28th Annual Piper Jaffray Healthcare Conference

2016

Safe Harbor Statement

Certain matters discussed in this presentation and oral statements made from time to time by representatives of the Company may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the Federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.

Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Many of these factors are beyond the Company’s ability to control or predict. Important factors that may cause actual results to differ materially and that could impact the Company and the statements contained in this presentation can be found in the Company’s filings with the Securities and Exchange Commission including the Company’s Report on Form 10-Q for the quarter ended September 30, 2016, and 10-K for the year ended December 31, 2015. For forward-looking statements in this presentation, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update or supplement any forward-looking statements as a result of new information, future events, or otherwise.

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Company Snapshot

Core OEM

Growth

• Private label electrosurgical

manufacturing

• Customers: Large medical

technology companies

• J-Plasma

• PlazXact

• Future new products

• Direct and channel partners

• Electrosurgical

• Cauteries

• Lighting Solutions

• Sold through distribution

YTD Revenue: $2.5M

YTD Revenue: $20.3M YTD Revenue: $4.4M

Product Examples Product Examples

Product Examples

• Advanced energy-based medical device company• Specializes in developing, manufacturing and marketing of electrosurgical products

Experienced Management Team

Executive Joined Bovie Representative Previous Experience

Rob GershonChief Executive Officer

December 2013

Jay EwersChief Financial Officer

June 2014

Todd HornsbyVice President of Sales

August 2014

Shawn RomanVice President of Research &

DevelopmentOctober 2014

4

Rob SaronPresident and Director

January 1978

Moshe CitronowiczSenior Vice President

October 1993

Years of Relevant Experience

28 Yrs.

34 Yrs.

15+ Yrs.

15 Yrs.

35 Yrs.

30 Yrs. KCR TechnologiesSequential

Information Systems

Jack McCarthyChief Commercialization Officer

March 2014 28 Yrs.

Investment Highlights

5

Growing Core and OEM Businesses in Electrosurgery with Global Footprint

Transformational J-Plasma® Surgical Product Targeting Large and Growing Markets

Robust R&D Pipeline

Strong Direct Salesforce and High Profile Channel Partners for Growth Segment

Highly Experienced Management Team

High Growth (+28% YTD 2016) and Expanding Gross Margin

Strong Momentum in Core Business

• Bovie has unique brand position with global name recognition

• Long-standing relationships with “Big 7” distributors

• New product & private label launches drive incremental growth

• Actively targeting new market opportunities (e.g., animal health)

• Predictable revenue generator

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7

Advancing OEM Business

• Inbound OEM requests from industry’s top manufacturers

• Staggered customer contracts to smooth revenue inflows

• Benefits from joint development activities

• Design and develop specs to address partners’ innovations

• Produce finished products

2,038,000

1,947,038

695,171

GYN Procedures

Surgical PlasticsProcedures

AestheticPlasticsProcedures

Potential specialties to target in the short/medium term:• Cardiac• Thoracic• Urology• General surgery

Sources: CDC, NIH, APGO, ASPS, ASAPS, AHA, ASPS*Assumes $375 ASP for disposable hand piece, and $25,000 ASP per J-Plasma generator 8

• GYN ONC • Oncology• ENT • Vascular

Initial Targeted Specialties > $2 Billion TAM* -- U.S. Only

Significant Market Growth Opportunities

J-Plasma PlazXact

1,414,900

190,600

27,60022,700

1,257,600

Knee Shoulder Elbow Ankle

Future Potential Market Application

Arthroplastic Procedures for:

U.S. and EUOrthopedic Arthroplasty Procedure Volumes

Sources: Meddevicetracker report dated August 2016Note: 2016E procedure volumes

• Revolutionary technology ionizes helium to create stream of plasma

• Precise cutting, coagulation and ablation with limited thermal spread

- Stable, thin, focused stream of ionized helium gas

- Wide range of control

- No conductive currents through the patient during surgery

• Allows surgeons to safely perform procedures on delicate structures such as:

- Fallopian Tubes - Ureters - Bowel

- Esophagus - Ovaries - Lymph Nodes

• Protected by 38 patents:

- 13 US and 3 foreign issued

- 15 US and 7 foreign pending

Recognized as an Innovation of the Year by

The Society of Laparoendoscopic

Surgeons (SLS) 3 Years in a Row

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J-Plasma®: Transformational Product

J-Plasma® Energy Stream for Limited Thermal Damage*

• Clinical study compared levels of unintended thermal damage to peritoneal tissue (membrane lining the abdominal cavity) among other energy-based surgical tools vs J-Plasma®

• Red areas represent the depth of thermal or energy damage each tool left below the tissue surface; blue areas represent unaffected tissue

• J-Plasma® demonstrated far lowest amount of collateral thermal injury to healthy tissue surrounding the operative site

*Reference: Pedroso J, Gutierrez M, Volker W. J-Plasma, monopolar pencil, argon beam and CO2 laser electrosurgery: comparative evaluation of thermal spread in a porcine tissue model (white paper). Bovie Medical Corporation. June 2014 10

J-Plasma® Demonstration Video

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J-Plasma®: Competitive Advantages

Comparative Case Study: J-Plasma® in Endometriosis600,000 procedures per year in US

Key Differences CO2 Laser J-Plasma®

Treating potential lesions Treats visible lesions only Treats visible and potential lesions

Tactile feedback No tactile cutting feedback or maneuverability

Direct tactile cutting feedback and maneuverability

Control of energy Requires laser safety backstop Controlled energy: stream distance limited to surgical site

OR requirements Multiple specialized OR requirements (privileges, goggles,

techs, wet drapes, etc.)

No additional OR resources required

Price Estimated Capital ASP: $100,000+

Estimated disposable hand piece ASP: $425+

Estimated Capital ASP: $25,000

Estimated disposable hand piece ASP: $375

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Current J-Plasma Channel Partners

• Privately held medical device company with deep experience, expertise and

relationships in the plastic surgery/aesthetics space

• Non-exclusive 4 year Agreement signed June 30, 2016

• Training and launch plans underway

Plastic Surgery / Aesthetics

GYN and GYN Oncology

• Leading women’s health company (NASDAQ: HOLX)

• Pilot underway; option to expand into global distribution agreement

• Hologic will add J-Plasma® product line to portfolio in GYN and GYN/oncological surgery in all U.S. and OUS markets it serves

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Clinical Research Pipeline for J-Plasma

Lymphocele Reduction

Pediatric Heart Surgery

Dermal Resurfacing

GYN Oncology

Vulvar Dysplasia

Chronic Wound Reduction

General Surgery Oncology

Studies in Progress Planned Studies

Estimated TimingCategory

2017

2017

2017 – 2018

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Arthroscopic Ablator

• Sterile, single-use device for cutting, coagulating and ablation of soft tissue

• Orthopedic sports medicine focus

• Efficient tip design translates into the following advantages:

– Low power requirement to initiate ablation

– Lower power = lower heat = safer for the patient

– Compatible with any generator

• FDA clearance August 2016

PlazXact™

Targeting New Specialties: Medical Advisory Board

• Comprised of surgeon thought-leaders to advise on growth

product launches including J-Plasma® application for

specialty procedures

• Initial target specialties including: urology, cardiothoracic

and cardiovascular

• Progress in robotics

• Expect to add at least 1 additional member in GYN

Oncology within next few months

• Expect to have 6-9 surgeon members

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Dr. Husam Balkhy, Director, Minimally Invasive & Robot Cardiac Surgery, Duhossois Center for Advanced Medicine

Dr. Robert J. Cerfolio, Section Chief, Thoracic Surgery University of Alabama Hospital

Founding member of MAB: Dr. Vipul Patel,

world renowned robotic surgeon, Medical

Director of Global Robotics Institute,

Florida

Dr. Craig McCoy, Women’s Wellness Center, Columbia MO. Obstetrics & Gynecology Specialist

• Developing new growth products to complement J-Plasma® and boost growth in core business

• Cadence of product launches

J-Plasma Precise 360 ™

Bovie Ultimate®

IDS-310 ™

DERM 101™

DERM 102 ™

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PlazXact™ Ablator

World-Class R&D Capability as Growth Catalyst

J-Plasma Precise

• New Growth products• Select new Core products• FDA clearances for new

indications• J-Plasma line extensions

2014 2015 2016 2017

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State-of-the-Art Manufacturing Footprint

Clearwater, FL Sofia, Bulgaria China

Size 60,000 sq. ft. 16,000 sq. ft. • 70,000 sq. ft.

Owned / Contracted

Owned Owned Contracted

Capabilities

• Assembly• Integration• Final Testing• Packaging• Sterilization Management

• Manufacturing• Complex Component

Assembly• Initial Testing

• Component Manufacturing• Sub-Assemblies• Finished Medical Devices

(Electrodes)

The company also rents office space of 3,650 sq. ft. in Purchase, NY

Capacity to increase output from existing facilities

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Strong Financial Performance

$7.8

$10.1

$21.2

$27.1

41.3%

50.3%

42.6%

48.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

Q3 2015 Q3 2016 YTD 2015 YTD 2016

Gro

ss M

argi

n

Rev

enu

e ($

in m

illio

ns)

Core & OEM J-Plasma Gross Margin

• Over 20% growth – driven by J-Plasma

• 900 basis point gross margin improvement in Q3

• Cash flow neutral in Q3

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Historical Financials

($ in 000's) PY Q3 YTD 9/30

2015 2015 2016 2015 2016

Revenue $29,520 $7,823 $10,063 $21,226 $27,133

Revenue Growth 6.6% 15.2% 28.6% 5.0% 27.8%

Cost of Goods Sold 16,963 4,594 5,001 12,183 14,049

Gross Profit $12,557 $3,229 $5,062 $9,043 $13,084

Gross Margin 42.5% 41.3% 50.3% 42.6% 48.2%

Operating Expenses 19,543 5,042 5,307 14,678 15,832

Loss from Operations ($6,986) ($1,813) ($245) ($5,635) ($2,748)

Cash on hand as of September 30, 2016 $9,329

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Expected Shift in Business Mix

88.4%

74.7%68.6%

<40%

7.2%

16.0%17.5%

8% - 12%

4.4% 9.3% 13.9%

>50%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

2015 2016 YTD Q3 2016 Target

% o

f To

tal R

even

ue

Core OEM Growth

Financial Appendix

Financial Position: Assets

*All figures in thousands

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  September 30, December 31,

2016 2015

  (Unaudited)

Current assets:

 

Cash and cash equivalents $ 9,329 $ 11,805

Restricted cash 779 839

Trade accounts receivable, net 3,869 2,925

Inventories, net 5,930 5,957

Prepaid expenses and other current assets 564 516

 

Total current assets 20,471 22,042

 

Property and equipment, net 6,498 6,810

Brand name and trademark 1,510 1,510

Purchased technology and license rights, net 242 323

Goodwill 185 185

Deposits 123 123

Deferred tax asset - 25

Other assets 119 430

 

Total assets $ 29,148 $ 31,448

Financial Position: Liabilities and Stockholders’ Equity

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September 30, December 31,

2016 2015

(Unaudited)

Current liabilities:

Accounts payable $ 1,650 $ 1,214

Accrued payroll 216 321

Accrued vacation 454 228

Current portion of mortgage note payable 239 239

Accrued and other liabilities 1,666 2,119

 

Total current liabilities 4,225 4,121

 

Mortgage note payable, net of current portion 2,754 2,934

Notes payable 140 140

Deferred rent 14 18

Deferred tax liability 564 564

Derivative liabilities 822 267

 

Total liabilities 8,519 8,044

 

 

Stockholders' equity:

Series B convertible preferred stock, par value

$.001; 3,588,139 issued and 1,975,639

outstanding as of September 30, 2016 and

December 31, 2015.

2 2

Common stock, par value $.001 par value;

40,000,000 shares authorized; 27,285,297 issued

and 27,142,218 outstanding as of September 30,

2016 and 27,194,251 issued and 27,051,172

outstanding as of December 31, 2015

27 27

Additional paid-in capital 43,512 42,859

Accumulated deficit (22,912) (19,484)

 

Total stockholders' equity 20,629 23,404

 

Total liabilities and stockholders' equity $ 29,148 $ 31,448

 

Income Statement

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2016 2015 2016 2015

Sales $ 10,063 $ 7,823 $ 27,133 $ 21,226

Cost of sales 5,001 4,594 14,049 12,183

Gross profit 5,062 3,229 13,084 9,043

Other costs and expenses:

Research and development 682 583 1,941 1,534

Professional services 292 427 1,045 1,070

Salaries and related costs 2,192 1,929 6,492 5,749

Selling, general and administrative 2,141 2,103 6,354 6,325

Total other costs and expenses 5,307 5,042 15,832 14,678

Loss from operations (245) (1,813) (2,748) (5,635)

Interest expense, net (36) (40) (125) (120)

Change in fair value of warrant liabilities, net (683) 266 (555) 1,800

Total other income (expense), net (719) 226 (680) 1,680

Loss before income taxes (964) (1,587) (3,428) (3,955)

Income tax benefit, net -- -- -- (8)

Net loss $ (964) $ (1,587) $ (3,428) $ (3,963)

Accretion on convertible preferred stock -- -- -- (222)

Gain on conversion of warrants and preferred shares,

net-- -- -- 13,956

Net income (loss) attributable to common

shareholders$ (964) $ (1,587) $ (3,428) $ 9,771

Income (loss) per share

Basic (0.04) (0.06) (0.13) 0.42

Diluted (0.04) (0.06) (0.13) 0.31

Weighted average number of shares outstanding-

basic27,075 27,051 27,059 23,414

Weighted average number of shares outstanding -

dilutive27,075 27,051 27,059 26,346

September 30, September 30,

Three Months Ended Nine Months Ended

Reconciliation Between GAAP and Non-GAAP

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(Amounts in '000's except earnings per share) 2016 2015 2016 2015

Net income/(loss) GAAP basis (964)$ (1,587)$ (3,428)$ (3,963)$

Accretion on convertible preferred stock - - - (222)

Deemed dividend on conversion of warrants and Series A convertible preferred to

Series B convertible preferred stock -

- -

13,956

Net income/(loss) attributable to common shareholders (964)$ (1,587)$ (3,428)$ 9,771$

Net income/(loss) per share - basic (GAAP basis) (0.04)$ (0.06)$ (0.13)$ 0.42$

Other non-GAAP adjustments:

(Gain)/loss on change in fair value of derivative liabilities 683$ (266)$ 555$ (1,800)$

Accretion on convertible preferred stock - - - 222

Deemed dividend on conversion of warrants and Series A convertible preferred to

Series B convertible preferred stock -

- -

(13,956)

Adjusted non-GAAP net income/(loss) (281)$ (1,853)$ (2,873)$ (5,763)$

Income/(loss) per share - basic on: (Note 1)

(Gain) on change in fair value of derivative liabilities - (0.01) - (0.08)

Accretion on convertible preferred stock - - - 0.01

Gain on conversion of warrants and Series A convertible preferred to

Series B convertible preferred stock - - -

(0.60)

Adjusted non-GAAP net (loss) per share -basic (0.01)$ (0.07)$ (0.11)$ (0.25)$

Weighted average number of shares outstanding - basic 27,075 27,051 27,059 23,414

Weighted average number of shares outstanding - diluted 27,075 27,051 27,059 26,346

(Note 1) Amounts reflected in the presentation of EPS calculations may be impacted by rounding

Three Months Ended Nine Months Ended

September 30, September 30,

J-Plasma® US-Only Market

Sources: CDC, NIH, APGO, ASPS, ASAPS,AHA* (5,000 hospitals)27

GYN Market

Procedures # of Annual Procedures 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 $162,000,000

Total GYN Procedures 2,038,000 $375 $764,250,000

Capital* 5,000 $25,000 $125,000,000

Total GYN Available Market $889,250,000

J-Plasma® US-Only Market

Sources: CDC, NIH, APGO, ASPS, ASAPS,AHA* (5,000 hospitals) 28

Plastic Market

Total Available Market

Procedure Type # of Annual Procedures ASP

Surgical Plastics Procedures 1,947,038 $375 $730,139,250

Aesthetics Plastics Procedures 695,171 $375 $260,689,125

Total Plastics Procedures 2,642,209 $375 $990,828,375

Capital* 5,000 $25,000 125,000,000

Total Plastic Available Market $1,115,828,375

GYN: Targeted Procedures 2,038,000 $375 $764,250,000

Capital 5,000 $25,000 $125,000,000

Plastic: Targeted Procedures 2,642,209 $375 $990,828,375

Capital 5,000 $25,000 $125,000,000

Total Available Market 4,685,209 $2,005,078,375