What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-12 compared with 2022-05-25 · 256 added, 210 removed, 130 unchanged (78% of the section changed)

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security, disaster preparedness and outdoor media advertising.

The Company has designed five

product lines for the electrification of transportation, that incorporate the same underlying proprietary technology and value for producing

a unique alternative to grid-tied charging, having a built-in renewable energy source in the form of attached solar panels and/or light

wind generator to produce power and battery storage to store the power.

These products are rapidly deployable and attractively designed.

The Company has designed

five product lines for the electrification of transportation, that incorporate the same underlying proprietary technology and value

for producing a unique alternative to utility grid-tied charging, having a built-in renewable energy source in the form of attached

solar panels and/or light wind generator to produce power and battery storage to store the power.

These products are rapidly

deployable and attractively designed.

Our product lines include:

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EV ARC™ DCFC – DC Fast Charging system for charging EVs.

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

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

EV-Standard™ – patent

issued on December 31, 2019 and still under development.

A lamp standard, EV charging and emergency power product which uses an existing

streetlamp’s foundation and a combination of solar, wind, grid connection and onboard energy storage to provide curbside charging.

UAV ARC™ - patent issued on November 24,

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In addition, with the acquisition

of All Cell Technologies, LLC, we now offer Beam AllCell™ energy storage technology with a highly flexible lithium-ion battery platform

architecture.

The battery design uses a proprietary phase change material which provides a low-cost thermal management solution and a

unique safety mechanism to prevent propagation of thermal runaway.

They are ideally suited for applications where energy density, safety

and specialized enclosures require high power in small spaces.

Drones, submersibles, recreational products and a host of micro mobility

products benefit from this technology.

Beam is already using AllCell™ energy storage products in EV ARC™ products for EV charging

and plan to incorporate this battery technology in our new product designs that are under development.

of All Cell Technologies, LLC (“All Cell”) in March 2022, we now offer Beam AllCell™ energy storage technology with

a highly flexible lithium-ion and lithium iron phosphate battery platform architecture.

The battery design uses a proprietary phase change

material which provides a low-cost thermal management solution and a unique safety mechanism to prevent propagation of thermal runaway.

They are ideally suited for applications where energy density, safety and specialized enclosures require high power in small spaces.

submersibles, recreational products and a host of micro mobility products benefit from this technology.

Beam is already using AllCell™

energy storage products in EV ARC™ products for EV charging and plans to incorporate this battery technology in our new product

designs that are under development.

We believe that we are living

in an increasingly electrified and untethered era, where electricity is replacing other forms of fuel and energy and doing so, increasingly

without being connected to the grid through the use of batteries and other forms of energy storage.

We also believe that there is a clear

need for a rapidly deployable and highly scalable EV charging infrastructure, and that our products fulfill these requirements.

grid-tied installations which require general and electrical contractors, engineers, consultants, digging trenches, permitting, pouring

concrete, wiring, and ongoing utility bills, the EV ARC™ systems, equipped with our proprietary battery technologies, can be deployed

in minutes, not months, and are powered by renewable energy so there is no utility bill.

We are agnostic as to the EV charging service

equipment or provider and integrate best of breed solutions based upon our customer’s requirements.

For example, our EV ARC™

and Solar Tree® products have been deployed with ChargePoint, Blink, Enel X, Electrify America and other high quality EV charging

We can make recommendations to customers, or we can comply with their specifications and/or existing charger networks.

they generate and store all their own electricity, our products replace the infrastructure required to support EV chargers, but not the

in an increasingly electrified era, where electricity is replacing other forms of fuel and energy without being connected to the utility

grid through the use of batteries and other forms of energy storage.

We also believe that there is a clear need for a rapidly deployable

and highly scalable EV charging infrastructure, and that our products fulfill these requirements.

Unlike utility grid-tied installations

which require general and electrical contractors, engineers, consultants, digging trenches, permitting, pouring concrete, wiring, and

ongoing utility bills, the EV ARC™ systems, equipped with our proprietary battery technologies, can be deployed in minutes, not

months, and are powered by renewable energy so there is no utility bill.

We are agnostic as to the EV charging service equipment or provider

and integrate best of breed solutions based upon our customer’s requirements.

For example, our EV ARC™ and Solar Tree®

products have been deployed with ChargePoint, Blink, Enel X, Electrify America and other high quality EV charging solutions.

recommendations to customers, or we can comply with their specifications and/or existing charger networks.

Because they generate and store

all their own electricity, our products replace the utility grid and civil infrastructure required to support EV chargers, but not the

chargers themselves.

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Overall Business Outlook

Our revenues increased 175%

from $1.4 million in the first quarter of 2021 to $3.8 million for the first quarter of 2022.

Primarily due to our investment in sales

and marketing resources over the past two years which has created increased demand for our product, as well as an increase of $.4 million

of sales for our battery storage business in March following the acquisition of All Cell Technologies, LLC.

During the first quarter of

2022, revenues from federal customers and from enterprise customers showed strong growth compared to the same period in the prior year.

We invested in our federal business channel with the addition of a federal lobbyist, a federal business development resource and a government

relations employee who are helping to identify opportunities on the federal side, including increased awareness of our product and outreach

with federal agencies.

In addition, as companies are moving back to work from working from home during the past two years due to the pandemic,

there is an increase in demand for workplace charging and corporate fleets.

We continued to have material revenues from state and local

agencies which comprised 69% and 70% of our sales in Q1 of 2022 and 2021, respectively.

In addition, there is increased support for funding

EV charging infrastructure on the state and federal level, as well as a number of federal grants available in addition to the Federal

Solar Investment Tax Credit and Rule 179 accelerated depreciation which provide a strong financial incentive for many of our target customers.

Net Zero Emission Initiatives continues to expand at the federal, state and local levels and with private enterprise.

We expect the electric

vehicle market to continue to experience significant growth over the next decade as supported by an expected 61 new electric vehicles

launching in 2022 which will require additional EV charging infrastructure.

We believe our products are uniquely positioned to benefit

from this growth.

The Company’s acquisition

of All Cell Technologies, LLC, a battery storage company, will provide new customer opportunities for Beam Global’s products and

We believe Beam’s gross margin will improve by utilizing the Beam All Cell battery in its EV ARCs™ as it did for

10 years in the past, but now at lower cost.

Beam’s All Cell batteries are ideally suited for applications where energy density,

safety and bespoke enclosures require high power in small spaces.

Drones, submersibles, recreational products and a host of micro mobility

and electric vehicle products are already benefiting from AllCell’s highly differentiated products.

With the continued growth of

untethered electrification, we believe there is opportunity for increased demand in these markets and others.

revenues increased 114% from $3.5 million in the first six months of 2021 to $7.5 million for the first six months of 2022, primarily

due to our investment in sales and marketing resources over the past two years which has created increased demand for our EV ARC™ renewable

chargers, as well as an increase of $1.8 million of sales for our battery storage business since March following the acquisition of All

During the first six months of 2022, revenues from federal, state and local governments increased by $1.8 million compared to the

prior year, primarily due to an increase in sales to the State of California and federal customers.

In June, we were awarded a new three-year

statewide contract with the State of California which can be used by state, local and municipal government entities throughout the U.S.,

not just California, and provides previously negotiated pricing to make the procurement process easier.

We invested in our federal business

channel with the addition of a federal lobbyist, a federal business development resource and a government relations employee who are

helping to identify opportunities on the federal side, including increasing awareness of our product and outreach with federal agencies.

In addition, as companies are moving back to work from working from home during the past two years due to the pandemic, we are seeing

an increase in orders for workplace charging and corporate fleets for enterprise customers.

There is increased support for funding EV

charging infrastructure on the state and federal level, as well as a number of federal grants available in addition to the Federal Solar

Investment Tax Credit and accelerated depreciation as allowed under Section 179 of IRS code which

provide a strong financial incentive for many of our target customers.

Net Zero Emission Initiatives continues to expand at the federal,

state and local levels and with private enterprise.

We expect the electric vehicle market to continue to experience significant growth

over the next decade (60 new electric vehicles are expected to launch in 2022 alone) which will require additional EV charging infrastructure.

We believe our products are uniquely positioned to benefit from this growth.

We believe the Company’s

acquisition of the assets of All Cell, a battery storage company, will provide new customer opportunities for our Beam Global’s

As a result of the acquisition of All Cell, we believe Beam’s gross margin will improve by utilizing the Beam All Cell

battery in its EV ARCs™ as it did for 8 years in the past, but now at lower cost.

Beam’s All Cell batteries are ideally suited

for applications where energy density, safety and bespoke enclosures require high power in small spaces.

Drones, submersibles, recreational

products and a host of micro mobility and electric vehicle products are already benefiting from All Cell’s highly differentiated

With the continued growth of untethered electrification, we believe there is opportunity for increased demand in these markets

We continue to work with The

Superlative Group, an industry leading consultant engaged in the selling of corporate sponsorships and have identified several potential

corporate sponsors for a global naming rights agreement to network(s) of EV ARC™ units.

Superlative is compensated when they are

successful in securing a sponsor for our Driving on Sunshine network.

This business model can be replicated in other cities throughout

Our energy security business is connected with the deployment of our EV charging infrastructure products and serves as an

additional benefit to the value proposition of our charging products which, along with their integrated emergency power panels, can continue

to operate, charge EVs, and deliver emergency power during utility grid failures.

Our proprietary and state-of-the-art storage batteries

installed on our products and powering EV chargers are immune to grid failures and provide another benefit for customers such as municipalities,

counties, states, the federal government, hospitals, fire departments, large private enterprises with substantial facilities, and vehicle

fleet operators or anyone who needs a reliable source of electricity to fuel electric vehicles.

corporate sponsors to engage in a global naming rights agreement that would provide their corporate branding to network(s) of EV ARC™

units deployed throughout a city.

Superlative is compensated when they are successful in securing a sponsor for our Driving on Sunshine

This business model can be replicated in other cities throughout the country.

Our energy security business is connected with

the deployment of our EV charging infrastructure products and serves as an additional benefit to the value proposition of our charging

products which, along with their integrated emergency power panels, can continue to operate, charge EVs, and deliver emergency power during

utility grid failures.

Our proprietary and state-of-the-art storage batteries, combined with solar or wind generation, integrated into

our products and powering EV chargers are immune to grid failures and provide another benefit for customers such as municipalities, counties,

states, the federal government, hospitals, fire departments, large private enterprises with substantial facilities, and vehicle fleet

operators or anyone who needs a reliable source of electricity to fuel electric vehicles.

We have begun development

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Gross margins improved in

the quarter ended March 31, 2022, compared to the same period in 2021.

The increase in revenues of EV ARC TM systems from 18

in the first quarter of 2021 to 45 in the first quarter of 2022 resulted in favorable fixed overhead absorption and improved labor efficiencies

gained by the higher volume.

This was partially offset by ongoing inflation and supply chain driven cost increases on many of our components,

including steel, in addition to increased delivery charges due to fuel price increases.

We believe these cost increases are largely a

temporary increase brought on by supply chain issues resulting from plant closures and staffing shortages due to the Covid-19 virus as

well as other transitory inflationary pressures.

As the supply chain issues are resolved over time and costs begin to come back down in

the coming months and years, we expect to see a reduction in the cost of our bill of materials, which when combined with the cost reductions

we anticipate through use of our in-house battery manufacturing, should contribute to a material reduction in our product costs.

implementing lean manufacturing process improvements and making engineering changes to our product where we expect to benefit from cost

Many of the components that we integrate into our products are manufactured by others.

This is consistent with our strategy

to take advantage of the investment by large and well-funded organizations in the improvement of various components and sub-assemblies

which we integrate into our final product.

Batteries are the highest cost contributor to our bill of materials, but with the March 2022

purchase of All Cell Technologies, LLC, a lithium-ion battery manufacturer, we expect those costs to be significantly reduced.

in the process of identifying certain components and sub-assemblies which we manufacture or assemble in-house for which we intend to seek

outsourced contracted manufacturing.

We believe that outsourcing certain components and sub-assemblies will further reduce our costs,

increase our gross margins, and significantly increase the potential output from our factory.

We expect to see a significant increase

in the demand for electric vehicle charging infrastructure and as such we do not anticipate significant pricing pressure on our products.

The combination of this increase in demand for electric vehicle charging infrastructure and our revenues, and the cost cutting measures

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

the six months ended June 30, 2022 as a percentage of sales, compared to the same period in 2021.

The increase in EV ARC ™

systems sold from 42 units in the first six months of 2021 to 74 units in the first six months of 2022 resulted in favorable fixed overhead

absorption and improved labor efficiencies gained by the higher volume.

This was partially offset by ongoing inflation and supply chain

driven cost increases on many of our components, including steel, in addition to increased delivery charges due to fuel price increases.

We believe these cost increases are largely a temporary increase brought on by supply chain issues resulting from plant closures and staffing

shortages due to the Covid-19 virus as well as other transitory inflationary pressures.

We believe the supply chain issues will resolve

over time and costs will begin to come back down in the coming months and years.

We also expect to see a reduction in the cost of our

bill of materials.

Batteries are the highest cost contributor to our bill of materials, but with the March 2022 purchase of All Cell’s

assets, a battery manufacturer, we expect those costs to be significantly reduced.

We are implementing lean manufacturing process improvements

and making engineering changes to our product where we expect to benefit from cost reductions.

Many of the components that we integrate

into our products are manufactured by others.

This is consistent with our strategy to take advantage of the investment by large and well-funded

organizations in the improvement of various components and sub-assemblies which we integrate into our final product.

We continue to identify

components and sub-assemblies that may be more cost effective to outsource, which may further reduce our costs, increase our gross margins,

and significantly increase the potential output from our factory.

We expect to see a significant increase in the demand for electric vehicle

charging infrastructure and as such we do not anticipate significant pricing pressure on our products.

The combination of this increase

in demand for electric vehicle charging infrastructure and our revenues, and the cost cutting measures described above lead us to believe

that we will see significant improvement in our gross margins over the next year.

Significant Accounting Policies and Estimates

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Changes in Accounting Principles .

There were no significant changes in accounting principles that were adopted during the three months ended March 31, 2022.

There were no significant changes in accounting principles that were adopted during the three months ended June 30, 2022.

Results of Operations

Comparison of Results of Operations for the

Three Months Ended March 31, 2022 and 2021

For the quarter

ended March 31, 2022, our revenues increased 175% to $3.8 million compared to $1.4 million for the same period in 2021.

Revenues to customers

in California represented 48% of the total, which continues to be a strong market for EV ARC TM systems.

Three Months Ended June 30, 2022 and 2021

quarter ended June 30, 2022, our revenues increased 75% to $3.7 million compared to $2.1 million for the same period in 2021.

to customers in California represented 38% of the total, which continues to be a strong market for EV ARC™ systems.

Most of these customers

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to the prior year.

We recorded revenues in March 2022 of $0.4 million for energy storage as a result of our acquisition of All Cell Technologies

which closed on March 4, 2022.

We are currently engaged in a contract renewal process with the State of California’s Department

of General Services.

In addition, the General Services Administration (GSA) Beam was awarded a federal blanket purchase agreement (BPA)

which will provide federal agencies a streamlined procurement process for procuring EV ARCs.

During fiscal 2021, we invested in sales

and marketing employees, resources and programs to raise awareness of the benefits and value of our products, which is reflected in the

strong year over year sales growth in the quarter.

The receipt of orders may continue to be uneven due to the timing of customer approvals

or budget cycles, however we believe that as EV adoption increases in concert with increased availability of infrastructure funding, our

business will be less impacted by specific variations in order timing.

quarter ended March 31, 2022, our gross loss was $0.3 million, or 8% of sales, compared to $0.1 million, or 11% of sales in the same quarter

We recorded energy storage revenue of $1.4 million as a result of our acquisition of All Cell which closed on March

We were awarded a new contract with the State of California’s Department of General Services in June 2022 for a three-year

period plus two optional one-year extensions.

In addition, the General Services Administration (GSA) awarded Beam Global a federal blanket

purchase agreement (BPA) which will provide federal agencies a streamlined procurement process for procuring EV ARC ™ systems.

We continue to invest in sales and marketing employees, resources and programs to raise awareness of the benefits and value of our products,

which is reflected in the strong year over year sales growth in the quarter.

The receipt of orders may continue to be uneven due to the

timing of customer approvals or budget cycles, however we believe that as EV adoption increases in concert with increased availability

of infrastructure funding, our business will be less impacted by specific variations in order timing.

quarter ended June 30, 2022, our gross loss was $0.3 million, or 9% of sales, compared to $0.3 million, or 13% of sales in the same quarter

of the prior year.

As a percentage of sales, the margin improved by 4 percentage points, primarily due to the increase in production levels

in the current quarter compared to the first quarter of 2021, which resulted in favorable fixed overhead absorption.

in the current quarter compared to the second quarter of 2021, which resulted in favorable fixed overhead absorption.

In addition, our

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We expect our cost per unit to continue to

decrease as we expect to see material costs return to normalcy post pandemic.

We also acquired a lithium-ion battery manufacturer, All

Cell Technologies, LLC in March 2022, which should significantly reduce the cost of the batteries in our units.

In addition, as we expect

the Company to grow in 2022 and beyond, we expect our fixed overhead absorption to continue to improve.

decrease as we expect to see material costs return to normalcy post pandemic and as our volumes increase.

We also acquired a battery manufacturer,

All Cell in March 2022, which is expected to significantly reduce the cost of the batteries in our units.

In addition, as we expect the

Company to grow in 2022 and beyond, we expect our fixed overhead absorption to continue to improve.

Operating Expenses.

operating expenses were $2.0 million for the first quarter of 2022, compared to $1.1 million for the same period in the prior year, a

79% increase.

The increase was primarily due to $0.3 million for increased sales and marketing expense to support revenue growth, $0.2

million for expenses related to the newly acquired All Cell Technologies, $0.2 million increase for legal and accounting services, partially

attributable to the acquisition, and $0.2 million of other net expenses.

operating expenses were $2.5 million for the quarter ended June 30, 2022, compared to $1.4 million for the same period in the prior year,

an 82% increase.

The increase was primarily due to $0.8 million in expenses attributable to the newly acquired All Cell and $0.2 million

increase for accounting and legal services, primarily attributable to the acquisition.

Increases in other operating expenses were mostly

offset by a gain recorded from the favorable change in fair value of contingent consideration related to the All Cell acquisition.

Comparison of Results of Operations for the

Six Months Ended June 30, 2022 and 2021

months ended June 30, 2022, our revenues increased 114% to $7.5 million compared to $3.5 million for the same period in 2021.

to customers in California represented 43% of the total, which continues to be a strong market for EV ARC ™ systems.

these customers were state agencies or municipalities.

Revenues to federal customers and corporate enterprises also increased during the

quarter compared to the prior year.

We recorded energy storage revenues of $1.8 million as a result of our acquisition of All Cell which

closed on March 4, 2022.

We were awarded a new contract with the State of California’s Department of General Services in June 2022

for a three-year period plus two optional one-year extensions.

In addition, the General Services Administration (GSA) awarded Beam Global

a federal blanket purchase agreement (BPA) which will provide federal agencies a streamlined procurement process for procuring EV ARCs.

We continue to invest in sales and marketing employees, resources and programs to raise awareness of the benefits and value of our products,

which is reflected in the strong year over year sales growth in the quarter.

The receipt of orders may continue to be uneven due to the

timing of customer approvals or budget cycles, however we believe that as EV adoption increases in concert with increased availability

of infrastructure funding, our business will be less impacted by specific variations in order timing.

six months ended June 30, 2022, our gross loss was $0.6 million, or 8% of sales, compared to $0.4 million, or 12% of sales in the same

quarter of the prior year.

As a percentage of sales, the margin improved by 4 percentage points, primarily due to the increase in production

levels in the current quarter compared to the same period in 2021, which resulted in favorable fixed overhead absorption.

our labor efficiency improved during the quarter as a result of a steady flow of units through the factory.

This was partially offset

by an increase in material costs for steel, batteries and other components, due to the Covid-19 pandemic and other inflationary pressures.

Shipping costs have increased globally as well as gas prices which have increased our delivery costs.

We expect our cost per unit to continue

to decrease as we expect to see material costs return to normalcy post pandemic.

We also acquired a battery manufacturer, All Cell in

March 2022, which should significantly reduce the cost of the batteries in our units.

In addition, as we expect the Company to grow in

2022 and beyond, we expect our fixed overhead absorption to continue to improve.

Operating Expenses.

operating expenses were $4.5 million for the six months ended June 30, 2022, compared to $2.5 million for the same period in the prior

year, an 81% increase, but a decrease as a percentage of revenue of 11 percentage points.

The increase was primarily due to $1.1 million

in expenses attributable to the newly acquired All Cell, $0.4 million increase for legal and accounting services, primarily attributable

to the acquisition, and $0.3 million increase for sales and marketing costs to generate increased sales levels.

Increases in other operating

expenses were mostly offset by a $0.2 million gain recorded from the favorable change in fair value of contingent consideration related

to the All Cell acquisition.

Liquidity and Capital Resources

At March 31, 2022, we had

cash of $19.2 million, compared to cash of $21.9 million at December 31, 2021.

At June 30, 2022, we had cash

of $13.8 million, compared to cash of $21.9 million at December 31, 2021.

We have historically met our cash needs through a combination

of proceeds received from private and public offerings of our securities and loans.

Our cash requirements are generally for operating

of debt and equity financings.

Our cash requirements are generally for operating activities.

Our cash flows from operating,

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Net cash provided by financing activities

For the three months ended

March 31, 2022, our cash used in operating activities was $1.9 million compared to $0.9 million for the three months ended March 31, 2021.

Net loss of $2.3 million for the quarter ended March 31, 2022 was increased by $0.4 million of non-cash expense items that included depreciation

and amortization of $0.2 million, common stock issued for services for director compensation of $0.1 million and non-cash compensation

expense related to the grant of stock options of $.01 million.

Further, cash used in operations included an increase in prepaid expenses

and other current assets by $1.5 million, primarily related to the purchase of cells and $0.6 million increase in inventory based on the

sales forecast.

Cash provided by operations included a $1.2 million decrease in accounts receivable due to the collection of a couple

slow pay accounts from 2021, $0.5 million decrease in accounts payable, $0.4 million increase in accrued expenses and $0.1 million increase

in deferred revenue.

For the six months ended June

30, 2022, our cash used in operating activities was $7.4 million compared to $3.8 million for the same period in 2021.

Net loss of $5.1

million for the six months ended June 30, 2022 was increased by $0.7 million of non-cash expense items that included depreciation and

amortization of $0.5 million, common stock issued for services for director compensation of $0.2 million and non-cash compensation expense

related to the grant of stock options of $0.2 million.

Further, cash used in operations included an increase in prepaid expenses and other

current assets by $3.0 million, primarily related to the prepayment of battery cells, and $3.5 million increase in inventory (i) to secure

battery cells required for battery manufacturing in case of potential future supply chain challenges and (ii) due to higher work in work

in process inventory nearly complete EV ARC units that were waiting for parts at June 30, 2022.

The increases in prepayments and inventory

are not expected to continue in future quarters, but rather should reduce to lower levels over the next 12 months.

Cash provided by operations

included a $0.9 million decrease in accounts receivable due to the collection of a couple of slow paying accounts from 2021, $2.1 million

increase in accounts payable primarily for inventory, $0.3 million increase in deferred revenue and $0.1 million increase in accrued expenses.

Net loss of $2.9 million for

the three months ended March 31, 2021 decreased by $0.2 million for non-cash expense items that included depreciation and amortization,

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

the six months ended June 30, 2021 decreased by $0.5 million for non-cash expense items that included depreciation and amortization, common

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

of operating lease right of use asset.

Cash used in operations for the period included a $0.5 million increase in inventory purchases

and a $0.1 million reduction of sales tax payable.

Cash provided by operations included a $0.2 million decrease in accounts receivable

due to lower revenues in the first quarter of 2021, compared to the fourth quarter of 2020, a $0.2 million decrease in prepaid expenses

and other current assets as the December 31, 2020 balance included a receivable for payment due for warrant exercises, a $0.2 million

increase in accounts payable primarily due to increased inventory purchases, and a $0.1 million increase in accrued expenses for accrued

payroll for Q1 2021 that was paid in Q2 2021.

Cash used in operations for the period included a $1.0 million increase in accounts receivable

due to some slow payments from Q1 shipments and a $0.8 increase in inventory based on forecasted requirements.

Cash provided by operations

included a $0.3 increase in accounts payable primarily due to increased inventory purchases.

Cash used in investing activities

in the three months ended March 31, 2022 included $0.8 million cash payment for working capital payment related to the acquisition of

All Cell Technologies, LLC and $0.1 million to purchase equipment.

The three months ended March 31, 2021 included $0.1 million to fund

patent related costs and to purchase equipment.

In the three months ended

March 31, 2022, cash generated by our financing activities included $0.1 million from the exercise of warrants, compared to $2.4 million

for the exercise of warrants for the same period in the prior year.

Current assets increased to

$28.0 million at March 31, 2022 from $27.6 million at December 31, 2021.

Current liabilities increased to $6.1 million at March 31, 2022

from $3.0 million at December 31, 2021, primarily due to the recording of $0.9 million for contingent consideration, current based on

the terms of the acquisition of All Cell Technologies, LLC, and a $1.3 million increase in deferred revenue for customer deposits received

from customers.

As a result, our working capital decreased to $21.8 million at March 31, 2022 compared to $24.6 million at December 31,

The Company has been

focused on marketing and sales efforts over the past two years to support an increase in revenues.

We saw a 45% increase in revenues

in 2021 compared to 2020, and the first quarter of 2022 was 175% higher than the first quarter of 2021 which shows continued

improvement on revenues.

While the Company has still not earned a gross profit on its sale of products, as revenues increase, we

expect to see our fixed overhead costs spread over more units, which will reduce the cost per unit.

Management has made several

design changes and process improvements in our manufacturing operations in 2021 and Q1 2022 which has helped to increase labor

efficiency and reduce costs.

At the same time, supply chain issues related to the COVID-19 virus have caused an increase in certain

of our material costs, most notably in steel purchases.

However, we believe that we will continue to improve our gross profit as our

revenues grow.

Management believes that with anticipated increased production volumes, efficiencies will continue to improve, and

the fixed overhead cost per unit will decrease.

In addition, our suppliers believe that costs that have increased this past year

should start to come back down in the later part of 2022.

This should result in increasing gross profits on the EV ARC ™ and

Solar Tree® products in the future.

in the six months ended June 30, 2022 included $0.8 million cash payment for working capital payment related to the acquisition of All

Cell and $0.2 million to purchase equipment.

The three months ended June 30, 2021 included $0.2 million to fund patent related costs and

to purchase equipment.

In the six months ended June

30, 2022, cash generated by our financing activities included $0.3 million from the exercise of warrants, compared to $2.6 million for

the exercise of warrants for the same period in the prior year.

Current assets were $27.2

million at June 30, 2022 and $27.6 million at December 31, 2021.

Current liabilities increased to $7.9 million at June 30, 2022 from $3.0

million at December 31, 2021, primarily due to the acquisition of All Cell, including additions of $2.3 million in accounts payable and

accrued liabilities, $0.7 million in contingent consideration, current, based on the terms of the acquisition, and $1.5 million increase

in deferred revenue for customer deposits.

As a result, our working capital decreased to $19.4 million at June 30, 2022 compared to $24.6

million at December 31, 2021.

The Company has been focused

on marketing and sales efforts over the past two years to support an increase in revenues.

We saw a 45% increase in revenues in 2021 compared

to 2020, and the first half of 2022 was 114% higher than the first half of 2021 which shows continued improvement on revenues.

Company has still not earned a gross profit on its sale of products, as revenues increase, we expect to see our fixed overhead costs spread

over more units, which will reduce the cost per unit.

Management has made several design changes and process improvements in our manufacturing

operations in 2021 and the first half of 2022 which has helped to increase labor efficiency and reduce costs.

At the same time, supply

chain issues related to the COVID-19 virus have caused an increase in certain of our material costs, most notably in steel purchases.

However, we believe that we will continue to improve our gross profit as our revenues grow.

Management believes that with anticipated

increased production volumes, efficiencies will continue to improve, and the fixed overhead cost per unit will decrease.

our suppliers believe that costs that have increased over the past year should start to come back down in the later part of 2022.

should result in increasing gross profits on the EV ARC ™ and Solar Tree® products in the future.

The Company may be required

to raise capital from the private or public issuance of its securities or debt instruments until it achieves positive cash flow from its

business, which is predicated on increasing sales volumes and the continuation of production cost reduction measures.

The Company has

505,714 warrants remaining at March 31, 2022, which could potentially generate an additional $3.2 million of proceeds over the next 2

years, depending on the market value of our stock and the warrant holders’ ability to exercise them.

The proceeds from these offerings

are expected to provide working capital to fund business operations and the development of new products.

Management cannot currently

predict when or if it will achieve positive cash flow.

to raise capital until it achieves positive cash flow from its business, which is predicated on increasing sales volumes and the continuation

of production cost reduction measures.

The Company has warrants to purchase 469,621 shares of our Common Stock outstanding at June 30,

2022, which could potentially generate an additional $3.0 million of proceeds over the next 2 years, depending on the market value of

our stock and the warrant holders’ ability to exercise them.

The proceeds from these offerings are expected to provide working capital

to fund business operations and the development of new products.

Management cannot currently predict when or if it will achieve positive

On March 4, 2022, the Company

completed an acquisition of All Cell Technologies, LLC (“All Cell”), a leader in energy storage solutions.

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”) (on the closing date, based on the closing price of the Beam Common Stock of $13.61,

such shares had a value of approximately $14.4 million) plus an additional $0.8 million in cash for the net working capital of primarily

inventory held by All Cell at closing.

In addition to the cash paid for the working capital of $0.8 million, the Purchase Agreement requires

a capital investment of not less than $1.5 million of equipment to be used for the business.

The maximum aggregate number of shares of

Common Stock that the Company will issue to All Cell for the Closing Consideration and Earnout Consideration will not exceed 1.8 million

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

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”) (on the closing date, based on the closing price of the Beam Common

Stock of $13.61, such shares had a value of approximately $14.4 million) plus an additional $0.8 million in cash for the net working capital

of primarily inventory held by All Cell at closing.

In addition to the cash paid for the working capital of $0.8 million, the Purchase

Agreement requires a capital investment of not less than $1.5 million of equipment to be used for the business.

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 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 Common Stock that

the Company will issue to All Cell for the Closing Consideration and Earnout Consideration will not exceed 1.8 million shares.

Management believes that evolution

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What changed 10-Q

Item 2. Management’s Discussion and Analysis