Beam Global

BEAM GLOBAL

NOTES TO THE FINANCIAL STATEMENTS

DECEMBER 31, 2025 AND 2024

CORPORATE ORGANIZATION

Beam Global was incorporated in* June 2006as a limited liability company (“LLC”). Through a series of transactions and mergers, including a series of2010* transactions where the then existing entity was acquired by an inactive publicly held company in a transaction treated as a recapitalization of the Company, the resulting entity became a Nevada Corporation. On* September 15, 2020,*the Company announced its rebranding and changed its corporate name to Beam Global (hereinafter the “Company”, “us”, “we”, “our” or “Beam”) and trading on Nasdaq: BEEM.

On* March 4, 2022,*the Company acquired substantially all the assets of All Cell Technologies, LLC (“All Cell”), an energy storage solutions and technologies company based in Broadview, Illinois.

On* October 20, 2023,*the Company completed an acquisition of Amiga DOO Kraljevo (“Amiga”), a company engaged in the manufacture and distribution of steel structures with electronic integration located in Kraljevo, Serbia.

On* August 30, 2024,Beam Global acquired Telcom d.o.o. Beograd (“Telcom”), a business located in Serbia and engaged in the manufacturing of power electronics and telecommunications equipment. Refer to note4,* Business Combinations for additional details.

On* June 20, 2025,the Company entered into a Joint Venture Agreement (the “Joint Venture Agreement”) with The Platinum Group, a company registered with the department of Economy – Abu Dhabi (“TPG”). Pursuant to the Joint Venture Agreement, the Company agreed to establish Beam Middle East Limited, a limited liability company in Abu Dhabi, United Arab Emirates for the purpose of marketing, selling, manufacturing and distributing the Company's products (the “Joint Venture”) in accordance with the terms of the Joint Venture Agreement and the strategy, business plan, and budget of the Joint Venture (the “Plan”). The Company and TPG each have a 50% equity interest in the Joint Venture. Refer to note4,* Business Combinations for additional details.

NATURE OF OPERATIONS

Beam is a clean-technology innovation company headquartered in San Diego, California with offices in the U.S. in San Diego, California and Broadview, Illinois; in Europe in Belgrade and Kraljevo, Serbia; and in Abu Dhabi, United Arab Emirates. We develop, design, engineer, manufacture, and sell high-quality, renewably energized infrastructure products for electric vehicle (“EV”) charging, infrastructure for Smart Cities (the interconnected physical and digital elements within a city that utilize technology to enhance efficiency, sustainability, and quality of life for residents), energy security and disaster preparedness and highly energy-dense battery solutions in safe, compact and unique form-factors. Additionally, we manufacture structures with electronic integration such as streetlighting, cell towers and energy infrastructure products as well as power electronics including invertors, charge controllers, power supplies and LED lighting. Beam’s energy storage products provide high energy density in safe, compact and bespoke form-factors, which we believe are ideal for the rapidly growing mobile and stationary equipment product market which often requires electrical energy without being connected to the electrical grid.

Beam Global’s products and proprietary technology solutions target the following markets:

PRINCIPLES OF CONSOLIDATION

These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements include our accounts. All intercompany accounts and transactions have been eliminated. Certain amounts in prior periods have been reclassified to conform to the current period presentation. The effects of the reclassification werenot material to the consolidated financial statements.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the accompanying financial statements include the allowance for credit losses (CECL), valuation of inventory and standard cost allocations, depreciable lives of property and equipment, valuation of contingent consideration liability, valuation of intangible assets, estimates of loss contingencies, estimates of the valuation of lease liabilities and the related right of use assets, valuation of share-based costs, and the valuation allowance on deferred tax assets.

CONCENTRATIONS

Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash and accounts receivable.

The Company maintains its cash in banks and financial institution deposits that at times* mayexceed federally insured limits. The Company hasnot* experienced any losses in such accounts from inception through* December 31, 2025*. As of* December 31, 2025*, approximately $350 thousand of the Company’s cash deposits were greater than the federally insured limits.

Major Customers

The Company continually assesses the financial strength of its customers. We arenot aware of any material credit risks associated with our customers. For the year ended* December 31, 2025*, no customer accounted for more than10% of total revenues and for the year ended* December 31, 2024*, one customer accounted for 15% of total revenues. At* December 31, 2025and2024,* accounts receivable fromone customer accounted for 27% of total accounts receivable. The Company’s concentration of sales to federal, state and local governments represented 29% of revenues for the year ended* December 31, 2025and 62% of revenues for the same period ended2024.*

Foreign Operations

The following summarizes key financial metrics associated with the Company’s continuing operations:

F-9

CASH

For the purposes of the statements of cash flow, the Company considers all liquid investments with an original maturity ofthree months or less when purchased to be cash equivalents. There wereno cash equivalents at* December 31, 2025* or* December 31, 2024*.

FOREIGN CURRENCY TRANSLATION

The Company’s reporting currency is U.S. dollars. The functional currency of the Company is the U.S. dollar. The functional currency of Amiga and Telcom is the Serbian Dinar. The Company translates the assets and liabilities at the exchange rates in effect on the balance sheet date. The Company translates the revenue, costs, and expenses at the average rate of exchange rates in effect during the period. The Company includes translation gains and losses in the stockholders’ equity section of the Company’s consolidated balance sheet in accumulated other comprehensive income or loss. Transactions undertaken in other currencies are translated using the exchange rate in effect as of the transaction date and any exchange gains and losses resulting from these transactions are included in the consolidated statements of operations in other income. The translation gain for the year ending* December 31, 2025* was $1.2 million, compared to a translation loss of $1.8 million for the year ending* December 31, 2024*, resulted from the fluctuation in the exchange rates when translating the financial statements of foreign subsidiaries from their functional currencies into U.S. dollar.

FAIR VALUE MEASUREMENTS

The Company follows the authoritative guidance that establishes a formal framework for measuring fair values of assets and liabilities in the consolidated financial statements that are already required by generally accepted accounting principles to be measured at fair value. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability.

The Company utilizes market data or assumptions that market participants who are independent, knowledgeable, and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to Level1 measurements and the lowest priority to level3 measurements, and accordingly, Level1 measurement should be used whenever possible.

The hierarchy is broken down intothree levels based on the reliability of inputs as follows:

Level1 – Quoted prices in active markets for identical assets or liabilities or published net asset value for alternative investments with characteristics similar to a mutual fund.

Level2 – Inputs other than quoted prices included within Level1 that are observable for the asset or liability, either directly or indirectly.

Level3 – Unobservable inputs for the asset or liability.

F-10

The methods used* mayproduce a fair value calculation that may**not* be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate, the fair value of certain financial instruments could result in a difference fair value measurement at the reporting date. There wereno changes in the Company’s valuation methodologies from the prior year.

For purpose of this disclosure, the carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable – trade, other prepaid expenses and current assets, accounts payable and other current liabilities, all approximate fair value due to their short-term nature as of* December 31, 2025*. The Company had Level3 liabilities as of* December 31, 2025*. There wereno transfers between levels during the reporting period.

ACCOUNTS RECEIVABLE

In2023, the Company adopted Accounting Standards Update (ASU)2016-13, Financial Instruments – Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments. The amendments in this ASU replace the incurred loss model for recognition of credit losses with a methodology that reflects expected credit losses over the life of the loan and requires consideration of a broader range of reasonable and supportable information to calculate credit loss estimates. This update didnot have a significant impact on the Company’s consolidated financial statements. The Company does business and extends credit based on an evaluation of each customer’s financial condition, generally without requiring collateral. Management reviews accounts receivable on a periodic basis to determine if any receivables* maybecome uncollectible. Management’s evaluation includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, dialogue with the customer, the financial profile of a customer, our historical write-off experience, net of recoveries, and economic conditions. Exposure to losses from receivables is expected to vary by customer due to the financial condition of each customer. The Company estimates future credit losses based on the age of customer receivable balances, collection history and forecasted economic trends. The Company monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances. The allowance for expected credit losses was $0.9 million at December 31, 2025* and $0.3 million at* December 31, 2024*.

INVENTORY

Inventory is stated at the lower of cost and net realizable value. Cost is determined using thefirst-in,first-out method of accounting. Inventory costs primarily relate to purchased raw materials and components used in the manufacturing of our products, work in process for products being manufactured, and finished goods. Included in these costs are direct labor and certain manufacturing overhead costs associated with normal capacity in the manufacturing process. The Company regularly reviews inventory components and quantities on hand and performs annual physical inventory counts.

PROPERTY, EQUIPMENT AND DEPRECIATION

Property and equipment is recorded at cost. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets of 3 to 7 years, except for leasehold improvements for which the depreciation is recorded over the shorter of the lease term or the estimated useful life. Expenditures for maintenance and repairs, along with fixed assets below our capitalization threshold, which is $5 thousand, are expensed as incurred.

F-11

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset* may**not* be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended* December 31, 2025,the Company evaluated its long-lived assets for impairment and determined thatno* impairment of long-lived assets was required.

Property and equipment are carried at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the asset. Amortization of leasehold improvements is computed using the shorter of the lease term or estimated useful life of the asset. Additions and improvements are capitalized, while repairs and maintenance are expensed as incurred. Useful lives of each asset class are as follows:

LEASES

At the inception of a contract the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use of the asset throughout the period, and (3) whether it has the right to direct the use of the asset. The Company allocates the consideration in the contract to each lease component based on its relative stand-alone price to determine the lease payments. The Company has elected tonot recognize right of use assets and lease liabilities for short term leases that have a term of12 months or less.

BUSINESS COMBINATION

The purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets assumed, such excess is allocated to goodwill. The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows and estimates made by management. The Company records the net assets and results of operations of an acquired entity from the acquisition date. Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred.

Assets acquired, including identifiable intangible assets, are recorded at fair value upon acquisition and are carried at cost less accumulated amortization. Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives except for customer relationships, for which the amortization is recorded on an accelerated method over the estimate useful life.

Contingent consideration liability is recognized at the estimated fair value on the acquisition date. Subsequent changes to the fair value of contingent consideration liability are recognized in operating expenses in the statement of operations. Contingent consideration liability related to the acquisition consists of commercial milestone payments and are valued using a Monte Carlo simulation. The fair value of commercial milestone payments reflects management’s estimates of discount rates and probability of achieving certain milestones.

FINITE-LIVED INTANGIBLE ASSETS

Administrative costs for patents are accumulated on the balance sheet as a patent asset until such time as a patent is issued. The costs of these intangible assets are classified as a long-term asset and amortized on a straight-line basis over the legal life of such asset, which is typically 20 years. In the event a patent is denied or abandoned, all accumulated administrative costs will be expensed in the period in which the patent was denied or abandoned.

F-12

GOODWILL

Goodwill represents the excess of the purchase prices of an acquired business over the fair value of the underlying net tangible and intangible assets. The Company is required to assess goodwill for impairment annually, or more frequently if circumstances indicate impairment* mayhave occurred. Such assessment is performed at the reporting unit level, for which the Company has one. The Companyfirst* assesses qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test, including macroeconomic conditions, industry and market considerations, and our overall financial performance. If, after completing the qualitative assessment, it is determined it is more likely thannot that the estimated fair value is greater than the carrying value, the Company concludesno impairment exists. Alternatively, if the Company determines in the qualitative assessment, it is more likely thannot that the fair value is less than its carrying value, then the Company performs a quantitative goodwill impairment test to identify both the existence of an impairment and the amount of impairment loss, by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the estimated fair value of the reporting unit is less than the carrying value, then a goodwill impairment charge is recognized in the amount by which the carrying amount exceeds the fair value, limited to the total amount of goodwill allocated to that reporting unit. The goodwill annual assessment test is performed in thefourth quarter of every year or when an event occurs, or circumstances change such that it is reasonably possible that an impairment* may*exist.

During the year ended* December**31,* 2025, the Company continued to experience a decline in its stock price resulting in the total market value of its common stock outstanding (“market capitalization”) being less than the carrying value of the reporting unit. Management believes this decline in market value is due to a variety of factors, as further described below, butnot the actual value of the acquired entities which included the goodwill which is being impaired. Considering the circumstances and indicators of potential impairment described above, Management performed an interim quantitative goodwill impairment test as of* March 31, 2025.Managementfirst* considered whether any impairment was present for the Company’s long-lived assets, concluding thatno such impairments were present. The Company doesnot have any indefinite lived assets other than goodwill. The Company concluded that the sustained stock price decline in the Company’s common stock and its market capitalizations as of* March 31, 2025was a triggering event which required Management to perform a quantitative goodwill impairment test. Management determined the value of goodwill largely based on the Company’s stock price andnot* on the activities or performance of the acquired entities. The results of the Company’s test for impairment of goodwill as of* March 31, 2025,utilizing recent trends in stock price over a reasonable period, created a condition in which the accounting rules determine that the fair value of goodwill fell below its book value. Based on the results of the goodwill impairment procedures, the Company recorded a $10.8 million goodwill impairment for the single reporting unit during the year ended December 31, 2025.*

REVENUE RECOGNITION

Revenue is recognized by applying the followingfive steps:1) identify the contracts with a customer;2) identify the performance obligations in the contract;3) determine the transaction price;4) allocate the transaction price to the performance obligations; and5) recognize revenue when (or as) we satisfy a performance obligation.

Revenues are primarily derived from the direct sales of manufactured products. Revenues* may*also consist of maintenance fees for the maintenance of previously sold products and revenues from sales of professional services.

Revenues from inventoried product are recognized upon the final delivery of such product to the customer or when legal transfer of ownership takes place. Revenue values are fixed price arrangements determined at the time an order is placed, or a contract is entered into. The customer is typically obligated to make payment for such products within a30 to45-day period after delivery.

Revenues from maintenance fees for services provided by the Company are recognized equally over the period of the maintenance term. Revenue values are fixed price arrangements determined at the time an order is placed, or a contract is entered into. The customer is typically obligated to make payment for the service in advance of the maintenance period.

Extended maintenance or warranty services, where the customer has the option to purchase this extension as a separate purchase option, are considered a separate performance obligation. If the Company doesnot control the extended services, in terms of having the responsibility for fulfillment of the obligation or the option to choose who will perform the services, the Company is acting as an agent and would report the revenues on a net basis.

Revenues from professional services such as relocations, charger replacements or out of warranty repairs are recognized when services are performed. Revenue values are based upon fixed fee arrangements or hourly fee-based arrangements with agreed hourly rates of service categories in line with expertise requirements. These services are billed to a customer as such services are provided and the customer will be obligated to make payments for such services typically within a30 to45-day period.

Revenue is recorded net of discounts and sales taxes collected on behalf of governmental authorities; shipping and handling fees billed to customers are recorded as revenues.

Any deposits received from a customer prior to delivery of the purchased product or monies paid prior to the period for which a service is provided are accounted for as deferred revenue on the balance sheet.

The Company generally provides a standardone-year warranty on its EV charging infrastructure products for materials and workmanship but* mayprovide multiple-year warranties as negotiated, and it will pass on the warranties from its vendors, if any, which generally covers thisone*-year period. EffectiveQ3 2024, the Company increased the warranties, offered on new customer orders, tofive-year warranties. The Company accrues for product warranties when the loss is probable and can be reasonably estimated.

F-13

Disaggregation of Revenue from Contracts with Customers

The following table disaggregates gross revenue from our clients by significant geographic area for the years ending* December 31, 2025and2024*:

COST OF REVENUES

The Company records direct material and component costs, direct labor and associated benefits, and manufacturing overhead costs such as supervision, manufacturing equipment depreciation, rent, and utility costs, all of which are capitalized into inventory prior to a sale, and once sold are recorded as costs of revenues. The Company further includes shipping and handling costs as cost of revenues.

RESEARCH AND DEVELOPMENT

Expenditures for research and development of the Company’s products are expensed when incurred and are included in operating expenses. The Company recognized research and development costs of $0.6 million and $1.8 million for the years ending* December 31, 2025and2024*, respectively.

ADVERTISING

The Company conducts advertising for the promotion of its products and services. Advertising costs are charged to operations and included in operating expenses when incurred. Such amounts aggregated $0.1 million for the year ending* December 31, 2025* and $0.2 million for the year ending* December 31, 2024*.

STOCK-BASED COMPENSATION

Compensation expense related to stock awards is measured at estimated fair market value and the expense is amortized over the vesting period using the straight-line attribution method and expense for performance-based stock grants is amortized over the service period.

The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model. Forfeitures are accounted for as incurred, as a reversal of share-based compensation expense related to awards that willnot vest. The fair value of restricted stock units is determined based on the closing market price of the Company’s common stock on the grant date. Compensation expense for time-based restricted stock units (RSUs) is recognized ratably over the vesting period. A portion of RSUs granted contain performance conditions for vesting tied to specific company goals, such as gross margin and revenue targets (PSUs). The Company has calculated the results for fiscal year2025 and determined that the “maximum” performance measure for cumulative revenue and the “threshold” performance measure for gross margin were achieved as of* December 31, 2025*.

INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of ASC Topic740, “Income Taxes,” which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely thannot that the net deferred asset willnot be realized.

F-14

The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely thannot that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken arenot offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceed the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company hasnot recorded a liability for unrecognized tax benefits. All tax returns will remain open for examination by the federal and state taxing authorities forthree andfour years, respectively, from the date of utilization of any net operating loss carryforwards. The Company has receivedno notice of audit from the IRS for any of the open tax years. The Company's policy is to record estimated interest and penalties related to uncertain tax benefits as income tax expense. As of* December 31, 2025and2024,* the Company hadno accrued interest or penalties recorded related to uncertain tax positions.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid information. The Company adopted this standard, on a prospectively basis, on* January 1, 2025.*

On* July 4, 2025,the One Big Beautiful Bill Act, or OBBBA, was enacted. The legislation includes several changes to the U.S. federal corporate income tax law, among other things, reinstating100%* bonus depreciation on qualified fixed assets, immediate expensing of domestic research and development expenditures, and favorable rules for determining the limitation on business interest expense. These changes were retroactively enacted for tax years beginning after* December 31, 2024,with certain provisions effective after January 19, 2025.The provisions of the OBBBA didnot* have a material impact on the effective income tax rate.

NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the periods presented. Diluted net loss per common share is computed using the weighted average number of common stock outstanding for the period, and, if dilutive, potential common stock outstanding during the period. Potential common stock consists of the incremental shares of common stock issuable upon the exercise of stock options, stock warrants, convertible debt instruments or other common stock equivalents. Potentially dilutive securities are excluded from the computation if their effect is anti-dilutive.

The following shares werenot included in the computation of diluted loss per share for the years ended* December 31, 2025and2024* because the effects would have been anti-dilutive. These options and warrants* may*dilute future earnings per share.

COMMITMENTS AND CONTINGENCIES

Certain conditions* mayexist as of the date the financial statements are issued, which mayresult in a loss to the Company, but which will only be resolved whenone* or more future events occur or fail to occur. Company management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that* mayresult in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency isnot* probable but is reasonably possible, or is probable but cannot be reasonably estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable would be disclosed. The Company doesnot include legal costs in its estimates of amounts to accrue.

RISKS AND UNCERTAINTIES

The continuing impacts of rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, such as the imposition of tariffs and shifts in international alliances, have resulted, and* maycontinue to result, in a global slowdown of economic activity, which maydecrease demand for a broad variety of goods and services, including those provided by the Company’s clients and as a result, the Company, while also disrupting supply channels, sales channels and advertising and marketing activities for an unknown period of time. Additionally, recent changes to U.S. policy implemented by the U.S. Congress, and the Executive Branch and the responses of other nations to such actions have impacted and mayin the future impact, among other things, the U.S. and global economy, international alliances and trade relations, international conflicts, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. As a result of the current uncertainty regarding economic activity, the Company is unable to predict the size and duration of the impact of its revenue and its results of operations, if any, of actions taken to date and those that may*occur in the future. The extent of the potential impact of these macroeconomic factors on the Company’s operational and financial performance will depend on a variety of factors, including the extent of geopolitical disruption and its impact on the Company’s clients, partners, industry and employees, all of which are uncertain at this time and cannot be accurately predicted. The Company continues to monitor the effects of these macroeconomic factors and intends to take steps deemed appropriate to limit the impact on its business.

F-15

There can beno assurance that precautionary measures, whether adopted by the Company or imposed by others, will be effective, and such measures could negatively affect its sales, marketing, and client service efforts, delay and lengthen its sales cycles, decrease its employees’, clients’, or partners’ productivity, or create operational or other challenges, any of which could harm its business and results of operations.

SEGMENTS

The Company assesses its segment reporting based on how it internally manages and reports the results of its business to its chief operating decision maker. Management reviews financial results, manages the business and allocates resources on an aggregate basis. Therefore, financial results are reported in asingle operating segment.

RECENT ACCOUNTING PRONOUNCEMENTS

Recently adopted pronouncements

In* December 2023,the FASB issued ASUNo.* 2023-09, “Income Taxes (Topic740*): Improvements to Income Tax Disclosures*” (“ASU2023-09”). ASU2023-09 requires disaggregated information about a company’s effective tax rate reconciliation and information on income taxes paid. The standard is effective for Beam beginning with our annual financial statements for the fiscal year ending* December 31, 2025.Early adoption is permitted. We adopted this ASU prospectively on January 1, 2025.*See Note14. Income Taxes

In* July 2025,the FASB issued ASUNo.* 2025-05, "Financial Instruments - Credit Losses" ("ASU2025-05"), to introduce a practical expedient for all entities, which simplifies the calculation required for estimating credit losses and assumes that current conditions as of the balance sheet date donot change for the remaining life of the asset. ASU2025-05 is effective for annual reporting periods beginning after* December 15, 2025,and interim reporting periods within those annual reporting periods; however, early adoption is permitted. ASU2025*-25 allows for adoption using a prospective method. The Company early adopted this standard as of* January 1, 2025.The adoption of this standard didnot* have a material impact on the Company's consolidated financial statements.

Recent pronouncementnot* yet adopted*

In* October 2023,the FASB issued ASU2023*-06, “Disclosure Improvements” (“ASU2023-06”), which amends the disclosure or presentation requirements related to various subtopics in the FASB Accounting Standard Codification (the “Codification”). The ASU was issued in response to the SEC’s disclosure update and signification initiative issued in* August 2018.*The effective date for the amendments for each topic will be the date on which the SEC’s removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoptions prohibited.

In* November 2024,the FASB issued ASU2024*-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic220*): Disaggregation of Income Statement Expenses."This guidance requires additional disclosure of certain amounts included in the expense captions presented on the Statement of Operations as well as disclosures about selling expenses. The ASU is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15,2026 and interim reporting periods beginning after December 15, 2027.Early adoption is permitted for annual financial statements that havenot* yet been issued. The Company is currently evaluating the impact of this ASU on its consolidated financial statements and related disclosures.

In* November 2024,the FASB issued ASU2024*-04, "Debt with Conversion and Other Options" (“ASU2024-04”), which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. ASU2024-04 is effective for annual periods beginning after* December 15, 2025,and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in Update2020*-06. Adoption can be on a prospective or retrospective basis. The Company is currently evaluating the disclosure impact that ASU2024-04 * may*have on its financial statement presentation and disclosures.

In* December 2025,the FASB issued ASU2025*-11, Interim Reporting (Topic270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU2025-11 are effective for interim reporting periods within annual reporting periods beginning after* December 15,*2027 and early adoption is permitted. The amendments in ASU2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the disclosure impact that ASU2025-11 * may*have on its financial statement presentation and disclosures.

Other recent accounting pronouncements didnot or arenot believed by management to have a material impact on the Company’s present or future consolidated financial statements.

The Company had net losses of $27.0 million for the year ended* December 31, 2025which includes $18.9 million of non-cash expenses that mainly included impairment of goodwill of $10.8 million, employee stock-based compensation of $3.0 million, depreciation and amortization of $3.5 million and $1.0 million of amortization of operating lease right of use asset. The Company had net cash used in operating activities of $10.5 million for the year ending December 31, 2025.*

At* December 31, 2025,the Company had a cash balance of $1.0 million and working capital of $8.9 million. Based on the Company’s current operating plan and the available working capital it believes can be converted to cash (specifically the accounts receivable balance of approximately $8.2 million), the Company believes that it has the ability to fund its operations and meet contractual obligations for at leasttwelve* months from the date of this report.

In* March 2023,the Company entered into a supply chain line of credit agreement with OCI Group for up to $100 million with a5*-year term to further support our working capital requirements. Subject to the terms of the agreement, OCI Group will make available to the Company funding based on amounts owed to the Company by its customers. To date, the Company hasnot borrowed against this line of credit.

On* April 11, 2025,we entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley”), pursuant to which we mayissue and sell shares of our common stock from time to time, at our option, through B. Riley as our sales agent, subject to certain terms and conditions. Upon our delivery and B. Riley’s acceptance of a placement notice, B. Riley will use commercially reasonable efforts to sell shares, consistent with its normal trading and sales practices, in transactions deemed to be “at the market” offerings as defined in Rule415* of the Securities Act of1933, as amended, including by means of ordinary brokers’ transactions at market prices, in block transactions or as otherwise agreed by B. Riley and us. B. Riley* mayalso sell the shares of common stock in negotiated transactions, subject to our prior approval. Any shares sold will be sold pursuant to our effective shelf registration statement on Form S-3 (FileNo.* 333-272396), as supplemented by a prospectus supplement dated* April 11, 2025and November 13, 2025,*which allows us to sell up to $15.6 million in shares of our common stock. We will pay B. Riley a commission of up to 2.5% of the gross proceeds of the sale of any shares sold through B. Riley.

As of December31, 2025, the Company has received gross proc eeds of $8.0 million from sales of its common stock under the Sales Agreement.

Although the Company believes that it will become profitable in the next few years as our revenues grow, our gross profit improves and we leverage our overhead costs, we expect to continue to incur losses for a period of time. If necessary, the Company* mayraise additional capital to finance its future operations through equity or debt financings. There isno* guarantee that profitable operations will be achieved, or that additional capital or debt financing will be available on a timely basis, on favorable terms, or at all, and such funding, if raised,* may**not* be sufficient to meet our obligations or enable us to continue to implement our long-term business strategy. In addition, obtaining additional funding or entering into other strategic transactions could result in significant dilution to our stockholders.

F-16

Telcom

On* August 30, 2024,the Company acquired Telcom d.o.o Beograd (“Telcom”), pursuant to a Share Sale and Purchase Agreement dated as of August 30, 2024 (*the “Agreement”) with the owners (the “Sellers”) of Telcom. Telcom is a business located in Serbia and engaged in the manufacturing of telecommunications equipment. Beam Global acquired all of the equity stock of Telcom from the Sellers in exchange for cash and Beam Global common stock. The total purchase price was subject to adjustment based on the amount of cash held by Telcom at closing. Based on Telcom’s cash balance at closing equal to approximately EUR 220,298, Beam Global paid to the Sellers a purchase price equal to EUR 815,298 which was paid to the Sellers as follows: (i) EUR 430,000 cash and (ii) issued 82,506 shares of Beam Global common stock. At closing, Telcom had a positive working capital balance of approximately EUR 500,000 which consisted of (i) a cash balance equal to EUR 220,000, accounts receivables of approximately EUR 115,000, inventory of approximately EUR 275,000 and accounts payable of approximately EUR 110,000.

F-17

In addition to the above payments, the Telcom Sellers were eligible to earn up to EUR 250,000 (the “Earnout Cap”) in additional shares of Beam common stock if Telcom meets certain revenue milestones for fiscal years2024 and2025 (the “Telcom Earnout Consideration”). The Telcom Earnout Consideration that the Telcom Sellers were eligible to receive for2024 was equal to the amount the net revenue of Telcom (“Telcom Net Revenue”) exceeded EUR 850,000 for2024 up to the Earnout Cap. The Company issued 27,836 shares of stock valued at $0.1 million as payment for the2024 Telcom Earnout Consideration. The Telcom Earnout Consideration was less than the Earnout Cap, and the Telcom Sellers will be eligible for additional Telcom Earnout Consideration in2025 if (i)2025 Telcom Net Revenue exceeds2024 Telcom Net Revenue, and (ii)2025 Telcom Net Revenue exceeds*$850,000.* The Telcom Earnout Consideration for2025 will be calculated based on the amount the2025 Net Revenue exceeds the2024 Net Revenue subject to the Earnout Cap. Inno event, will the Telcom Earnout Consideration for2024 and2025, in the aggregate, exceed the Earnout Cap. The Telcom Earnout Consideration for each period will be calculated based on the volume weighted average price of Beam’s common stock for thethirty trading days prior to the end of the applicable calendar year. Inno event and underno circumstances will the Telcom Sellers receive from Beam or will Beam issue to the Telcom Sellers in connection with the transaction Beam’s common stock in an amount that exceeds 19.99% of the outstanding common stock of Beam immediately prior to closing. The Company issued 59,546 shares of stock valued at $0.1 million as payment for the2025 Telcom Earnout Consideration

The acquisition was accounted for as a business combination in accordance with Accounting Standards Codification (ASC)805, Business Combinations. Goodwill represents the premium the Company paid over net fair value of tangible and intangible assets acquired.

The valuation of the Earnout Consideration was performed using a discounted cash flow analysis to determine the fair value of the contingent consideration, which includes estimates and assumptions such as forecasted revenues of Telcom, discount rates, and the milestone settlement value. As such valuation includes the use of unobservable inputs, it is considered to be a Level3 measurement. The fair value of the Earnout Consideration will be reassessed on a quarterly basis with the change recorded to operating expenses. Refer to Note2 for changes in the fair value of the Earnout Consideration during the years ended* December 31, 2025and2024.*

The following table summarizes the estimated fair value allocation of consideration exchanged for the estimated fair value of tangible assets acquired and liabilities assumed at the acquisition date. The estimated fair value for working capital is generally equivalent to the net book value of the acquired assets and liabilities on the acquisition date. Fair value assigned to property, plant and equipment is based on real estate appraisals, market value comparisons, or acquired net book value of recently acquired assets. The valuation of the contingent consideration is based on a discounted cash flow analysis using the Company’s forecasted results for the operations for thetwo years subject to revenue earn-out targets.

Consideration is comprised of the following:

F-18

The following table shows the allocation of consideration to assets and liabilities at fair value:

The Company believed it to be probable the maximum amount of Earnout Consideration would be earned and therefore accrued the full amount in the opening balance sheet. The estimated fair values were assigned to identifiable assets acquired and liabilities.

Beam Middle East Limited

On* June 20, 2025,*the Company entered into a Joint Venture Agreement (the “Joint Venture Agreement”) with The Platinum Group, a company registered with the department of Economy – Abu Dhabi (“TPG”). Pursuant to the Joint Venture Agreement, the Company agreed to establish Beam Middle East Limited, a limited liability company in Abu Dhabi, United Arab Emirates for the purpose of marketing, selling, manufacturing and distributing the Company's products (the “Joint Venture”) in accordance with the terms of the Joint Venture Agreement and the strategy, business plan, and budget of the Joint Venture (the “Plan”). The Company and TPG each shall have a 50% equity interest in the Joint Venture. TPG is engaged in the fields of energy, real estate, finance and investing, healthcare, information technology, sports and entertainment, food services and legal services.

Pursuant to the Joint Venture Agreement, the Company shall be responsible to make timely capital contributions to the Joint Venture to cover all expenses as mutually agreed in the Plan to the extentnot covered by Joint Venture cash flows or by authorized borrowings of the Joint Venture. As of* December 31, 2025,there have beenno capital contributions. All of the profits generated by the Joint Venture will be distributed to the Company until such time as any capital contributions made by the Company have been returned to the Company. Thereafter each of the Company and TPG shall receive an equal share of the profits in accordance with their equity ownership. The Joint Venture is managed byfive* (5) directors (the “JV Board”),two (2) of which are appointed by TPG (the “TPG Directors”),two (2) of which are appointed by the Company (the “Company Directors”), and afifth being an independent director appointed by mutual approval of both TPG and the Company. The JV Board has full power to manage and control all aspects of the Joint Venture’s business and affairs; provided, that, certain “Major Decisions” (as defined in the Joint Venture Agreement) must be approved by each of the Company Directors. The Joint Venture Agreement* maybe terminated upon the expiration or non-renewal of the License Agreement (as defined below), by unanimous resolution of the Company and TPG, or upon a judicial determination. The Company consolidates the financials of Beam Middle East Limited in accordance with ASC810*-10.

In connection with entering into Joint Venture Agreement, the Company agreed to enter into a license agreement with the Joint Venture (the “License Agreement”), permitting the Joint Venture to use certain of the Company’s intellectual property, without additional compensation, on and subject to the terms set forth in the License Agreement. The License Agreement continues for a period offive (5) years, with subsequentfive-year renewal options. The Company* mayterminate the License Agreement (i) in the event of a default of TPG; (ii) if the Companyno* longer controls at leastfifty percent (50%) of the voting interest of the Joint Venture and the right to appointtwo (2) of thefive (5) directors of the Joint Venture; or (iii) uponthirty (30) days’ prior written notice to the Joint Venture and TPG if the Joint Venture doesnot reasonably commence development, production, or sales efforts on or before* December 31, 2025.*

F-19

Prepaid expenses and other current assets are summarized as follows:

Inventories are stated at the lower of cost and net realizable value. Costs are determined using thefirst in-first out (FIFO) method. As of* December 31, 2025and2024*, inventory consists of the following:

Property and equipment consist of the following:

Depreciation expense for the years ended* December 31, 2025and2024* was $2.5 million and $2.6 million, respectively. For the years ended* December 31, 2025* and* December 31, 2024*, depreciation expense recognized in Operating expenses was $0.3 million in each year, and $2.2 million and $2.4 million in Cost of Good Sold, respectively.

F-20

Intangible assets, net as of* December 31, 2025and2024* consists of the following**:**

Amortization expense for each of the years ended* December 31, 2025and2024* was $1.0 million. Amortization expense for intangible assets held as of* December 31, 2025* will be$1.0 million for each of the years2026 –2028. For both years ending* December 31, 2025* and* December 31, 2024*, amortization expense recognized in Operating expenses was $0.2 million and$0.2 million respectively and $0.8 million and $0.7 million in Cost of Good Sold respectively.

The Company’s acquisitions identified Goodwill and intangible assets. Goodwill represents the purchase price in excess of fair values assigned to the underlying identifiable net assets of the acquired business. Goodwill as of* December 31, 2025and2024* consists of the following:

F-21

The major components of accrued expenses and long-term liabilities are summarized as follows:

Acquired long-term liability of $2.9 million consists of a restructuring debt settlement from the acquisition of Amiga. Approximately $0.5 million is current and included in other accrued expenses and the rest is categorized in long-term liability. The debt restructuring was entered into in2021 for anine-year term withfive years remaining at* December 31, 2025*. Payments are due quarterly as a percentage of the remaining balance due.

Legal Matters:

The Company* mayfrom time to time become party to actions, claims, suits, investigations or proceedings arising from the ordinary course of our business, including actions with respect to intellectual property claims, breach of contract claims, labor and employment claims and other matters. Any litigation could divert management time and attention from the Company, could involve significant amounts of legal fees and other fees and expenses, or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations. Actions, claims, suits, investigations and proceedings are inherently uncertain, and their results cannot be predicted with certainty. We arenot* currently involved in any legal proceedings that we believe are, individually or in the aggregate, material to our business, results of operations or financial condition. However, regardless of the outcome, litigation can have an adverse impact on us because of associated cost and diversion of management time. As of* December 31, 2025*, after consulting with legal counsel, management believes there wereno pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

F-22

On* September 1, 2020,the Company entered into afive-year operating lease for their headquarters building in San Diego, California. The term of the existing lease was extended until February 28, 2026and subsequently until September 30, 2026.The agreement also provides that the Landlord mayterminate the lease uponsixty* (60) days’ prior written notice to the Company. At this time, it isnot reasonably certain that the Company will extend the term of the lease and, therefore, the renewal periods have been excluded from the right-of-use (“ROU”) asset.

As part of the All Cell acquisition, the Company assumed a facility lease located in Broadview, Illinois, and recorded $0.2 million in right-of-use asset and lease liability. The lease term ended on* August 31, 2023and contains clauses for annual rent escalation. The present values of the lease payment streams were calculated using an effective borrowing rate of 10%. The Company remained in the facility on a month-to-month lease and then entered into afive-year lease extension effective February 1, 2024*and recorded $1.4 million in right-of-use asset and lease liability.

As part of the acquisitions in Serbia, the Company assumed a lease for a small office and a few minimal leases in Belgrade, Serbia, which have an indefinite term and* maybe terminated at any time with30* days’ notice. Because of the short term and small value, these leases werenot capitalized.

During thetwelve months ended* December 31, 2025and2024*, cash paid for amounts included in the measurement of operating lease liabilities were $0.8 million and $1.1 million, respectively. Operating lease costs for thetwelve months ended* December 31, 2025and2024* were $0.8 million and $1.0 million, respectively.

The table below summarizes the Company's lease-related assets and liabilities as of* December 31, 2025and2024*:

Supplemental cash flow information related to the lease is as follows:

As the Company’s leases donot provide an implicit rate, the Company uses its incremental borrowing rate to discount the lease payments to present value. The estimated incremental borrowing rate is derived from information available at the lease commencement date. The future minimum rental commitments for our operating leases is as follows:

F-23

Stock Issued for Acquisitions

The Company issued 82,506 shares of its common stock upon acquiring Telcom during the year ended* December 31, 2024.See further discussion in note4.* Business Combination.

Committed Equity Facility

In2022, the Company entered into a Common Stock Purchase Agreement and Registration Rights Agreement with B. Riley Principal Capital II, LLC under which the Company issued 281,157 shares for approximately $3.0 million. As consideration for B. Riley’s commitment to purchase shares of the Company’s common stock, the Company issued B. Riley 10,484 shares of its common stock in both* September 2022and April 2023.The facility was terminated on October 1, 2024.*

The Company issued 281,157 shares under the Purchase Agreement for $3.0 million in proceeds, of which $0.5 million was offset by the offering costs as of* December 31, 2024.*

Awards Under Stock Incentive Plans

On* June 9, 2021,the Company’s stockholders approved the Beam Global2021* Equity Incentive Plan (the*“2021* Plan”) under which 2,000,000 shares of the Company’s common stock are allowed to be issued pursuant to the exercise of stock options or other awards granted under such plan in addition to the 630,000 shares previously allowed under the Beam Global2011 Stock Incentive Plan. The number of shares reserved for issuance under the2021 Plan will increase automatically on* January1* of each of2022 through2031 by the number of shares equal to 5% of the aggregate number of outstanding shares of the Company’s common stock as of the immediately preceding* December31,* or a lesser number as* maybe determined by our board of directors or compensation committee. As of December 31, 2025*,3.9 million shares remain available to grant under the2021 Plan.

Stock Options

Stock options are granted to new and existing employees. New employee option grants generally have a term often years and vest ratably over four years. Existing employee option grants generally have a term often years and vest immediately upon grant.

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model. This model incorporates certain assumptions for inputs including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life and expected volatility in the market value of the underlying common stock based on our historical volatility. The Company uses the simplified method to estimate the expected term. The expected term of stock options granted to employees is equal to the contractual term of the option award. The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which haveno vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate.

We used the assumptions in the table below and we assumed there wouldnot be dividends granted for the options granted in fiscal2025 and2024:

F-24

Option activity for the years ended* December 31, 2025and2024* is as follows:

The Company’s stock option compensation expense was $0.4 million and $0.8 million for the years ended* December 31, 2025and2024*, respectively, and there was $3.9 million of total unrecognized compensation costs related to outstanding stock options at* December 31, 2025* which will be recognized over 5.3 years. There wereno options exercised in the year ended* December 31, 2025*, and the total intrinsic value of options exercised was immaterial for the year ended* December 31, 2024*. Number of stock options vested and unvested as of* December 31, 2025* were 554,061 and 183,389, respectively. During the years ended* December 31, 2025and2024*, the weighted average fair value of options granted was $5.90 and $4.02 per share, respectively. Stock-based compensation expense is generally included in selling, general and administrative expenses in the consolidated statement of operations.

Restricted Stock Units and Common Stock

During the year ended* December 31, 2025,*the Company granted 222,656 restricted stock units (RSUs),187,031 of which contain performance conditions (PSUs), as well as 870,000 shares of the Company's common stock to its Chief Executive Officer. All units and shares vested upon issuance.

A summary of activity of the RSUs for the year ended* December 31, 2025* is as follows:

A summary of activity of the PSUs for the year ended* December 31, 2025* is as follows:

Stock compensation expense related to restricted stock units was $0.5 million during the year ended* December 31, 2025*, withno further unrecognized stock compensation expense to be recognized as of* December 31, 2025*. Stock compensation expense related to common stock granted was $1.3 million during the year ended* December 31, 2025*.

F-25

Restricted Stock Awards

The Company issues restricted stock to the members of its board of directors as compensation for such members’ services. Such grants generally vest ratably overfour quarters. Through2022, the Company also issued restricted stock to its CEO, for which generally 50% of the shares granted vest ratably overfour quarters and the remaining 50% vest ratably overtwelve quarters. The common stock related to these awards are issued to an escrow account on the date of grant and released to the grantee upon vest. The fair value is determined based on the closing stock price of the Company’s common stock on the date granted and the related expense is recognized ratably over the vesting period.

A summary of activity of the restricted stock awards for the years ended* December 31, 2025and2024* is as follows:

Stock compensation expense related to restricted stock awards was $0.4 million for the year ended* December 31, 2025* and $0.5 million for the year ended* December 31, 2024*, respectively. Fair values of restricted stock vested during each of the years ended* December 31, 2025and2024* were 0.4 million.

As of* December 31, 2025*, there wereno unvested shares of common stock.

Warrants

As of* December 31, 2025*, the Company had outstanding warrants to purchase up to 200,000 shares of the Company’s common stock at a price per share equal to $17.00 to a consultant for investor relations services to be provided over afive-year period. The warrants are immediately exercisable but are subject to repurchase by the Company until the required service is provided. The fair value of such warrants was $8.05 per share or $1.6 million on the date of grant using the Black-Scholes option-pricing model. This model incorporated certain assumptions for inputs including a risk-free market interest rate of 3.86%, expected dividend yield of the underlying common stock of 0%, expected life of 2.5 years and expected volatility in the market value of the underlying common stock based on our historical volatility of 99.6%. The fair value of the warrants was recorded to prepaid expenses and other current assets to be recognized over the service period. During the year ended* December 31, 2025*, $0.3 million was recorded as expense and at* December 31, 2025*, $0.7 million of cost hasnot been recognized and will be recognized over the next 2.25 years.

A summary of activity of warrants outstanding for the years ended* December 31, 2025and2024* is as follows:

Outstanding warrants as of* December 31, 2025* have a weighted average remaining contractual life of 2.25 years and will expire in* March 2028.The outstanding shares of the warrants at December 31, 2025* haveno intrinsic value.

During the year ended* December 31, 2025*, no warrants were exercised, and in the year ended* December 31, 2024*,128,411 warrants to purchase shares of the Company’s registered common stock were exercised generating $0.8 million.

F-26

For each of the identified periods, revenues can be categorized into the following:

During the year ended* December 31, 2025and2024*,29% and 62% of revenues were derived from federal, state and local governments, respectively. In addition,40% of revenues in the year ended* December 31, 2025* were international sales compared to 25% in the prior year.

At* December 31, 2025and2024*, deferred revenue was $2.5 million and $1.6 million, respectively. These amounts consisted mainly of customer deposits in the amount of $1.5 million and $0.6 million for* December 31, 2025and2024*, respectively and prepaid multi-year maintenance plans for previously sold products which account for $1.0 million and $1.1 million for* December 31, 2025and2024*, respectively, and pertain to services to be provided through2035. Revenue recognized during the year ended* December 31, 2025and2024* which pertained to revenue deferred in prior years was $0.1 million and $1.0 million respectively.

The balance of contract assets is driven by the difference in timing of when revenue is recognized from performance obligations satisfied in the current reporting period and when amounts are invoiced to the customer. The balance of contract liabilities is driven by the difference in timing between when cash is received pursuant to a contract and when the Company’s performance obligations under the contract are satisfied.

The following table provides the activity for the contract liabilities recognized:

F-27

The provision for income taxes consists of the following:

The components of loss from continuing operations before provision for income taxes consists of the following:

The Company’s tax expense differs from the “expected” tax expense for Federal income tax purposes, (computed by applying the United States Federal tax rate of 21% to loss before taxes). The following is a reconciliation of the Company’s effective tax rate on income and the statutory rate for the year ended* December 31, 2025.*

As previously disclosed, prior to the adoption of ASU2023-09, the difference between the provision (benefit) for income taxes and the amount computed by applying the U.S. federal income tax rate for the year ended* December 31, 2024*is as follows:

F-28

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities are as follows:

As a result of the Company’s history of incurring operating losses, a valuation allowance has been established. The valuation allowance at* December 31, 2025* was $31.8 million. The increase in the valuation allowance during2025 was $5.9 million which was all recorded through deferred taxes.

At* December 31, 2025*, the Company has a Federal net operating loss carry forward of $92.8 million, of which $25.1 million is available to offset future net income through2037. The net operating loss (“NOL”) expires during the years2027 to2037 and $67.7 million* maybe carried forward indefinitely and limited to offsetting 80% of taxable income. At December 31, 2025*, the Company has a state net operating loss carryforward of $97.2 million andno foreign net operating loss carry forward. The utilization of the net operating loss carryforwards is dependent upon the ability of the Company to generate sufficient taxable income during the carryforward period. In the event that a significant change in ownership of the Company occurs as a result of the Company’s issuance of common stock, the utilization of the NOL carry forward will be subject to limitation under certain provisions of the Internal Revenue Code. Management doesnot presently believe that such a change has occurred.

No liability related to uncertain tax positions is recorded on the financial statements related to uncertain tax positions. There areno unrecognized tax benefits as of* December 31, 2025*. The Company doesnot expect that uncertain tax benefits will materially change in the next12 months.

The Company will file U.S. Federal, California, Illinois, Michigan, New York, Tennessee, Texas and Wisconsin State tax returns, and a New York City tax return. All tax returns will remain open for examination by the Federal and State taxing authorities forthree andfour years, respectively, from the date of utilization of any net operating loss carryforwards.

The cash paid for income tax (net of refunds) during the year consists of $6 thousand for state income taxes and $4 thousand for foreign income taxes. Domestic income taxes included $3 thousand for New York City, $1 thousand for New York State, and $2 thousand for Texas. Foreign income taxes included $4 thousand for Serbia.

The Company has asingle reportable segment focused around providing clean-technology innovation focused on providing high-quality, renewably energized products. The Company’s chief operating decision-maker (the “CODM”), who is the Chief Executive Officer, assesses performance for the reportable segment and decides how to allocate resources using net income (loss) as the primary measure of profitability. The CODM isnot regularly provided with specific segment expenses, but focuses on revenue, gross profit, and net income. Expense information, including cost of sales, can be easily computed from the provided information. These segment (and consolidated) measures of profitability are shown in the statements of operations. The measure of segment assets are reported on the balance sheets as total assets.

Management has evaluated events that have occurred subsequent to the date of these condensed consolidated financial statements through the date of filing. Based upon this review, the Company identified the following subsequent event that requires disclosure but didnot require adjustment to the financial statements.

In* February 2026,the Company entered into an agreement to extend its lease in San Diego for an additionalseven*-month period, through* September 30, 2026.*

On* April 7, 2026,*the Company executed an Amended and Restated Employment Agreement with Desmond Wheatley, President and Chief Executive Officer.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Power of Attorney

Each person whose signature appears below constitutes and appoints each of Desmond Wheatley and Lisa A. Potok, true and lawful attorney-in-fact, with the power of substitution, for him in any and all capacities, to sign amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or his substitute or substitutes, may do or cause to be done by virtue thereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed by the following persons in the capacities and on the dates indicated: