What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 308 added, 261 removed, 159 unchanged (78% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Beam develops, manufactures and sells high-quality,

renewably energized infrastructure products for electric vehicle charging infrastructure, energy storage, energy security, disaster preparedness

and outdoor media advertising.

Beam develops, manufactures

and sells high-quality, renewably energized infrastructure products for electric vehicle charging infrastructure, energy storage, energy

security, disaster preparedness and outdoor media advertising.

The Company has designed five

product lines 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.

product lines that incorporate our proprietary technology 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

These products are rapidly deployable and attractively designed.

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EV ARC™ Electric Vehicle Autonomous Renewable Charger – a patented, rapidly deployed, infrastructure product that uses integrated solar power and battery storage to provide a mounting asset and a source of power for factory installed electric vehicle charging stations of any brand.

The electronics are elevated to the underside of the solar array making the unit flood-proof up to nine and a half feet and allowing adequate space on the engineered ballast and traction pad which gives the product stability.

The electronics are elevated to the underside of the solar array making the unit flood-proof up to nine and a half feet and allowing adequate space to park a vehicle on the engineered ballast and traction pad which gives the product stability.

Solar Tree® DCFC – Off-grid, renewably energized and rapidly deployed, patented single-column mounted smart generation and energy storage system with the capability to provide a 150kW DC fast charge to one or more electric vehicles or larger vehicles.

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

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

EV ARC™ DCFC – DC Fast Charging system for charging EVs comprised of four interconnected EV ARC™ systems and a 50kW DC fast charger.

EV-Standard TM – patent issued on December 31, 2019 and currently 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.

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An off-grid, renewably energized and rapidly deployed product and network used to charge aerial drone (UAV) fleets.

In addition, with the acquisition

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, medical and 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 there is a

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for our electric vehicle charging infrastructure products are:

our patented, renewably energized products which dramatically reduce the cost, time and complexity of the installation and operation of EV charging infrastructure and outdoor media platforms when compared to traditional, utility grid tied alternatives;

our patented, renewable energy products dramatically reduce the cost, time and complexity of the installation and operation of EV charging infrastructure and outdoor media platforms when compared to traditional, utility grid tied alternatives;

our proprietary and patented energy solutions;

our first-to-market advantage with EV charging infrastructure products which are renewably energized, rapidly deployed and require no construction or electrical work on site;

our products’ capability to operate during grid outages and to provide a source of EV charging and emergency power rather than becoming inoperable during times of emergency or other grid interruptions;

our ability to continuously create new and patentable inventions which are marketable and a complex integration of our own proprietary technology and parts, and other commonly available engineered components, creating a further barrier to entry for our competition.

Our revenues increased from

$6.2 million in 2020 to $9.0 million in 2021 primarily due to an investment in sales and marketing resources over the past two years.

During the year ended December 31, 2021, product sales were generated from a wide variety of markets, including state and local government

agencies, colleges, commercial businesses, utilities, and federal customers.

Our contract with the State of California included a 52-unit

EV ARC TM purchase to provide sustainable EV charging and emergency power for 12 state government agencies in California.

late 2020, we entered into a Multiple Award Schedule Contract with the General Services Administration (GSA) that helps streamline purchases

from Federal agencies and state and local governments.

We have also invested in our federal business channel by adding a federal lobbyist,

a federal business development resource and a government relations employee.

These resources have helped with language in legislature

to include renewable charging instead of just grid-tied, to raise awareness of our product and to increase outreach with federal agencies.

This resulted in several orders in 2021, including a 21-unit order from the US Marine Corps at 14 bases throughout the U.S.

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.

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.

We made progress in our outdoor

media advertising business during 2021 and entered into a collaboration agreement with the City of San Diego to deploy solar-powered EV

charging infrastructure across the city.

We are currently working with The Superlative Group, an industry leading consultant engaged in

the selling of corporate sponsorships, and have identified several corporate sponsors for a global naming rights agreement to our network

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 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 state-of-the-art storage batteries installed on our EV chargers are immune to grid failures and provide another benefit for certain

customers such as municipalities, counties, states, the federal government, hospitals, fire departments, large private enterprises with

substantial facilities, and vehicle fleet operators.

our ability to continuously create new and patentable inventions which are marketable and a complex integration of our proprietary technology and parts, and other commonly available engineered components, which create a further barrier to entry for our competition.

Our revenues increased

from $9.0 million in 2021 to $22.0 million in 2022 we believe as a result of the ongoing maturation of the electric vehicle

ecosystem, increased urgency for charging infrastructure as more EVs are adopted, an increased understanding of the challenges

facing the installation and operation of utility grid-tied chargers and due to an increased investment in sales and marketing

resources over the past two years.

During the year ended December 31, 2022, product sales were generated from a wide variety of

markets, including state and local government agencies, federal customers, commercial businesses, colleges and utilities.

52-unit EV ARC™ purchase was made under our contract with the State of California to provide sustainable EV charging and emergency

power for 12 state government agencies in California.

In 2022, we also received an order for $5.3 million from New York City to

deliver EV ARCs TM throughout the city.

As a result of our acquisition of All Cell in March 2022, we generated revenues of

$5.2 million from sales of our solid, state-of-the-art energy storage product.

In late 2020, we entered into a Multiple Award

Schedule Contract with the General Services Administration (GSA) that helps streamline purchases from Federal agencies and state and

local governments.

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.

We have also invested

in our federal business channel by adding a federal lobbyist, a federal business development resource and a government relations

These resources have helped to identify opportunities on the federal side and are increasing awareness of our product and

outreach with federal agencies.

They are also able to support language in legislature to increase opportunities for federal

contracts or federal grants and other funding.

This resulted in several large federal orders in 2022, including a $29.4 million

order through Techflow, Inc.

for the US Army (IMCOM), a $11.7 million order for the General Services Administration for the

Department of Veterans Affairs, and several other orders for the Department of Homeland Security, US Navy Facilities, US Marine

Corps, and others.

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 30% Federal Solar Investment Tax Credit and Rule 179 accelerated

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

We expect the electric vehicle

market to continue to experience significant growth over the next decade as evidenced by 61 new electric vehicles that were launched

in 2022 which will require additional EV charging infrastructure.

We believe our products are uniquely positioned to benefit from

continued to made progress in finding a sponsor for our outdoor media advertising business during 2022, working 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 our network of EV ARC™ systems.

Superlative is compensated only when they are successful

in securing a sponsor for our Driving on Sunshine network.

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 state-of-the-art storage batteries installed on our

EV charging systems 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.

We have begun development

on our newest patented products - our EV Standard TM and UAV ARC™, which we expect will expand our product offerings with

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

Several contributing factors

resulted in reporting a gross loss in both 2021 and 2020.

We currently have a fixed overhead structure and facility that will support

expected growth over the next several years.

Until our revenues increase, we have underutilized capacity that adds a fixed cost burden

to our margins.

As we have increased our production volumes, we have increased our fixed overhead absorption which reduces our fixed overhead

cost allocation per unit, as well as benefited from improved labor efficiencies and utilization and cost improvements by negotiating volume

purchase discounts.

We are also implementing lean manufacturing process improvements and making engineering changes to our product where

we can benefit from cost reductions.

on our newest patented products - our EV Standard™ and UAV ARC™, which we expect will expand our product offerings with the same

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

Several contributing factors resulted

in reporting a gross loss in both 2022 and 2021.

We currently have a fixed overhead structure and facility that is underutilized but will

support our expected growth over the next several years.

As our revenues continue to increase, and we increase our production volumes,

we will continue to increase our fixed overhead absorption which reduces our fixed overhead cost allocation per unit, as well as benefit

from improved labor efficiencies and utilization and cost improvements by negotiating volume purchase discounts.

We are also implementing

lean manufacturing process improvements and making engineering changes to our product which we believe will result in further 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 experienced cost increases on many of our components in 2021, most notably

our steel cost, which we believe to be largely a temporary increase brought on by supply chain issues resulting from plant closures and

staffing shortages brought on by the Covid-19 virus.

As those costs begin to come back down, and other components such as battery cells

and solar panels continue to decrease in cost precipitously in the coming months and years, we 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 AllCell

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

We are 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

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 experienced cost increases on many of our components during 2021 and 2022, most notably our steel cost, which

were brought on by supply chain issues resulting from plant closures and staffing shortages during the Covid-19 pandemic.

In late 2022,

we started to see these increases flatten out and some are starting to decrease, and we 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 AllCell Technologies,

LLC, a lithium-ion battery manufacturer, we expect those costs to be significantly reduced.

We have design changes to our EV ARC TM

planned for 2023 that will reduce component costs and streamline the manufacturing process which will reduce the cost.

We continually

review the 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,

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the financial statements for further information on the Company’s critical accounting policies which are summarized as follows:

Use of Estimates.

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets

and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates in the accompanying financial statements include the allowance

for doubtful accounts receivable, valuation of inventory and standard cost allocations, depreciable lives of property and equipment, valuation

of intangible assets, estimates of loss contingencies, estimates of the valuation of lease liabilities and the related right of use assets,

valuation of share-based costs, and the valuation allowance on deferred tax assets.

Business Combination.

The purchase price of an acquisition is allocated to the tangible and intangible assets acquired and liabilities assumed based on

their estimated fair values at the acquisition date.

To the extent the purchase price exceeds the fair value of the net identifiable tangible

and intangible assets assumed, such excess is allocated to goodwill.

The Company determines the estimated fair values after review and

consideration of relevant information, including discounted cash flows and estimates made by management.

The Company records the net assets

and results of operations of an acquired entity from the acquisition date.

Acquisition-related costs are recognized separately from the

acquisition and are expensed as incurred.

Contingent consideration liability

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

Subsequent changes to the fair value of contingent consideration liability

are recognized in operating expenses in the statement of operations.

Contingent consideration liability related to the acquisition consists

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

The fair value of commercial milestone payments reflects

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

Changes in the fair value of contingent

consideration subsequent to the acquisition date are recognized in operating expense in our consolidated statements of operations.

is stated at the lower of cost and net realizable value.

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

Inventory costs primarily relate to purchased raw materials and components used in the manufacturing of our products, work in

process for products being manufactured, and finished goods.

Included in these costs are direct labor and certain manufacturing

overhead costs associated with normal capacity in the manufacturing process.

The Company regularly reviews inventory components and

quantities on hand and performs annual physical inventory counts.

Impairment of

Long-lived Assets.

The Company accounts for long-lived assets in accordance with the provisions of Accounting Standards

Codification (“ASC”) 360-10-35-15 “Impairment or Disposal of Long-Lived Assets,” which requires that

long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is measured by a

comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset.

assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the

assets exceeds the fair value of the assets.

Assets to be disposed of are reported at the lower of the carrying amount or fair value

less costs to sell.

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

being manufactured, and finished goods.

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

normal capacity in the manufacturing process.

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

physical inventory counts.

Impairment of Long-lived

The Company accounts for long-lived assets in accordance with the provisions of Accounting Standards Codification (“ASC”)

360-10-35-15 “Impairment or Disposal of Long-Lived Assets,” which requires that long-lived assets and certain identifiable

intangibles be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not

be recoverable.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future

undiscounted net cash flows expected to be generated by the asset.

If such assets are considered to be impaired, the impairment to be

recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed

of are reported at the lower of the carrying amount or fair value less costs to sell.

Revenue Recognition.

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Revenues from professional

services are recognized as services are performed.

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

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

These services are billed to a customer as such

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

services for relocations, charger replacements or out of warranty repairs are recognized as services are performed.

Revenue values are

based upon fixed fee arrangements or hourly fee-based arrangements with agreed to hourly rates of service categories in line with expertise

requirements.

These services are billed to a customer as such services are provided and the customer will be obligated to make payments

for such services typically within a 30-45 day period.

The Company has a policy of

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The Company generally provides

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

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

The Company accrues for product

warranties when the loss is probable and can be reasonably estimated.

a standard one-year warranty on its EV charging infrastructure products for materials and workmanship but may provide multiple year warranties

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

The Company accrues

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

Cost of Revenues.

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Company further includes shipping and handling fees billed to customers as revenues and shipping and handling costs as cost of revenues.

Share-Based Compensation.

We measure and recognize compensation expense for all share-based payments based on estimated fair value.

Share-based compensation

expense is recognized based on the fair value on a straight-line basis over the requisite service periods of the awards.

The fair value

of our restricted stock and performance stock units is based on the market price of our common stock on the date of grant.

The determination

of the amount of share-based compensation expense for our performance stock units requires the use of certain estimates and assumptions

that affect the amount of share-based compensation expense recognized in our consolidated statements of operations.

At each reported period,

we reassess the probability of the achievement of corporate performance goals to estimate the amount of shares to be released.

or decrease in share-based compensation expense resulting from an adjustment in the estimated shares to be released is treated as a cumulative

catch-up in the period of adjustment.

If any of the assumptions or estimates used change significantly, share-based compensation expense

may differ materially from what we have recorded in the current period.

Results of Operations

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Fiscal Years Ended December 31, 2022 and 2021

year ended December 31, 2021, our revenues were $9,001,751 compared to $6,210,350 for the same period in 2020, an increase of

$2,791,401 or 45% which was driven by sales volume.

Revenues for the year ended December 31, 2021 included the sale of 118 EV ARC™ units including the

delivery of most of the 52 units ordered by the State of California.

Sales to federal agencies also grew in 2021, including a

21-unit order from the U.S.

Marine Corps.

This is further supported by a federal infrastructure bill that was passed in November

2021 that designates $7.5 billion for the nationwide deployment of 500,000 EV charging stations and $6.1 billion for electric

vehicle related initiatives in Governor Newsom’s California budget proposal.

We are currently engaged in a contract renewal

process with the State of California’s Department of General Services.

In addition, we continue to see an increase in repeat

orders and multiple unit orders compared to any prior year.

During 2020, we experienced some delays in customers placing orders as a

result of the COVID-19 pandemic, but this improved as we moved into 2021.

Revenues for the year ended December 31, 2020 included the

sale of 69 EV ARC™ units including 29 units to Electrify America for deployment in California, as well as to various

municipalities, colleges, utilities and federal agencies.

It also included the sale of three Solar Tree® systems and an EV

ARC ™ DC fast charging system for a rest stop in California.

During fiscal 2021, we invested in sales and marketing

employees, resources and programs to raise awareness of the benefits and value of our products.

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

year ended December 31, 2021, we had a gross loss of $971,644 compared to a gross loss of $710,974 for the same period in 2020.

loss as a percentage of revenue decreased to 10.8% for the year ended December 31, 2021, compared to 11.4% for the same period in 2020.

As a result of the increase in production levels in 2021 compared to 2020, we benefited from an

increase in fixed overhead absorption.

We have also implemented certain design changes and value engineering on our EV ARC TM

which streamlined the manufacturing process and reduced material and labor costs in the latter part of the year.

We are implementing lean

manufacturing process improvements which resulted in some labor efficiency improvements and increased our output to allow us to meet production

These cost improvements were offset by increases in material costs, especially for steel and batteries, due to the Covid-19

pandemic and resulting inflationary pressures.

Shipping costs have increased globally as well which

has increased our delivery costs.

However, we made some changes to our shipping practices in the second half of 2021 to minimize the use

of third-party logistics companies, which helped to mitigate some of the increased cost.

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, AllCell 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.

ended December 31, 2022, our revenues increased 144% to $22.0 million compared to $9.0 million for 2021.

Revenues to federal customers

increased by $4.5 million.

In addition, we were awarded a number of contracts from federal agencies in late September and early October

of 2022 totaling more than $46.0 million, which we intend to deliver over the next 12 months.

Some of these units shipped in the quarter

ended December 31, 2022, with the balance scheduled for delivery in 2023.

We recorded energy storage revenues of $5.2 million as a result

of our acquisition of All Cell which closed on March 4, 2022.

Our revenue to state agencies increased by $0.8 million compared to the

prior year, and we continue to have a strong concentration of revenues to the State of California and state of New York, which represent

29% and 18% of total revenues, respectively.

Revenues derived from non-government entities increased to 37% of our total revenues

in 2022 representing a partial return to pre-COVID levels, compared to 13% of our total revenues in 2021.

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.

ended December 31, 2022, our gross loss was $1.7 million, or 8% of sales, compared to $1.0 million, or 11% of sales in the prior year.

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

quarter compared to 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 $0.8 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 and transportation prices which have increased our

delivery costs.

Toward the end of the year, we started to see some reduction in gas prices and our products’ components.

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 2023 and beyond, we expect our fixed overhead absorption to continue to improve.

Operating Expenses.

operating expenses were $5,627,674 for the year ended December 31, 2021 compared to $4,496,660 for the same period in 2020, a 25% increase.

Our operating expense decreased as a percentage of sales from 72.4% of sales in 2020 to 62.5% of sales in 2021.

increase was primarily due to $573,235 for increased sales and marketing expense to support revenue growth, $98,975 for research and development

increased headcount to support development projects, $86,926 for increased directors and officers insurance premiums, $77,683 for increased

costs related to the 2021 annual shareholder meeting, $56,781 for increased accountant fees, $55,696 for building repairs, $32,834 for

increased director cash compensation, $32,575 for legal fees and $116,309 of other net increases.

Income Tax Expense.

tax expense for the year ended December 31, 2021 related to minimum taxes due, primarily for the California Franchise Tax Board.

not incur any federal tax liability for the years ended December 31, 2021 or December 31, 2020 because we incurred operating losses for

tax purposes in these periods.

A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more

likely than not that the net deferred asset will not be realized.

Due to continuing losses, recoverability is not considered likely and as such we have provided a valuation allowance

which will remain until the Company becomes profitable in an adequate amount that it becomes likely the deferred tax assets can be recovered.

Other Income and Expense.

Interest income decreased by $6,844 in the year ended December 31, 2021 due to lower interest rates.

Interest expense decreased from

$11,893 for the year ended December 31, 2020 to $498 for the year ended December 31, 2021 due to the repayment of debt in 2020.

operating expenses were $18.0 million for the year ended December 31, 2022, compared to $5.6 million in the prior year, primarily due

to a $5.5 million change in fair value of contingent consideration related to the All Cell acquisition.

Excluding such cost, the operating

expenses for the year ended December 31, 2022 increased by $6.9 million compared to the prior year, driven by $3.4 million in expenses

attributable to the newly acquired All Cell business, $2.3 million increase in employee non-cash compensation, including a $1.6 million

increase in employee non-cash stock-based compensation, $0.6 million increase for legal and accounting services, primarily attributable

to the acquisition, and $0.5 million increase for sales and marketing costs to generate increased sales levels.

As a percentage of revenue,

operating expenses excluding the change in fair value of contingent consideration decreased by 6 percentage points.

Liquidity and Capital Resources

At December 31, 2022, we had

cash of $21,948,512, compared to cash of $26,702,804 at December 31, 2020.

cash of $1.7 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 used in operating activities

$ (6,406,707 )

$ (4,138,138 )

Net cash used in investing activities

Net cash provided by financing activities

Net cash (used in) provided by financing activities

For the year ended December 31,

31, 2021, our cash used in operating activities was $6,406,707 compared to $4,138,138 for the year ended December 31, 2020.

$6,596,039 for the year ended December 31, 2021 was increased by $1,312,113 of non-cash expense items that included depreciation and amortization

of $92,775, common stock issued for services for director compensation of $742,285, non-cash compensation expense related to the grant

of stock options of $444,713 primarily due to an increase in the stock price in the year ended December 31, 2021, and $32,340 for amortization

of operating lease right of use asset.

Further, cash used in operations included an increase in accounts receivable of $2,040,783 due

to a strong fourth quarter revenue in 2021 compared to 2020, $485,961 increase in inventory due to inventory purchases to support increased

sales activity and $34,569 decrease in sales tax payable for California Q4 2021 shipments.

Cash provided by operations included a decrease

in prepaid expenses and other current assets of $141,199, an increase in accounts payable of $815,950 due to inventory purchases, $335,121

increase in accrued expenses primarily due to compensation related accruals at the end of the year and $146,262 for an increase in deferred

2022, our cash used in operating activities was $18.1 million compared to $6.4 million for the year ended December 31, 2021.

of $19.7 million for the year ended December 31, 2022 was increased by $9.1 million of non-cash expense items that included a change in

fair value of contingent consideration of $5.5 million, depreciation and amortization of $1.1 million, common stock issued for services

for director compensation of $0.4 million and employee stock-based compensation expense of $2.0 million.

Further, cash used in operations

included a $0.6 million increase in accounts receivable, $0.8 million increase in prepaid expenses and other current assets, primarily

related to the prepayment of battery cells, and $8.2 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 TM

units as well as finished EV ARC TM units awaiting final delivery at December 31, 2022.

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.

provided by operations included a $1.3 million increase in accounts payable primarily for inventory and $0.9 million increase in accrued

Our operating activities resulted

in cash used in operations of $4,138,138 for the year ended December 31, 2020.

Net loss of $5,213,025 for the year ended December 31,

2020 was increased by $1,208,504 of non-cash expense items that included depreciation and amortization of $40,952, common stock issued

for services for director compensation of $458,924, non-cash compensation expense related to the grant of stock options of $722,549 primarily

due to an increase in the stock price in the quarter ended December 31, 2020, amortization of debt discount of $5,990, offset by $19,911

for amortization of operating lease right of use asset.

Further, cash used in operations included an increase in accounts receivable of

$1,021,937 due to a strong fourth quarter revenue in 2020 compared to 2019, an increase in prepaid expenses and other current assets of

$385,895 primarily due to warrants that were exercised but the payment was pending, and $220,417 for the payment of a convertible note

to a related party for deferred compensation.

Cash provided by operations included a reduction of inventory of $1,060,614, an increase

in accounts payable of $242,900 due to inventory purchases to support Q4 2020 shipments, $86,452 increase in accrued expenses, $85,917

increase in sales tax payable for California Q4 2020 shipments, $13,880 for an increase in deferred revenue, and $4,869 for a decrease

in cash used in operations of $6.4 million for the year ended December 31, 2021.

Net loss of $6.6 million for the year ended December

31, 2021 was increased by $1.3 million of non-cash expense items that included depreciation and amortization of $0.1 million, common stock

issued for services for director compensation of $0.7 million and non-cash compensation expense related to the grant of stock options

of $0.4 million primarily due to an increase in the stock price in the year ended December 31, 2021.

Further, cash used in operations

included an increase in accounts receivable of $2.0 million due to a strong fourth quarter revenue in 2021 compared to 2020 and $0.5 million

increase in inventory due to inventory purchases to support increased sales activity.

Cash provided by operations included a decrease

in prepaid expenses and other current assets of $0.1 million, an increase in accounts payable of $0.8 million due to inventory purchases,

$0.3 million increase in accrued expenses primarily due to compensation related accruals at the end of the year and $0.1 million for an

increase in deferred revenue.

Cash used in investing activities

in the year ended December 31, 2021 included $83,871 to fund patent related costs and $498,270 to purchase equipment, primarily for production

and transportation.

The year ended December 31, 2020 included $93,137 to fund patent related costs and $265,764 to purchase equipment,

primarily for transportation equipment and a forklift truck.

in the year ended December 31, 2022 included $0.8 million cash payment for working capital payment related to the acquisition of All Cell,

$0.9 million to purchase equipment and $0.1 million in patent costs.

The year ended December 31, 2021 included $0.1 million to fund patent

related costs and $0.5 million to purchase equipment, primarily for production and transportation.

In 2022, cash generated by

our financing activities included $2,854,223 from the exercise of warrants and $10,706 from the exercise of stock options, offset by $630,373

used to cover payroll taxes for cashless stock option exercises.

In 2020, cash generated by our financing activities included $18,999,675

in proceeds from the issuance of common stock pursuant to a public offering and $9,926,858 from the exercise of warrants, offset by the

funding of equity offering costs of $1,566,852 and the payment of an auto loan.

our financing activities included $0.5 million from the exercise of warrants, $0.5 million used to cover payroll taxes related to stock-based

compensation and $0.3 million payment of equity offering costs related to the committed equity line agreement entered into with B.

In 2021, cash generated by our financing activities included $2.9 million from the exercise of warrants, offset by $0.6 million used to

cover payroll taxes for cashless stock option exercises.

Current assets decreased to

$27,566,820 at December 31, 2021 from $29,903,431 at December 31, 2020, primarily due to a $4,754,292 decrease in cash, offset by a $2,040,783

increase in accounts receivable.

Current liabilities increased to $2,955,010 at December 31, 2021 from $1,770,400 at December 31, 2020,

primarily due to an increase in accounts payable for purchases of inventory to support the increased sales forecast and an increase in

accrued expenses driven by accrued compensation costs at December 31, 2021.

As a result, our working capital decreased to $24,611,810

at December 31, 2021 compared to $28,133,031 at December 31, 2020.

In May 2020, the Company received

a Small Business Administration Payroll Protection Plan loan for $339,262 for protection against potential impact from the COVID-19 virus

which was repaid with interest in November 2020.

The Company has been focused

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

While we did see a 45% increase in revenues

in 2021 compared to 2020, the Company has still not earned a gross profit on its sale of products.

However, the revenue growth in the

quarter ended December 31, 2021 was 59% over the prior year and the gross loss improved by 37% primarily as a result of the increased

fixed overhead absorption.

Management has made several design changes and process improvements in our manufacturing operations in 2021

as well which has helped to increase labor efficiency and reduce costs.

At the same time, supply chain issues related to the COVID-19

virus has caused an increase in certain of our material costs, most notably in steel purchases, which has offset some of the improvements

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

Management believes that with increased

production volumes that we believe are forthcoming, 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.

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

519,658 warrants remaining at December 31, 2021, which could potentially generate an additional $3,273,845 of proceeds over the next 2.3

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.

March 4, 2022, the Company completed an acquisition of AllCell Technologies, LLC (“AllCell”), 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 AllCell 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 $911,711 in cash for the net working capital

of primarily inventory held by AllCell at closing.

In addition to the cash paid at closing of $911,711, the Purchase Agreement requires

a capital investment of not less than $1,500,000 of equipment to be used for the business.

The maximum aggregate amount of shares

of Common Stock that Buyer will issue to Seller for the Closing Consideration and Earnout Consideration

will not exceed 1.8 million shares.

$19.9 million at December 31, 2022 from $27.6 million at December 31, 2021, primarily due to a $20.3 million decrease in cash, offset

by a $10.6 million increase in inventory and $1.4 million increase in prepaid expenses and other current assets.

Current liabilities increased

to $13.2 million at December 31, 2022 from $3.0 million at December 31, 2021, primarily due to the recording of $6.8 million current portion

of contingent consideration, a $1.3 million increase in accounts payable for purchases of inventory to support the increased sales forecast,

$1.0 million increase in current deferred revenue and a $1.0 million increase in accrued expenses.

As a result, our working capital decreased

to $6.8 million at December 31, 2022 compared to $24.6 million at December 31, 2021.

The Company has been focused on

marketing and sales efforts to increase our revenues.

Revenues increased by 45% from 2020 to 2021 and 144% from 2021 to 2022, demonstrating

that this investment has been successful.

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

has improved even during an inflationary period, and 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 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 over the past year should start to decrease beginning in 2023.

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

of production cost reduction measures.

In September 2022, the Company entered into a Common Stock Purchase Agreement with B.

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 440,204

shares of our Common Stock outstanding at December 31, 2022, which could potentially generate an additional $2.8 million of proceeds over

the next 1.3 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.

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.

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.

Management believes that evolution

2 unchanged sentences

addition of sales personnel and independent sales channels, continued

management of overhead costs, increased overhead absorption resulting from revenue growth, process improvements and vendor negotiations

leading to cost reductions, increased public awareness of the Company and its products, and the maturation of certain long sales cycle

opportunities.

management of overhead costs, increased overhead absorption resulting from volume growth, process improvements and vendor negotiations

leading to cost reductions, increased public awareness of the Company and its products, and the continued acceleration of average sales

cycle opportunities.

Management believes that these steps, if successful, may enable the Company to generate sufficient revenue to continue

38 unchanged sentences

approximately $6.9 million after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

In September 2022, the Company entered into a

Common Stock Purchase Agreement with B.

Riley Principal Capital II, LLC (“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 shares of its

common stock over a period of 24 months in its sole discretion.

Off-Balance Sheet Arrangements

9 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis