Foundingmember:Dr.VipulPatel,worldrenownedrobo?csurgeon,MedicalDirectorofGlobalRobo?csIns?tute,Florida
Dr.CraigMcCoy,Women’sWellnessCenter,ColumbiaMO.Obstetrics&GynecologySpecialist
Dr.DennisChi,DeputyChiefandHeadofOvarianCancerSurgery,GynecologyServiceatMemorialSloanKe;eringCancerCenter
• DevelopingadvancedenergyproductstocomplementJ-Plasma®andPlazXact™andboostgrowthincorebusiness
• Cadenceofproductlaunches
J-PlasmaPrecise360™
BovieUl=mate®
IDS-310™
DERM101™DERM102™
17
PlazXact™Ablator
World-ClassR&DCapabilityasGrowthCatalyst
J-PlasmaPrecise
• NewAdvancedEnergyproducts
• SelectnewCoreproducts• FDAclearancesfornewindica?ons
• J-Plasmalineextensions
2014 2015 2016 2017
J-PlasmaFlexibleRobo=cHP
J-PlasmaOpenHPRedesign
18
State-of-the-ArtManufacturingFootprint
Clearwater,FL Sofia,Bulgaria China
Size 60,000sq.s. 16,000sq.s. • 70,000sq.s.
Owned/Contracted
Owned Owned Contracted
Capabili?es
• Assembly• Integra?on• FinalTes?ng• Packaging• Steriliza?onManagement
• Manufacturing• ComplexComponent
Assembly• Ini?alTes?ng
• ComponentManufacturing• Sub-Assemblies• FinishedMedicalDevices
(Electrodes)
Thecompanyalsorentsofficespaceof3,650sq.G.inPurchase,NY
Capacitytoincreaseoutputfromexis2ngfacili2es
19
StrongFinancialPerformance
• 24%revenuegrowthforFY2016–drivenbyJ-Plasma• 850basispointgrossmarginimprovementin4Q16
20
HistoricalFinancials
($in000's)2015 2016 2015 2016
Revenue $8,295 $9,494 $29,520 $36,627RevenueGrowth 11.1% 14.5% 6.6% 24.1%
CostofGoodsSold 4,781 4,664 16,963 18,712
GrossProfit $3,514 $4,830 $12,557 $17,915GrossMargin 42.4% 50.9% 42.5% 48.9%
OperatingExpenses 4,867 5,874 19,543 21,707
LossfromOperations ($1,353) ($1,044) ($6,986) ($3,792)
CashonhandasofDecember31,2016 $14,456
Q4 FY
21
ExpectedShisinBusinessMix
FinancialAppendix
FinancialPosi=on:Assets
*Allfiguresinthousands
23
December 31, 2016 December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents $ 14,456 $ 11,805
Restricted cash 779 839
Trade accounts receivable, net 4,733 2,925
Inventories, net 6,158 5,957
Prepaid expenses and other current assets 413 516
Total current assets 26,539 22,042
Property and equipment, net 6,449 6,810
Brand name and trademark 1,510 1,510
Purchased technology and license rights, net 215 323
Goodwill 185 185
Deposits 109 123
Deferred tax asset — 25
Other assets 103 430
Total assets $ 35,110 $ 31,448
FinancialPosi=on:Liabili=esandStockholders’Equity
24
LIABILITIES AND STOCKHOLDERS' EQUITYCurrent liabilities:
Accounts payable $ 1,606 $ 1,214Accrued payrollAccrued vacationCurrent portion of mortgage note payableAccrued and other liabilities
Total current liabilitiesMortgage note payable, net of current portionNote payableDeferred rentsDeferred tax liabilityDerivative liabilities
Total liabilitiesEQUITY
Series A 6% convertible preferred stock, par value $0.001; 3,500,000 shares authorized, zero issued and outstanding as of December 31, 2016 and December 31, 2015STOCKHOLDERS' EQUITY
Series B convertible preferred stock, $0.001 par value; 3,588,139 authorized and 975,639 issued and outstanding as of December 31, 2016 and 3,588,139 authorized and 1,975,639 issued and outstanding as of December 31, 2015, respectively
Common stock, $0.001 par value; 40,000,000 shares authorized; 31,002,832 issued and 30,859,753 outstanding as of December 31, 2016 and 27,194,251 issued and 27,051,172 outstanding as of December 31, 2015, respectivelyAdditional paid-in capitalAccumulated deficit
Total stockholders' equityTotal liabilities and stockholders' equity $ 35,110 $ 31,448
1 2
— —
26,223 23,404
31 27
49,625 42,859 (23,434) (19,484)
5,272 4,121
8,887 8,044
2,694 2,934140 14014 18
564 564203 267
404 228239 239
2,604 2,119
419 321
IncomeStatement
25
2016 2015 2016 2015Sales $ 9,494 $ 8,295 $ 36,627 $ 29,520 Cost of sales 4,664 4,781 18,712 16,963 Gross profit 4,830 3,514 17,915 12,557 Other costs and expenses:Research and development 676 626 2,618 2,160 Professional services 441 413 1,486 1,484 Salaries and related costs 2,546 1,733 9,038 7,482 Selling, general and administrative 2,211 2,095 8,565 8,417 Total other costs and expenses 5,874 4,867 21,707 19,543 Loss from operations (1,044) (1,353) (3,792) (6,986)Interest expense, net (35) (40) (158) (158)Change in fair value of derivative liabilities, net 620 — 64 1,799 Total other (expense) income, net 585 (40) (94) 1,641 Loss before income taxes (459) (1,393) (3,886) (5,345)Income tax expense 64 17 64 25 Net loss $ (523) $ (1,410) $ (3,950) $ (5,370)Accretion on convertible preferred stock — — — (222)Gain on conversion of warrants and preferred shares, net — — — 13,956 Net (loss) income attributable to common shareholders (523) (1,410) (3,950) 8,364
(Loss) income per share attributable to common shareholdersBasic $ (0.02) $ (0.05) $ (0.14) $ 0.34 Diluted $ (0.04) $ (0.05) $ (0.15) $ 0.24
Weighted average number of shares outstanding - basic 28,574 27,051 27,433 24,333 Weighted average number of shares outstanding - dilutive 28,618 27,051 27,449 27,747
Year Ended December 31,Three Months Ended December 31,
Reconcilia=onBetweenGAAPandNon-GAAP
26
2016 2015 2016 2015Net loss GAAP Basis $ (523) $ (1,410) $ (3,950) $ (5,370)Accretion on convertible preferred stock — — — (222)Gain on conversion of warrants and Series A convertible preferred to Series B convertible preferred stock — — — 13,956
Net (loss) income attributable to common shareholders $ (523) $ (1,410) $ (3,950) $ 8,364 Net (loss) income per share - basic (GAAP basis) $ (0.02) $ (0.05) $ (0.14) $ 0.34
Other non-GAAP adjustments:(Gain) loss on change in fair value of derivative liabilities $ (620) $ 1 $ (64) $ (1,799)Accretion on convertible preferred shares — — — 222 Gain on conversion of warrants and Series A convertible preferred to Series B convertible preferred stock — — — (13,956)
Adjusted non-GAAP net loss $ (1,143) $ (1,409) $ (4,014) $ (7,169)
Income/(loss) per share - basic on: $ (0.02) — — $ (0.07)Other administrative expenses — — — $ 0.01 Gain on conversion of warrants and Series A convertible preferred to Series B convertible preferred stock — — — $ (0.57)
Adjusted non-GAAP net (loss) per share -basic $ (0.04) $ (0.05) $ (0.14) $ (0.29)Adjusted non-GAAP net (loss) per share -diluted $ (0.04) $ (0.05) $ (0.15) $ (0.26)
Weighted average number of shares outstanding - basic 28,574 27,051 27,433 24,333 Weighted average number of shares outstanding - diluted 28,618 27,051 27,449 27,747
Three Months Ended December 31, Year Ended December 31,(Unaudited)(Inthousands,exceptpersharedata)
J-Plasma®US-OnlyMarket
Sources:CDC,NIH,APGO,ASPS,ASAPS,AHA*(5,000hospitals)27
GYNMarketProcedures #ofAnnualProcedures ASP
Endometriosis 600,000 $375 $225,000,000
Adhesiolysis 300,000 $375 $112,500,000
Myomectomy 65,000 $375 $24,375,000
Condylomas 360,000 $375 $135,000,000
Cesarean(Repeat) 280,000 $375 $105,000,000
Hysterectomy 433,000 $375 $162,000,000TotalGYNProcedures 2,038,000 $375 $764,250,000
Capital* 5,000 $25,000 $125,000,000TotalGYNAvailableMarket $889,250,000
J-Plasma®US-OnlyMarket
Sources:CDC,NIH,APGO,ASPS,ASAPS,AHA*(5,000hospitals) 28
Plas?cMarketProcedureType #ofAnnualProcedures ASP
SurgicalPlas?csProcedures 1,947,038 $375 $730,139,250Aesthe?csPlas?csProcedures 695,171 $375 $260,689,125
TotalPlas?csProcedures 2,642,209 $375 $990,828,375
Capital* 5,000 $25,000 125,000,000TotalPlas?cAvailableMarket $1,115,828,375
GYNONCMarket
J-Plasma®US-OnlyMarket
Sources:CDC,NIH,APGO,ASPS,ASAPS,AHA*(5,000hospitals) 29
TotalAvailableMarket