RMG and Romeo reserve the right to withdraw or amend for any reason any offering and to reject any Subscription Agreement for any reason. RMG Acquisition Corp | RMG Capital 4 AN OPPORTUNITY TO INVEST IN LEADING TECHNOLOGY POWERING THE COMMERCIAL VEHICLE ELECTRIFICATION REVOLUTION We are A Leader in Battery Technology with Industry Leading Hardware , Software and Thermal Management Attractive and Large Commercial Vehicle TAM World Class Partnerships and Strategic Players Fully Produced in North America Blue Chip Customer Base, 5 Transaction Summary Romeo and RMG combination to publicly list a dynamic, innovative battery technology company Romeo Team Proposed Transaction Overview Romeo Systems, Inc. (Romeo ) is an industry leader in the design and manufacturing of energy - dense lithium - ion ( Li - ion) battery packs and modules, focused on the electrification of commercial vehicles globally Romeo to combine with RMG Acquisition Corp. ( RMG, NYSE : RMG), a publicly listed special purpose acquisition company with ~$ 234mm cash held in trust 1 and a focus on disruptive technologies in the energy and industrial areas Robert Mancini, CEO, and Phil Kassin, President and COO, from RMG to join Romeo Board, adding their substantial business, financial, legal and public board experience to the governance and operations of the company Transaction reflects a $900mm pre - money equity valuation for Romeo, representing a highly attractive opportunity to invest in a leader in commercial vehicle electrification Romeo to receive ~$340mm cash at closing to fund its attractive growth opportunities 2 Romeo will use proceeds from the Transaction as growth capital primarily to fund expansion of production capacity; working capital to support increasing production demand; and substantial R&D activities devoted to developing the next generation of battery systems technology All - primary transactio n; existing Romeo shareholders, including management and strategic partner BorgWarner (BWA), are rolling virtually 100 % of their equity and collectively are expected to own 67% of the pro forma company at closing $1.3Bn post - money Equity Value $993mm Enterprise Value, with no material debt outstanding at closing Represents 1.3x EV / 2023E Revenue, a highly attractive entry multiple relative to peer group Robert Mancini Chief Executive Officer Lauren Webb Chief Financial Officer 1 As of July 31, 2020. Romeo Power: A SPAC Stock You Can Fall In Love With BWA holds 60% JV equity ownership to Romeos 40% Cements partnership with the worlds preeminent vehicle supplier to accelerate Romeos global growth and bolsters operational execution BWA Commercial Relationship BWA provides design, engineering, manufacturing, sales and services expertise to Romeo and to the Romeo / BWA JV Provides flexibility for both entities to rapidly scale operations in highly capital efficient manner while maintaining high levels of product quality Romeo Partnership with BorgWarner Significantly De - Risks Production Execution 1 Market cap as of September 30, 2020, 22 Strategic Joint Venture with BorgWarner (Contd) Aligned key objectives and responsibilities within the JV JV Ownership Contribution of Technology, Services and Expertise JV Ownership Contribution of Services and Expertise Operational Responsibilities Design and develop new technology >> Romeo CTO is Chief Engineer Support customer acquisition efforts >> technical sales, costing, quoting Guide supplier selection / qualification >> vet potential suppliers, conduct site visits and quality audits Perform Application Engineering Services / Engineering Studies Operational assets / personnel : Chief Engineer, Technical Sales, Design Engineers; Testing Resources (Cell Characterization, Safety, Reliability, and Validation) Contributions / ongoing support of JV: R&D in JV Field of Use Romeo Power Purview within the JV Contributions / ongoing support of JV Space in existing manufacturing facilities worldwide Global supply chain and supplier quality organization Leveraging vendor base for best material costs Manufacturing engineering and automotive quality systems expertise Access to existing OEM customers for cross - selling Back office support for JV operations BorgWarner Responsibilities Operational Responsibilities Produce Romeo products on global scale Lead sales , BD, and account management for LV globally and CV markets outside North America Provide in region applications engineering support and field support Operational assets / personnel : General Manager, EU Sales Team, Global Supply Chain Management, Production Expertise JV Responsibilities Joint Venture Light Vehicles & CVs < 20k lbs CVs > 20k lbs outside N.A. Corporate Overview. INVESTOR ALERT: Kirby McInerney LLP Announces an Investigation of This non - GAAP financial measure should not be considered in isolation from, or as an alternative to, financial measures determin ed in accordance with GAAP. Forward - looking statements include, without limitation, statements regarding the estimated future financial performance, financial position and financial impacts of the Business Combination, the satisfaction of closing cond iti ons to the Business Combination and the PIPE investments, the level of redemption by RMGs public stockholders, the timing of the completion of the Business Combination, the anticipated pro forma enterprise value, revenues and EBITDA of the combined company following the Business Combination, anticipated ownership percentages of the combined companys stockholders following the potential transaction, and the business strategy, plans and obj ectives of management for future operations, including as they relate to the potential Business Combination. Protera share price estimated using ArcLight share price as proxy; aggregate value assumes 240.1 pro forma shares outstanding an d ($801MM) of net debt based on January 2021 Investor Presentation 2023E - 2025E . The Lion Electric Co. - Investor Relations Nikola Completes Acquisition of Romeo Power, Nikola
Being in receipt of the presentation you agree you may be restricted from dealing in (or encouraging others to deal in) price sensitive securities. According to Romeo Power, its solution will deliver a battery with a 25% energy density advantage. 2 Assumes no redemptions from the public shareholders of RMG. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. Matthieu Cardinal - In transition - Freelance | LinkedIn Use the PitchBook Platform to explore the full profile. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS, ANY AMENDMENTS THERETO AND ANY OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION AB OUT RMG, ROMEO AND THE BUSINESS COMBINATION. Prospectuses and Registrations Filter. In the commercial v ehicle segment, gravimetric density is the primary KPI Larger space in CVs allow for flexibility in fitting battery packs in the vehicle, rendering volumetric density less important Certain restrictions still apply, depending on the pack position (e.g., height restriction) Emerging pack providers represent a significant improvement over current mainstream EVs on the market Romeo is leading in energy density relative to direct competitors current products and in a similar range with 2021E generation Commentary Romeo energy density data based on identified product improvements for current and NextGen packs 170 210 180 190 220 185 240 250 260 150 290 300 310 0 120 145 130 150 155 125 160 200 165 140 170 230 175 0 180 140 115 160 200 190 195 135 280 270 Audi e - tron Tesla Model S P85 BMW i3 Hyundai Kona Kreisel 2020 Kreisel 2021 E Akasol 2020 Akasol 2021 Proterra Battery Pack Microvast BMZ Inc. Romeo 2020E Romeo 2021E ZOE gen 2 Bolt I - PACE ID NEO Tesla Model 3 Leading Pack P roviders Study Conducted by Roland Berger CV Passenger Car, 35 Battery Lifecycle Management Romeos proprietary technology enables the quickest fast charge while maintaining battery capacity Cell chemistry selection and design based on commercial vehicle needs New generation of low cobalt NCA cells with extra long life Uniform thermal management and BMS controls By developing multiple leading edge fast charging protocols, Romeo is able to balance charging needs with battery life Preheating and thermal modulation ensure cells receptive to fast charge Rigorous laboratory experimentation and battery modeling identifies fast charge methods with least damage factors 0 5 10 15 20 25 30 35 40 Romeo Fast Charge 1 Romeo Fast Charge 2 Romeo Fast Charge 5 Romeo Fast Charge 7 Tesla SuperCharge Minutes One Million Mile Battery Life 1 Collection of the Quickest Fast Charge Protocols for Different Applications 1 Tesla Open Source Data Project, 36 0 100 200 300 400 500 0:00 0:03 0:06 0:10 0:13 0:16 0:20 Temperature ( C ) Time (mm:ss) Thermal Event Safety Designing a safe battery system using a collaborative effort across multiple knowledge domains Thermal Event Mitigation In - House Battery Safety Testing and Targeted Safety R&D Selection of safest cells only as result of elaborate testing campaign Reproducible and predictable behavior Cell Selection Robust to vibration and road failures Flame ablation and resistant material Mechanical Design Venting strategy and methodology Crash mitigation strategy Pack Design Rational fusing hierarchy down to the single cell Multiple disconnects and pyro devices Electrical Design Romeos Solution at Work Allows for continuous destructive testing and failure analysis, providing quick and precise feedback for the safest product designs In - house testing capabilities include: Cell, module, pack and destructive testing (fire and mechanical ) Materials and components stability / dielectric withstand at high voltage Testing and validation of venting strategies Abuse testing covers most stringent safety standards Safety group director with 10+ years of battery safety experience Battery Experiencing Incident Thermal Incident Not Propagating to Neighbor Batteries Protected B atteries E xperiencing Thermal Runaway Thermal incident propagates from cell to cell Competitor Packs Module and pack design prevents propagation of incident Romeo Power E xperiencing Thermal Runaway, 37 Designed for Cell & Material Recovery at End of Life Romeo keeps sustainability at the forefront Battery Recycling will be a Key Focus for Many Competitors Recycling rates for li - ion batteries in the U.S. and Europe are less than 5% today Large - scale, global adoption of li - ion batteries will require cost - effective recycling processes Ease of battery recovery cannot be at expense of safety and durability Reducing recycling cost through ease of access to aged battery cells: Reduced work hours for pack / module disassembly Reduced tooling required for disassembly Romeos batteries are designed with recycling ease in mind: Layered design approach for ease of disassembly drives more cost effective recycling Low content of adhesives and putties that would make separation processes complex and expensive Layered design allows for simple peel style disassembly Designed for Cell & Material Recovery at End of Life Battery Life Cycle Recycling Packs can be processed to extract valuable rare - earth materials Raw - material extraction and R eprocessing Romeo Pack Manufacturing Reuse Packs can be repurposed for a second - life application in energy - storage services that is suitable to their reduced performance capabilities Second - life Application in Stationary S torage New Battery Pack Electric Vehicle Battery Refurbishing Junkyard Used Battery Pack Source: Chemical & Engineering News, 38 Machine Learning to Optimize Battery Life and Warranty Coverage Romeos machine learning provides incremental future revenue opportunities with fleets Romeo applies algorithms for life optimization of electric fleets based on field operation data Ride sharing or truck fleet companies can maximize total fleet battery health (effective total asset life) by leveraging machine learning to help make choices on the following: Vehicles to deploy Routes to take Optimal charging schedule Machine Learning Opportunity for as high as 25% life extension with parameter optimization (Direct impact to TCO) Aging as a Result of Charge Time Optimization How it Works Model population as one virtual battery Provide individual decisions that benefit net total asset and increase profitability of fleet managers, and TCOs Learn aging factors from field behavior based on feedback from battery population health optimization, 39 Key IP Focus Areas: Intellectual Property Overview Romeo has taken a deliberate approach in protecting its IP and trade secrets Battery Structure, Interconnect, Sensing and Balancing Enables high throughput micro - laser welding Protect s Romeos current manufacturing and design methods, allowing a highly configurable approach Blocks competition from adopting errorless micro - laser welding and subsequently, higher throughput rates Romeo is, at its Core, a Knowledge - Based Organization Focused deeply on limiting exposure and pursuing patents to protect Romeos core recipe, in addition to claiming future technology domains Select IP Overview Battery Vapor Chamber Key technology for battery cooling and thermal management Protects proprietary findings which will be core to future battery evolution Semi automated plant with high throughput assembly and micro precision processes such as novel laser welding technologies Patented architecture enabling multi voltage options, and ternary fusing protection for added safety E - Plate Methodology and patent pending designs for achieving most uniform temperature distribution and efficient cooling Thermals Active and passive methods, and materials for achieving single cell and multiple cell fault tolerance, and venting Safety Algorithms for accurate and precise battery states estimation, diagnostics and prognostics BMS Production Recipes, and combinations to achieve adequate thermal management, structural support, and voltage isolation Materials Single or multi - layered current collector enables product variants and quick new product deployment Enables high throughput micro laser welding for speed of manufacturing time Creates additional safety features via ternary fusing Utilizes gas to liquid, and liquid to gas phase change Lightweight with highest possible heat transfer coefficient Enables new regime of power capability, 41 Proposed Transaction O verview Transaction Structure Valuation Capital Structure RMG and Romeo Power have agreed to enter a business combination on October 5, 2020; the transaction is expected to close in Q4 2020 It is anticipated that the post - closing company will be listed on NYSE under the ticker RMO and retain its Romeo Power name Transaction reflects a $900mm pre - money equity valuation for Romeo, representing a highly attractive opportunity to invest in a leader in commercial vehicle electrification Romeo to receive ~$ 340mm cash at closing to fund its attractive growth opportunities $1,334mm post - money Equity Value $993mm Enterprise Value, with no material debt outstanding at closing Represents 1.3x EV / 2023E Revenue, a highly attractive entry multiple relative to peer group The transaction will be funded by a combination of ~$234mm cash held in trust and $150mm in PIPE proceeds All - primary transaction; existing Romeo shareholders, including management and strategic partner BorgWarner (BWA) are rolling virtually 100% of their equity and collectively are expected to own 67% of the pro forma company at closing, 42 $ in millions 2020E 2021E 2022E 2023E 2024E 2025E Income Statement Items Product $ 5 $ 134 $ 399 $ 710 $ 1,043 $ 1,462 Engineering Services $ 2 $ 3 $ 3 $ 11 $ 16 $ 22 BMI Revenue $ 0 $ 0 $ 7 $ 37 $ 88 $ 156 JV Royalty / Service Support $ 3 $ 3 $ 3 $ 7 $ 10 $ 11 Total Romeo Revenue $ 11 $ 140 $ 412 $ 765 $ 1,156 $ 1,650 % Growth 39 % 1,193 % 195 % 86 % 51 % 43 % ( - ) Direct Materials $ 6 $ 134 $ 349 $ 543 $ 771 $ 1,041 ( - ) Other COGS $ 8 $ 15 $ 23 $ 38 $ 55 $ 75 Gross Profit ($ 4) ($ 10) $ 40 $ 182 $ 331 $ 534 Gross Profit Margin % nm nm 10 % 24 % 29 % 32 % ( - ) R&D $ 6 $ 19 $ 26 $ 28 $ 35 $ 45 ( - ) Other Operating Expenses $ 12 $ 25 $ 33 $ 64 $ 99 $ 151 EBITDA ($ 22) ($ 54) ($ 19) $ 91 $ 196 $ 338 EBITDA Margin % nm nm nm 12 % 17 % 20 % Income From JV ($ 1) ($ 1) ($ 1) ($ 7) $ 2 $ 7 Key Balance Sheet and Cash Flow Items Net Working Capital ($ 1) ($ 55) ($ 30) ($ 31) ($ 30) ($ 46) % of Revenue (11 %) (39 %) (7 %) (4 %) (3 %) (3 %) Capital Expenditures $ 1 $ 59 $ 50 $ 30 $ 65 $ 41 % of Revenue 5 % 43 % 12 % 4 % 6 % 3 % Romeo Power Projected Financial Overview Commentary Strong pipeline built with commercialization and production ramp commencing in 2021 $412mm Revenue in 2022E and $1.65Bn Revenue in 2025E at a 59% CAGR 32% Gross Margin profile in 2025E as Romeo benefits from scale volume and pack input efficiencies Company commitment to disciplined R&D spend for continued technology leadership EBITDA margins projected to expand to 20% in 2025E as Romeo consolidates its market position and deepens portfolio penetration, including BMI product Capex budget supports best - in - class tooling and standing up manufacturing lines to meet strong customer demand 40% of JV Net Income, 43 Joint Venture Projected Financial Overview $ in millions 2020E 2021E 2022E 2023E 2024E 2025E Income Statement Items Total JV Revenue $ 0 $ 4 $ 9 $ 229 $ 547 $ 708 % Growth nm nm 133 % 2,363 % 139 % 29 % ( - ) JV Royalty $ 0 $ 0 $ 0 $ 4 $ 7 $ 9 ( - ) Other COGS $ 0 $ 4 $ 9 $ 210 $ 478 $ 618 Gross Profit $ 0 $ 0 $ 0 $ 15 $ 62 $ 81 Gross Profit Margin 4 % 5 % 5 % 6 % 11 % 11 % ( - ) JV Service Support Costs $ 3 $ 2 $ 2 $ 2 $ 2 $ 2 ( - ) Operating Expenses $ 0 $ 0 $ 1 $ 21 $ 36 $ 36 EBITDA ($ 3) ($ 3) ($ 3) ($ 9) $ 23 $ 43 EBITDA Margin % nm nm nm nm 4 % 6 % JV Net Income ($ 3) ($ 3) ($ 3) ($ 18) $ 5 $ 17 $708mm JV Revenue in 2025E with a 76% CAGR from 2023E 2025E, and access to global CV opportunity Romeo offers engineering support to the JV at a 15% premium to cost, reflected in Romeo Power Revenue Tiered IP license agreement paying Romeo Power a $7mm flat fee royalty and 0.75% of Revenue over $500mm in 2025E Romeo Power will provide technical engineering personnel and operating assets to the JV Romeo Powers financials will include 40% of JVs net income Commentary, 44 Pro Forma E quity O wnership RMG Shareholders 17 % / 23.0 RMG Sponsor Shares 4% / 5.8 PIPE Investors 11% / 15.0 Existing Romeo Power Shareholders 67 % / 89.7 All Romeo Power convertible debt and equity holders will receive stock in public company (no cash paid to Romeo Power shareholders at closing) Proceeds for transaction will be used to capitalize balance sheet for ~$340mm Romeo will use proceeds to primarily fund: Expansion of production capacity in its state - of - the - art manufacturing facility Working capital to support increasing production demand Substantial research and development activities devoted to developing the next generation of battery systems technology Completion of the transaction is expected to occur during the fourth quarter of 2020 $ in millions $ % Newly Issued RMG Shares $897 70% Estimated Cash Held in Trust 3 $234 18% PIPE Proceeds $150 12 % Total Sources $1,281 100% Equity Consideration to Existing Romeo Power Shareholders $897 70 % Estimated Romeo Net Debt $3 0.3 % Cash to Balance Sheet $341 27 % Payment of Estimated Transaction Fees $40 3 % Total Uses $1,281 100 % Sources and Uses 1,2 Pro Forma Valuation 4 Post Money Ownership 4 $ in millions , except per share data Share Price $ 10.00 Pro Forma Shares Outstanding 133.4 Equity Value $ 1,334 Plus: Debt - Less: Cash to Balance Sheet $ 341 Enterprise Value $ 993 1 Based on Romeo capital structure as of June 30, 2020; $7mm of existing convertibles notes to convert to equity at closing. Download PDF . This presentation shall also not constitute an offer to sell or the solicitation of an offer to buy any securities pursuant to the Business Combination or otherwise, nor shall there be any sale of securities in any jurisdiction in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Broad contact network in the global fintech space. Lion's line-up of purpose-built all-electric vehicles currently consists of seven urban truck and bus models available for purchase today. Investor Presentation Q3 FY23. Factors that may cause such differences include, but are not limited to: (1) RMGs ability to complete th e Business Combination or, if RMG does not complete the Business Combination, any other initial business combination; (2) satisfaction or waiver (if applicable) of the conditions to the Business Combination, including with respect to the approval of the stockholders of RMG; (3) the ability to maintain the listing of the combined companys securities on the New York Stock Exchange; (4) the inability to complete the PIPE investments; (5) the risk that the Business C ombination disrupts current plans and operations of RMG or Romeo as a result of the announcement and consummation of the transaction described herein; (6) the ability to recognize the anticipated benefits of the Business Comb ination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management a nd key employees; (7) costs related to the Business Combination; (8) changes in applicable laws or regulations and delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approva ls required to complete the Business Combination; (9) the possibility that Romeo and RMG may be adversely affected by other economic, business, and/or competitive factors, including the COVID - 19 pandemic; (10) the outcome of any legal proceedings that may be instituted against RMG, Romeo or any of their respective directors or officers following the announcement of the Business Combination; (11) the failure to realize anticipated pro forma results and underlying assumptions, including with respect to estimated stockholder redemptions and purchase price and other adjustments; and (12) other risks and uncertainties indicated from time to time in the preliminary prox y statement of RMG related to the Business Combination, including those under Risk Factors therein, and other documents filed or to be filed with the Securities and Exchange Commission (SEC) by RMG.
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