What changed in this filing

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Item 1. Financial Statements

2022-11-10 compared with 2022-08-12 · 198 added, 157 removed, 410 unchanged (46% of the section changed)

2 unchanged sentences

(In thousands)

September 30,

Current assets

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Stockholders' equity

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

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

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 10,095,562 and 8,971,711 shares issued or issuable and outstanding as of September 30, 2022 and December 31, 2021, respectively.

Additional paid-in-capital

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of revenues

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Balance at December 31, 2020

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

Net loss for the three months ended March 31, 2021

Balance at March 31, 2021

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 June 30, 2021

Net loss for the three months ended June 30, 2021

Balance at June 30, 2021

Stock issued for director services - vested

Stock issued to escrow account - unvested

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

Balance at September 30, 2021

Stockholders'

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Balance at December 31, 2021

Stock issued for director services

Stock issued to escrow account

Stock issued for director services - vested

Stock issued to escrow account - unvested

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 issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

1 unchanged sentence

Balance at June 30, 2022

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Stock issued for Committed Equity Facility

Balance at September 30, 2022

The accompanying unaudited notes are an integral

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(Unaudited, in thousands)

Six Months Ended

Nine Months Ended

September 30,

Operating Activities:

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Prepaid expenses and other current assets

Increase (decrease) in:

Accounts payable

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Investing Activities:

Payment for acquisition

Working capital payment for acquisition

Purchases of equipment

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Proceeds from warrant exercises

Payments of equity offering costs

Net cash provided by financing activities

Net (decrease) increase in cash

Net decrease in cash

Cash at beginning of period

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Fair value of common stock issued as consideration for business combination

Purchase of property and equipment by incurring current liabilities

Depreciation cost capitalized into inventory

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

Issuance of stock for Committed Equity Line

The accompanying unaudited notes are an integral

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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.

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

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

On 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.

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 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.

and reclassifications) necessary to present fairly our results of operations and cash flows for the three and nine months ended September

30, 2022 and 2021, and our financial position as of September 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

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The Company has not experienced any

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

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

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

As of September 30, 2022, approximately $ 4.9 million of the Company’s

cash deposits were greater than the federally insured limits.

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the financial strength of its customers.

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.

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.

For the three months ended September 30, 2022, two customers accounted for 22 % and 10 % of total

revenues each and for the nine months ended September 30, 2022, two customers accounted for 15 % and 10 % of total revenues each.

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

At September 30, 2022, accounts receivable from two customers accounted for 25 % and 11 % 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 nine months ended September 30, 2022 and 2021, the Company had a heavy concentration of

sales to federal, state and local governments which represented 58 % and 84 % of revenues, respectively.

Significant Accounting Policies

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.

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

and fair value measurements.

During the nine months ended

September 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.

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

assets and fair value measurements.

Business Combination

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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;

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.

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

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Options to purchase 279,658

shares of common stock and warrants to purchase 469,621

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

shares of common stock and warrants to purchase 469,305 shares of common stock were outstanding at September 30, 2022.

Options to purchase

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.

222,383 shares of common stock and warrants to purchase 542,823 shares of common stock were outstanding at September 30, 2021.

These options

and warrants were not included in the computation of diluted loss per share for the three and nine months ended September 30, 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 280-10

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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.

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.

For the nine months ended September 30, 2022 and 2021, the Company had net losses of $ 11.9 million (which includes $ 5.1

million of non-cash expenses) and $ 4.6 million (which included $ 0.9 million of non-cash expenses), respectively, and net cash used in

operating activities of $15.7 million and $5.2 million, respectively.

During the first nine months of 2022, the $15.7 million of operating

cash usage included $9.1 million to purchase inventory and to prepay vendors for inventory to reduce the risk of potential shortages of

cells required for battery manufacturing, and to increase work in process and finished inventory of EV ARC™ units based on a strong

revenue forecast.

The prepayment and inventory balances are not expected to continue to increase and utilize cash at the same rate as

the first nine months, but rather should level off or reduce to lower levels over the next 12 months.

At September 30, 2022, the

Company had a cash balance of $ 4.7 million and working capital of $ 12.8 million .

Based on the Company’s current operating plan,

the Company believes that it has the ability to fund its operations and meet contractual obligations for at least twelve months from September

The Company believes that it 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.

Should the Company need to raise additional capital, in September 2022, the Company entered into a

Common Stock Purchase Agreement and Registration Rights Agreement with B.

Riley under which the Company has the right, but not the obligation,

to sell up to $30.0 million shares or a maximum of 2.0 million of its common stock over a period of 24 months in its sole discretion (see

note 10 for further information).

Furthermore, we could pursue other equity or debt financings.

In addition, the Company’s outstanding warrants have generated $ 0.3 million and $ 2.7 million of proceeds during the nine months

ended September 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

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

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

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 at closing.

In addition, All Cell is eligible

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The Company incurred $ 0.1

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.

million of transaction costs during the nine months ended September 30, 2022, directly related to the acquisition that is reflected in

operating expenses in the statement of operations.

Goodwill represents the excess

9 unchanged sentences

with the change recorded to operating expenses.

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

Change in the fair value of the Earnout Consideration during the nine months ended September

30, 2022 is as follows (in thousands):

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Change in estimated fair value

Balance as of June 30, 2022

Balance as of September 30, 2022

The preliminary fair values

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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):

beginning of the nine months ended September 30, 2021 (in thousands):

Schedule of Pro Forma Information

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 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.

been completed at the beginning of the nine months ended September 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 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

for the three and nine months ended September 30, 2022 includes revenues of $ 1.7 million and $ 3.5 million , and loss from operations of

$ 5.0 million and $ 6.4 million , respectively, from the acquired All Cell assets.

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Total minimum rental payments remaining as of

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

September 30, 2022 was $ 0.1 million .

PREPAID EXPENSES AND OTHER CURRENT ASSETS

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Schedule of Other Current Assets

September 30,

Vendor prepayments

Related party receivable

Deferred equity offering costs

Prepaid insurance

1 unchanged sentence

Related party receivables

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

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

Inventory consists of the following (in thousands):

Schedule of Inventory

September 30,

Finished goods

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Schedule of property and equipment

September 30,

Office furniture and equipment

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Schedule of accrued expense

September 30,

Accrued vacation

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

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.

As of September 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.

Other Commitments:

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There was no Federal income

tax expense for the six months ended June 30, 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 June 30, 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.

tax expense for the nine months ended September 30, 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 September 30, 2022 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.

STOCKHOLDERS’ EQUITY

1 unchanged sentence

The Company issued 1,055,000

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

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

See further discussion

Business Combination.

Committed Equity Facility

On September 2, 2022, the

Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement with

Riley Principal Capital, LLC (“B.

Pursuant to the Purchase Agreement, the Company has the right, in its sole

discretion, to sell to B.

Riley up to $ 30.0

million , or a maximum of 2.0 million shares of the Company’s common stock at 97% of the volume weighted average price (“VWAP”)

of the Company’s common stock on the trading day, calculated in accordance with the Purchase Agreement, over a period of 24 months

subject to certain limitations and conditions contained in the Purchase Agreement.

Sales and timing of any sales are solely at the election

of the Company, and the Company is under no obligation to sell any securities to B.

Riley under the Purchase Agreement.

As consideration

Riley’s commitment to purchase shares of the Company’s common stock, the Company issued 10,484 shares of its common

stock and will issue an additional 10,484

shares of its common stock or a cash payment of $ 150,000 ,

at the Company’s sole discretion, when the first VWAP purchase occurs.

Other than the issuance of

the initial commitment shares of the Company’s common stock to B.

Riley, the Company had not issued any shares of its common stock

to raise capital under the Purchase Agreement as of September 30, 2022.

The Company incurred an aggregate

cost of approximately $0.4 million in connection with the Purchase Agreement, including the fair value of the 10,484 shares of common

stock issued to B.

Riley upon the execution of the agreement, which was recorded to prepaid expenses and other current assets on the Balance

Sheet to be offset against future proceeds from the sale of the Company’s common stock under the Purchase Agreement.

Awards Under Stock Incentive Plans

Stock Options

Option activity for the six months ended June

Option activity for the nine months ended September

30, 2022 is as follows:

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Outstanding at June 30, 2022

The Company’s stock

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.

The Company’s stock option compensation

expense was $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2022, respectively, and $ 0.1 million

and $ 0.2 million for the three and nine months ended September 30, 2021, respectively.

There was $ 1.0 million of total unrecognized compensation

costs related to outstanding stock options at September 30, 2022 which will be recognized over 3.6 years.

Number of stock options

vested and unvested as of September 30, 2022 were 198,016 and 81,642 , respectively.

Restricted Stock

A summary of activity of the restricted stock

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

awards for the nine months ended September 30, 2022 is as follows:

Schedule of restricted stock award activity

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Nonvested at December 31, 2021

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

Nonvested at September 30, 2022

As of September 30, 2022,

there were unreleased shares of common stock representing $ 0.1 million of unrecognized restricted stock grant expense which will be recognized

over approximately 2.3 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

underlying warrants outstanding for the nine months ended September 30, 2022 is as follows:

Schedule of common stock warrant

Weighted Average Exercise Price

Outstanding at December 31, 2021

Outstanding at June 30, 2022

Outstanding at September 30, 2022

For each of the identified

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Product sales

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Total revenues

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.

During the three and nine

months ended September 30, 2022 24 % and 34 % of revenues were derived from customers located in California, respectively.

During the three

and nine months ended September 30, 2021, 91 % and 58 % of revenues were derived from customers located in California, respectively.

addition, 2 % of revenues in the nine months ended September 30, 2022 were international sales compared to none in the same period in the

At September 30, 2022 and

December 31, 2021, deferred revenue was $ 1.6 million and $ 0.3 million , respectively.

These amounts represented customer deposits in the

amount of $ 1.3 million and $ 0.1 million for September 30, 2022 and December 31, 2021, respectively, and prepaid multi-year maintenance

plans for previously sold products which account for $ 0.3 million and $ 0.2 million for September 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