What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-11-12 compared with 2021-08-12 · 162 added, 158 removed, 162 unchanged (66% of the section changed)

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EV-Standard ™ – patent issued on December 31, 2019 and still under development.

A Lamp Standard replacement EV charging and emergency power product

which uses an existing streetlamp’s foundation and a combination of solar, wind, grid connection and onboard energy storage to provide

curbside charging, street lighting and emergency power.

A Lamp Standard replacement EV charging and emergency power product which uses an existing streetlamp’s foundation and a combination of solar, wind, grid connection and onboard energy storage to provide curbside charging, street lighting and emergency power.

UAV ARC™ - patent issued on November 24, 2020 and still under development.

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For example, our EV ARC™ and Solar Tree® products have been deployed with Chargepoint,

Blink, Enel X, Electrify America and other high quality EV charging solutions.

We can make recommendations to customers or we can comply

with their specifications and/or existing charger networks.

Our products replace the infrastructure required to support EV chargers, not

the chargers themselves.

Blink, Enel X, Electrify America, BTC Power and other high quality EV charging solutions.

We can make recommendations to customers, or

we can comply with their specifications and/or existing charger networks.

Our products replace the infrastructure required to support

EV chargers, not the chargers themselves.

We do not sell EV charging, rather we sell products which enable it.

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our products’ capability to operate during grid outages and to provide a source of EV charging and emergency power rather than becoming inoperable during times of emergency or other grid interruptions;

our ability to continuously create new and patentable inventions which

are marketable and integrate our own proprietary technology and parts with other available engineered components, creating a further barrier

to entry for our competition.

our ability to continuously create new and patentable inventions which are marketable and integrate our own proprietary technology and parts with other available engineered components, creating a further barrier to entry for our competition.

Overall Business Outlook

Our revenues increased

from $2,772,210 in the first six months of 2020, to $3,493,490 for the same period in 2021.

Compared to the first half of 2020, our

sales in the first half of 2021 to municipalities remains strong, and we have experienced growth from federal customers through our

GSA contract and also from enterprise customers.

We have strengthened our sales force over the past year and increased marketing

efforts, including engaging a public relations firm and a rebranding, to communicate and increase awareness of our products to

potential customers.

On January 27, 2021, President Biden issued an executive order that called for “clean and zero-emission

federal, state, local, and tribal government fleets.” President Biden also proposed $174 billion investment in the EV

market and an additional 500,000 publicly available EV charging stations on U.S.

There is also a $1 trillion

infrastructure bill that was proposed in August 2021 that includes $7.5 billion for a nationwide network of plug-in electric vehicle

That bill passed the Senate on August 10 th and is now headed to the House.

Our revenues increased from

$4,009,644 in the first nine months of 2020 to $5,514,102 for the same period in 2021.

Of our revenues in the first nine months of 2021,

71% were to state and local governments, primarily due to the delivery of 30 units of a 52 unit order from the State of California.

have also experienced growth from federal customers through our Federal General Services Administration (GSA) Multiple Award Schedule

(MAS) contract which represented 14% of revenues in the first nine months of 2021 and enterprise customers represented 11% of revenues

for the same period.

We have strengthened our sales force over the past year and increased marketing efforts, including engaging a public

relations firm and a rebranding, to communicate and increase awareness of our products to potential customers.

On January 27, 2021, President

Biden issued an executive order that called for “clean and zero-emission federal, state, local, and tribal government fleets.”

Also, the Senate passed a bill on August 10, 2021 which Congress passed on November 5, 2021 for a $1.2 trillion infrastructure package

that includes $7.5 billion for building a nationwide network of plug-in electric vehicle chargers.

Beam Global views federal investment

in EV infrastructure as an important potential source of future revenues particularly now that the Company has been awarded a

Federal General Services Administration (GSA) Multiple Award Schedule (MAS) contract that will make the procurement process by

federal agencies much easier and faster.

We have hired a government relations person and engaged a lobbying firm in Washington DC to

support this opportunity for growth.

in EV infrastructure as an important potential source of future revenues particularly now that the Company has been awarded a Federal

General Services Administration (GSA) Multiple Award Schedule (MAS) contract that will make the procurement process by federal agencies

much easier and faster.

We have hired a government relations person and engaged a lobbying firm in Washington DC to support this opportunity

We are also increasing our sales across the U.S.

to add to our significant presence in

We believe that our opportunities in corporate markets will increase as demand for workplace and public charging

We believe our products are uniquely positioned to benefit from this growth, as well as increased market share as a

result of our ability to rapidly deploy resilient and low total cost EV charging infrastructure without the complexities of

construction, electrical work or permitting.

to add to our significant presence in California.

We believe that our opportunities

in corporate markets will increase as demand for workplace and public charging increases.

We believe our products are uniquely positioned

to benefit from this growth, as well as increased market share as a result of our ability to rapidly deploy resilient and low total cost

EV charging infrastructure without the complexities of construction, electrical work or permitting.

We continue to make progress

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We had a gross loss of $631,020

in the six months ended June 30, 2021, compared to gross income of $15,695 for the same period in the prior year.

We currently have a

fixed overhead structure and facility that will support our expected growth over the next several years.

in the nine months ended September 30, 2021, compared to a gross loss of $173,037 for the same period in the prior year.

have a fixed overhead structure and facility that will support our expected growth over the next several years.

Until our production increases,

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us to believe that we will see significant improvement in our gross margins in the future.

In the short-term, we are experiencing increases

in steel pricing and transportation cost.

We are working with our suppliers to get the best pricing we can and to ensure adequate supply

until such time as production supply improves and pricing is expected to go back to normal pricing.

Significant Accounting Policies and Estimates

Company’s significant accounting policies are described in Note 1 in the Company’s Annual Report on Form 10-K for the year

ended December 31, 2020.

There have been no material changes in these policies or their application.

The Company’s significant

accounting policies are described in Note 1 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

have been no material changes in these policies or their application.

Use of Estimates.

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Changes in Accounting Principles .

There were no significant changes in accounting principles that were adopted during the three months ended June 30, 2021.

There were no significant changes in accounting principles that were adopted during the three months ended September 30, 2021.

Results of Operations

Comparison of Results of Operations for the

Three Months Ended June 30, 2021 and 2020

Three Months Ended September 30, 2021 and 2020

For the three

months ended June 30, 2021, revenues were $2,121,098, a 46% increase over $1,455,158 for the three months ended June 30, 2020.

the second quarter of 2021, we continued to ship units to various municipalities and also the first 7 of 52 units ordered by the State

of California which have been deployed at various State agencies, including Cal Fire, Cal OES and Caltrans.

A further two units were delivered

on the New York City contract (the first of our latest EV ARC TM 2020 flood-proof model), and delivery of the second of our

latest generation of Solar Tree® products to a customer in central California which will provide charging for full-sized electric

buses, electric heavy-duty vehicles, electric agricultural equipment, public transportation and growing electric vehicle options in the

construction industry.

We also saw a strong increase in revenues to federal customers compared to Q2 2020, which we expect will continue

given an increase in federal funding and grant opportunities for electric vehicles and related infrastructure and due to our being issued

a Federal General Services Administration Contract.

Revenues to enterprise customers also increased this quarter which we also expect

to improve as more companies return to working on-site as a result of the COVID-19 vaccine.

During 2020, we experienced some delays in

orders as a result of the COVID-19 pandemic, but we expect to see less delays as we move forward.

backlog on June 30, 2021 was $3.7 million.

three months ended June 30, 2021, we had a gross loss of $273,877 compared to a gross income of $55,336 for the three months ended June

Despite the increase in revenues during the quarter of 2021 compared to 2020, our gross loss increased primarily due to an increase

in costs for the new EV ARC™ 2020 unit that was launched at the end of 2019 and rolled out in 2020, compared to the original EV

Our experience with the original EV ARC™ demonstrated that while the initial costs of the unit start out high, the operations

and engineering teams improve the production process and reduce material costs which will reduce the costs over time.

We anticipate that

this process will be repeated with the EV ARC™ 2020.

We are also being negatively impacted by increases in steel prices and shipping

costs due to high demand.

We expect our margins to improve as we increase our production levels, which will reduce our overhead costs

per unit and improve our labor efficiency.

We are also improving our shipping practices which we believe will further reduce our costs.

months ended September 30, 2021, revenues were $2,020,612, a 63% increase over $1,237,434 for the three months ended September 30, 2020.

During the third quarter of 2021, we had a heavy concentration of revenues from California as we deployed an additional 23 of the 52 units

ordered by the State of California through the state-wide Department of General Services (DGS) contract.

These units are being deployed

at various State agencies, including Cal Fire, Cal OES and Caltrans.

We also delivered our first order on our state-wide Florida Sheriff’s

Association contract.

We received new orders of $5.4 million during the quarter which resulted in a strong backlog on September 30, 2021

of $7.1 million.

three months ended September 30, 2021, we had a gross loss of $208,023 compared to a gross loss of $188,732 for the three months ended

September 30, 2020.

Despite the increase in revenues during the third quarter of 2021 compared to 2020, our gross loss increased primarily

due to an increase in costs for the new EV ARC™ 2020 unit that was launched at the end of 2019 and rolled out in 2020, compared

to the original EV ARC™.

Based on our experience with the production of our original EV ARC™, we believe our production costs

per unit for the new EV ARC TM 2020 will reduce over time as our operations and engineering teams improve the production process.

We are also being negatively impacted by increases in steel and other components due to high demand.

We saw a significant increase on

many of our steel component orders during the quarter which is beginning to be reflected in our cost of revenues and will continue to

increase as more orders are received.

We expect that these higher material costs may continue for several more quarters until global production

levels increase.

We made some changes to our shipping practices in Q3 2021 to minimize the use of third party logistics companies due

to significant pricing increases.

This resulted in deployment cost savings compared to recent quarters.

This was partially offset by decreased

revenue for shipping and handling during the current quarter as the DGS contract is exempt from paying for shipping and handling.

Operating Expenses.

operating expenses were $1,369,010 for the three months ended June 30, 2021, compared to $888,456 for the same period in 2020, a 54% increase.

The increase was primarily due to $187,221 for non-cash compensation expense for stock option expense and vesting of director restricted

shares, $145,407 for increased sales and marketing expense to support revenue growth, $40,528 for increased costs related to the proxy

and shareholder meeting, $33,377 for increased R&D headcount to support development projects, $20,856 for increased D&O insurance

premiums and $53,165 of other net increases.

operating expenses were $1,481,306 for the three months ended September 30, 2021, compared to $906,962 for the same period in 2020, a

63% increase.

The increase was primarily due to $202,463 for non-cash compensation expense for stock option expense and vesting of director

restricted shares, $243,614 for increased sales and marketing expense to support revenue growth, $31,997 for increased costs related to

our 2021 annual shareholder meeting and $96,269 of other net increases.

Other Income and Expense.

Interest income was $1,924 in the quarter ended June 30, 2021, compared to $627 in the quarter ended June 30, 2020, due to a significantly

lower average gross yield on our investments, despite higher cash balances.

Interest expense was $665 in the quarter ended June 30, 2020,

and there was no interest expense in the quarter ended June 30, 2021.

was $1,641,788 for the three months ended June 30, 2021, a $807,831 increase from a net loss of $833,957 for the same period in 2020,

Other income and expense were $698 of income in the quarter ended September 30, 2021, compared to $159 of expense the quarter ended September

was $1,688,631 for the three months ended September 30, 2021, a $592,777 increase from a net loss of $1,100,023 for the same period in

2020, primarily due to the increase in gross loss and increased operating expenses.

Comparison of Results of Operations for the

Six Months Ended June 30, 2021 and 2020

months ended June 30, 2021, revenues were $3,493,490, a 26% increase over $2,772,210 for the six months ended June 30, 2020.

from municipalities during the first six months of 2021 continued to be strong, comparable to the first six months of 2020.

The increased

revenue in the first half of 2021 compared to the prior year came from revenues from both federal and enterprise customers.

we are seeing more multiple unit orders as evidenced by a 52 system order from the State of California and several others.

we experienced some delays in orders as a result of the COVID-19 pandemic, which are starting to move forward.

backlog on June 30, 2021 was $3.7 million.

six months ended June 30, 2021, we had a gross loss of $422,997 compared to a gross income of $15,695 for the six months ended June 30,

Despite the increase in revenues during the first 6 months of 2021 compared to 2020, our gross loss increased primarily due to an

increase in costs for the new EV ARC™ 2020 unit that was launched at the end of 2019 and rolled out in 2020, compared to the original

Our experience with the original EV ARC™ demonstrated that while the initial costs of the unit start out high, the

operations and engineering teams improve the production process and reduce material costs which will reduce the costs over time.

We anticipate

that this process will be repeated with the EV ARC™ 2020.

We are also being negatively impacted by increases in steel prices and

shipping costs due to high demand.

We expect our margins to improve as we increase our production levels, which will reduce our overhead

costs per unit and improve our labor efficiency.

We also expect to improve our shipping costs.

Nine Months Ended September 30, 2021 and 2020

months ended September 30, 2021, revenues were $5,514,102, a 38% increase over $4,009,644 for the nine months ended September 30, 2020,

primarily due to the delivery of 30 of the 52 units ordered by the State of California.

Sales from Federal agencies also grew in the first

nine months of 2021 compared to the same period in the prior year.

In addition, we continue to see more multiple unit orders compared

to prior quarters as evidenced by a 52 system order from the State of California and several others.

During 2020, we experienced some

delays in customers placing orders as a result of the COVID-19 pandemic, which are now moving forward in 2021.

Our backlog on September

30, 2021 was $7.1 million.

nine months ended September 30, 2021, we had a gross loss of $631,020 compared to a gross loss of $173,037 for the nine months ended September

Despite the increase in revenues during the first nine months of 2021 compared to 2020, our gross loss increased primarily due

to increased costs for the new EV ARC™ 2020 unit that was launched at the end of 2019 and rolled out in 2020, compared to the original

Based on our experience with the production of our original EV ARC™, we believe our production costs per unit for

the new EV ARC 2020 will reduce over time as our operations and engineering teams improve the production process.

We are also being negatively

impacted by increases in steel prices and shipping costs due to high demand.

Steel costs have increased significantly in the past two

quarters, and we expect this to continue for the next several quarters until global production improves.

Our shipping costs using third

party logistics companies also increased in the first nine months of 2021 compared to the prior year.

However, we made some changes to

our shipping practices in Q3 2021 to minimize the use of third party logistics companies, which resulted in significant savings over the

prior quarter.

Operating Expenses.

operating expenses were $2,471,685 for the six months ended June 30, 2021, compared to $1,790,456 for the same period in 2020, a 38% increase.

The increase was primarily due to $273,096 for non-cash compensation expense for stock option expense and vesting of director restricted

shares, $158,409 for increased sales and marketing expense to support revenue growth, $62,618 for R&D increased headcount to support

development projects, $39,937 for increased costs related to the proxy and shareholder meeting, $27,885 for increased D&O insurance

premiums, $27,333 for increased director cash compensation, $20,654 for increased legal expense, and $71,297 of other net increases.

operating expenses were $3,952,991 for the nine months ended September 30, 2021, compared to $2,697,418 for the same period in 2020, a

47% increase.

The increase was primarily due to $475,559 for non-cash compensation expense for stock option expense and vesting of director

restricted shares, $394,177 for increased sales and marketing expense to support revenue growth, $78,310 for research and development

increased headcount to support development projects, $71,934 for increased costs related to the 2021 annual shareholder meeting, $57,190

for increased directors and officers insurance premiums, $33,334 for increased director cash compensation, $39,790 for increased accounting

fees, $21,562 for recruiting fees and $83,717 of other net increases.

Other Income and Expense.

Interest income was $2,910 in the six months ended June 30, 2021, compared to $9,519 for the same period in 2020, due to a significantly

lower average gross yield on our investments, despite higher cash balances.

Interest expense was $10,437 in the six months ended June

30, 2020, and there was no interest expense in the six months ended June 30, 2021.

loss was $2,892,597 for the six months ended June 30, 2021, a $1,116,119 increase from a net loss of $1,776,478 for the same period in

Interest income was $3,658 in the nine months ended September 30, 2021, compared to $10,280 for the same period in 2020, due to a significantly

lower average gross yield on our investments.

Interest expense was $11,357 in the nine months ended September 30, 2020, compared to a

nominal $50 in the nine months ended September 30, 2021.

was $4,581,228 for the nine months ended September 30, 2021, a $1,704,727 increase from a net loss of $2,876,501 for the same period in

2020, primarily due to the increase in gross loss and increased operating expenses.

Liquidity and Capital Resources

At June 30, 2021, we had cash

of $25,308,606, compared to cash of $26,702,804 at December 31, 2020.

We have historically met our cash needs through a combination of

equity and debt financings.

At September 30, 2021, we

had cash of $23,078,452, compared to cash of $26,702,804 at December 31, 2020.

We have historically met our cash needs through a combination

of equity and debt financings.

Our cash requirements are generally for operating activities.

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investing and financing activities, as reflected in the condensed statements of cash flows, are summarized in the table below:

Cash provided by (used in):

September 30,

Cash (used in) provided by:

Net cash used in operating activities

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Net loss of $4,581,228 for

the six months ended June 30, 2021 decreased by $549,041 for non-cash expense items that included depreciation and amortization, common

stock issued for services for director compensation, non-cash compensation expense related to the grant of stock options, and amortization

the nine months ended September 30, 2021 decreased by $899,123 for non-cash expense items that included depreciation and amortization,

common stock issued for services for director compensation, non-cash compensation expense related to the grant of stock options, and amortization

of operating lease right of use asset.

Cash used in operations for the period included a $1,021,591 increase in accounts receivable due

to some slow payments from Q1 shipments and an $827,868 increase in inventory based on forecasted requirements.

Cash provided by operations

included a $348,965 increase in accounts payable primarily due to increased inventory purchases, a $48,258 increase in deferred revenue

due to an increase in the sale of maintenance plans, a $24,790 decrease in prepaid expenses and other current assets, $16,271 increase

in sales tax payable and a $4,082 increase for accrued expenses.

Cash used in operations for the period included a $1,011,971 increase in inventory based on forecasted

requirements, a $689,353 increase in accounts receivable due to some slow payments and an $18,691 decrease in sales tax payable.

provided by operations included an $89,663 increase in prepaid expenses and other current assets due to insurance prepayments, a $62,549

increase in accounts payable for inventory purchases, a $52,107 increase in deferred revenue due to an increase in the sale of maintenance

plans and a $37,198 increase in accrued expenses.

Net loss of $2,876,501 for

the six months ended June 30, 2020 was decreased by $225,237 for non-cash expense items that included depreciation and amortization, common

stock issued for services for director compensation, non-cash compensation expense related to stock options and amortization of debt discount

to interest expense associated with the related party note.

Cash used in operations for the period included increases in inventory by

$308,438 based on forecasted deliveries, prepaid expenses and other current assets of $262,944 for vendor prepayments for inventory, rent,

insurance and others, increase in accounts receivable of $64,944 due to a slow paying customer from Q4 2019, payment of a convertible

note originally issued in lieu of salary for a related party of $220,417, decrease in accounts payable of $126,018 and a $13,426 decrease

in deferred revenue for a deposit from a customer.

Cash provided by operations included an increase of $168,241 accrued expenses, primarily

for payroll and related expenses and an overpayment by a customer, $16,211 for an increase for sales tax payable and $6,250 for deposits.

the nine months ended September 30, 2020 was decreased by $345,899 for non-cash expense items that included depreciation and amortization,

common stock issued for services for director compensation, non-cash compensation expense related to the grant of stock options, amortization

of debt discount associated with the related party note, and amortization of operating lease right of use asset.

Cash used in operations

for the period included a $545,619 increase in accounts receivable due to higher revenues in Q3 2020 compared to Q4 2019, a $239,863 increase

in prepaid expenses and other current assets for inventory prepayments and insurance deposits, payment of a convertible note originally

issued in lieu of salary for a related party of $220,417, and a decrease in accounts payable of $114,228.

Cash provided by operations

included an increase of $177,640 for accrued expenses, primarily for payroll and related expenses, $143,224 for a decrease in inventory

purchases, $74,703 for an increase for sales tax payable, $18,968 for increased deferred revenue for maintenance contracts, and $4,869

for deposits.

Cash used in investing activities

included $168,225 to purchase manufacturing equipment and $37,779 for patent related costs during the six months ended June 30, 2021.

In the six months ended June 30, 2020, $140,241 was used to purchase manufacturing equipment and $44,082 was used to fund patent related

During the six months ended

June 30, 2021, cash generated by our financing activities included $2,643,494 in proceeds received from the exercise of warrants and we

used cash of $81,039 to cover payroll taxes related to cashless stock option exercises.

During the six months ended June 30, 2020, cash

generated by our financing activities included $317,185 in proceeds received from the exercise of warrants and we borrowed $339,262 through

the Small Business Administration Paycheck Protection Program made available through the Coronavirus Aid, Relief, and Economic Security

Act (CARES Act).

During this period, we used cash of $5,473 for the repayment of an auto loan and $6,986 of deferred equity offering costs

related to the filing of a Form S-3 registration statement.

Working capital has increased

from $28,063,320 at December 31, 2020 to $28,177,437 at June 30, 2021, primarily due to cash proceeds from warrant exercises, partially

offset by operating cash usage.

While the Company

continues to focus on sales and increased market awareness of its products, the Company has not generally earned a net profit on its

sales of products during recent years.

included $473,318 to purchase manufacturing equipment, including two trucks for product delivery and $60,681 for patent related costs

during the nine months ended September 30, 2021.

In the nine months ended September 30, 2020, $153,097 was used to purchase manufacturing

equipment and $69,551 was used to fund patent related costs.

During the nine months ended

September 30, 2021, cash generated by our financing activities included $2,684,519 in proceeds received from the exercise of warrants

and we used cash of $614,269 to cover payroll taxes related to cashless stock option exercises.

During the nine months ended September

30, 2020, cash generated by our financing activities included $11,499,675 in proceeds from the issuance of common stock pursuant to a

public offering, offset by funding of deferred equity offering costs of $960,833, $1,066,912 from the exercise of warrants, we borrowed

$339,262 through the Small Business Administration Paycheck Protection Program made available through the Coronavirus Aid, Relief, and

Economic Security Act (CARES Act), and we paid $8,275 toward the repayment of an auto loan.

Working capital has decreased

from $28,133,031 at December 31, 2020 to $26,125,088 at September 30, 2021, primarily due to operating cash usage, partially offset by

cash proceeds from warrant exercises.

While the Company continues

to focus on sales and increased market awareness of its products, the Company has not generally earned a net profit on its sales of products

during recent years.

However, we believe that our net profit will improve as our revenues grow.

believes that with increased production volumes that we believe are forthcoming, efficiencies will continue to improve, and total

per unit production costs will decrease, thus allowing for increasing gross profits on the EV ARC™ and Solar Tree®

products in the future.

The Company may raise capital from the issuance of its securities or debt instruments until it achieves

positive cash flow from its business, which is predicated on increasing sales volumes and the continuation of production cost

reduction measures.

Management cannot currently predict when or if it will achieve positive cash flow.

Management believes that with increased

production volumes that we believe are forthcoming, efficiencies will continue to improve, and total per unit production costs will decrease,

thus allowing for increasing gross profits on the EV ARC™ and Solar Tree® products in the future.

The Company may raise capital

from the issuance of its securities or debt instruments until it achieves positive cash flow from its business, which is predicated on

increasing sales volumes and the continuation of production cost reduction measures.

Management cannot currently predict when or if it

will achieve positive cash flow.

On July 7, 2020, the Company

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis