Pivotal : Business update / equity raising - investor presentation

ersonal use only

BUSINESS UPDATE / EQUITY RAISING -

INVESTOR PRESENTATION

3 February 2022

Confidential © 2022 Pivotal Systems

Disclaimer

This presentation has been prepared by Pivotal Systems Corporation (ARBN 626 346 325) (Pivotal or Company) in relation to its proposed accelerated non-renounceable pro rata entitlement offer of new CHESS Depositary Interests (CDIs) representing shares of common stock in the Company in accordance with section 708AA of the Corporations Act 2001 (Cth) (Corporations Act) as notionally modified by the Australian Securities and Investments Commission (ASIC). Each recipient of this presentation is deemed to have agreed to accept the qualifications, limitations and disclaimers set out below.

Summary information and not an offer

The information in this presentation is an overview and does not contain all information necessary for investment decisions. The information in this presentation should be read together with the Company's financial results for the half year ended 30 June 2021 released on the ASX

onlyannouncement platform together with other announcements and information about the Company released on its ASX announcement platform and on its website at https://www.pivotalsys.com/. The information in this presentation does not constitute investment or financial product advice (nor taxation or legal advice) or a recommendation to acquire securities in Pivotal and is not intended to be used as the basis for making any investment decision in any jurisdiction. This presentation does not take into account your individual investment objectives, financial situation or particular needs. In making investment decisions in connection with any acquisition of securities, investors or potential investors should rely on their own examination of the assets and financial position of the Company and should consult their own legal, business and/or financial advisers before making any investment decision.

The information contained in this presentation has been prepared in good faith by Pivotal, however no representation or warranty expressed or implied is made by Pivotal, its directors, officers, employees, advisers and agents (Parties) as to the accuracy, correctness, completeness or adequacy of any statements, estimates, opinions or other information contained in this presentation including any forecasts or prospective financial information. 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 the future. The Parties have not carried out due diligence investigations in connection with the preparation of this presentation and have not verified the information in this presentation. To the extent permitted by law, none of the Parties takes any responsibility for any loss or damage suffered as a result of any inadequacy,

useincompleteness or inaccuracy in any such statement or information including, without limitation, any financial information, any estimates or projections and any other financial information.

To the maximum extent permitted by law, the Parties disclaim any liability to any person for any direct, indirect or consequential loss or damage which may be suffered by any person through the use or reliance on anything contained in or omitted in this presentation.

This document is not a prospectus, disclosure document, product disclosure statement or other offering document under Australian law or under any other law. It does not contain all of the information necessary to make an investment decision or that would be required to be disclosed in a prospectus prepared in accordance with the Corporations Act 2001 (Cth). This document has not been and will not be filed with or approved by any regulatory authority in Australia, including ASIC, or any other jurisdiction.

Future performance and forward looking statements

Past performance information provided in this presentation may not be a reliable indication of future performance. Certain information in

this presentation refers to the intentions of Pivotal, forecasts, forward looking statements and comments about future events. Forward ersonalooking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be

relied upon as an indication or guarantee of future performance. The occurrence of events in the future are subject to risks, uncertainties and other factors, many of which are outside the control of Pivotal, that may cause Pivotal actual results, performance or achievements to differ from those referred to in this presentation. All such risks should be carefully considered by prospective investors before they make any investment decision. Such forward-looking statements speak only as of the date of this presentation. Forward looking statements should not be relied on as an indication or guarantee of future performance. Accordingly, the Parties do not give any assurance, representation or guarantee that the occurrence of the events or forward looking statements referred to in the presentation will actually occur or be achieved as contemplated, nor take any responsibility or duty to update or maintain these forward looking statements to reflect any change in expectations in relation to any forward looking statements or any change in events, conditions or circumstances on which any such statement is based. Such forecasts, prospects or returns are by their nature subject to significant uncertainties and contingencies. Before making an investment decision, you should consider, with or without the assistance of a financial adviser, whether an investment is appropriate in light of your particular investment needs, objectives and financial circumstances.

Non IFRS financial measures

Pivotal uses certain measures to manage and report on its business that are not recognised under Australian Accounting Standards, IFRS or

Confid ntial

US GAAP. These measures are collectively referred to in this document as 'non-IFRS financial measures' under Regulatory Guide 230 'Disclosing non-IFRS financial information' published by ASIC. Management uses these non-IFRS financial measures to evaluate the performance and profitability of the overall business. The principal non-IFRS financial measure that is referred to in this document is EBITDA. EBITDA is earnings before interest, tax, depreciation and amortisation and significant items. Management uses EBITDA to evaluate the operating performance of the business prior to the impact of significant items, the non-cash impact of depreciation and amortisation and interest and tax charges.

Although Pivotal believes that these measures provide useful information about the financial performance of Pivotal, they should be considered as supplements to the income statement measures that have been presented in accordance with the Australian Accounting Standards and IFRS and in relation to FY21 in accordance with US GAAP and not as a replacement for them.

Financial data

All dollar values are in US dollars (US$) unless as otherwise presented.

Distribution

This document has been prepared for publication in Australia and may not be released to US wire services or distributed in the United States. The CDIs have not been, and will not be, registered under the US Securities Act and may not be offered or sold in the United States or to US Persons (as defined in Rule 902(k) under the US Securities Act) except in transactions exempt from, or not subject to, the registration requirements of the US Securities Act and applicable US state securities laws. The distribution of this document in the United States and elsewhere outside Australia may be restricted by law. In particular, this document may not be distributed to any person, and the CDIs may not be offered or sold in any country where it would be illegal. Persons who come into possession of this document who are not in Australia should observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. By receiving this document you are deemed to confirm, represent and warrant to the Parties that you agree to be bound by the limitations and conditions set out in this disclaimer. Please see "International Offer Restrictions" on page 25 for more information.

Notice to U.S. persons: restriction on purchasing CDIs on ASX

Pivotal Systems is incorporated in the State of Delaware and its securities have not been registered under the U.S. Securities Act of 1933 (US Securities Act) or the laws of any state or other jurisdiction in the United States. Trading of Pivotal Systems' CHESS Depositary Interests (CDIs) on the Australian Securities Exchange is not subject to the registration requirements of the U.S. Securities Act in reliance on Regulation S under the U.S. Securities Act and a related 'no action' letter issued by the U.S. Securities and Exchange Commission to the ASX in 2000. As a result, the CDIs are "restricted securities" (as defined in Rule 144 under the U.S. Securities Act) and may not be sold or otherwise transferred except in transactions exempt from, or not subject to, the registration requirements of the U.S. Securities Act. For instance, U.S. persons who are qualified institutional buyers ("QIBs", as defined in Rule 144A under the U.S. Securities Act) may purchase CDIs in reliance on the exemption from registration provided by Rule 144A. To enforce the transfer restrictions, the CDIs bear a FOR Financial Product designation on the ASX. This designation restricts CDIs from being purchased by U.S. persons except those who are QIBs. In addition, hedging transactions with regard to the CDIs may only be conducted in compliance with the U.S. Securities Act.

International Offer Restrictions

This document does not constitute an offer of new shares of CDIs of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the CDIs may not be offered or sold, in any country outside Australia except to the extent permitted below.

Korea

See page 25

New Zealand

See page 25

United Kingdom

See page 25

2

Contents

only		5
BUSINESS UPDATE
EQUITY RAISING		12
APPENDIX A: KEY RISKS		17
use		24
APPENDIX B: INTERNATIONAL OFFER RESTRICTIONS
APPENDIX C: UNDERWRITING AGREEMENT		26
ersonal
Confidential © 2022 Pivotal Systems	3

Executive Summary

ersonal use only

	• Financial reporting standards changed from AASB/IFRS to U.S. GAAP from FY2021
	• Record unaudited FY2021 revenue of US$29.2m, 34.4% increase on pcp3 (FY2020: US$21.8m) driven by strong demand from existing Original Equipment
		Manufacturer (OEM) and Integrated Device Manufacturer (IDM) customers
FINANCIALS1	•	Record unaudited FY2021 New orders of US$33.4m, 57% increase on pcp (FY2020: US$21.2m) driven by strong demand from OEM and IDM customers
	•	Pivotal has now shown 7 quarters of consecutive revenue growth2

• Full year FY2021 unaudited gross margins expanded significantly to 31.3%, up from 1.6% in the pcp3

• Pivotal projects FY2022 Revenues of US$34m-US$40m

• Successful completion of Non-Recurring Engineering (NRE) agreement with leading Japanese Original Equipment Manufacturer (OEM) for next generation Atomic Layer Deposition (ALD) product

• Successfully integrated and installed GFCs on a tool at South 8 Technologies, Inc., in the reported period, following the Memorandum of Understanding

BUSINESS UPDATE	(MOU) signed in Q3 2021
	• Current Chief Operating Officer (COO) Kevin Hill to be appointed as Chief Executive Officer (CEO) from 1 June and will also be appointed to the Board
	• John Hoffman will remain in existing role as Executive Chairman. Joe Monkowski will not seek re-election as a director at the forthcoming AGM but will
	continue in his role as President and Chief Technology Officer
	• 1 for 4.24 pro-rataaccelerated non-renounceableentitlement offer to raise approximately A$14.8m (US$10.5m4) at A$0.49 (US$0.354) per New CDI
	(Equity Raising)
	• Will comprise an accelerated Institutional Entitlement Offer and a Retail Entitlement Offer to eligible shareholders
EQUITY RAISING	• Proceeds from the equity raising will be used to accelerate Pivotal's growth initiatives, provide incremental working capital for general corporate
purposes and cover the costs of the offer
	• Major shareholders Anzu Partners and Viburnum Funds have committed to take up their full pro-rata entitlement of A$4.4m (US$3.2m4). The balance of
	A$10.4m (US$7.4m4) is underwritten by MA Moelis and will be sub-underwritten by investors including Anzu Partners and Viburnum Funds
	• Directors and senior management including John Hoffman and Joseph Monkowski have committed to participate for A$0.3m of their entitlements

1. Pivotal's FY2021 results referred to in this presentation are preliminary and unaudited. Pivotal will release its full year CY2021 results to the market on 28 February 2021. All figures presented are under U.S. GAAP except where expressly noted otherwise
2. Based on International Financial Reporting Standards ("IFRS"). The Company is moving from IFRS to US GAAP reporting from FY2021
3. On a U.S. GAAP basis. See page 10 for an unaudited comparison of the result under both IFRS and U.S. GAAP with associated commentary
4. AUD/USD of 0.71 as at 2 February 2022

Confidential © 2022 Pivotal Systems

4

ersonal use only

BUSINESS

UPDATE