The Center for Wound Healing, Inc'

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The Center for Wound Healing, Inc. (Symbol
CFWH.OB)
Andrew G. Barnett, Chief Executive Officer
Investor Presentation June, 2009
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Safe Harbor Statement

• This presentation contains forward-looking
  statements within the meaning of the Private
  Securities Litigation Reform Act of 1995 that
  involve significant risks and uncertainties.
  Such forward-looking statements involve a number
  of known and unknown risks, uncertainties and
  other factors which may cause the actual results,
  performance or achievements of the Company to be
  materially different from any future results,
  performance or achievements expressed or implied
  by such forward-looking statements. Such factors
  include, but are not limited to, the risks of
  uncertainty of patent protection, the impact of
  supply and manufacturing constraints or
  difficulties, product market acceptance, possible
  technological obsolescence, increased
  competition, customer concentration and other
  risks detailed in the Companys filings with the
  Securities and Exchange Commission.
• The words believe, demonstrate, intend,
  expect, estimate, anticipate, likely, and
  similar expressions identify forward-looking
  statements. Readers are cautioned not to place
  undue reliance on those forward-looking
  statements, which speak only as of the date the
  statement was made. The Company is under no
  obligation to provide any updates to any
  information contained in this presentation.

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The Center for Wound Healing, Inc.

• CFWH develops and manages hospital-based wound
  care centers that provide traditional wound care
  and hyperbaric (HBO) treatments to outpatients
  on an outsourced basis.
• Our centers utilize advanced wound healing
  technologies, including HBO, and a
  multi-disciplinary team approach to heal chronic
  and acute non-healing wounds such as diabetic,
  venous stasis, pressure, trauma and ischemic
  wounds.
• As an outpatient unit, the CFWH staff works
  closely with each patients primary physician to
  treat and heal the patients wound in a cost
  effective and timely manner.

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Investment Highlights

• Large market driven by diabetes treatment
• Companys patient population Diabetics comprise
  80 and are 60 years of age the fastest
  growing medical demographic
• Real upside with Medicare expansion to millions
  uninsured
• Financial turnaround achieved 2007 2008
• Gross margin up 900 basis points
• EBITDA from 180,000 to 8.6 million
• Growth continues through 2009YTD
• Compelling value proposition at all levels
• Improved outcomes for patients
• Turnkey approach that generates significant cash
  flow for hospitals and substantial income for
  doctors
• Cost reduction throughout the healthcare system
• Highly scalable, profitable business model with
  significant operating leverage
• Company centers expected to double in three years

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Large Market Opportunity

• Large and growing hospital opportunity
• 700 hospitals in New England, Mid-Atlantic
  states
• 4,000 hospitals in U.S. that can support HBO
• Market strata
• Virgin hospitals that dont have dedicated
  wound healing centers
• Hospitals with wound healing but not HBO
• Hospitals that offer both and self-manage
• Hospitals under contract with competitors
• Growing diabetic population
• Podiatrists, vascular surgeons, plastic surgeons,
  post-radiation oncologists, oral surgeons, and
  head and neck surgeons are our primary referral
  sources

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Focus on Diabetes

• Chronic wounds occur in over two percent of the
  general population with medical treatment costs
  exceeding 2 billion
• Diabetes affects 24 million people in US
  incidence is growing at approximately eight
  percent per year
• Diabetic foot ulcers, frequently treated by HBO,
  affect over 800,000 people per year
• Diabetics account for 80 of our portfolio
  patient population and the average age is 60
• We serve the fastest growing medical demographic
  in the United States

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Successful Turnaround 2007 - 2008

• January 2007 Scenario
• No financial or accounting systems
• Investment spending out-of-control lt30 days cash
  on hand
• No working capital management AR and AP
• Toxic sub-debt
• Year Ended June 30, 2008 (comparisons w/07)
• Sales of 26.4 million, up 33
• Operating income 3.1 million v. 7 million loss
• Gross margin 50.1 v. 41.3
• EBITDA 8.6 million v. 180,000

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Benefits Multiple Levels of Our Healthcare System

• Patients
• Safe, effective treatment that returns patients
  to more productive lives
• Hospitals
• Generates substantial free cash flow in excess of
  450,000 per year at program maturity, within
  year one
• Ancillary services revenue, reduced LOS and
  improved margins, long-term and profitable
  patient relationships within catchment area
• Significant income opportunity for doctors
• Healthcare system
• Substantially reduced costs
• Improved hospital profitability from existing
  businesses

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Hyperbaric Oxygen Therapy

• Simple, non-invasive and painless treatment
  enhances the bodys natural healing and
  strengthens the immune system, resulting in more
  rapid and complete healing for patients
• The patient rests in a transparent airtight
  chamber with 100 oxygen at 2-3x sea level
  atmospheric pressure
• Creates a 10- to 15- fold increase in plasma
  oxygen concentration with a resultant increase in
  tissue oxygenation
• 83 of patients undergoing HBO therapy in our
  centers heal

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Turnkey Operation for Hospitals

• We manage the build out of facility, purchase the
  furniture, and all equipment, including the
  hyperbaric chambers, and hire and manage staff
• We provide advanced wound care practice
  guidelines, training, policies and procedures,
  and deploy WoundDocs, our state-of-the-art,
  web-based electronic medical records application
• We manage the program and control all
  administrative functions of the center
• Our financial relationship is with the hospital,
  not with insurance companies. We assist the
  hospital with the billing process, collections
  and medical appeals, if necessary
• We market the program to the hospitals referral
  base

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Cost Benefits for Healthcare System

• Reduced inpatient stays, reduction in hospital
  time and costs, improved hospital margins
• Decrease in amputation rates
• Huge cost savings between amputation and HBO
• Faster healing 83 of our HBO patients heal
• Average of 35 HBO treatments/patient v. national
  Medicare average of 45 treatments/patient
• Compelling economics for hospitals, physicians
  and both government and commercial insurers
• Patients return to more productive lives without
  taxing the healthcare system

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Retail Model Improves Performance

• New centers are operational within four months of
  contract signing and reach maturity within one
  year
• Key metrics
• Inventory turn a/k/a chamber utilization dives
  per center/day currently 6.4, up from 5.3 in
  January 08 target 6.5 by July
• Average current revenue/reimbursement per dive of
  495
• Direct labor costs maintaining flat labor cost
  at three to seven dives per center/day
• Patient population is 42 Medicare
• Significant operating leverage
• Increasing portfolio dives from 6.0 to 6.5 per
  day yields annualized 2.1 million revenue, 1.6
  million EBITDA

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Improved Center Management

• Regional Management Structure
• Hub-and-spoke portfolio management
• Measurement metrics similar to retail store or
  franchise models volume, direct costs, four-wall
  contribution
• Repopulated most center operations management
• Maximize gross margin dollars
• State-of-the-art Business Processes and Systems
• WoundDocs, our HIPAA-compliant web-based EMR
  application being rolled-out to portfolio and
  will be complete EOM May
• Great Plains financial reporting application
  suite
• Revamped and Focused Marketing Efforts
• Consistent educational outreach on HBO and wound
  care
• Clinical Liaison Specialists

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Center Structure and Economics

• A typical comprehensive wound care center offers
  advanced wound care and HBO therapies
• Staffing includes
• Program Manager
• Registered Nurse
• HBO Technicians (2)
• Annual staffing costs of approximately 300
  thousand
• CFWH investment includes
• Buildout of 240 thousand
• Two HBO chambers at 100 thousand each
• Other FFE of 30 thousand
• 2,300 square feet provided by the hospital at no
  charge
• Expected HBO treatment rollout begins at three
  dives and reaches maturity within six months
  seven dives/day

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Center Structure and Economics

• Costs and returns to hospital
• Up to 25 of the buildout, approximately 50,000
• Space provided to CFWH at no charge
• Minor supplies costs, about 8/patient
• An average of 450,000 cash flow per year
• Doctor income of 250,000 per year
• CFWH four wall contribution a/k/a gross margin
• Breakeven at month one (three dives/day)
• 40.0 month four
• 47.5 month 12 and forward
• At maturity and for the life of the contract, a
  center should generate annual revenue and
  contribution of 950,000 and 450,000,
  respectively

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Recent Operating Progress

• Center openings
• Monmouth Medical Center, Monmouth, NJ (August 08)
• Pottstown Medical Center, Pottstown, PA
  (December 08)
• Jameson Medical Center, New Castle, PA (January
  09)
• Princeton University Hospital, Princeton, NJ
  (April 09)
• Strong sales target pipeline
• Opportunities to grow beyond the pipeline, i.e.,
  acquisitions, have been identified
• Rendered 49,000 treatments in CY08 v. 42,000
  CY07 wound care volume is up 20
• Approximately 10 of wound care patients are HBO
  candidates

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Current Facilities
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Strategic Growth Initiatives

• Center openings
• Expect up to three centers in calendar 2009
• 10 centers in fiscal 2010 15 centers per fiscal
  year, 2011 - 2012
• Bolster footprint within current markets of New
  England and mid-Atlantic states
• Expand geographic base to regions identified by
  management western Pennsylvania, Illinois,
  Kentucky, Ohio, Michigan, Alabama
• Green field opportunities
• Hospitals with wound care but without HBO
• Acquire existing programs

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Selected Financials
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Selected Financials

• Three Months Ended March 31, 2009
• Sales of 6.9 million, up six percent compared
  with the prior years three month period
• Operating income of 455,000
• Gross margin of 47.1 for the quarter
• EBITDA of 1.8 million
• Nine Months Ended March 31, 2009
• Sales of 21.5 million, up 14 compared with the
  prior period
• Operating Income of 1,356,000
• Gross margin was 48.6
• EBITDA of 6.3 million

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What is EBITDA and Why is it Important?

• Earnings Before Interest, Taxes, Depreciation and
  Amortization
• Critical measure of operating results because it
  excludes capital structure costs and non-cash
  items.
• For a company like ours, which has a complex
  capital structure that uses two forms of debt,
  including debt with warrants, EBITDA is the only
  way to measure true operating performance.
• Demonstrates a companys ability to service its
  capital structure costs and investment spending
  capabilities

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CFWH Net Loss and EBITDA
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The Need and Ability to Generate Cash
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The Ultimate Measure of a Companys
CapabilitiesThe Ability to Generate Free Cash
Flow
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Balance Sheet and Liquidityat March 31 09

• Current Ratio was 21
• 8.9MM of working capital
• Senior bank facility of 8MM, outstanding were
  3.7MM, the lowest since January 07
• We expect to generate close to 5MM of cash from
  operations for FY09 and approach 7MM next year
• We have more than enough liquidity to fund all
  operating, investment spending and balance sheet
  obligations in accordance with our business plan

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Investment Highlights

• Large market driven by diabetes treatment and an
  aging population the fastest growing medical
  demographic
• Potential additional upside with Medicare
  expansion to million of the uninsured
• Financial turnaround achieved 2007 2008
• Gross margin up 900 basis points
• EBITDA from 180,000 to 8.6 million
• Compelling value proposition at all levels
• Improved outcomes for patients
• Turnkey operation for hospitals
• Significant generation of free cash flow to
  hospitals and doctors
• Cost reduction for healthcare system
• Highly scalable, profitable business model with
  significant operating leverage
• Number of centers expected to double in three
  years

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The Center for Wound Healing, Inc. (Symbol
CFWH.OB)
Andrew G. Barnett Chief Executive Officer