What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-03-31 compared with 2022-03-31 · 717 added, 779 removed, 507 unchanged (75% of the section changed)

12 unchanged sentences

controls and procedures.

At the end of the period covered by this Annual

Report on Form 10-K, we conducted an evaluation, under the supervision and with the participation of our management, including our Chief

Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, the disclosure

controls and procedures of our Company were not effective to ensure that the information required to be disclosed in our Exchange Act

reports was recorded, processed, summarized and reported on a timely basis due to material weakness in internal controls as identified

below under “Management’s Report on Internal Control Over Financial Reporting”.

Since the type of material weakness

identified below have a pervasive effect across the inventory transaction cycle, management has determined that these circumstances constitute

material weakness that therefore affects disclosure controls and procedures.

At the end of the period covered

by this Annual Report on Form 10-K, we conducted an evaluation, under the supervision and with the participation of our management, including

our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and

Based upon the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2022,

the disclosure controls and procedures of our Company were not effective to ensure that the information required to be disclosed in our

Exchange Act reports was recorded, processed, summarized and reported on a timely basis due to material weakness in internal controls

as identified below under “Management’s Report on Internal Control Over Financial Reporting”.

Since the type of material

weakness identified below have a pervasive effect across the inventory transaction cycle, management has determined that these circumstances

constitute material weakness that therefore affects disclosure controls and procedures.

Management’s Report on Internal Control

18 unchanged sentences

in our Exchange Act reports was recorded, processed, summarized and reported on a timely basis.

We identified the following material weakness which existed as of December 31, 2021:

The Company currently does not have sufficient controls in place to

ensure that all inventory is appropriately tracked and recorded on a timely basis, given the lack of an automated tracking system

and the manual nature of its current processes and controls surrounding inventory.

The Company performs manual processes during the

year to track and control inventory transactions, apply labor and overheads to inventory and to perform a wall-to-wall physical

inventory at the end of the year to confirm the ending inventory balance and valuation.

While these processes provide good results

in determining inventory and cost of sales transactions, as we grow, it has become a very time-consuming process and could impact

our ability to submit timely reporting.

A manufacturing system will also provide better management tools to analyze and plan

We identified the following

material weakness which existed as of December 31, 2022:

The Company currently does not have sufficient controls in place to ensure that all inventory is appropriately tracked and recorded on a timely basis, given the lack of an automated tracking system and the manual nature of its current processes and controls surrounding inventory.

The Company performs

manual processes during the year to track and control inventory transactions, apply labor and overheads to inventory and to perform

a wall-to-wall physical inventory at the end of the year to confirm the ending inventory balance and valuation.

processes provide good results in determining inventory and cost of sales transactions, as we grow, it has become a very

time-consuming process and could impact our ability to submit timely reporting.

While manual controls improved significantly in 2022

at our San Diego location, we determined we had similar issues with manufacturing systems at our Chicago facility that was added in 2022

as a result of the AllCell Technologies, Inc.

A manufacturing system will provide automated processes, better controls,

and improved management tools to analyze and plan production.

This will avoid over-purchasing or shortages of inventory.

We plan to implement a manufacturing and purchasing system

during fiscal 2022.

Since these controls have a pervasive effect across the inventory

transaction cycle, management has determined that these circumstances constitute a material weakness, based on the criteria established

in the “Internal Integrated Framework” issued by COSO in 2013 and as a result, we did not maintain effective internal control

over financial reporting as of December 31, 2021.

these controls have a pervasive effect across the inventory transaction cycle, management has determined that these circumstances constitute

a material weakness, based on the criteria established in the “Internal Integrated Framework” issued by COSO in 2013 and as

a result, we did not maintain effective internal control over financial reporting as of December 31, 2022.

No Attestation Report by Independent Registered

2 unchanged sentences

virtue of our exemption from such requirement as a smaller reporting company.

Changes in Internal Controls Over Financial Reporting

During the quarter ended December 31,

2021, we continued to implement stronger manual processes.

Our annual year-end wall-to-wall inventory process was improved over prior

We still utilized spreadsheets to track our inventory counts and valuation, but our processes were improved to reduce the time

required and the accuracy of the count.

In October, we hired a Director of Operations who implemented improved warehouse organization,

inventory procedures, order processing and more to add stronger processes and strengthen our controls.

In late December, we also hired

an experienced electro-mechanical assembly supervisor who will add oversight and process improvements to our inventory and manufacturing

processes going forward.

In addition, we hired a seasoned financial controller with accounting expertise to the Company to help insure

we meet our closing timeline and assist in testing our manual controls.

With these resources in place, we intend to implement a new Enterprise

Resource Planning (ERP) system.

Changes in Internal Controls Over Financial

During the three months ended

September 30, 2022, we significantly improved our manual inventory processes related to ordering, counting, warehousing, valuing and transacting

our inventory at our San Diego facility.

We selected an ERP System and began planning the implementation scheduled for January through

At the same time, we continue to implement process improvements in our Chicago facility which will provide for better controls

in manufacturing.

At March 31, 2022, we identified the

following material weakness:

With regard to a business combination that was completed during the quarter ended March 31, 2022, we identified that the controls over the review of the business combination were not designed effectively such that a material error in the calculation of the purchase price was not detected in a timely manner.

During the quarters ended

June 30, September 30, 2022, and December 31, 2022, the Company implemented a control to review third-party valuation reports, which include

formalized review procedures and enhanced communications with third-party experts.

We believe that these controls have effectively addressed

the material weakness identified in the quarter ended March 31, 2022 and that this no longer represents a material weakness.

OTHER INFORMATION.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

The information required by

17 unchanged sentences

or will be included in an amendment to this Form 10-K.

AND FINANCIAL STATEMENT SCHEDULES.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

Financial Statements

2 unchanged sentences

Financial Statement Schedules

The following exhibits are included with this

The following exhibits are included

with this filing:

Incorporated by Reference

Exhibit Description

Underwriting Agreement

Underwriting Agreement, dated July, 2020

Underwriting Agreement, dated November 23, 2020

Asset Purchase Agreement By and Between Beam Global and AllCell Technologies, LLC dated February 16, 2022

Articles of Incorporation

Amendment to Articles of Incorporation dated December 23, 2016

Certificate of Change to Articles of Incorporation dated April 11, 2019

Certificate of Amendment to Articles of Incorporation dated September 14, 2020

Bylaws of Registrant

Amendment to Bylaws

Description of Registrant's Securities Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

Form of Warrant issued to SFE VCF, LLC

Form of Investor Warrant

Warrant Agency Agreement by and between Envision Solar International, Inc.

Purchase Agreement By and Between Beam Global and AllCell Technologies, LLC dated February 16, 2022

of Incorporation

to Articles of Incorporation dated December 23, 2016

of Change to Articles of Incorporation dated April 11, 2019

of Amendment to Articles of Incorporation dated September 14, 2020

of Registrant

of Registrant's Securities Pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

of Investor Warrant

Agency Agreement by and between Envision Solar International, Inc.

and Corporate Stock Transfer, Inc.

Form of Representative Warrant

Form of Warrant issued to bridge lender on August 27, 2018

Form of Warrant for Bridge Refinance Convertible Secured Promissory Note

of Representative Warrant

of Warrant issued to bridge lender on August 27, 2018

of Warrant for Bridge Refinance Convertible Secured Promissory Note

Stock Incentive Plan of Envision Solar International, Inc., dated as of August 10, 2011

Form of Restricted Stock Agreement

Form of Stock Option Agreement

10% Subordinated Convertible Promissory Note, dated December 17, 2009, issued to John Eve y

Amended and Restated 10% Subordinated Convertible Promissory Note, dated as of December 31, 2010, issued to John Evey

Employment Agreement by and between Envision Solar International, Inc.

of Restricted Stock Agreement

of Stock Option Agreement

and Restated 10% Subordinated Convertible Promissory Note, dated as of December 31, 2010, issued to John Evey

Agreement by and between Envision Solar International, Inc.

and Desmond Wheatley, effective as of January 1, 2016

Amendment to Employment Agreement for Desmond Wheatley, effective as of January 1, 2016

Amendment to Employment Agreement for Desmond Wheatley, effective as of January 1, 2021

Revolving Convertible Promissory Note, dated September 18, 2017

Convertible Secured Promissory Note, dated September 18, 2017

Security Agreement -Purchase Order Financing, dated September 18, 2017

Security Agreement – Convertible Secured Promissory Note, dated September 18, 2017

Promissory Note for bridge loan, dated August 27, 2018

Securities Purchase Agreement for the bridge loan, dated August 27, 2018

Promissory Note for Deferred Compensation of Desmond Wheatley, dated effective January 15, 2016

Amendment to Promissory Note with SFE VCF, LLC, dated December 1, 2018

Offer letter to Katherine H.

to Employment Agreement for Desmond Wheatley, effective as of January 1, 2016

to Employment Agreement for Desmond Wheatley, effective as of January 1, 2021

Convertible Promissory Note, dated September 18, 2017

Agreement -Purchase Order Financing, dated September 18, 2017

Agreement – Convertible Secured Promissory Note, dated September 18, 2017

Note for bridge loan, dated August 27, 2018

Purchase Agreement for the bridge loan, dated August 27, 2018

Note for Deferred Compensation of Desmond Wheatley, dated effective January 15, 2016

to Promissory Note with SFE VCF, LLC, dated December 1, 2018

letter to Katherine H.

McDermott, dated July 12, 2019

Separation Agreement for Chris Caulson dated as of July 23, 2019

Change in Control Severance Benefit Plan

Lease Agreement – 5660 Eastgate Dr.

in Control Severance Benefit Plan

Agreement – 5660 Eastgate Dr.

Beam Global Equity Incentive Plan

Consent of Independent Registered Public Accounting Firm (RSM US

Consent of Independent Registered Public Accounting Firm (Salberg & Company, P.A.

Stock Purchase Agreement

Rights Agreement

Stock Unit Award Agreement

of Independent Registered Public Accounting Firm (RSM US LLP)

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

4 unchanged sentences

Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101).

Inline XBRL Instance Document

(the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)