What changed in this filing

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Item 1. Financial Statements

2022-08-12 compared with 2022-05-25 · 239 added, 186 removed, 328 unchanged (56% of the section changed)

15 unchanged sentences

Sales tax payable

Deferred revenue

Deferred revenue, current

Contingent consideration, current

6 unchanged sentences

Stockholders' equity

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

Preferred stock, $ 0.001 par value, 10,000,000 authorized, none outstanding as of June 30, 2022 and December 31, 2021

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 10,084,184 and 8,971,711 shares issued or issuable and outstanding as of June 30, 2022 and December 31, 2021, respectively

Additional paid-in-capital

5 unchanged sentences

Condensed Statements of Operations

(Unaudited, in thousands)

(Unaudited, in thousands except per share data)

Three Months Ended

Six Months Ended

Cost of revenues

1 unchanged sentence

Loss from operations

Other income (expense)

Interest income

Interest expense

Total other income, net

Loss before income tax expense

Income tax expense

Net loss per share - basic

6 unchanged sentences

(Unaudited, in thousands)

Total Stockholders'

Stockholders'

Paid-in-Capital

Balance at December 31, 2020

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock issued for director services

Stock issued to escrow account

Stock option expense

1 unchanged sentence

Stock option exercise (cashless)

Net loss for the three months ended March 31, 2021

Net loss for the three months

ended March 31, 2021

Balance at March 31, 2021

Total Stockholders'

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

Balance at June 30, 2021

Stockholders’

Paid-in-Capital

Balance at December 31, 2021

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock issued for director services

Stock issued to escrow account

Stock issued for acquisition

1 unchanged sentence

Warrants exercised for cash

Stock option exercise (cashless)

Stock option exercise (for

Balance at March 31, 2022

Stock issued for director services

Stock issued to escrow account

Stock issued for acquisition

Stock option expense

Warrants exercised for cash

Balance at June 30, 2022

The accompanying unaudited notes are an integral

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended

Six Months Ended

Operating Activities:

2 unchanged sentences

Common stock issued for services

Change in fair value of contingent consideration liabilities

Compensation expense related to grant of stock options

36 unchanged sentences

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.

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

and compact, highly energy-dense battery solutions.

Beam’s infrastructure products enable electric vehicle charging and reliable

electrical power 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.

Beam’s energy storage products provide

high energy density in a safe and compact form-factor ideal for the rapidly increasing numbers of mobile and stationary equipment and

products which require electrical energy without being connected to the electrical grid.

March 4, 2022, the Company acquired substantially all the assets of All

Cell Technologies, LLC (“All Cell”), an energy storage solutions and technologies company based in Broadview, Illinois.

to note 3, Business Combination for additional details.

Basis of Presentation

4 unchanged sentences

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 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.

and reclassifications) necessary to present fairly our results of operations and cash flows for the three and six months ended June 30,

2022 and 2021, and our financial position as of June 30, 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.

Certain information and disclosures

32 unchanged sentences

The Company has not experienced any

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

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

losses in such accounts from inception through June 30, 2022.

As of June 30, 2022, approximately $ 13.9 million of the Company’s

cash deposits were greater than the federally insured limits.

2 unchanged sentences

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

For the three months ended June 30, 2022, two customers accounted for 34 % and 14 % of total revenues

and for the six months ended June 30, 2022, two customers accounted for 23 % and 12 % of total revenues each.

For the three months

ended June 30, 2021, revenues from four customers accounted for 22 %, 18 %, 16 % and 10 % of total revenues and for the six months ended June

30, 2021, revenues from three customers accounted for 13 %, 13 % and 11 % of total revenues.

At June 30, 2022, accounts receivable from two

customers accounted for 47 % and 11 % 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.

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 six months ended June

30, 2022 and 2021, the Company had a heavy concentration of sales to federal, state and local governments which represented 61 % and 77 %

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

During the six months ended

June 30, 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.

1 unchanged sentence

and fair value measurements.

Business Combinations

Business Combination

The purchase price of an acquisition

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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.

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

amortization is recorded on an accelerated method over the estimate useful life.

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

23 unchanged sentences

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;

1 — Quoted prices in active markets for identical assets or liabilities.

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.

or other inputs that are observable or can be

corroborated by observable market data for substantially the full term of the assets or liabilities.

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

11 unchanged sentences

Options to purchase 284,433

common shares and warrants to purchase 505,714

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

shares of common stock and warrants to purchase 469,621

shares of common stock were outstanding at June 30, 2022.

Options to purchase 333,980

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.

shares of common stock and warrants to purchase 549,335

shares of common stock were outstanding at June 30, 2021.

These options and warrants were not included in the computation of diluted

loss per share for the three and six months ended June 30, 2022 and 2021 because the effects would have been anti-dilutive.

options and warrants may dilute future earnings per share.

The Company follows ASC 280-10

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.

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.

For periods through the date

of the 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

of net losses.

For the six months ended June 30, 2022 and 2021, the Company had net losses of $ 5.1

million (which includes $ 0.7

million of non-cash expenses) and $ 2.9

million (which included $ 0.5

million of non-cash expenses), respectively, and net cash used in operating activities of $7.4

million and $3.8

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.

During the first six months of 2022, the $7.4 million of operating cash usage included $3.6 million to

purchase inventory and to prepay vendors for inventory to reduce the risk of potential shortages of cells required for battery manufacturing,

and an increase of work in process inventory of EV ARC™ units.

The increases in prepayments and inventory are not expected to be ongoing

quarterly cash requirements, but rather should reduce to lower levels over the next 12 months.

At June 30, 2022, we had

a cash balance of $ 13.8

million and working capital of $ 19.4 million.

Based on the Company’s current operating plan, the Company believes that it has sufficient cash to fund its operations and

meet contractual obligations for at least twelve months from June 30, 2022.

The Company can also manage prepayment and inventory

levels as well as spending levels for sales and marketing resources to help manage our cash over time.

The Company believes that our

business will become profitable in the next few years as our revenues continue to grow, we improve our gross margins and we leverage

our overhead costs, but we expect to continue to incur losses for a period of time.

That may require the Company to raise additional

capital to finance its future operations.

We have shown success in raising capital in public and private markets in the past.

addition, we have an S-3 Shelf registration that will become available on May 23, 2023 or we could pursue debt financings.

addition, the Company’s outstanding warrants have generated $0.3 million and $2.6 million of proceeds during the six months

ended June 30, 2022 and 2021, respectively.

There is no guarantee that profitable operations will be achieved, the warrants will be

exercised or that additional capital or debt financing will be available.

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”).

On March 4, 2022, the Company completed its acquisition of substantially

all the assets of All Cell Technologies, LLC (“All Cell”), a leader in energy storage solutions.

We believe this strategic

acquisition will 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

In addition, All Cell is eligible

to earn an additional number of shares of Beam Common Stock if Beam’s new energy storage business 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):

(i) two times the amount of energy storage products revenue and

contracted backlog that is greater than $7.5 million for 2022, and (ii) two times the amount of energy storage products 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 All Cell for the Closing Consideration and Earnout Consideration will not exceed 1.8 million shares.

from energy storage products used in Beam Global products will not be considered as contributing to the Earnout calculation.

The preliminary fair value

of consideration transferred consisted of the following (in thousands):

Schedule of Noncash or Part Noncash Acquisitions

2 unchanged sentences

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

The following table summarizes

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

Schedule of assets acquired and liabilities assumed

Prepaid expenses

Property, plant and equipment

Intangible assets

Intangible assets, including goodwill

Total assets acquired

2 unchanged sentences

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 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

million of transaction costs during the six months ended June 30, 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.

Goodwill 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):

The 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.

The fair value of the Earnout Consideration is reassessed on a quarterly basis

with the change recorded to operating expenses.

Change in the fair value of the Earnout Consideration during the six months ended June

30, 2022 is as follows (in thousands):

Schedule of fair value earnout

Balance as of December 31, 2021

Acquisition of All Cell

Change in estimated fair value

Balance as of June 30, 2022

The preliminary fair values

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

Schedule of acquired intangible assets

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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):

The 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 six months ended June 30, 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.

Three Months Ended June 30,

Six Months Ended June 30,

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 six months ended June 30, 2021.

In addition, the 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 pro forma financial information includes adjustments to reflect the incremental amortization expense

of the identifiable intangible assets and transaction costs, as well as removes the impact of the debt that was not acquired by the Company.

The statement of operations

for the three and six months ended June 30, 2022 includes revenues of $ 1.4 million and $ 1.8 million, and loss from operations of $ 1.0

million and $ 1.4 million, respectively, from the acquired All Cell assets.

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.

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

June 30, 2022 were $ 0.2 million, of which $ 0.1 million is due within 2022.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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Related party receivables

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

as of June 30, 2022 and December 31, 2021 consisted primarily of payroll related taxes due for employee stock vesting.

Inventory consists of the following (in thousands):

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are summarized as follows (in thousands):

Accrued expense schedule

Schedule of accrued expense

Accrued vacation

7 unchanged sentences

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

As of March 31, 2022, there

As of June 30, 2022, there

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

3 unchanged sentences

Since inception,

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

by the agent;

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

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

2 unchanged sentences

There was no Federal income

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

tax expense for the six months ended June 30, 2022 or 2021 due to the Company’s net losses.

Income tax expense represents minimum

1 unchanged sentence

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.

to offset all deferred tax assets as of June 30, 2022 and no benefit has been provided for the year-to-date loss.

On a quarterly basis,

4 unchanged sentences

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.

shares of its common stock upon acquiring certain assets of All Cell during the six months ended June 30, 2022.

See further discussion

Business Combination.

1 unchanged sentence

Stock Options

Option activity for the three months ended March

Option activity for the six months ended June

30, 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

Outstanding at June 30, 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

option compensation expense was $ 0.1

million and $ 0.2

million for the three and six months ended June 30, 2022, respectively, and $ 0.1

million for each of the three and six months ended June, 30, 2021.

There was $ 1.1

million of total unrecognized compensation costs related to outstanding stock options at June 30, 2022 which will be recognized

Number of stock options vested and unvested as of June 30, 2022 were 191,778 and 92,655, respectively.

Restricted Stock

A summary of activity of the restricted stock

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

awards for the six months ended June 30, 2022 is as follows:

Schedule of restricted stock award activity

Weighted- Average Grant- Date Fair Value

Average Grant-

Date Fair Value

Nonvested at December 31, 2021

Nonvested at March 31, 2022

As of March 31, 2022, there

Nonvested at June 30, 2022

As of June 30, 2022, there

were unreleased shares of common stock representing $ 0.2 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:

over approximately 2.5 years.

A summary of the number of shares of common stock

underlying warrants outstanding for the three months ended June 30, 2022 is as follows:

Schedule of warrant activity

Exercise Price

Weighted Average Exercise Price

Outstanding at December 31, 2021

Outstanding at March 31, 2022

Outstanding at June 30, 2022

For each of the identified

2 unchanged sentences

Three Months Ended

Six Months Ended

Product sales

4 unchanged sentences

Total revenues

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.

During the three and six months

ended June 30, 2022 38 % and 43 % of revenues were derived from customers located in California, respectively.

During the three and six

months ended June 30, 2021, 43 % and 38 % of revenues were derived from customers located in California, respectively.

In addition, 2 % of

revenues in the six months ended June 30, 2022 were international sales compared to none in the same period in the prior year.

At June 30, 2022 and December

31, 2021, deferred revenue was $ 1.8 million and $ 0.3 million, respectively.

These amounts represented customer deposits in the amount

of $ 1.5 million and $ 0.1 million for June 30, 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 June 30, 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