Announcement PDF ASX ANNOUNCEMENT: 17 September 2024 September 2024 Capital Raise Investor Presentation ………………..………………………………………………………………………………………………………………………. Amaero International Limited (ASX:3DA) (“Amaero” or “the Company”) provides a copy of the investor presentation used for the capital raising that the Company announced today. This investor presentation has been updated to reflect the final size of the capital raising. This announcement has been authorized for release by the Chairman and CEO. For further information, please contact: Amaero International Limited (ASX:3DA) Hank J. Holland Jane Morgan Chairman and CEO Investor and Media Relations hank.holland@amaeroinc.com jm@janemorganmanagement.com.au ………………..………………………………………………………………………………………………………………………. About Amaero Amaero International Limited (ASX:3DA) is an ASX-listed company with manufacturing and corporate headquarters located in Tennessee, USA. Amaero is a leading U.S. domestic producer of high-value C103, refractory alloy, and titanium powders for additive and advanced manufacturing of components utilized by the defense, space, and aviation industries. The technical and manufacturing team brings decades of experience and know-how with pioneering work in gas atomization of refractory and titanium alloys. The company has commissioned advanced gas atomization technology with an industry leading yield of AM powder. The company is also a leader in Isostatic Powder Processing (IPP) manufacturing of large near-net-shape powder metallurgy parts with forged-equivalent material properties and microstructure for a variety of alloys. IPP is helping alleviate the strained domestic supply chain for castings and forgings of large components. For more information Follow us on X Subscribe on our YouTube Follow us on LinkedIn Subscribe to our mailing list to receive updates Visit our investor website: https://www.amaeroinc.com AMAERO INTERNATIONAL LIMITED (ASX:3DA) Equity Capital Raising Presentation | 17 September 2024 Not for release to US wire service or distribution in the United States Important notice and disclaimer This investor presentation (Presentation) is dated 17 September 2024 and has been prepared by Amaero International Ltd (ACN 633 541 634) (Amaero) in relation to a non-underwritten institutional placement of new fully paid ordinary shares in Amaero (New Shares) which includes a conditional component that is subject to approval of Amaero’s shareholders at a general meeting (together, the Placement). By attending an investor presentation or briefing, or accepting, accessing or reviewing this Presentation, you acknowledge and agree to the terms set out below. Summary information This Presentation is for information purposes only and is a summary only. It should be read in conjunction with Amaero’s most recent financial report and Amaero’s other periodic and continuous disclosure information lodged with the Australian Securities Exchange (ASX), which is available at www.asx.com.au. The content of this Presentation is provided as at the date of this Presentation (unless otherwise stated). Reliance should not be placed on information or opinions contained in this Presentation and, subject only to any legal obligation to do so, Amaero does not have any obligation to correct or update the content of this Presentation. Certain market and industry data used in this Presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Neither Amaero nor its representatives have independently verified any such market or industry data provided by third parties or industry or general publications. Not financial product advice or offer This Presentation does not and does not purport to contain all information necessary to make an investment decision, is not intended as investment or financial advice (nor tax, accounting or legal advice), must not be relied upon as such and does not and will not form any part of any contract or commitment for the acquisition of New Shares. Any decision to buy or sell securities or other products should be made only after seeking appropriate and independent professional financial advice. This Presentation is of a general nature and does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. Any investment decision should be made solely on the basis of your own enquiries. Before making an investment in Amaero, you should consider whether such an investment is appropriate to your particular investment objectives, financial situation or needs. Amaero is not licensed to provide financial product advice in respect of its shares. This Presentation is for information purposes only and is not a prospectus, product disclosure statement or other offering document under Australian law or any other law (and will not be lodged with the Australian Securities and Investments Commission (ASIC) or any other foreign regulator). This Presentation is not, and does not constitute, an invitation or offer of securities for subscription, purchase or sale in any jurisdiction. International restrictions The distribution of this Presentation in jurisdictions outside Australia may be restricted by law and you should observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws (see Appendix A of this Presentation). In particular, this Presentation may not be distributed or released to US wire services in the United States. By accepting this Presentation, you represent and warrant that you are entitled to receive such Presentation in accordance with the above restrictions and agree to be bound by the limitations contained therein. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or in any jurisdiction in which such an offer would be unlawful. The New Shares have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (U.S. Securities Act), or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold, directly or indirectly, in the United States, unless they have been registered under the U.S. Securities Act (which Amaero has no obligation to do or procure) or are offered or sold in a transaction exempt from, or not subject to, the registration requirements of the U.S. Securities Act and any other applicable U.S. state or federal securities laws. Refer to Appendix A of this Presentation for further details about international offer restrictions. Investment risk An investment in Amaero shares is subject to known and unknown risks, some of which are beyond the control of Amaero and its directors. Amaero does not guarantee any particular rate of return or the performance of Amaero nor does it guarantee any particular tax treatment. You should have regard to the risk factors disclosed in Amaero’s periodic and continuous disclosure announcements lodged with the ASX, which is available at www.asx.com.au. Cooling off rights do not apply to the acquisition of New Shares. Financial and other information Investors should be aware that certain financial measures included in this Presentation are ‘non-IFRS financial information’ under ASIC Regulatory Guide 230: ‘Disclosing non-IFRS financial information’ published by ASIC and also ‘non-GAAP financial measures’ within the meaning of Regulation G under the U.S. Securities Exchange Act of 1934, as amended, and are not recognised under AAS and International Financial Reporting Standards (IFRS). Such non-IFRS financial information/non-GAAP financial measures do not have a standardised meaning prescribed by AAS or IFRS. Therefore, the non-IFRS/non-GAAP financial information may not be comparable to similarly titled measures presented by other entities and should not be construed as an alternative to other financial measures determined in accordance with AAS or IFRS. Although Amaero believes these non-IFRS/non-GAAP financial measures provide useful information to investors in measuring the financial performance and condition of its business, investors are cautioned not to place undue reliance on any non-IFRS financial information/non-GAAP financial measures included in this Presentation. Certain figures, amounts, percentages, estimates, calculations of value and fractions provided in this Presentation are subject to the effect of rounding. Accordingly, the actual calculation of these figures may differ from the figures set out in this Presentation. All financial information in this Presentation is in Australian dollars (A$ or AUD) unless otherwise stated. Past performance Past performance, including past share price performance of Amaero and any pro forma financial information given in this Presentation, is given for illustrative purposes only and should not be relied upon as (and is not) an indication of Amaero’s views on its future financial performance or condition. Past performances of Amaero cannot be relied upon as an indicator of (and provides no guidance as to) the future performance of Amaero. Nothing contained in this Presentation, nor any information made available to you is, or shall be relied upon as, a promise, representation, warranty or guarantee, whether as to the past, present or future. Important notice and disclaimer Future performance and forward-looking statements This Presentation contains certain forward-looking statements. The words “expect”, “anticipate”, “estimate”, “intend”, “believe”, “guidance”, “should”, “could”, “may”, “will”, “predict”, “plan” and other similar expressions are intended to identify forwardlooking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies that are subject to change without notice and involve known and unknown risks and uncertainties and other factors that are beyond the control of Amaero, its directors and management. This includes statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. Actual results, performance or achievements may differ materially from those expressed or implied in such statements and any projections and assumptions on which these statements are based. These statements may assume the success of Amaero’s business strategies. The success of any of those strategies will be realised in the period for which the forward-looking statement may have been prepared or otherwise. Readers are strongly cautioned not to place undue reliance on forward-looking statements, particularly given the current economic climate and geopolitical tensions. None of Amaero, its representatives or advisers assumes any obligation to update these forward-looking statements. No representation or warranty, express or implied, is made as to the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in this Presentation. The forward-looking statements are based on information available to Amaero as at the date of this Presentation. Except as required by law or regulation (including the ASX Listing Rules), none of Amaero, its representatives or advisers undertakes any obligation to provide any additional or updated information whether as a result of a change in expectations or assumptions, new information, future events or results or otherwise, nor does any of Amaero, its representatives or advisers undertake any responsibility and liability for forward-looking statements (including, without limitation, liability for negligence). Indications of, and guidance or outlook on, future earnings or financial position or performance are also forward-looking statements. Time All references to time in this Presentation are to Australian Eastern Standard Time (AEST), unless otherwise indicated. Disclaimer Curran & Co Pty Ltd (ABN 40 604 395 226) and Shaw and Partners Limited (ABN 24 003 221 583) (Joint Lead Managers) are acting as joint lead managers and bookrunners in relation to the Placement. The Joint Lead Managers, their affiliates and related bodies corporate, are full service financial institutions engaged in various activities, which may include trading, financing, corporate advisory, financial advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services, including for which they have received or may receive customary fees and expenses. The Joint Lead Managers (and/or their affiliates or related bodies corporate) have provided, and may in the future provide, financial advisory, financing services and other services to Amaero and to persons and entities with relationships with Amaero, and/or may have other interests in or relationships with Amaero and to persons and entities with relationships with Amaero, for which they received or will receive customary fees and expenses. In the ordinary course of its various business activities, the Joint Lead Managers and (and/or their respective affiliates and related bodies corporate) may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of Amaero, and/or persons and entities with relationships with Amaero. The Joint Lead Managers, their affiliates and/or related bodies corporate may also communicate independent investment recommendations, market colour or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments. One or more investors may elect to acquire an economic interest in the New Shares (Economic Interest), instead of subscribing for or acquiring the legal or beneficial interest in those shares. The Joint Lead Managers (or their affiliates) may, for its own account, write derivative transactions with those investors relating to the New Shares to provide the Economic Interest, or otherwise acquire shares in Amaero in connection with the writing of such derivative transactions in the Placement bookbuild and/or the secondary market. As a result of such transactions, the Joint Lead Managers (or their affiliates) may be allocated, subscribe for or acquire New Shares or shares of Amaero in the Placement bookbuild and/or the secondary market, including to hedge those derivative transactions, as well as hold long or short positions in such shares. These transactions may, together with other shares in Amaero acquired by the Joint Lead Managers or their respective affiliates in connection with their ordinary course sales and trading, principal investing and other activities, result in the Joint Lead Managers or their affiliates disclosing a substantial holding and earning fees. To the maximum extent permitted by law, Amaero and the Joint Lead Managers and their respective related bodies corporate and affiliates, and their respective officers, directors, employees, agents and advisers (each a Limited Party): (i) disclaim all responsibility and liability (including, without limitation, any liability arising from fault, negligence or negligent misstatement) for any loss arising from this Presentation or reliance on anything contained in or omitted from it or otherwise arising in connection with this Presentation; (ii) disclaim any obligations or undertaking to release any updates or revision to the information in this Presentation to reflect any change in expectations or assumptions; (iii) do not make any representation or warranty, express or implied, as to the accuracy, reliability, completeness of the information in this Presentation or that this Presentation contains all material information about Amaero or that a prospective investor or purchaser may require in evaluating a possible investment in Amaero or acquisition of shares in Amaero, or likelihood of fulfilment of any forward-looking statement or any event or results expressed or implied in any forward-looking statement; and (iv) do not make any representation, warranty, assurance or guarantee that the information in this Presentation has been independently verified. Neither the Joint Lead Managers, nor their or Amaero’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, partners, employees, agents or advisers have authorised, permitted or caused the issue, submission, dispatch or provision of this Presentation and, for the avoidance of doubt, except for references to their names, none of them makes or purports to make any statements in this Presentation and there is no statement in this Presentation which is based on any statement by any of them. Further, the Joint Lead Managers and their Limited Parties do not accept any fiduciary obligations to or relationship with you, any investor or potential investor in connection with the Placement or otherwise. The Joint Lead Managers and their Limited Parties do not make any recommendation as to whether any potential investor should participate in the Placement, and any representation, assurance or guarantee in connection with the repayment of capital or any particular rate of income or capital return on an investment in Amaero (including an investment in New Shares). Important notice and disclaimer You acknowledge and agree that by accessing this Presentation: • you expressly disclaim any fiduciary, agency, custodial or other legal relationship with the Joint Lead Managers and their Limited Parties, and agree that you are responsible for making your own independent judgements with respect to the Placement or other matter arising in connection with this Presentation; • to the maximum extent permitted by law, you undertake to not seek to bring any claim against the Joint Lead Managers and their Limited Parties, or otherwise hold any of those parties liable in any respect, in connection with this Presentation or the Placement; and • you warrant and agree that you have not relied on any statements made by the Joint Lead Managers and their Limited Parties in relation to the Placement. You acknowledge and agree that determination of eligibility of investors for the purposes of the Placement is determined by reference to a number of matters, including legal and/or regulatory requirements and the discretion of Amaero and the Joint Lead Managers, and each of Amaero and the Joint Lead Managers disclaim any duty or liability (including for negligence) in respect of the exercise or otherwise of that discretion, to the maximum extent permitted by law in respect of that determination and the exercise or otherwise of that discretion. The Joint Lead Managers may rely on information provided by or on behalf of institutional investors in connection with managing and conducting the Placement without having independently verified that information, and the Joint Lead Managers do not bear responsibility for the accuracy or completeness of that information The Joint Lead Managers may have interests in the securities of Amaero, including by providing investment banking services to Amaero. Further, the Joint Lead Managers may act as market maker or buy or sell those securities or associated derivatives as principal or agent. The Joint Lead Managers may receive fees for acting in its capacity as joint lead managers for the Placement. Table of Contents Section 1 C103 Qualification Announcement 2 Amaero Today 3 Capital Raising 4 Make More in America Again 4 Planned Capital Investments 1 C103 Qualification Announcement Completes Qualification of C103 with ADDMAN Group “ • Amaero completes qualification of C103 AM powder to ADDMAN Group and its subsidiary Castheon’s technical specifications Achieving qualification of C103 with ADDMAN Group and Castheon is a validating and transformative milestone. This strategic collaboration will play a crucial role in demonstrating manufacturing readiness and advancing the integration of additive manufacturing into the most vital and critical defense and space applications” • Positions Amaero as the largest capacity and most responsive U.S. domestic producer of C103, refractory and specialty alloy powder for additive manufacturing • Amaero’s successful qualification of C103 AM powder triggers ADDMAN’s offtake obligation with 0.25 tonnes expected to ship in in CY2024 and 2.0 tonnes expected to ship in CY2025 • The qualification commences a five year preferred supplier agreement whereby Amaero will be the primary supplier of C103, refractory and titanium alloy AM powder to ADDMAN Group and its subsidiaries, including Castheon and Keselowski Advanced Manufacturing (KAM); expected future sales are material to Amaero’s revenue; moreover, the attributable revenue is a key assumption underpinning Amaero’s expectation that it will achieve EBITDA breakeven in FY2026 – H a n k J . H o l l a nd, A m a e r o Chairman & CEO 1 Milestones Achieved Ahead of Guidance Q4 FY2024 A Offtake and Preferred Supplier Agreement and A$20M Institutional Capital Raise Key Milestones 1 Atomizer Commissioning 2 Delivery of C103 Powder for Testing 3 Completion of C103 Qualification Publicly Announced Milestone Completion Date / Date Range Actual Milestone Completion Date 2 M Q1 FY2025 J J A Q2 FY2025 S O N D FY2025 Anticipated Milestones Commercialization and Scaling • • • Commence powder sales of C103, specialty and titanium alloys; pursue additional refractory alloy development Secure selectively targeted offtake and commercial agreements Deliver first commercial revenues and multi-ton IPP manufactured components Facility • • • Order Atomizer #3 Commission Atomizer #2 Complete improvements to Tennessee manufacturing and HQ facility Funding Opportunities • • Secure inaugural U.S. government grant and pursue additional targeted opportunities Source commercial debt financing Commercial and Government Collaboration • • Advance development activities and commercial collaboration with ADDMAN Group Advance collaboration with DoD-funded labs and defense primes 3 Amaero Addresses Critical Gap in the Supply Chain Raw Material Provider C103 Powder Provider End Customer Tier 1 Supplier Additive Manufacturing AM Mining “ Melt Cast / Feedstock Refractory & Specialty Powder Production IPP Manufacturing There is long-standing law on manufacturing-related content of an Acquisition Strategy (AS)…[that] mandates that Major Defense Acquisition Programs (MDAP) include…[m]ethods to encourage investment by U.S. domestic sources in advanced manufacturing technology production equipment and processes…” ________________________ Source: U.S. Department of Defense Manufacturing Technology Program. 4 Defense Prime Contractors ‒ Military Branches Manufacturing Readiness Level (MRL) Deskbook; Ve r s i o n 2 0 2 2 Demand Signals Estimated Manufacturing Powder Demand in U.S. (Figures in Kg) CAGR ’23E–’28E 203,779 Verticals Hypersonics • Harsh environment protection for rocket nozzle stages • Urgent U.S. national security priority to field leading offensive and defensive capabilities to counter capabilities of China and Russia 15% 184,932 173,838 Strategic Missiles 140,466 25% 118,637 • Harsh environment protection for rocket nozzle stages for orbital reentry vehicles • The U.S. is currently recapitalizing its groundbased strategic missile arsenal via the Sentinel program 100,341 High-Temperature Material Demand Space Launch 105,385 C103 Demand, Wrought and Powder Harsh environment protection for rocket nozzle stages • C103 is well-established in this market for second-stage extender applications 62% 73,418 Satellites 48,778 25,562 AM C103 Demand • 9,567 13,979 2023E 2024E 2025E 2026E 2027E 2028E ________________________ Source: Estimated demand figures from Fairmont Consulting Group analysis dated 23 January 2024. Note: Gov’t Fiscal Year Ending September 30. 5 • Thruster nozzle • Opportunities to leverage integrated design features and novel materials to better address the extreme environments of space 2 Amaero Today Who is Amaero? Amaero is a producer of high-value refractory, specialty and titanium alloy powder for additive and advanced manufacturing of mission-critical components utilized by the defense, space and aviation industries 6 Three Pillars of Amaero’s Business Specialty Metal Powders Production of refractory, specialty and titanium powders for the defense, aerospace and industrial manufacturing sectors IPPManufactured Near Net Shape Parts AMAERO Leveraging the Amaero team’s decades of PM IPP manufacturing experience to accommodate parts too large to print via AM Special Development Projects In-house development of various highperformance alloys 7 Amaero’s Strategic Direction 1 U.S. Domestic Manufacturer Established corporate and manufacturing headquarters in Tennessee 2 3 Experienced Leadership Attracted seasoned technical and operating team Specialty Focus Expertise in specialty alloy powder production 8 1 Amaero Locates Manufacturing and Corporate Headquarters in Tennessee 100,000 Square Feet – Option to Purchase 10-year agreement with Tennessee Valley Authority provides subsidized electricity at ~A$0.09 / kWh National average: ~A$0.28 / kWh ________________________ Source: U.S. Bureau of Labor Statistics. Note: Company assumed USD to AUD exchange rate of 1.54. 9 2 Chief Executive and Board Hank Holland c Chairman & Chief Executive Officer Lieutenant General (Retired) H.R. McMaster Special Advisor to Chairman and CEO Background Background Mr. Holland serves as Managing Partner of Pegasus Growth Capital, where he oversees deal origination, transaction structure and investment execution, and leads the strategy and general management of the fund. With 35 years of experience in investment, finance and capital market management across public and private markets, he has successfully sourced, structured and led investments in early-stage growth businesses. In addition to Amaero, Holland has led successful investments in other portfolio companies, including LogicSource, Inc. Mr. McMaster will advise Mr. Holland on strategic and commercial matters, as well as on Amaero’s engagement with the U.S. Government, Department of Defense, DoD-funded research and defense prime contractors. Upon graduating from the U.S. Military Academy in 1984, McMaster served as a commissioned officer for 34 years. He retired as a lieutenant general in June 2018 after serving as the 25th assistant to the U.S. President for the Department of National Security Affairs. From 2014-2017, McMaster designed the future army as the director of Army Capabilities Integration Center and the deputy commanding general of the U.S. Army Training and Doctrine Command. Pegasus Growth Capital has led three capital raises for Amaero and owns approximately 35% of the fully paid ordinary shares. On a fully converted, fully diluted basis, Pegasus ownership is approximately 42%. McMaster is the Fouad and Michelle Ajami Senior Fellow at the Hoover Institution, Stanford University, the Bernard and Susan Liautaud Fellow at Freeman Spogli Institute and lecturer at Stanford University’s Graduate School of Business. He is a distinguished visiting fellow at Arizona State University. He holds a PhD in military history from University of North Carolina at Chapel Hill. Holland has previously held senior roles at First Republic Investment Management, Merrill Lynch and Sanford C. Bernstein. He holds a B.S. in Civil Engineering from Southern Methodist University and a Master's in Agriculture from Colorado State University. Board of Directors Eric Bono Omer Granit Robert Latta Erik Levy Jamie Levy Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director 10 Lucy Robb Vujcic Non-Executive Director 2 Technical and Operational Leadership Eric Bono Ron Aman Fred Yolton Dave Schmidt Chris Scanlon Jay Chandran President & Chief Technical Officer Vice President of Manufacturing Technical Fellow Powder Metallurgy & Materials Engineering Director of Computational Analysis Chief Financial Officer Chief Operating Officer Experience Experience Experience Experience Experience Experience 11 3 Specialty Is Our Focus — Unlocking New, High-Value Market Opportunities Estimated Manufacturing Powder Demand in U.S. by Weight Amaero Specialty Alloys (incl. C103) Titanium Metric Tonnes % 0.9 3% 3.9 12% 3.3 10% 3.9 (Metric tonnes in thousands, % of market) Commentary Material Feedstock Price Est. Powder Price Nb C103(1) A$1,390 – A$1,850 A$4,620 – A$5,390 Titanium(1) A$52 – A$62 A$215 – A$280 Cobalt A$100 – A$123 A$177 – A$200 Nickel A$46 – A$77 A$100 – A$123 Stainless Steel A$15 – A$20 A$46 – A$77 Aluminum A$8 – A$20 A$23 – A$46 12% Cobalt Nickel 18.7 59% Stainless Steel Aluminum 1.1 4% ________________________ Source: Fairmont Consulting Group Analysis dated 23 January 2024, with reference to Metal Powder Industries Foundation and SmarTech analysis. Note: All figures in AUD. Company assumed USD to A