What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-12 · 247 added, 213 removed, 173 unchanged (73% of the section changed)

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inadequate capital to continue or expand its business, and the inability to raise additional capital or financing to implement its business plans;

unavailability of capital or financing to prospective customers of the Company to enable them to purchase products and services from the Company;

failure to commercialize the Company’s technology or to make sales;

reductions in demand for the Company’s products and services, whether because of competition, general industry conditions, loss of tax incentives, technological obsolescence or other reasons;

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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 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.

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™ – 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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Overall Business Outlook

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.

Our revenues increased

156% from $5.5 million in the first nine months of 2021 to $14.1 million for the first nine months of 2022, primarily due to our

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

renewable chargers, as well as an increase of $3.5 million in sales from our battery storage business since the closing of our

acquisition of All Cell in March 2022.

The Company believes there continues to be a high level of support for funding EV charging

infrastructure on the federal level, including 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.

Given these available resources, we invested in a federal lobbyist, a federal business development resource

and a government relations employee, who are helping to identify opportunities on the federal side and are increasing awareness of

our product and outreach with federal agencies.

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

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

a direct result, during the first nine months of 2022, revenues from the federal government increased by $2.3 million compared to

the prior year.

In addition, we were awarded several large federal orders in September through November 2022 that are scheduled to

deliver within 12 months:

Techflow, Inc.

for the US Army (IMCOM)

Veterans Administration

Department of Homeland Security

Navy Facilities - Navfac (4 orders)

US Marine Corps (4 orders)

General Services Administration (3 orders)

Science Applications International Corp (SAIC) for the US Army (2 orders)

Ongoing efforts to expand

revenues to state agencies have also been successful.

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.

During the first nine months of 2022, we increased revenues to state agencies

by $1.6 million compared to the same period in the prior year.

In addition, in early October 2022, we were awarded a $5.3 million contract

from the Department of Citywide Administrative Services (DCAS) to deploy units throughout New York City.

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.

Revenues to enterprise customers for the first nine months of 2022 increased

by $1.1 million compared to the same period in the prior year.

We expect the electric vehicle market to continue to experience significant

growth over the next decade 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

acquisition of the assets of All Cell, a battery storage company, will provide new customer opportunities for our products.

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 eight 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 products.

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

We continue to work with The

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the same proprietary technology as our current products and allow us to expand into new markets.

Gross margins improved in

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

Gross margins improved as

a percentage of sales in the nine months ended September 30, compared to the same period in 2021.

The gross margin is the nine months

ended 2022 includes $0.5 million of non-cash intangible amortization, which is not included in the prior year.

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.

systems sold from 76 units in the first nine months of 2021 to 136 units in the first nine 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.

shortages due to the COVID-19 pandemic as well as other transitory inflationary pressures.

We are starting to see some pricing increases

leveling off, and we expect costs to 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 June 30, 2022.

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

Results of Operations

Comparison of Results of Operations for the

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

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 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 second quarter of 2021, which resulted in favorable fixed overhead absorption.

In addition, 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.

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 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 $2.5 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

Three Months Ended September 30, 2022 and 2021

For the quarter

ended September 30, 2022, our revenues increased 227% to $6.6 million compared to $2.0 million for the same period in 2021.

federal customers increased by $2.1 million compared to the same quarter in the prior year.

In addition, we were awarded a number of contracts

from federal agencies in late September and early October in line with the federal year-end.

Revenues to corporate enterprises also increased

during the quarter by $0.9 million compared to the prior year as employees are returning to working on-site, and as large employers are

converting to electric fleets.

Revenues to customers in California, consisting mostly of state agencies and municipalities, represented

24% of the total, which continues to be a strong market for EV ARC™ systems.

In early October 2022, we received a contract from

the Department of Citywide Administrative Services (DCAS) for $5.3 million to deploy units throughout New York City in the coming months.

We also recorded energy storage revenue of $1.7 million as a result of our acquisition of All Cell which closed on March 4, 2022.

backlog consisting of undelivered purchase orders scheduled to deliver within 12 months was $32.3 million at September 30, 2022 and has

increased significantly in October with the Federal and DCAS orders.

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 September 30, 2022, our gross loss was $0.3 million, or 5% of sales, compared to $0.2 million, or 10% of sales in the same

quarter of the prior year.

As a percentage of sales, the margin improved by 5 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.

levels in the current quarter compared to the third quarter of 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.

by an increase of $0.2 million for non-cash intangible amortization and 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.

Toward the end of the third quarter, we started to see some reduction in gas prices and cost increases from

our suppliers have begun to level off.

We expect our cost per unit to improve as we expect to see material costs start to decrease 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 $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.

operating expenses were $6.5 million for the quarter ended September 30, 2022, compared to $1.5 million for the same period in the prior

The increase was primarily due to a $3.9 million change in fair value of contingent consideration related to the All Cell acquisition

based on an increase in 2022 forecasted revenues and backlog than expected earlier in the year.

Excluding such cost, the operating expenses

for the quarter ended September 30, 2022 increased by 74% compared to the same period in the prior year, driven by expenses attributable

to the newly acquired All Cell business of $1.1 million.

Comparison of Results of Operations for the

Nine Months Ended September 30, 2022 and 2021

months ended September 30, 2022, our revenues increased 156% to $14.1 million compared to $5.5 million for the same period in 2021.

to federal customers increased by $2.3 million year to date, compared to the same period in the prior year.

In addition, we were awarded

a number of contracts from federal agencies in late September and early October totalling more than $46.0 million, which will be delivered

over the next 12 months.

We recorded energy storage revenues of $3.5 million as a result of our acquisition of All Cell which closed on

March 4, 2022.

Our revenue to state agencies increased by $1.6 million year to date compared to the prior year, and we continue to have

a strong concentration of revenues to the State of California which represents 34% of total revenues.

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.

nine months ended September 30, 2022, our gross loss was $1.0 million, or 7% of sales, compared to $0.6 million, or 11% of sales in the

same period of the prior year.

As a percentage of sales, the margin improved by four 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.

In addition, 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 of $0.5 million for non-cash intangible amortization and 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.

Toward the end of the third quarter, we started to see some reduction in gas prices and

cost increases for some of our products’ components have begun to level off.

We expect our cost per unit to improve as we expect

to see material costs start to decrease and as our volumes increase.

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 $10.9 million for the nine months ended September 30, 2022, compared to $4.0 million for the same period in the

prior year, primarily due to a $3.7 million change in fair value of contingent consideration related to the All Cell acquisition.

such cost, the operating expenses for the quarter ended September 30, 2022 increased by 83% compared to the same period in the prior year,

driven by $2.3 million in expenses attributable to the newly acquired All Cell business, $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

As a percentage of revenue, operating expenses excluding the change in fair value of contingent consideration represented a decrease

of 20 percentage points.

Liquidity and Capital Resources

At June 30, 2022, we had cash

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

At September 30, 2022, we

had cash of $4.7 million, compared to cash of $21.9 million at December 31, 2021.

We have historically met our cash needs through a combination

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

September 30,

Cash provided by (used in):

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Net cash provided by financing activities

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.

For the nine months ended

September 30, 2022, our cash used in operating activities was $15.7 million compared to $5.2 million for the same period in 2021.

loss of $11.9 million for the nine months ended September 30, 2022 was increased by $5.1 million of non-cash expense items that included

a change in fair value of contingent consideration of $3.7 million, depreciation and amortization of $0.8 million, common stock issued

for services for director compensation of $0.3 million and non-cash compensation expense related to the grant of stock options of $0.3

Further, cash used in operations included a $2.2 million increase in accounts receivable, $1.0 million increase in prepaid expenses

and other current assets, primarily related to the prepayment of battery cells, and $8.3 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 process inventory

of nearly complete EV ARC units that were waiting for parts as well as finished EV ARC units awaiting final delivery at September 30,

The increases in prepayments and inventory are not expected to continue in future quarters, but rather should remain flat or reduce

to lower levels over the next 12 months.

Cash provided by operations included a $2.3 million increase in accounts payable primarily for

inventory, $0.2 million increase in deferred revenue and $0.2 million increase in accrued expenses.

Net loss of $4.6 million for

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

the nine months ended September 30, 2021 was decreased by $0.9 million in non-cash expense items that included depreciation and amortization,

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

of operating lease right of use asset.

Cash used in operations for the period included a $1.0 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 operations for the period included a $1.0 million increase in inventory based on forecasted

requirements and a $0.7 million increase in accounts receivable due to some slow payments.

Cash provided by operations included a $0.1

million increase in prepaid expenses and other current assets due to insurance prepayments, a $0.1 million increase in accounts payable

for inventory purchases, and a $0.1 million increase in deferred revenue due to an increase in the sale of maintenance plans.

Cash used in investing activities

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

in the nine months ended September 30, 2022 included $0.8 million cash payment for working capital payment related to the acquisition

of All Cell, $0.8 million to purchase equipment and $0.1 million in patent costs.

The nine months ended September 30, 2021 included $0.5

million to fund patent related costs and to purchase equipment.

In the nine months ended September

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 year period also includes a $0.2 million payment of equity offering

costs related to the committed equity line agreement entered into with B.

Current assets were $24.5

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

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

Current liabilities increased to $8.7 million at September 30, 2022

from $3.0 million at December 31, 2021, primarily due to the acquisition of All Cell, including additions of $1.3 million in accounts

payable and accrued liabilities, $4.8 million in contingent consideration, current, based on the terms of the acquisition, and $1.3 million

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.

In addition, accounts payable for the remainder of the Company increased by $1.3 million due

to increased purchases of inventory to support the increased revenue activity.

As a result, our working capital decreased to $12.8 million

at September 30, 2022 compared to $24.6 million at December 31, 2021.

The Company has been focused

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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.

to 2020, and the first nine months of 2022 was 156% higher than the first nine months 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 the first nine months 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.

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 over the past year should start to decrease beginning in 2023.

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

2 unchanged sentences

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

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 to sell up to $30.0 million shares of its common stock over a period

of 24 months (see note 10 for further information.) In addition, we could pursue other equity or debt financings.

Furthermore, the Company

has warrants to purchase 469,305 shares of our Common Stock outstanding at September 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

The proceeds from these offerings are expected to provide working capital to fund business operations and the development of new

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

On March 4, 2022, the Company

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”).

believe this strategic acquisition will increase and diversify our 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.

(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