Flux Power, Inc “Leading the Charge with Lithium - ion Batteries” May 28, 2020 1
Safe Harbor Language Forward Looking Statements: This presentation contains forward-looking statements. All statements other than statements of historical fact contained in this presentation, including statements as to the Company’s future results of operations and financial position, planned products and services, business strategy and plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “aims,” “predicts,” ”potential,” “seeks,” attempts,” “poised“ or “continues” or the negative of these terms or other similar words. These statements are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Also, these forward-looking statements represent the Company’s estimates and assumptions only as of the date of this presentation. The Company assumes no obligation to update any forward-looking statements after the date of this presentation. This presentation also contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other industry data. These data involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates. The Company has not independently verified the statistical and other industry data generated by independent parties and contained in this presentation and, accordingly, it cannot guarantee their accuracy or completeness. In addition, projections, assumptions and estimates of its future performance and the future performance of the industries in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results to differ materially from those expressed in the estimates made by independent parties and by the Company. May 28, 2020 2
Who is Flux Power? ▪ Designer, developer, manufacturer, and seller of lithium-ion battery packs that replace inefficient and environmentally undesirable lead-acid packs in industrial equipment ▪ $37M invested-to-date in Flux Power. ▪ Unique modular design and proprietary software lends itself to tremendous flexibility. ▪ Investment and engineering talent have yielded unique lithium-ion solutions that offer Flux Power LiFT Pack compelling economic advantages as well as environmental benefits. ▪ Over 5 years of relationship building has positioned Flux Power for significant revenue growth and margin improvement in 2021-2022. ▪ Relocated this past year to 65,000 sq ft facility with production capacity for $100M revenue annually. ISO 9001 Certified Assembly Facility in Vista, CA May 28, 2020 3
Large Addressable Market Sit-on Narrow Aisle Walkie End Rider ▪ $2.5 Billion addressable, annual revenue potential. ▪ Only 1% of the addressable market is penetrated by lithium. ▪ Fragmented “start - up” competition; large battery OEMs slow to migrate to lithium (requires different Forklift Type Description Class sales and service infrastructure). Class 1 Sit-on/counterbalanced Class 2 Narrow Aisle ▪ Lithium now offers economic benefits and is Electric Trucks Electric Trucks Class 3 Walkie Pallet Class 3 End Riders/Center Riders green. Class 4 IC, Solid Tires ▪ Flux packs can also be “dropped in” to forklifts and Internal Combustion Trucks Internal Combustion (IC) Trucks Class 5 IC, Pneumatic Tires replace “end of life” lead acid batteries. Class 6 Electric and IC Tractor/Trailers Tractors/Rough Terrain Trucks Class 7 Rough Terrain Forklift Trucks Note : OSHA Classifications IC includes: propane, gasoline, diesel, May 28, 2020 4
Lithium-ion: lower cost/higher performance vs Lead Acid ▪ More efficient ▪ Longer life ➢ Longer lasting per charge ▪ Sustained voltage ➢ Less ‘wasted’ energy ➢ Full performance throughout ➢ CO2 Savings operating shift ➢ No maintenance ▪ Faster to charge ➢ Less downtime ▪ Net effect: Lower cost ➢ Multiple shifts: replace 3 lead acid batteries with one lithium May 28, 2020 5
Competitive Landscape • Only 1% forklift market penetrated by Lithium • Key competitors (each having annual lithium sales < $20million: • Navitas • Electrovaya (Toronto based) • Green Cubes (half forklifts, half medical devices) • One Charge (Irvine, CA) • Ensol (Seattle) • Triathlon (German, with an office in Dallas) • Large OEM battery companies slow to introduce lithium offerings • Fuel Cell products focus on sites with 200 or more forklifts, 3 shifts with 5 minute charging requirements (vs 1-2 hours for lithium), and high capital cost. • Propane: some customers who have been eager to migrate to our lithium due to environmental concerns. May 28, 2020 6
A Decade of Energy Storage Pedigree • Roll out full line of UL Listed packs. Full Suite of Energy • Introduce lower cost/higher performance BMS • Class 1 L Series: 3wheel Counterbalance Storage Products FY20 2Q20 Using Lithium Iron Phosphate Cobia: lowest $/kWh product (no cobalt) Class 3 End Rider (Q1 CY 2019) 1Q19 Class 2 Narrow Aisle launched 4Q18 • Class 1 “ Counter Balance ” launched • Airport GSE shipped first two large orders 3Q18 Class 3 Walkie LiFT Pack UL Approval • Only pack tested & approved by major OEM ’ s: Toyota, Raymond, and Crown Equipment 2016 Focus shifted to Industrial transport market 2014 2013 2009 Class 3 Walkie LiFT Pack introduced in 2014 Company founded with focus on EV battery packs 7
Flux Power Advantages ▪ Proprietary engineering, design, & battery management Approvals : system: 2 patents granted, 5 pending ▪ Strong OEM, Distributor & Customer relationships ✓ Private label product launch Q1 2019 ✓ Large orders with Fortune 100 Customers ▪ Industry leading unit shipments; rollout of full product line ✓ 6,000 units over 6+ years: Proven track record ▪ Only UL Listed walkie pack for sale across all OEM forklifts ▪ ISO9001 Approved, PPAP approved for OEM supply May 28, 2020 8
Private Label OEM Relationship Leading Global Forklift OEM ($3B revenue) Relationship Benefits ▪ Flux Power Walkie Pack is provided as a “private ▪ Catalogue listing and marketing exposure label” under OEM brand; launched April 2019 dramatically increases industry credibility ▪ Audit on site by OEM, validating quality ▪ Leverage sales of full product line at over 200 OEM dealer locations ▪ Future plans include marketing to Europe, S. America ▪ Substantially enhances Flux Power’s competitive ▪ Currently developing a follow-on proprietary model for position in market OEM new Class 3 forklift ▪ Private label demand expected to drive ▪ OEM has given validation and support of Flux Power volume/production and sales/marketing economies products and service ▪ Flux Power will continue to serve all major lift ▪ Relationship built over several years of in-depth equipment makes dialogue and collaboration May 28, 2020 9
Modular Designs for Full Product Line: Very Scalable Launched 2018-19 and Fit Most Models d fits Launched 2014 3-Tier Pack 2-Tier Blade 1-Tier Pack (GSE/Class 1) (Class 2/Class 3) (Class 3) Ground Support Class 3 Walkie Class 1 Ride-On Class 2 Narrow Aisle Class 3 End Rider Equipment 1.7 to 4.3 kWh 16 to 48 kWh 21.6 to 32 kWh 21.6 to 31 kWh 9.6 to 14.4 kWh May 28, 2020 10
Benefits of Modular Design ▪ Flexible and conducive to product variations ▪ Limited component basket delivers vast product range ▪ Reliability strengths read across all applications ▪ Core components can be utilized in custom applications ▪ Power and control components can be distributed throughout a vehicle if needed ▪ Family familiarity: ▪ User / Technician / Fleet Manager / Distributor / Designer / Production ▪ Low spare parts requirement May 28, 2020 11
Flux Power “Sky BMS” Telematics Access to Fleet Management and Diagnostics Anywhere Data is transmitted Data is sent to via cellular or Wi-Fi telematics units connection 1 2 Data is stored in a 3 cloud base Data is translated and displayed to the customer 4 May 28, 2020 12
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