Beam Global

BEAM GLOBAL

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Nature of Operations

References in this Report to “we,” “us,” “our,” the “Company” or “Beam” means Beam Global, a Nevada corporation, and its subsidiaries.

Beam is a sustainable technology innovation company headquartered in San Diego, California with offices in the U.S. in San Diego, California, Yuma, Arizona and Broadview, Illinois; in Europe in Belgrade and Kraljevo, Serbia; and in Abu Dhabi, United Arab Emirates ("UAE"). We develop, design, engineer, manufacture, and sell high-quality, rapidly deployed and autonomous infrastructure products for electric and autonomous vehicle (“EV and AV”) charging, energy security and disaster preparedness and highly energy-dense battery solutions in safe, compact and unique 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. Additionally, we manufacture structures with integrated intelligence and electronics such as street lighting, cell towers and energy infrastructure products 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). We further design, engineer and manufacture specialized power electronics including inverters, charge controllers, power supplies and LED lighting.

Our charging products are rapidly deployed without the need for construction or electrical work. Our sustainable technology products are designed to replace an electrical installation process with an easy, robust and reliable product at a low cost of total ownership.

We provide energy storage technologies that make commodity battery cells safer, longer lasting and more energy efficient. Our battery management systems (BMS), and associated thermal packaging, make batteries safer and usable in a variety of mobility, energy-security, and stationary applications.

Our streetlighting and other street furniture products are mass produced in our factories in Serbia and have been sold in18 nations globally.

Beam's renewable energy infrastructure products and proprietary technology solutions target the following markets:

Basis of Presentation

The interim unaudited condensed consolidated financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial statements and are in the form prescribed by the Securities and Exchange Commission in instructions to Form10-Q and Rule10-01 of Regulation S-X. In management’s opinion, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly our results of operations and cash flows for thethree andsix months ended* June 30, 2026and2025*, and our financial position as of* June 30, 2026*, have been made. All amounts are presented in thousands if otherwise noted. The results of operations for such interim periods arenot necessarily indicative of the operating results to be expected for the full year.

Certain information and disclosures normally included in the notes to the annual financial statements have been condensed or omitted from these interim financial statements. Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto for the year ended* December 31, 2025*. The* December 31, 2025* balance sheet is derived from those 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 certain expected credit losses, 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.

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Recent Accounting Pronouncements

Recently adopted pronouncements

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 adopted this ASU prospectively on* January 1, 2026.The adoption hadno* impact on its 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 Standards Codification (the “Codification”). The ASU was issued in response to the SEC’s disclosure update and simplification 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. 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*-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, 2026and 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* 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, 2027and 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.

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 institutions deposits that at times* mayexceed federally insured limits. The Company hasnot* experienced any losses in such accounts from inception through* June 30, 2026*. As of* June 30, 2026*, approximately $0.8 million of the Company’s cash deposits were greater than the federally insured limits.

Major Customers

For thethree months ended* June 30, 2026*, two customers accounted for 13% and 11% of total revenues, respectively, and for thethree months ended* June**30,* 2025, one customer accounted for 10% of total revenue. At* June 30, 2026*, three customers accounted for 13%,13%, and 12%, respectively, of total accounts receivable and at* December 31, 2025,one customer accounted for 27% of total accounts receivable. For thesix* months ended* June 30, 2026and2025*, the Company’s concentration of sales to federal, state and local governments represented 33% and 40%of revenues, respectively.

Foreign Operations

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

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Accounts Receivable

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, the Company’s 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. A summary of the allowance for credit losses at June 30, 2026* and the year ended* December 31, 2025*:

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Fair Value Measurement

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.

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 in 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* June 30, 2026*. The Company hadno Level3 liabilities as of* June 30, 2026*. There wereno transfers between levels during the reporting period.

Significant Accounting Policies

During thesix months ended* June 30, 2026*, there wereno changes to our significant accounting policies as described in our Annual Report on Form10-K for the year ended* December 31, 2025*.

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 outstanding shares of dilutive instruments as of* June 30, 2026* and2025 werenot included in the computation of diluted loss per share:

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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 a single operating segment.

The Company had net loss of $9.9 million for thesix months ended* June 30, 2026* which included $5.0 million of non-cash expenses that mainly included provision for credit losses of $1.8 million, depreciation and amortization of$1.7 million, stock-based compensation of$0.7 million and amortization of operating lease right of use asset of$0.7 million.

The Company had net cash used in operating activities of $4.8 million and $2.1 million for thesix months ended* June 30, 2026and2025*, respectively.

At* June 30, 2026*, the Company had a cash balance of $1.0 million and working capital of $5.5 million. Based on the Company’s current operating plan and the available working capital that it believes can be converted to cash (specifically the accounts receivable balance of approximately $6.7 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 afive*-year term to further support the Company's 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,the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (“B. Riley”), pursuant to which it mayissue and sell shares of its common stock from time to time, at its option, through B. Riley as its sales agent, subject to certain terms and conditions. Upon the Company's 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 the Company. B. Riley* mayalso sell the shares of common stock in negotiated transactions, subject to the Company's prior approval. Any shares sold will be sold pursuant to the Company's effective shelf registration statement on Form S-3 (FileNo.* 333-272396), as supplemented by a prospectus supplement dated* April 11, 2025,and November 14, 2025,which allows the Company to sell up to $15.6 million in shares of its common stock (the “ATM Prospectus Supplement”). The Company will pay B. Riley a commission for up to 3% of the gross proceeds of the sale of any shares sold through B. Riley. As of June 30, 2026,*the Company has $10.0 million remaining available for issuance and sale under the ATM Prospectus Supplement.

Although the Company is focused on achieving profitability through revenue growth, improved gross margins and operating leverage, the Company expects to continue to incur losses for a period of time. The Company* mayseek additional capital to finance its operations, support working capital needs and execute its business strategy, including through equity or debt financings or other strategic transactions. There can beno* assurance that the Company will achieve profitable operations or that additional capital or debt financing will be available when needed, on favorable terms, or at all. Any additional financing, if obtained,* may**not* be sufficient to meet its obligations or support its long-term business strategy. In addition, any equity financing, debt financing with an equity component, or other strategic transactions could result in significant dilution to the Company's stockholders.

Prepaid expenses and other current assets are summarized as follows:

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Inventories are stated at the lower of cost and net realizable value. Costs are determined using thefirst in-first out (FIFO) method. Inventory is presented net of a reserve for excess and obsolete inventory of $267 thousand and $281 thousand as of* June 30, 2026and December 31, 2025,respectively, which is recorded against raw materials. As of June 30, 2026* and* December 31, 2025*, inventory consists of the following:

Property and equipment consist of the following:

Depreciation expense during thethree months ended* June 30, 2026and2025* was $0.6 million in each period. For thesix months ended* June 30, 2026and2025,* depreciation expense was $1.2 million and $1.3 million, respectively. For thethree months ended* June 30, 2026and2025*, depreciation expense recognized in Operating expenses was $0.1 million in each period. For thesix months ended* June 30, 2026and2025* depreciation expense recognized in Operating expenses was $0.1 million in each period.

Depreciation expense recognized in Cost of Revenues for thethree months ended* June 30, 2026and2025* was $0.5 million in each period. Depreciation recognized in Cost of Revenues for thesix months ended* June 30, 2026and2025,* was $1.1 million in each period.

The Company recorded a goodwill impairment charge of $10.8 million during thethree months ended* March 31, 2025.As a result, the Company hasno goodwill balance as of December 31, 2025,or June 30, 2026.*

Intangible assets, net, as of* June 30, 2026* and* December 31, 2025* consists of the following:

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Amortization expense for thethree months ended* June 30, 2026*, and2025 was $0.2 million in each period. For thesix months ended* June 30, 2026and2025,* amortization expense was $0.5 million in each period. For thesix months ended* June 30, 2026and2025,* amortization expense recognized in Operating expenses was $0.1 million in each period. Amortization expense recognized in Cost of Revenues for thethree andsix months ended* June 30, 2026and2025* was $0.1 million in each period.

Total estimated amortization on the Company’s intangible assets for each of the years ending* December 31, 2026* through2030 and thereafter is as follows:

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

Acquired long-term liability of $2.6 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 remainder is categorized in long-term liability. The debt restructuring was entered into in2021 for anine-year term with four years andsix months remaining at* June 30, 2026*. Payments are interest-free, unsecured and 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* June 30, 2026*, 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.

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On* September 1, 2020,the Company entered into afive-year operating lease for its headquarters building in San Diego, California. The term of that lease was extended until February 28, 2026and subsequently until September 30, 2026.The agreement provided that the landlord mayterminate the lease uponninety* (90) days’ prior written notice to the Company. On* April 27, 2026,the landlord exercised its right to terminate the lease for San Diego. The lease terminated on July 26, 2026.The termination didnot* result in any termination penalties to the Company, and the Company doesnot have any ongoing obligations under the lease following the termination date. See Subsequent Events.

On* June 17, 2026,the Company entered into afive-year operating lease for approximately 31,241 square feet at653* E.20th Street in Yuma, Arizona for its warehouse and manufacturing operations. Although rent under the lease begins on* July 15, 2026,the Company obtained control of the premises on June 25, 2026upon satisfying the lease’s conditions to possession, and that date is the lease commencement date under ASC842.* Accordingly, the Company recognized an operating lease right-of-use asset and a corresponding lease liability of approximately $0.7 million as of* June 30, 2026.The Company separately entered into a lease for the adjacent building at655* E.20th Street, which hadnot been made available to the Company as of* June 30, 2026;*no right-of-use asset or lease liability has been recognized for that lease as of that date.

The Company has additional factory locations in Broadview, Illinois; Belgrade and Kraljevo in Serbia; and a sales and administration office in Abu Dhabi, United Arab Emirates.

The table below summarizes the Company’s lease related assets and liabilities as of* June 30, 2026* and* December 31, 2025*:

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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 rental commitments for our operating leases are as follows:

The weighted average remaining lease term and weighted average discount rate for our operating leases as of* June 30, 2026* are as follows:

There wasno Federal income tax expense for thesix months ended* June 30, 2026* or2025 due to the Company’s net losses. Income tax expense represents the minimum state taxes due. As a result of the Company’s history of incurring operating losses, a full valuation allowance has been established. As of* June 30, 2026*, no benefit has been provided for the quarter-to-date and year-to-date loss. On a quarterly basis, the Company evaluates the positive and negative evidence to assess whether the more likely thannot criteria have been satisfied in determining whether there will be further adjustments to the valuation allowance.

At Market Issuance Sales Agreement

On* April 11, 2025,the Company entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc., pursuant to which the Company has the right, butnot* the obligation, to sell shares of its common stock having an aggregate offering price of up to $15.6 million, subject to certain terms and conditions. The Company has received aggregate net proceeds of $5.2 million from sales of its common stock pursuant to the At Market Issuance Sales Agreement during thesix months ended* June 30, 2026*.

Stock Options

Stock options* may*be granted to new and existing employees and other eligible participants under the Company’s equity incentive plan. New employee option grants generally have a term often years and vest ratably over four years.

Option activity for thesix months ended* June 30, 2026* is as follows:

Vested and Exercisable at* June 30, 2026represents vested options that are below the closing price on June 30, 2026of $1.30. Total options vested at June 30, 2026*are 738,708.

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.

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The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the table below and we assumed there wouldnot be dividends paid during the life of the options granted during thesix months ended* June 30, 2026*.

The Company’s stock option compensation expense was $53 thousand and $1.5 million for thethree months ended* June 30, 2026and2025*, respectively, and $0.4 million and $1.6 million for the* 6 months ended* * June 30, 2026and2025,* respectively. There was $0.5 million of total unrecognized compensation costs related to outstanding stock options at* June 30, 2026* which will be recognized over 3.3 years. There wereno options exercisedin thesix months ended* June 30, 2026*. The number of stock options vested and unvested as of* June 30, 2026* were 738,708 and 136,892, respectively. Stock-based compensation expense is generally included in selling, general and administrative expenses in the consolidated statement of operations.

On* June 4, 2025,the Compensation Committee recommended and approved aone*-time stock award of 870,000 shares of common stock to the Company’s chief executive officer, Desmond Wheatley, under the Company’s2021 Equity Incentive Plan. The common stock award was granted as bonus compensation based on his performance in fiscal years ending* December 31, 2023and2024,* and in connection with the completed acquisitions of All Cell Technologies, LLC, Amigo DOO Kraljevo and Telcome d.o.o. Beograd.

Restricted Stock Units

There wereno stock compensation expenses related to restricted stock units or performance stock units for thesix months ended* June 30, 2026*. Stock compensation expense related to restricted stock units was $35 thousand during thesix months ended* June 30, 2025.Stock compensation expense related to performance stock units was $0.2 million during thesix* months ended* June**30,* 2025. There areno further unrecognized stock compensation expenses related to restricted stock units remaining to be recognized at this time.

Restricted Stock Awards

The Company issues restricted stock awards to non-employee members of its board of directors as compensation for such members’ services. Such grants generally vest ratably overfour 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 vesting. 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.

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A summary of activity of the restricted stock awards for thesix months ended* June 30, 2026*:

Stock compensation expense related to restricted stock awards was $0.1 million for each of thethree months ended* June 30, 2026and2025,* and $0.2 million for each of thesix months ended* June 30, 2026* and2025. Fair values of restricted stock vested during each of thesix months ended* June 30, 2026and2025* were $0.2 million for each period.

As of* June 30, 2026*, there were unvested shares of common stock representing $0.3 million of unrecognized restricted stock grant expense which will be recognized over6 months.

Warrants

During thesix months ended* June 30, 2026*, the Company had an outstanding warrant to purchase up to 200,000 shares of the Company’s common stock at a price per share equal to $17.00 issued 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 warrant is $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 warrant was recorded to prepaid expenses and other current assets to be recognized over the service period. During thesix months ended* June 30, 2026*, $0.1 million was recorded as expense and at* June 30, 2026*, $0.6 million of cost hasnot been recognized and will be recognized over the next 1.7 years.

A summary of activity of warrants outstanding for thesix months ended* June 30, 2026* is as follows:

Outstanding warrants at* June 30, 2026* have a weighted average remaining contractual life of 1.7 years and will expire in* March 2028.The shares underlying the warrants at June 30, 2026* haveno intrinsic value.

For each of the identified periods, revenues are categorized as follows:

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The following table disaggregates revenue from our clients by significant geographic area for thethree andsix months ended* June 30, 2026and2025*:

During thethree andsix months ended* June 30, 2026* less than 1% of revenues were derived from federal customers. For thethree andsix months ended* June 30, 2025,2% and 8% of revenues were derived from federal customers. For thethree* months ended* June 30, 2026and2025* 37% and 32% of revenues were derived from state and local governments, respectively. In addition,47% of revenues in thethree and 48% in thesix months ended* June 30, 2026,*were sales made outside of the U.S. compared to 47% and 37% in the prior year.

At* June 30, 2026and2025*, deferred revenues were $1.9 million and $1.7 million, respectively. These amounts consisted mainly of customer deposits in the amount of $1.0 million and $0.5 million for* June 30, 2026and2025*, respectively, and prepaid multi-year maintenance plans for previously sold products which account for $0.9 million and $1.2 million for* June 30, 2026and2025*, respectively, and pertain to services to be provided through2035. Revenue recognized during thesix months ended* June 30, 2026and2025* which pertained to revenue deferred in prior years was $161 thousand and $114 thousand, 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:

The Company has asingle reportable segment focused on providing innovative energy, mobility and smart cities technology 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 information provided. 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.

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The impacts of rising interest rates, inflation, changes in foreign currency exchange rates and geopolitical developments, including conflicts and instability in the Middle East, and changes in trade policy, including the imposition of tariffs and shifts in international alliances, have resulted, and* maycontinue to result, in global economic uncertainty and a slowdown in economic activity, which may*decrease demand for a broad variety of goods and services, including those provided by the Company’s clients and as a result, those provided by the Company, while also disrupting supply channels, sales channels, transportation routes, customer procurement processes and marketing activities for an unknown period of time. In particular, escalation of hostilities involving Iran, Israel, the United States, regional governments or regional proxy groups could adversely affect regional stability, disrupt shipping lanes, impair access to ports and transportation routes, increase fuel, freight, insurance and security costs, and delay or prevent the movement of components and finished products. Armed conflict, maritime attacks, vessel seizures, blockades, port closures, sanctions, export controls, customs restrictions, banking restrictions, currency instability or other governmental measures affecting the Middle East could also impair the Company’s ability to conduct business, collect receivables, perform under contracts, pay vendors, repatriate funds or realize the expected benefits of its international growth initiatives, including in the Middle East and Africa.

Additionally, recent changes to U.S. policy related to tariffs 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, 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 to 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.

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.

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.

Subsequent to* June 30, 2026,the operating lease for the Company’s former headquarters in San Diego, California terminated on July 26, 2026 (see Note9*). The termination didnot result in any termination penalties to the Company, and the Company hasno ongoing obligations under that lease following the termination date.

On* July 14, 2026,the Company entered into a newtwo-year lease, commencing July 15, 2026,*for approximately 5,000 square feet in San Diego, California, which serves as its headquarters, with aggregate lease payments over the term of approximately $0.2 million.

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