What changed in this filing

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Item 1. Financial Statements

2022-05-25 compared with 2021-11-12 · 353 added, 606 removed, 161 unchanged (86% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

September 30,

(In thousands)

Current assets

Accounts receivable

Prepaid and other current assets

Prepaid expenses and other current assets

Inventory, net

2 unchanged sentences

Operating lease right of use asset

Intangible assets, net

Liabilities and Stockholders' Equity

4 unchanged sentences

Deferred revenue

Contingent consideration, current

Operating lease liabilities, current

1 unchanged sentence

Deferred revenue, noncurrent

Contingent consideration, noncurrent

Operating lease liabilities, noncurrent

Total liabilities

Commitments and contingencies (Note 8)

Stockholders' equity

Preferred stock, $ 0.001 par value, 10,000,000 authorized, none outstanding as of September 30, 2021 and December 31, 2020, respectively.

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 8,948,248 and 8,482,387 shares issued or issuable and outstanding as of September 30, 2021 and December 31, 2020, respectively.

Preferred stock, $ 0.001 par value, 10,000,000 authorized, none outstanding as of March 31, 2022 and December 31, 2021

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 10,048,091 and 8,971,711 shares issued or issuable and outstanding as of March 31, 2022 and December 31, 2021, respectively

Additional paid-in-capital

Accumulated deficit

( 55,603,834 )

( 51,022,606 )

Total stockholders' equity

3 unchanged sentences

Condensed Statements of Operations

For the Three Months Ended

For the Nine Months Ended

September 30,

(Unaudited, in thousands)

Three Months Ended

Cost of revenues

$ ( 631,020 )

Operating expenses

Loss from operations

( 1,689,329 )

( 1,095,695 )

$ ( 4,584,011 )

( 2,870,455 )

Other income (expense)

Interest income

Interest expense

Total other income (expense), net

Loss before income tax expense

( 1,688,631 )

( 1,095,854 )

$ ( 4,580,403 )

( 2,871,532 )

Income tax expense

$ ( 1,688,631 )

$ ( 1,100,023 )

$ ( 4,581,228 )

$ ( 2,876,501 )

Net loss per share - basic and diluted

Weighted average shares outstanding - basic and diluted

Net loss per share - basic

Net loss per share - diluted

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

The accompanying unaudited notes are an integral

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Condensed Statements of Changes in Stockholders'

Paid-in-Capital

Balance at December 31, 2019

$ ( 45,809,581 )

Stock issued for director services

Stock issued to escrow account -

Stock option expense

Warrants exercised

Net loss for the three months ended

March 31, 2020

Balance at March 31, 2020

$ ( 46,752,102 )

Stock issued for director services

Stock issued to escrow account -

Stock option expense

Warrants exercised

Net loss for the three months ended

June 30, 2020

Balance at June 30, 2020

$ ( 47,586,059 )

Stock issued for director services

Stock issued to escrow account -

Stock option expense

Proceeds from issuance of common

stock, pursuant to public offering

Warrants exercised

Stock option exercise (cashless)

Stock issued for services

Cash fees related to stock offering

Net loss for the three months ended

September 30, 2020

( 1,100,023 )

Balance at September 30, 2020

$ ( 48,686,082 )

Stockholders'

(Unaudited, in thousands)

Total Stockholders'

Paid-in Capital

Balance at December 31, 2020

$ ( 51,022,606 )

Stock issued for director services

Stock issued to escrow account -

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

1 unchanged sentence

Stock option exercise (cashless)

Net loss for the three months ended

March 31, 2021

( 1,250,809 )

Net loss for the three months ended March 31, 2021

Balance at March 31, 2021

$ ( 52,273,415 )

Stock issued for director services

Stock issued to escrow account -

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Net loss for the three months ended

June 30, 2021

( 1,641,788 )

Balance at June 30, 2021

$ ( 53,915,203 )

Stock issued for director services

Total Stockholders'

Paid-in Capital

Balance at December 31, 2021

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock issued for acquisition

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Stock option exercise (for cash)

Net loss for the three months ended

September 30, 2021

( 1,688,631 )

Balance at September 30, 2021

$ ( 55,603,834 )

Balance at March 31, 2022

The accompanying unaudited notes are an integral

1 unchanged sentence

Condensed Statements of Cash Flows

For the Nine Months Ended

September 30,

(Unaudited, in thousands)

Three Months Ended

Operating Activities:

$ ( 4,581,228 )

$ ( 2,876,501 )

Adjustments to reconcile net loss to net cash used in operating activities:

2 unchanged sentences

Compensation expense related to grant of stock options

Amortization of debt discount

Amortization of operating lease right of use asset

Amortization of debt discount

Changes in assets and liabilities:

2 unchanged sentences

Prepaid expenses and other current assets

( 1,011,971 )

Increase (decrease) in:

1 unchanged sentence

Accrued expenses

Convertible note payable repaid in lieu of salary - related party

Sales tax payable

1 unchanged sentence

Net cash used in operating activities

( 5,160,604 )

( 3,231,325 )

Investing Activities:

Payment for acquisition

Purchases of equipment

2 unchanged sentences

Financing Activities:

Repayments of auto loan

Borrowings on note payable - Paycheck Protection Program

Withhold shares to cover taxes for cashless stock option exercise

Taxes paid related to net share settlement of equity awards

Proceeds from warrant exercises

Payments of equity offering costs

Proceeds from issuance of common stock and warrants, pursuant to public offering

Net cash provided by financing activities

Net (decrease) increase in cash

( 3,624,352 )

Cash at beginning of period

Cash at end of period

Supplemental Disclosure of Cash Flow Information:

Cash paid for interest

Cash paid for taxes

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Recording of right of use asset and corresponding liability

Reclassification of deferred equity offering costs into APIC

Transfer of fixed asset to inventory

Fair value of common stock issued as consideration for business combination

Depreciation cost capitalized into inventory

Right-of-use assets obtained in exchange for lease liabilities

The accompanying unaudited notes are an integral

1 unchanged sentence

NOTES TO THE CONDENSED FINANCIAL STATEMENTS

SEPTEMBER 30, 2021

NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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company based in San Diego, California.

Beam develops, designs, engineers, manufactures and sells high-quality, renewably energized infrastructure

products for electric vehicle charging, outdoor media and energy security and disaster preparedness.

Beam’s products enable vital

and highly valuable energy production in locations where it is either too expensive or too impactful to connect to the utility grid, or

where the requirements for electrical power are so important that grid failures, like blackouts, are intolerable.

When competing with

utilities or typical solar companies, we rely on our products’ ease of deployment, reliability, accessibility, and total cost of

ownership, rather than producing the cheapest kilowatt hour with the help of subsidies.

We develop, design, engineer, manufacture and sell high-quality, renewably energized infrastructure

products for electric vehicle (“EV”) charging, outdoor media and branding, and energy security and disaster preparedness as

well as safe and compact, highly energy-dense battery solutions.

Beam’s products enable vital and highly valuable energy production

in locations where it is either too expensive or too impactful to connect to the utility grid, or where the requirements for electrical

power are so important that grid failures, like blackouts, are intolerable.

On March 4, 2022, the Company

completed its acquisition of All Cell Technologies, LLC (“All Cell”), an energy storage solutions and technologies company

based in Broadview, Illinois.

Refer to note 3, Business Combination for additional details.

Basis of Presentation

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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 the nine months ended September 30, 2021

and 2020, and our financial position as of September 30, 2021, have been made.

The results of operations for such interim periods are

not necessarily indicative of the operating results to be expected for the full year.

and reclassifications) necessary to present fairly our results of operations and cash flows for the three months ended March 31, 2022

and 2021, and our financial position as of March 31, 2022, have been made.

The results of operations for such interim periods are not

necessarily indicative of the operating results to be expected for the full year.

The Company’s financial

statements are presented on a consolidated basis.

The Company prepared the consolidated financial statements included in this report

in accordance with accounting principles generally accepted in the U.S.

The consolidated financial statements include the accounts

of the Company and its wholly-owned subsidiaries.

Intercompany accounts and transactions have been eliminated in consolidation.

Certain information and disclosures

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The December 31, 2021 balance sheet is derived from those statements.

Risks and Uncertainties

The ongoing novel coronavirus

(COVID-19) pandemic has resulted in travel restrictions, quarantines, “stay-at-home” and “shelter-in-place” orders as

well as the shutdown of many businesses around the world.

These shutdowns have resulted in product shortages and longer delivery lead-times,

global shipping disruptions and higher costs due to increasing demands for these goods and services.

While we have been impacted by supplier

cost increases and other supply chain issues, the COVID-19 pandemic did not have a material adverse effect on our financial position or

results of operations for the nine months ended September 30, 2021.

With the rollout of a COVID-19 vaccine and booster shots, businesses

and governments are beginning to return to pre-pandemic status.

However, it is difficult to predict what governmental actions may be enacted in

the future or what impact the widespread economic disruption arising from the pandemic could have on our business.

The extent and duration

of the pandemic is unknown, and the future effects on our business are uncertain.

The Company is continuing to monitor the events and

circumstances surrounding the COVID-19 pandemic, which may require adjustments to the Company’s estimates and assumptions in the

Use of Estimates

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Recent Accounting Pronouncements

In August 2020, the Financial

Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options

(Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible

Instruments and Contracts in an Entity’s Own Equity to address the complexity in accounting for certain financial instruments

with characteristics of liabilities and equity.

This ASU includes amendments that significantly change the guidance on convertible instruments

and the derivative scope exception for contracts in an entity's own equity and simplifies the accounting for convertible instruments which

include beneficial conversion features or cash conversion features by removing certain separation models in Subtopic 470-20.

conditions were difficult to apply and resulted in circumstances where warrants may have been required to be accounted for as a liability

rather than as equity if issued under a registration statement.

The Company, in consultation with legal counsel, determined that its outstanding

public warrants issued under a Registration Statement on Form S-1 met, and continues to meet, the criteria for equity based on the terms

of the warrant.

Had the warrants been determined that liability treatment was required, the liability would have been approximately $64

million for the 953,595 public warrants at December 31, 2020 with a non-cash charge to the statement of operations of $61 million for

the year ended December 31, 2020.

The ASU is effective for smaller

reporting companies in fiscal years beginning after December 15, 2023, including interim periods within those fiscal years, although early

adoption is permitted, as early as fiscal years beginning after December 15, 2020.

As such, the Company adopted ASU 2020-06 effective

January 1, 2021, on a full retrospective basis, which will allow the Company to continue to classify the warrants as equity, and as a

result, had no effect on its condensed financial statements and related disclosures.

If the Company had recorded the warrants as a liability

in prior periods, with the full retrospective adoption on January 1, 2021, the liability would have been recast as equity and retained

earnings adjusted to reverse the effect of the liability entries and as a result, there would be no impact on the financial statements

for any periods presented.

In June 2016, the FASB issued

ASU 2016-13, Financial Instruments – Credit Losses (ASC Topic 326) requiring initial recognition of credit

losses, as well as any subsequent change in the estimate, when it is probable that a loss has been incurred.

The standard eliminates the

threshold for initial recognition in current U.S.

ASU 2016-13, Financial Instruments – Credit Losses (ASC Topic 326) requiring initial recognition of

credit losses, as well as any subsequent change in the estimate, when it is probable that a loss has been incurred.

The standard eliminates

the threshold for initial recognition in current U.S.

GAAP and it covers a broad range of financial instruments, including trade and other

4 unchanged sentences

beginning January 1, 2023.

The adoption of this guidance is not expected to have a material effect on our consolidated financial statements.

The adoption of this guidance is not expected to have a material effect on our financial statements.

Concentrations

Financial instruments that

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

Financial instruments that potentially subject

us to concentrations of credit risk consist of cash and accounts receivable.

The Company maintains its

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The Company has not experienced any

losses in such accounts from inception through September 30, 2021.

As of September 30, 2021, $ 23,184,771 of the Company’s cash deposits

were greater than the federally insured limits.

losses in such accounts from inception through March 31, 2022.

As of March 31, 2022, approximately $ 20.0 million of the Company’s

cash deposits were greater than the federally insured limits.

Major Customers

For the three months ended

September 30, 2021, revenues from one customer accounted for 74 % of total revenues, and for the nine months ended September 30, 2021,

revenues from one customer accounted for 36 % of total revenues, with no other single customer accounting for more than 10% of revenues.

At September 30, 2021, accounts receivable from two customers accounted for 52 % and 16 % of total accounts receivable, with no other single

customer accounting for more than 10% of the accounts receivable balance.

For the three months ended

September 30, 2020, revenues from four customers accounted for 41 %, 27 %, 14 % and 11 % of total revenues, and for the nine months ended

September 30, 2020, revenues from two customers accounted for 14 % and 13 % of total revenues, with no other single customer accounting

for more than 10% of revenues.

At September 30, 2020, accounts receivable from four customers accounted for 42 %, 29 %, 14 % and 10 % of total

accounts receivable, with no other single customer accounting for more than 10% of the accounts receivable balance.

For the nine months ended

September 30, 2021 and 2020, we had a heavy concentration of sales to federal, state and local governments which represented 71 % and 60 %

of revenues, respectively.

Cash and Cash Equivalents

For the purposes of the unaudited

condensed statements of cash flows, the Company considers all liquid investments with an original maturity of three months or less when

purchased to be cash equivalents.

There were no cash equivalents at September 30, 2021 and December 31, 2020, respectively.

Fair Value of Financial Instruments

The Company’s financial

instruments, including accounts receivable, accounts payable, accrued expenses, and short-term loans, are carried at historical cost basis.

At September 30, 2021, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these

Accounts Receivable

Accounts receivable are customer

obligations due under normal trade terms.

Management reviews accounts receivable on a periodic basis to determine if any receivables may

become uncollectible.

Management’s evaluation includes several factors including the aging of the accounts receivable balances,

a review of significant past due accounts, dialogue with the customer, the financial profile of a customer, our historical write-off experience,

net of recoveries, and economic conditions.

The Company includes any accounts receivable balances that are determined to be uncollectible

in its overall allowance for doubtful accounts.

After all attempts to collect a receivable have failed, the receivable is written off

against the allowance.

Inventory is stated at the

lower of cost and net realizable value.

Cost is determined using the first-in, first-out method of accounting.

Inventory costs primarily

relate to purchased raw materials and components used in the manufacturing of our products, work in process for products being manufactured,

and finished goods.

Included in these costs are direct labor and certain manufacturing overhead costs associated with the manufacturing

The Company regularly reviews inventory components and quantities on hand and performs annual physical inventory counts.

is established if this review process determines the net realizable value of such inventory may be below the carrying value.

The Company believes it will

achieve future economic value benefits for its patents.

All administrative costs for obtaining patents are accumulated on the balance

sheet as a patent asset until such time as a patent is issued.

The costs of these intangible assets are classified as a long-term asset

and amortized on a straight-line basis over the legal life of such asset, which is typically 20 years.

In the event a patent is denied

or abandoned, all accumulated administrative costs will be expensed in the period in which the patent was denied or abandoned.

amortization expense was $ 13,156 and $ 3,273 in the nine months ended September 30, 2021 and 2020, respectively.

In February 2016, the Financial

Accounting Standards Board issued Accounting Standards Update No.

“Leases (Topic 842)” whereby lessees need to recognize

almost all leases on the balance sheet as a right of use asset and a corresponding lease liability.

The Company adopted this standard

as of January 1, 2019 using the effective date method and applying the package of practical expedients to leases that commenced before

the effective date whereby the Company elected not to reassess the following:

(i) whether any expired or existing contracts contain leases,

and (ii) initial direct costs for any existing leases.

For contracts entered into after the effective date, at the inception of a contract

the Company assesses whether the contract is, or contains, a lease.

The Company’s assessment is based on:

(1) whether the contract

involves the use of a distinct identified asset, (2) whether we obtain the right to substantially all the economic benefit from the use

of the asset throughout the period, and (3) whether it has the right to direct the use of the asset.

The Company allocates the consideration

in the contract to each lease component based on its relative stand-alone price to determine the lease payments.

The Company has elected

to not recognize right of use assets and lease liabilities for short term leases that have a term of 12 months or less.

Revenue Recognition

Beam follows the revenue standards

of Financial Accounting Standards Board Update No.

“Revenue from Contracts with Customers (Topic 606).” The core

principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount

that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Revenue is recognized

in accordance with that core principle by applying the following five steps:

1) identify the contracts with a customer;

2) identify the

performance obligations in the contract;

3) determine the transaction price;

4) allocate the transaction price to the performance obligations;

and 5) recognize revenue when (or as) we satisfy a performance obligation.

Revenues are primarily derived

from the direct sales of manufactured products.

Revenues may also consist of maintenance fees for the maintenance of previously sold products

and revenues from sales of professional services.

Revenues from inventoried

product are recognized upon the final delivery of such product to the customer or when legal transfer of ownership takes place.

values are fixed price arrangements determined at the time an order is placed or a contract is entered into.

The customer is typically

obligated to make payment for such products within a 30-45 day period after delivery.

Revenues from maintenance

fees for services provided by the Company are recognized equally over the period of the maintenance term.

Revenue values are fixed price

arrangements determined at the time an order is placed or a contract is entered into.

The customer is typically obligated to make payment

for the service in advance of the maintenance period.

Extended maintenance or warranty

services, where the customer has the option to purchase this extension as a separate purchase option, are considered a separate performance

If the Company does not control the extended services, in terms of having the responsibility for fulfillment of the obligation

or the option to choose who will perform the services, the Company is acting as an agent and would report the revenues on a net basis.

Revenues from professional

services are recognized when services are performed.

Revenue values are based upon fixed fee arrangements or hourly fee-based arrangements

with agreed to hourly rates of service categories in line with expertise requirements.

These services are billed to a customer as such

services are provided and the customer will be obligated to make payments for such services typically within a 30-45 day period.

Revenues on a bill-and-hold

arrangement are recognized when control of the product is transferred to the customer, but physical possession of the product transfers

at a point in time in the future.

To determine this, the reason for the arrangement must be substantive, the product must be separately

identified and ready for physical transfer, the customer has the ability to direct the use of the product and the product cannot be directed

to another customer.

The Company has a policy of

recording sales incentives as a contra revenue.

The Company includes shipping

and handling fees billed to customers as revenues.

Any deposits received from

a customer prior to delivery of the purchased product or monies paid prior to the period for which a service is provided are accounted

for as deferred revenue on the balance sheet.

Sales tax is recorded on a

net basis and excluded from revenue.

The Company generally provides

a standard one-year warranty on its products for materials and workmanship but may provide multiple year warranties as negotiated, and

it will pass on the warranties from its vendors, if any, which generally covers this one-year period.

In accordance with ASC 450-20-25,

the Company accrues for product warranties when the loss is probable and can be reasonably estimated.

At September 30, 2021, the

Company has no product warranty accrual given the Company’s historical financial warranty expense.

Cost of Revenues

The Company records direct

material and component costs, direct labor and associated benefits, and manufacturing overhead costs such as supervision, manufacturing

equipment depreciation, rent, and utility costs, all of which are included in inventory prior to a sale, as costs of revenues.

further includes shipping and handling costs as cost of revenues.

Stock-Based Compensation

The Company follows ASC 718,

“Compensation – Stock Compensation.” ASC 718 requires companies to estimate and recognize the fair value of stock-based

awards to employees and directors.

The fair value of the portion of an award that is ultimately expected to vest is recognized as an expense

over the shorter of the service periods or vesting periods using the straight-line attribution method.

The Company adopted ASU 2018-07

and accounts for non-employee share-based awards in accordance with the measurement criteria of ASC 718 and recognizes the fair value

of such awards over the service period.

The Company used the modified prospective method of adoption.

The Company estimates the

fair value of each stock option at the grant date by using the Black-Scholes option pricing model.

The Company continually assesses

the financial strength of its customers.

For the three months ended March 31, 2022, three customers accounted for 22 %, 16 % and 12 % of

total revenues each.

For the three months ended March 31, 2021, revenues from three customers accounted for 32 %, 12 % and 10 % of total

At March 31, 2022, accounts receivable from two customers accounted for 34 % and 19 % of total accounts receivable with no other

single customer accounting for more than 10% of the accounts receivable balance.

At December 31, 2021, accounts receivable from four customers

accounted for 30 %, 22 %, 13 % and 10 % of total accounts receivable with no other single customer accounting for more than 10% of the accounts

receivable balance.

For the three months ended March 31, 2022 and 2021, the Company had a heavy

concentration of sales to federal, state and local governments which represented 69 % and 70 % of revenues, respectively.

Significant Accounting Policies

During the three months ended

March 31, 2022, there were no changes to our significant accounting policies as described in in our Annual Report on Form 10-K for the

year ended December 31, 2021.

See below for our policy related to business combinations, goodwill and indefinite-lived intangible assets

and fair value measurements.

Business Combinations

The purchase price of an acquisition

is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition

To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets assumed, such excess

is allocated to goodwill.

The Company determines the estimated fair values after review and consideration of relevant information, including

discounted cash flows and estimates made by management.

The Company records the net assets and results of operations of an acquired entity

from the acquisition date.

Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred.

Contingent consideration liability

is recognized at the estimated fair value on the acquisition date.

Subsequent changes to the fair value of contingent consideration liability

are recognized in operating expenses in the statement of operations.

Contingent consideration liability related to the acquisition consists

of commercial milestone payments and are valued using a Monte Carlo simulation.

The fair value of commercial milestone payments reflects

management’s estimates of discount rates and probability of achieving certain milestones.

Goodwill and Indefinite-lived Intangible Assets

Upon acquisition, identifiable

intangible assets are recorded at fair value and are carried at cost less accumulated amortization.

Identifiable intangible assets with

finite lives are amortized on a straight-line basis over their estimated useful lives except for customer deposits, for which the amortization

is recorded on a double declining method over the estimate useful life.

The carrying values of intangible assets with finite lives are

reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Goodwill represents the excess

of the purchase prices of an acquired business over the fair value of the underlying net tangible and intangible assets.

The Company is

required to assess goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if circumstances

indicate impairment may have occurred.

The Company first assesses qualitative factors to determine whether it is necessary to perform

the quantitative goodwill impairment test, including macroeconomic conditions, industry and market considerations, and our overall financial

If, after completing the qualitative assessment, it is determined it is more likely than not that the estimated fair value

is greater than the carrying value, the Company concludes no impairment exists.

Alternatively, if the Company determines in the qualitative

assessment, it is more likely than not that the fair value is less than its carrying value, then the Company performs a quantitative goodwill

impairment test to identify both the existence of an impairment and the amount of impairment loss, by comparing the fair value of the

reporting unit with its carrying amount, including goodwill.

If the estimated fair value of the reporting unit is less than the carrying

value, then a goodwill impairment charge is recognized in the amount by which the carrying amount exceeds the fair value, limited to the

total amount of goodwill allocated to that reporting unit.

The goodwill annual assessment test is performed in the fourth quarter of every

year or when an event occurs or circumstances change such that it is reasonably possible that an impairment may exist.

Fair Value Measurements

The fair value of assets and

liabilities are based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement

Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs.

We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable,

to measure fair value:

• Level 1 — Quoted

prices in active markets for identical assets or liabilities.

• Level 2 — Inputs,

other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for

substantially the full term of the assets or liabilities.

• Level 3 — Unobservable

inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The carrying amounts of financial

instruments such as cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate the related fair

values due to the short-term maturities of these instruments.

Net Loss Per Share

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Options to purchase 269,433

shares of common stock and warrants to purchase 542,823 shares of common stock were outstanding at September 30, 2021.

These shares were

not included in the computation of diluted loss per share for the three or nine months ended September 30, 2021 because the effects would

have been anti-dilutive.

These options and warrants may dilute future earnings per share.

Reclassifications

Where necessary, the

prior year’s information has been reclassified to conform to the current period’s statement presentation.

Condensed Statements of Cash Flows, the prepaid inventory of $126,100 that was converted to inventory at September 30, 2020 was

reclassified from inventory to conform to the September 30, 2021 presentation and $69,711

of deferred revenue was reclassed to deferred revenue, noncurrent on the Condensed Balance Sheets.

common shares and warrants to purchase 505,714

shares of common stock were outstanding at March 31, 2022.

Options to purchase 337,633

common shares and warrants to purchase 576,946

shares of common stock were outstanding at March 31, 2021.

These options and warrants were not included in the computation of

diluted loss per share for the three months ended March 31, 2022 and 2021 because the effects would have been anti-dilutive.

These options

and warrants may dilute future earnings per share.

The Company follows ASC

"Disclosures about Segments of an Enterprise and Related Information." During the nine months ended September 30, 2021 and 2020,

the Company only operated in one segment;

therefore, segment information has not been presented.

As reflected in the accompanying

unaudited condensed financial statements for the nine months ended September 30, 2021, the Company had a net loss and net cash used in

operating activities of $ 4,581,228 (which includes $ 814,588 of non-cash compensation expense) and $ 5,160,604 , respectively.

Additionally,

at September 30, 2021, the Company had an accumulated deficit of $ 55,603,834 .

The Company has incurred significant losses from operations

since inception, and such losses are expected to continue.

In April 2019, the

Company issued shares of its common stock in a public offering that generated gross proceeds of $ 13,201,000 ,

which was used to pay off the Company’s debt and to fund business operations.

The Company issued shares in two additional

public offerings generating gross proceeds of $ 11,499,675

in July 2020 and $ 7,500,000

in November 2020.

In addition, the warrants issued in the April 2019 public offering and from earlier private offerings generated an

additional $ 12,611,377

during fiscal 2020 through September 30, 2021 from the exercise of such warrants.

At September 30, 2021, there are warrants outstanding to

purchase up to 542,823

shares of common stock, which if fully exercised would generate an additional $ 3,424,385 .

At September 30, 2021, our

cash balance was $ 23,078,452 and our working capital was $ 26,125,088 .

Management believes it has sufficient cash to fund its liabilities

and operations for at least the next twelve months from the issue date of this report.

Inventory consists of the following:

280-10 for “Disclosures about Segments of an Enterprise and Related Information.” Management assesses its segment

reporting based on how it internally manages and reports the results of its business to its chief operating decision maker.

periods through the date of All Cell acquisition, the Company had, and reported in, one reportable segment.

Subsequent to the

acquisition of All Cell, management continues to review financial results, manage the business and allocate resources on an

aggregate basis.

Therefore, financial results continue to be reported in a single operating segment.

The Company has a history

of net losses, including the accompanying financial statements for the three months ended March 31, 2022 and 2021, where the Company had

net losses of $ 2.3 million (which includes $ 0.1 million of non-cash stock-based compensation expense) and $ 1.3 million (which includes

$ 0.1 million of non-cash stock-based compensation expense), respectively, and net cash used in operating activities of $ 1.9 million and

$ 0.9 million, respectively.

In addition, the Company’s outstanding warrants have generated an additional $ 0.1 million and $ 2.5 million

of proceeds during the three months ended March 31, 2022 and 2021, respectively.

The Company expects to

continue to incur losses for a period of time into the future.

In addition, there is no guarantee that the warrants will be

exercised or that additional capital or debt financing will be available when and to the extent required, or that if available, it

will be on terms acceptable to the Company.

The Company continues to invest in sales and marketing resources and seek out sales

contracts that should provide additional revenues and, in time, generate operating profits.

The cash balance at March

31, 2022 was $ 19.2 million and our working capital was $ 21.8 million at March 31, 2022.

Management believes it

has sufficient cash to fund its liabilities and operations for at least the next twelve months from the issue date of this report.

BUSINESS COMBINATION

March 4, 2022, the Company completed its acquisition of All Cell Technologies, LLC (“All Cell”), a leader in energy storage

This strategic acquisition is expected to increase and diversify our Company’s revenue, gross profitability, manufacturing

capabilities, intellectual portfolio and customer base.

The Company purchased substantially all of the assets and business of All Cell

for 1,055,000 shares of Beam Common Stock (“Closing Consideration”) plus an additional $ 0.8 million in cash for the net working

capital held by All Cell at closing.

In addition, All Cell is

eligible to earn an additional number of shares of Beam Common Stock if it meets certain revenue milestones (the “Earnout

Consideration”).

The Earnout Consideration is:

(i) two times the amount of All Cell revenue and contracted backlog that is

greater than $7.5 million for 2022, and (ii) two times the amount of All Cell 2023 revenue only which exceeds the greater of either

$13.5 million or 135% of the 2022 cumulative revenue, capped at $20.0 million.

Revenues exceeding $20.0 million in 2023 will not be

eligible for the Earnout Consideration.

The maximum aggregate number of shares of Beam Common Stock that the Company will issue to

seller for the Closing Consideration and Earnout Consideration will not exceed 1.8 million shares.

Use of All Cell energy storage

solutions in Beam Global products will not be considered as contributing to the Earnout calculation.

preliminary fair value of consideration transferred consisted of the following (in thousands):

Schedule of Noncash or Part Noncash Acquisitions

Working Capital Cash Payment

Earnout Consideration

Total consideration transferred

following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date (in thousands):

Schedule Of Recognized Identified Assets Acquired And Liabilities

Prepaid expenses

Property, plant and equipment

Intangible assets

Total assets acquired

Customer deposits

Total liabilities assumed

Total assets and liabilities assumed

The estimated fair values assigned

to identifiable assets acquired and liabilities assumed are provisional pending the finalization of the working capital and purchase price

allocation and are based on the information

that was available as of the acquisition date to estimate the fair value of assets acquired and liabilities assumed.

The Company believes

that information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed, but the Company

is waiting for additional information necessary to finalize those fair values.

Therefore, the provisional measurements of fair value reflected

are subject to change and such changes could be significant.

The Company expects to complete the allocation of purchase price as soon

as practicable, but no later than one year after the acquisition date.

The Company incurred $ 0.1

million of transaction costs during the three months ended March 31, 2022, directly related to the acquisition that is reflected in operating

expenses in the statement of operations.

represents the excess of the total purchase price over the fair value of the underlying net assets, largely arising from synergies expected

to be achieved by the combined company and expanded market opportunities.

The goodwill is expected to be fully deductible for tax purposes.

valuation of the Earnout Consideration was performed using a two-factor Monte Carlo simulation, which includes estimates and assumptions

such as forecasted revenues of All Cell, volatility, discount rates, share price and the milestone settlement value.

As such valuation

includes the use of unobservable inputs, it is considered to be a Level 3 measurement.

preliminary fair values assigned to identifiable intangible assets and goodwill acquired are as follows ($ in thousands):

Schedule of acquired intangible assets

Useful Life (yrs)

Developed technology

Customer relationships

The fair values of the developed

technology, trade name, customer relationships and backlog were estimated using an income approach.

Under the income approach, an intangible

asset’s fair value is equal to the present value of future economic benefits in the form of cash flows to be derived from ownership

of the asset.

The estimated fair values were developed by discounting future net cash flows to their present value at market-based rates

The useful lives of the intangible assets for amortization purposes were determined by considering the period of expected cash

flows used to measure the fair values of the intangible assets adjusted as appropriate for entity-specific factors including legal, competitive

and other factors that may limit the useful life.

The identifiable intangible assets are amortized on a straight-line basis over their

estimated useful lives except for customer deposits which uses accelerated depreciation.

Pro Forma Financial Information

following pro forma financial information summarizes the combined results of operations of Beam Global and All Cell as if the

companies had been combined as of the beginning of the three months ended March 31, 2021 (in thousands):

Schedule of Pro Forma Information

Three Months Ended March 31,

The pro forma financial information is presented for information purposes only and is not indicative of the results of operations

that would have been achieved had the acquisition been completed at the beginning of the three months ended March 31, 2021.

the unaudited pro forma financial information is not a projection of future results of operations of the combined company, nor does it

reflect the expected realization of any synergies or cost savings associated with the acquisition.

The unaudited pro forma financial information

includes adjustments to reflect the incremental amortization expense of the identifiable intangible assets and transaction costs.

statement of operations for the three months ended March 31, 2022 includes revenues of $ 0.4 million and loss from operations of $ 0.4 million

from the acquired All Cell business.

Broadview Lease

As part of the

acquisition, the Company assumed a facility lease located in Broadview, Illinois, and recorded $ 0.2

million in right-of-use asset and lease liability.

The lease term ends on August

31, 2023 and contains clauses for annual rent escalation.

Total minimum rental payments remaining as of March 31, 2022 were

million, of which $ 0.1

million is due within 2022.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other

current assets are summarized as follows (in thousands):

Schedule of Other Current Assets

Vendor prepayments

Related party receivable

Prepaid insurance

Total prepaid expenses and other current assets

Related party receivables

as of March 31, 2022 and December 31, 2021 consisted primarily of payroll related taxes due for an employee option exercise.

Inventory consists of the following (in thousands):

Schedule of Inventory

September 30,

Finished goods

1 unchanged sentence

Raw materials

Total net inventory

Total inventory

PROPERTY AND EQUIPMENT

Property and equipment consist

of the following (in thousands):

Schedule of property and equipment

September 30,

Office furniture and equipment

Computer equipment

Computer equipment and software

Leasehold improvements

4 unchanged sentences

ACCRUED EXPENSES

The major components of accrued expenses are summarized

The major components of accrued expenses

are summarized as follows (in thousands):

Accrued expense schedule

September 30,

Accrued vacation

Accrued salaries and bonus

Vendor accruals

Other accrued expense

Total accrued expenses

CONVERTIBLE NOTE PAYABLE - RELATED PARTY AND NOTE PAYABLE

On October 18, 2016, the Company

entered into a five-year employment agreement, effective as of January 1, 2016, with Mr.

Desmond Wheatley, the Chief Executive Officer,

President, and Chairman of the Company (the “Agreement”).

Pursuant to the Agreement, Mr.

Wheatley received an annual deferred

salary of $50,000 which Mr.

Wheatley deferred until such time as Mr.

Wheatley and the Board of Directors agreed that payment of the deferred

salary and/or cessation of the deferral was appropriate.

In August 2018, the Agreement was amended to provide that his salary shall defer

until the earliest to occur of the following:

(i) a permissible event specified in Section 409A of the Code, (ii) December 31, 2020, (iii)

a change of control as defined in the Agreement, or (iv) a sale of all or substantially all of the assets of the Company.

All deferred amounts were

evidenced by an unsecured convertible promissory note payable by the Company to Mr.

Wheatley bearing simple interest at the rate of 10%

per annum, accruing until paid, convertible into shares of the Company’s common stock at $7.50 per share at any time in whole or

in part at Mr.

Wheatley’s discretion.

As the conversion price was equivalent to the fair value of the common stock at various salary

deferral dates prior to June 30, 2018, there was no beneficial conversion feature to this note through such date.

Subsequent to June 30,

2018 through December 31, 2018 and based on the average daily closing price of our common stock, the Company recorded $ 8,672 of debt discount

for the beneficial conversion feature value which is being amortized to interest expense over the term of the note.

For the three months

ended March 31, 2019 and based on the average daily closing price of our common stock, the Company recorded $ 3,967 of debt discount for

the beneficial conversion feature value which is also being amortized to interest expense over the term of the note.

There was no beneficial

conversion value and therefore, no debt discount was recorded for any other periods subsequent to March 31, 2019.

Additionally, on March

29, 2017, the Board of Directors granted Mr.

Wheatley a $35,000 bonus for which Mr.

Wheatley agreed to defer such bonus under the same

terms of his salary deferral.

On September 17, 2019, the

Board of Directors adopted a resolution to pay off the convertible promissory note issued to Mr.

Wheatley for his deferred compensation

in the near future (subject to a recommendation on timing from Mr.

Wheatley), and no additional salary was deferred after September 15,

In February 2020, the remaining debt discount of $ 5,990 was recorded as interest expense, additional interest of $ 3,442 was accrued,

and the total note of $ 220,417 and interest of $ 52,326 was paid to Mr.

On May 1, 2020, the Company

received a U.S.

Small Business Administration Paycheck Protection Program loan of $ 339,262 which was offered through the Coronavirus Aid,

Relief, and Economic Security Act (CARES Act).

This loan was recorded as a note payable, is subject to a 1 % annual interest rate and has

a two year term.

This low interest loan was intended to support short term cash flow in the event we were more heavily impacted by the

COVID-19 virus.

In July 2020, we were able to raise capital and no longer required the loan.

The full amount of the loan was repaid on

November 13, 2020 in addition to $ 1,847 of interest.

In October 2015, the Company

purchased a new vehicle and financed the purchase through a dealer auto loan.

The loan has a term of 60 months, requires minimum monthly

payments of approximately $950, and bears interest at a rate of 5.99 percent.

The final payment was made on this loan in October 31, 2020.

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

be involved in litigation relating to claims arising out of our operations in the normal course of business.

As of September 30, 2021,

there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

In August 2016, the Company

entered into a sublease for its current corporate headquarters and manufacturing facility.

The sublease expired in August 2020 which was

the same term of the master lease for which the Company was the subtenant.

In September 2020, the Company initiated a new five year master

lease agreement, with two optional one year renewals.

Monthly lease payments will range from $52,000 to $58,526 per month over the term

of the lease.

As of March 31, 2022, there

were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

Other Commitments:

2 unchanged sentences

Since inception,

the Company entered into agreements to act as a reseller for certain vendors;

joint development contracts with third parties;

agreements where the Company would pay a referral fee to the referrer for business generated;

sales agent agreements whereby sales agents

would receive a fee equal to a percentage of revenues generated by the agent;

business development agreements and strategic alliance agreements

where both parties agree to cooperate and provide business opportunities to each other and in some instances, provide for a right of first

refusal with respect to certain projects of the other parties;

agreements with vendors where the vendor may provide marketing, investor

relations, public relations, technical consulting or subcontractor services, vendor arrangements with non-binding minimum purchasing provisions,

and financial advisory agreements where the financial advisor would receive a fee and/or commission for raising capital for the Company.

All expenses and liabilities relating to such contracts were recorded in accordance with GAAP during the periods.

The Company evaluates new

leases at inception based on the criteria defined in Leases (Topic 842).

On September 1, 2020, the Company entered into a new five year

operating lease with payments ranging from $52,000 to $58,526.

The lease has two one-year options to extend the term of the lease.

this time, it is not reasonably certain that we will extend the term of the lease and therefore the renewal periods have been excluded

from the right-of-use (“ROU”) asset.

We calculated the present value of the lease payment stream using our effective borrowing

rate of 10 % and recorded a ROU asset and operating lease liability each of $ 2,605,032 at September 1, 2020.

The ROU asset and the corresponding

lease liability are being equally amortized on a straight-line basis over the term of the lease which expires on August 31, 2025.

The tables below show the

operating ROU assets and liabilities as of December 31, 2020 and the balance as of September 30, 2021, including the changes during the

Schedule of Operating right-of use

Operating lease ROU asset as of December 31, 2020

Less amortization of operating lease ROU assets

Operating lease ROU asset as of September 30, 2021

As of September 30, 2021

and December 31, 2020, the current and non-current portions of the lease liability were recorded to the Balance Sheet as follows:

Schedule of lease liability

September 30,

Operating lease liabilities, current

Operating lease liabilities, noncurrent

Total lease liability

The future minimum rental

commitments for our operating leases reconciled to the lease liability as of September 30, 2021 is as follows:

Schedule of future minimum rental commitments

September 30, 2021

Total undiscounted future minimum payments

Less imputed interest

Total lease liability

the Company entered into sales agent agreements whereby sales agents would receive a fee equal to a percentage of revenues generated

by the agent;

agreements with vendors where the vendor may provide marketing, investor relations, public relations, technical consulting

or subcontractor services, vendor arrangements with non-binding minimum purchasing provisions, and financial advisory agreements where

the financial advisor would receive a fee and/or commission for raising capital for the Company.

There was no Federal income

tax expense for the nine months ended September 30, 2021 or 2020 due to the Company’s net losses.

Income tax expense represents

minimum state taxes due.

As a result of the Company’s history of incurring operating losses, a full valuation allowance has been

established to offset all deferred tax assets as of September 30, 2021 and no benefit has been provided for the year to date loss.

a quarterly basis, the company evaluates the positive and negative evidence to assess whether the more likely than not criteria have been

satisfied in determining whether there will be further adjustments to the valuation allowance.

RESTRICTED STOCK GRANTS TO DIRECTORS

On September 30, 2021 the

company granted each of our two non-employee directors annual restricted stock grants of 2,900 shares of our common stock and our lead

independent director an annual restricted stock grant of 4,000 shares of common stock, which vest quarterly in four (4) equal installments

beginning on December 31, 2021.

On the grant date, these shares had a per share fair value of $27.37 based on the closing trading price

of our common stock, or $268,234.

There was no expense recognized in the quarter ended September 30, 2021.

On April 1, 2021, the Board

approved two restricted stock grants to Mr.

Wheatley under the 2011 Stock Incentive Plan.

The total number of shares granted was determined

based on an award of $ 112,500 , divided by the per share closing trading price on April 1, 2021.

On the grant date, the shares had a per

share fair value of $ 40.10 and 2,806 shares were granted, half of which will vest quarterly over three equal installments and half of

which will vest quarterly over 11 equal installments.

During the six months ended September 30, 2021, 1,192 of these shares vested generating

an expense of $ 47,728 .

At September 30, 2021, 1,614 shares are unvested representing $ 64,772 of unrecognized restricted stock grant expense

which will be recognized through the quarter ending December 31, 2023.

On April 16, 2021, the Board

appointed Nancy Floyd to the Company’s board of directors.

Concurrent with her appointment, the Company, upon recommendation of

the Compensation Committee, granted Ms.

Floyd 5,592 shares of restricted stock which had a per share fair value of $ 33.34 on the date

of grant and will vest quarterly through September 30, 2021.

During the nine months ended September 30, 2021, all 5,592 shares vested generating

an expense of $ 186,426 .

At September 30, 2021, all of these shares were vested, and no unrecognized restricted stock grant expense remained.

On April 16, 2021, the Board

appointed Mr.

Posawatz as the Lead Independent Director.

With this appointment, the Company, upon recommendation of the Compensation Committee,

Posawatz 2,246 shares of restricted stock for this role which had a per share fair value of $ 33.34 on the date of grant and

will vest quarterly through September 30, 2021.

During the nine months ended September 30, 2021, all 2,246 shares vested generating an

expense of $ 74,876 .

At September 30, 2021, all of these shares were vested, and no unrecognized restricted stock grant expense remained.

On October 20, 2020, the Company

granted each of our two non-employee directors annual restricted stock grants of 12,200 shares of our common stock and our then lead independent

director an annual restricted stock grant of 17,100 shares of common stock, which vest quarterly in four (4) equal installments.

grant date, these shares had a per share fair value of $ 14.95 based on the closing trading price of our common stock, or $ 620,425 .

the three months ended March 31, 2021, upon the death of our lead independent director, 12,825 unvested shares of restricted stock were

forfeited and returned to the Company.

During the nine months ended September 30, 2021, 18,300 shares of restricted stock relating to

the other two directors vested, generating an expense of $ 273,584 .

At September 30, 2021, all of these shares were vested, and no unrecognized

restricted stock grant expense remained.

On June 17, 2020, the Board

approved two restricted stock grants to Mr.

Wheatley under the 2011 Stock Incentive Plan.

The total number of shares granted was determined

based on an award of $150,000 divided by the per share quoted trading price on June 17, 2020.

On the grant date, the shares had a per

share fair value of $ 7.35 and 20,408 shares were granted, half of which vest quarterly over four equal installments and half vest quarterly

over 12 equal installments.

During the nine months ended September 30, 2021, 5,101 shares from this grant vested and 3,141 shares from

an October 1, 2019 grant vested generating a total expense of $ 56,250 .

At September 30, 2021, 7,196 shares for these 2 grants are unvested

representing $ 50,000 of unrecognized restricted stock grant expense which will be recognized through the quarter ending March 31, 2023.

STOCK OPTIONS AND WARRANTS

tax expense for the three months ended March 31, 2022 or 2021 due to the Company’s net losses.

Income tax expense represents minimum

state taxes due.

As a result of the Company’s history of incurring operating losses, a full valuation allowance has been established

to offset all deferred tax assets as of March 31, 2022 and no benefit has been provided for the year-to-date loss.

On a quarterly basis,

the company evaluates the positive and negative evidence to assess whether the more likely than not criteria have been satisfied in determining

whether there will be further adjustments to the valuation allowance.

STOCKHOLDERS’ EQUITY

Stock Issued For Acquisition

The Company issued 1,055,000

shares of its common stock upon acquiring certain assets of All Cell Technologies, LLC.

See further discussion in note 3.

Business Combination.

Awards Under Stock Incentive Plans

Stock Options

During the three months ended September 30, 2021 and 2020, the Company

recorded non-cash stock option based compensation expense of $ 49,136 and $ 27,068 , respectively.

During the nine months ended

September 30, 2021 and 2020, the Company recorded non-cash stock option based compensation expense of $ 175,724 and $ 81,204 , respectively.

As of September 30, 2021, there was $ 435,461 of unrecognized stock option-based compensation expense that will be recognized over the

next 3 years.

During the three months

ended September 30, 2021, there were no

stock options granted.

There were 89,800

stock options exercised on a cashless basis for 33,142

shares of common stock at a weighted average exercise price of $ 13.27 .

The Company withheld shares to cover income and payroll taxes totaling $ 543,937 ,

which was charged to additional paid in capital.

There were 839

stock options exercised on a cash basis at an exercise price of $12.76 for a total purchase price of $ 10,706 .

During the nine months

ended September 30, 2021, there were no

stock options granted.

There were 95,753

stock options exercised on a cashless basis for 35,522

shares of common stock at a weighted average exercise price of $ 13.34 .

The Company withheld shares to cover income and payroll taxes totaling $ 624,976 ,

which was charged to additional paid in capital.

There were 839

stock options exercised on a cash basis at an exercise price of $12.76 for a total purchase price of $ 10,706 .

There were stock options

outstanding to purchase 222,383

shares of common stock at a weighted average exercise price of $ 9.30

at September 30, 2021.

During the nine months ended September 30, 2021, 22,833

stock options were forfeited.

During the nine months ended

September 30, 2021, warrants to purchase 422,761 shares of the Company’s common stock were exercised generating $ 2,684,520 .

30, 2021, there were warrants outstanding to purchase up to 542,823 shares of the Company’s common stock at a weighted average exercise

price of $ 6.34 .

Option activity for the three months ended March

31, 2022 is as follows:

Schedule of option activity

Number of Options

Weighted Average Exercise Price

Outstanding at December 31, 2021

Outstanding at March 31, 2022

The Company’s stock

option compensation expense was $ 0.1 million for each of the three months ended March 31, 2022 and 2021, and there was $ 1.0 million

of total unrecognized compensation costs related to outstanding stock options at March 31, 2022 which will be recognized over 4.0

Restricted Stock

A summary of activity of the restricted stock

awards for the three months ended March 31, 2022 is as follows:

Schedule of restricted stock award activity

Weighted- Average Grant- Date Fair Value

Nonvested at December 31, 2021

Nonvested at March 31, 2022

As of March 31, 2022, there

were unreleased shares of common stock representing $ 0.3 million of unrecognized restricted stock grant expense which will be recognized

over approximately three years.

A summary of activity of warrants outstanding

for the years ended March 31, 2022 is as follows:

Schedule of warrant activity

Exercise Price

Outstanding at December 31, 2021

Outstanding at March 31, 2022

For each of the identified

periods, revenues can be categorized into the following:

Schedule of revenues

For the Nine Months Ended

September 30,

periods, revenues can be categorized into the following (in thousands):

Schedule of disaggregated revenues

Three Months Ended

Product sales

4 unchanged sentences

Total revenues

At September 30, 2021 and

December 31, 2020, deferred revenue was $ 159,596 and $ 107,489 , respectively.

The September 30, 2021 balance consists of deferred maintenance

fees of $ 156,296 pertaining to services to be provided through the second quarter of 2027 and a $ 3,300 prepayment from a customer.

SUBSEQUENT EVENTS

In October 2021, an option

was granted to an employee to purchase up to 20,000 shares of the Company’s common stock.

This option will vest over 4 years and

has an exercise price of $26.80 per share.

During the three months ended

March 31, 2022 and 2021, 48 % and 32 % of revenues were derived from customers located in California, respectively.

In addition, 4 % of revenues

in the three months ended March 31, 2022 were international sales compared to none in the same period in the prior year.

At March 31, 2022 and December

31, 2021, deferred revenue was $ 1.5

million and $ 0.3 million, respectively.

These amounts represented customer deposits in the amount of $ 1.3

million and $ 0.1

million for March 31, 2022 and December 31, 2021, respectively and prepaid multi-year maintenance plans for previously sold products

which account for $ 0.2

million and $ 0.2

million for March 31, 2022 and December 31, 2021, respectively and pertain to services to be provided through 2028.

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 1. Financial Statements