Beam Global

Previous wording

The Company has designed five product lines that incorporate our proprietary technology for producing a unique alternative to grid-tied charging, having a built-in renewable energy source in the form of attached solar panels and/or light wind generator to produce power and battery storage to store the power. These products are rapidly deployable and attractively designed. Our product lines include:

Current wording

The Company has multiple product lines that incorporate our proprietary technology. Our off-grid EV charging and energy security products produce a unique alternative to grid-tied charging, having a built-in renewable energy source in the form of attached solar panels and/or light wind generator to produce power and battery storage to store the power. Versions of our charging infrastructure products are modified to support EVs, eMotorcycles, eBikes, desalination and auxiliary power. Our Smart Cities products combine structural elements with built in electronics, renewable energy generation, battery storage, sensors and IoT capabilities. These products are scalable and attractively designed and include:

Previous wording

We believe our chief differentiators for our electric vehicle charging infrastructure products are:

Current wording

We believe our chief differentiators for our electric vehicle charging and energy security infrastructure products are:

Previous wording

We have in place a Multiple Award Schedule Contract with the General Services Administration (GSA) that helps streamline purchases from Federal agencies and state and local governments. In addition, the General Services Administration (GSA) awarded Beam Global a federal blanket purchase agreement (BPA) which provides federal agencies a streamlined procurement process for procuring EV ARC™ systems. We have also continued to invest in our federal business channel which has helped us to identify federal opportunities and increased awareness of our product and outreach with federal agencies. In addition, there continues to be support for funding EV charging infrastructure on the state and federal level, as well as a number of federal grants available in addition to the 30% Federal Solar Investment Tax Credit and Rule 179 accelerated depreciation which provide a strong financial incentive for many of our target commercial customers. Strength in federal orders continued with a new order announced in January 2024 from the U.S. Army Corps of Engineers, Army Material Command (AMC) for $7.4 million. With our acquisition of Amiga in October 2023, we now have a facility in Europe that can manufacture and sell Beam products for the European market. Europe is the largest market in the world for electric vehicles and is a strong proponent of clean energy. We believe there is a lot of potential for growth in this region. We also expect the electric vehicle market to continue to experience significant growth over the next decade as evidenced by 61 new electric vehicles that were launched in 2022 which will require additional EV charging infrastructure. We believe our products are uniquely positioned to benefit from this growth.

Current wording

We have in place a Multiple Award Schedule Contract with the General Services Administration (GSA) that helps streamline purchases from Federal agencies and state and local governments. In addition, the General Services Administration (GSA) awarded Beam Global a federal blanket purchase agreement (BPA) which provides federal agencies a streamlined procurement process for procuring EV ARC™ systems. We have continued to invest in our federal business channel, which has helped us to identify federal opportunities and increased awareness of our product and outreach with federal agencies. In the beginning of 2024, we saw strength in federal orders with a new order announced in January 2024 from the U.S. Army Corps of Engineers, Army Material Command (AMC) for $7.4 million. A number of federal tax incentives remain, like the 30% federal solar tax credit and Rule 179 accelerated depreciation, which provide strong financial incentives for many of our targeted commercial customers. In addition, there continues to be support for funding EV charging infrastructure at the state level.

Previous wording

Our energy security business is also connected with the deployment of our EV charging infrastructure products and serves as an additional benefit to the value proposition of our charging products which, along with their integrated emergency power panels, can continue to operate, charge EVs, and deliver emergency power during utility grid failures. Our state-of-the-art storage batteries installed on our EV charging systems are immune to grid failures and provide another benefit for customers such as municipalities, counties, states, the federal government, hospitals, fire departments, large private enterprises with substantial facilities, and vehicle fleet operators.

Current wording

Our energy security business is also connected with the deployment of our EV charging infrastructure products and serves as an additional benefit to the value proposition of our charging products which, along with their integrated emergency power panels, can continue to operate, charge EVs, and deliver emergency power during utility grid failures. Our state-of-the-art storage batteries installed on our EV charging systems are immune to grid failures and provide another benefit for customers such as municipalities, counties, states, the federal government, hospitals, fire departments, large private enterprises with substantial facilities, and vehicle fleet operators. Drones, submersibles, recreational products and a host of micro mobility and electric vehicle products are already benefiting from our Beam All-Cell™ highly differentiated products. With the continued growth of untethered electrification, we believe there is an opportunity for increased demand in these markets and others.

Previous wording

Valuation Allowance on Deferred Income Taxes. The Company ensures that taxes are computed in accordance with ASC 740 and the appropriate valuation allowance is recorded. Management estimates the percentage change in pre-tax book loss/income and makes projections of future taxable loss/income in order to perform this assessment. We have recorded a valuation allowance to reduce our net deferred tax assets to zero, primarily due to historical net operating losses (“NOLs”) and uncertainty of generating future taxable income. If we determine that it is more likely than not that we will realize a deferred tax asset that currently has a valuation allowance, we would need to reverse the valuation allowance, reflecting an income tax benefit in our statements of operations at that time. This type of adjustment could result in a material adjustment to our financial statements.

Current wording

Valuation Allowance on Deferred Income Taxes. The Company ensures that taxes are computed in accordance with ASC 740 and the appropriate valuation allowance is recorded. Management estimates the percentage change in pre-tax book loss/income and makes projections of future taxable loss/income in order to perform this assessment. We have recorded a valuation allowance to reduce our net deferred tax assets to zero, primarily due to historical net operating losses (“NOLs”) and uncertainty of generating future taxable income. If we determine that it is more likely than not that we will realize a deferred tax asset that currently has a valuation allowance, we will need to reverse the valuation allowance, reflecting an income tax benefit in our statements of operations at that time. This type of adjustment could result in a material adjustment to our financial statements.

Previous wording

Valuation of Share-Based Costs. We currently have share-based awards that include warrants, stock options, restricted stock awards, restricted stock units and performance stock units. We measure and recognize compensation expense for all share-based payments based on an estimation of grant date fair value of our share-based awards. The fair value of stock options and the warrants are calculated using a black-scholes model which requires input of interest rates, stock volatility, stock prices, etc. Share-based compensation expense is then recognized based on an allocation of the fair value on a straight-line basis over the requisite service periods of the awards. The RSU and RSAs fair value is based on the market price of our common stock on the date of grant. The determination of the amount of share-based compensation expense for our performance stock units requires the use of certain estimates and assumptions that affect the amount of share-based compensation expense recognized in our consolidated statements of operations. For performance RSUs, at each reported period, we reassess the probability of the achievement of corporate performance goals to estimate the number of shares to be recorded as a liability. Stock compensation expense is a very large expense on our statement of operations and poor estimates could have a material effect on our financial statements.

Current wording

Valuation of Share-Based Costs. We currently have share-based awards that include warrants, stock options, restricted stock awards, restricted stock units and performance stock units. We measure and recognize compensation expenses for all share-based payments based on an estimation of grant date fair value of our share-based awards. The fair value of stock options and the warrants are calculated using a Black-Scholes model which requires input of interest rates, stock volatility, stock prices, etc. Share-based compensation expense is then recognized based on an allocation of the fair value on a straight-line basis over the requisite service periods of the awards. The RSU and RSAs fair value is based on the market price of our common stock on the date of grant. The determination of the amount of share-based compensation expense for our performance stock units requires the use of certain estimates and assumptions that affect the amount of share-based compensation expense recognized in our consolidated statements of operations. For performance RSUs, at each reported period, we reassess the probability of the achievement of corporate performance goals to estimate the number of shares to be recorded as a liability. Stock compensation expense is a very large expense on our statement of operations and poor estimates could have a material effect on our financial statements.

Previous wording

*Revenues.*For the year ended December 31, 2023, our revenues increased 206% to $67.4 million compared to $22.0 million for 2022. During the year ended December 31, 2023, $41.2 million, or 64% of product sales, were to Federal customers which increased by 544% over the prior year, primarily due to several large orders received in late 2022, including a $29.4 million order through Techflow, Inc. for the US Army (IMCOM), an $11.7 million order for the General Services Administration for the Department of Veterans Affairs, and several other orders for the Department of Homeland Security, US Navy Facilities, US Marine Corps, and others. State and Local governments accounted for 16% of revenues and included a $5.3 million order from New York City to deliver EV ARCs TM throughout the city. Revenues from our energy storage products were $8.5 million in 2023, a 63% increase over 2022 revenues. In addition, as a result of our acquisition of Amiga in October 2023, we reported revenues of $3.4 million for the period from October 20, 2023 through December 31, 2023. We continue to invest in sales and marketing employees, resources and programs to raise awareness of the benefits and value of our products, which is reflected in the strong year over year sales growth. The receipt of orders may continue to be uneven due to the timing of customer approvals or budget cycles, however we believe that as EV adoption increases in concert with increased availability of infrastructure funding, our business will be less impacted by specific variations in order timing.

Current wording

*Revenues.*For the year ended December 31, 2024, our revenues decreased 27% to $49.3 million compared to $67.4 million for 2023. Although a decrease year over year, this was a 124% increase over December 31, 2022 revenue of $22.0 million. During the year ended December 31, 2024, $15.5 million, or 32% product sales, were to Federal customers. State and Local governments customers accounted for 30% of revenues. We continue to invest in sales, marketing and government relation employees, resources and programs to raise awareness of the benefits and value of our products. The receipt of orders may continue to be uneven due to the timing of customer approvals or budget cycles, however we believe that as EV adoption increases in concert with increased availability of infrastructure funding, our business will be less impacted by specific variations in order timing.

Previous wording

*Gross Profit/(Loss).*The Company reported a positive gross profit of $1.2 million for the year ended December 31, 2023, compared to a $1.7 million gross loss in 2022. As a percentage of sales, the margin improved by nine percentage points. The gross profit includes a non-cash negative impact of $0.8 million for amortization of intangible assets resulting from the All Cell acquisition. Without this non-cash expense, gross profit for 2023 would be $2.0 million. The gross profit benefited from the increased volume resulting in increased fixed overhead absorption, partially offset by an increase in fixed overhead spending (including indirect headcount, service support, depreciation for capital to increase capacity, etc.). Direct headcount realized labor efficiencies as a result of the increased throughput, with a partial offset due to higher temporary agency labor rates when rapid delivery of products to customers were required. Material costs increased during the Covid 19 pandemic but are finally showing some reduction in the second half of 2023 for certain materials and components. Our engineering team has implemented design changes during 2023 which reduced the bill of materials for the EV ARCTM, improving the product margins especially in Q4 2023. Gross profit on EV ARC™ products at the unit level increased by 197% from Q4 2022 to Q4 2023. We had a $0.1 million increase in warranty cost and a $0.1 million scrap cost which was a $0.5 million increase due to a favorable adjustment in 2022. We expect to benefit from a price increase that was introduced in 2023 and should be reflected in orders delivered in 2024. Additionally, we expect to get a full-year benefit from the design changes and material cost reductions that began in late 2023 which should improve our 2024 gross profit margin. In addition, as we expect the Company to grow in the future, we expect our fixed overhead absorption to continue to improve.

Current wording

*Gross Profit/(Loss).*The Company reported a positive gross profit of $7.3 million, a 14.8% gross margin for the year ended December 31, 2024, compared to a gross profit of $1.2 million, a 1.8% gross margin in 2023. As a percentage of sales, the margin improved by thirteen percentage points primarily because we have implemented cost improvements in late 2023 as a result of design changes to the EV ARCTM as well as operational improvements and positive margins generated from the acquisition of Amiga. Additionally, 24.1% of ARC sales in 2024 reflected the price increase implemented in 2023. The gross profit includes a non-cash negative impact of $0.7 million for amortization of intangible assets resulting from the All Cell acquisition. Without this non-cash expense, gross profit for 2024 would be $8.0 million, a 16.3% gross margin. Our engineering team has continued to implement design changes during 2024 which reduced the bill of materials for the EV ARCTM, improving the product margins throughout 2024. We expect the Company’s revenue to grow in the future and our fixed overhead absorption to continue to improve.

Previous wording

At December 31, 2023, we had cash of $10.4 million, compared to cash of $1.7 million at December 31, 2022. We have historically met our cash needs through a combination of debt and equity financings and more recently through gross profit contributions. Our cash requirements are generally for operating activities and acquisitions.

Current wording

At December 31, 2024, we had cash of $4.6 million, compared to cash of $10.4 million at December 31, 2023. We have historically met our cash needs through a combination of debt and equity financing and more recently through gross profit contributions. Our cash requirements are generally for operating activities and acquisitions.

Previous wording

For the year ended December 31, 2022, our cash used in operating activities was $18.1 million compared to $6.4 million for the year ended December 31, 2021. Net loss of $19.7 million for the year ended December 31, 2022, was increased by $9.1 million of non-cash expense items that included a change in fair value of contingent consideration of $5.5 million, depreciation and amortization of $1.1 million, common stock issued for services for director compensation of $0.4 million and employee stock-based compensation expense of $2.0 million. Further, cash used in operations included a $0.6 million increase in accounts receivable, $0.8 million increase in prepaid expenses and other current assets, primarily related to the prepayment of battery cells, and $8.2 million increase in inventory (i) to secure battery cells required for battery manufacturing in case of potential future supply chain challenges and (ii) due to higher work in process inventory of nearly complete EV ARCTM units as well as finished EV ARCTM units awaiting final delivery at December 31, 2022. Cash provided by operations included a $1.3 million increase in accounts payable primarily for inventory and $0.9 million increase in accrued expenses.

Current wording

For the year ended December 31, 2024, our cash used in operating activities was $2.2 million compared to $13.3 million for the year ended December 31, 2023 Net loss of $11.3 million for the year ended December 31, 2024 was decreased by $3.7 million of non-cash expense items that included $3.7 million for depreciation and amortization, $3.6 million for stock-based compensation and $0.8 million in amortization of operating leases offset by $4.4 million for change in fair value of contingent consideration liabilities pertaining to the true-up of the earnout payment for Amiga. Cash used in operations included a $0.9 million decrease in accounts payable, $0.6 million decrease in noncurrent liabilities related to the long term deferred tax liability, a $0.2 million decrease in accrued expenses related to short term taxes payable, $0.2 million increase in inventory and $0.1 million increase in prepaid expenses and other current assets. In addition, cash provided by operations included $8.2 million decrease in accounts receivable and $0.4 million increase in deferred revenue.

Previous wording

For the year ended December 31, 2023, cash used in investing activities included $4.7 million cash for the acquisition of Amiga, net of cash acquired, $0.9 million for the purchase of equipment to increase the throughput in our facilities to meet the increased production levels and $0.1 million for spending on patents. Cash used in investing activities in the year ended December 31, 2022, included $0.8 million cash payment for working capital payment related to the acquisition of All Cell, $0.9 million to purchase equipment and $0.1 million in patent costs.

Current wording

For the year ended December 31, 2024, cash used in investing activities was $4.1 million which included $2.7 million cash for payment of deferred consideration in connection with the acquisition of Amiga, $0.8 million for the purchase of equipment to increase the throughput in our facilities and $0.5 million cash for the acquisition of Telcom, net of cash acquired. Cash used in investing activities in the year ended December 31, 2023, included $4.7 million cash for the acquisition of Amiga, net of cash acquired, $0.9 million for the purchase of equipment to increase the throughput in our facilities to meet the increased production levels and $0.1 million for spending on patents.

Previous wording

For the year ended December 31, 2023, cash generated by our financing activities included $25.4 million proceeds from a public offering to fund our acquisition of Amiga and for working capital, $2.1 million from the sale of stock under our committed equity facility and $0.2 million proceeds from public warrant exercises. In 2022, cash generated by our financing activities included $0.5 million from the exercise of warrants, $0.5 million used to cover payroll taxes related to stock-based compensation and $0.3 million payment of equity offering costs related to the committed equity line agreement entered into with B. Riley.

Current wording

For the year ended December 31, 2024, cash generated by our financing activities was $1.2 million which included $0.8 million proceeds from public warrant exercises, and $0.5 million from the sale of stock under our committed equity facility offset by $0.2 million used for restricted stock unit vesting. In 2023, cash generated by our financing activities was $27.7 million which included $25.4 million proceeds from a public offering to fund our acquisition of Amiga and for working capital, $2.1 million from the sale of stock under our committed equity facility and $0.2 million proceeds from public warrant exercises.

Previous wording

Current assets increased to $40.7 million at December 31, 2023 from $19.9 million at December 31, 2022, primarily due to an $8.7 million increase in cash and $11.5 million increase in accounts receivable. Current liabilities increased to $16.9 million at December 31, 2023 from $13.2 million at December 31, 2022, primarily due to a $6.9 million increase in accounts payable, $2.7 million deferred consideration, current for a cash payment owed for the Amiga acquisition and $1.0 million increase in accrued expenses, partially offset by a decrease of $6.8 million for contingent consideration, due to payment of the 2022 earnout for All Cell in 2023. As a result, our working capital increased to $23.8 million at December 31, 2023 compared to $6.8 million at December 31, 2022.

Current wording

Current assets decreased to $27.1 million at December 31, 2024 from $40.7 million at December 31, 2023, primarily due to a $7.9 million decrease in accounts receivable and $5.8 million decrease in cash. Current liabilities decreased to $13.3 million at December 31, 2024 from $16.9 million at December 31, 2023, primarily due to a $2.7 million decrease in deferred consideration, current, for a cash payment owed for the Amiga acquisition paid at the beginning of 2024, $0.8 million decrease in accounts payable and $0.3 million decrease in accrued expenses, partially offset by an increase of $0.1 million contingent consideration and $0.1 million in other current lease liabilities. As a result, our working capital decreased to $13.8 million at December 31, 2024 compared to $23.8 million at December 31, 2023. While the Company did not identify an impairment as of December 31, 2024, it has noted a decline in stock price during the first quarter of 2025 that may indicate a decrease in the fair value of the Company which could trigger an impairment. The Company is in the process of conducting an assessment to determine if an impairment is indicated and believes a material impairment of goodwill is possible during 2025.

Previous wording

The Company has been focused on marketing and sales efforts to increase our revenues and we believe those efforts have led to an increase in revenues by 144% from 2021 to 2022 and 206% from 2022 to 2023. The Company reached a positive gross profit in 2023 and it is expected to continue to improve in the future as a result of a price increase and a full year benefit from cost reductions from several design changes implemented in 2023, most of which occurred later in the year. As revenues increase, we expect to continue to see our fixed overhead costs spread over more units, which will reduce the cost per unit further. The Company started to see some material cost reductions in the latter part of 2023, especially with steel and battery cells, and we expect this trend to continue. This combined with engineering and manufacturing improvements should result in increasing gross profit margin on the EV ARC™ in the future.

Current wording

The Company has been focused on marketing and sales efforts to increase our revenues, and we believe those efforts have led to an increase in revenues by 144% from 2021 to 2022 and 206% from 2022 to 2023. Even though there was a decrease in revenues by 27% from 2023 to 2024, we believe our marketing and sales efforts have been impactful. The Company improved its gross profit in 2024, and it is expected to improve in the future as a result of a price increases and benefits from cost reductions from several design changes. As revenues increase, we expect to continue to see our fixed overhead costs spread over more units, which will reduce the cost per unit further. The Company continued to see material cost reductions as synergies are recognized, especially with steel and battery cells, and we expect this trend to continue. This combined with engineering and manufacturing improvements should result in increasing gross profit margin on the EV ARC™ in the future.

Previous wording

The Company may be required to raise capital to fund its operations until it achieves positive cash flow, which is predicated on increasing sales volumes and the continuation of production cost reduction measures. Currently, the Company has the right to sell up to $30.0 million or two million shares of its common stock over a period of 24 months (see note 12 for further information) to B. Riley pursuant to a Common Stock Purchase Agreement entered in September 2022. Otherwise, we could pursue other equity or debt financing. Furthermore, there are outstanding warrants to purchase 610,745 shares of our Common Stock at December 31, 2023, of which 410,745 will expire in April 2024. The proceeds from these offerings are expected to provide working capital to fund business operations and the development of new products. Management cannot currently predict when or if it will achieve positive cash flow.

Current wording

The Company may be required to raise capital to fund its operations until it achieves positive cash flow, which is predicated on increasing sales volumes and the continuation of production cost reduction measures. The Company could pursue other equity or debt financing. The proceeds from these offerings are expected to provide working capital to fund business operations and the development of new products. Management cannot currently predict when or if it will achieve positive cash flow. There is no 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. The proceeds from these offerings are expected to provide working capital to fund business operations and the development of new products. Management cannot currently predict when or if it will achieve positive cash flow.