What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-05-15 compared with 2022-11-10 · 346 added, 353 removed, 255 unchanged (73% of the section changed)

1 unchanged sentence

Condensed Balance Sheets

(In thousands)

September 30,

(In thousands, except share and per share data)

Current assets

1 unchanged sentence

Prepaid expenses and other current assets

Inventory, net

Total current assets

16 unchanged sentences

Stockholders' equity

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

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

Preferred stock, $ 0.001 par value, 10,000,000 authorized, none outstanding as of March 31, 2023 and December 31, 2022.

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 10,238,389 and 10,178,306 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively.

Additional paid-in-capital

7 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of revenues

Gross profit (loss)

Operating expenses

Loss from operations

Other income (expense)

Interest income

Interest expense

Total other income, net

Loss before income tax expense

8 unchanged sentences

(Unaudited, in thousands)

Stockholders'

Paid-in-Capital

Additional Paid-in

Total Stockholders'

Balance at December 31, 2021

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock issued to (released from) escrow account - unvested

Stock issued for acquisition

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Net loss for the three months ended March 31, 2021

Balance at March 31, 2022

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Net loss for the three months ended June 30, 2021

Balance at June 30, 2021

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Stock option exercise (for cash)

Net loss for the three months ended September 30, 2021

Balance at September 30, 2021

Stockholders'

Paid-in-Capital

Balance at December 31, 2022

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock issued for acquisition

Stock option expense

Stock issued to (released from)

escrow account - unvested

Stock-based compensation to consultants

Employee stock-based compensation

Warrants exercised for cash

Sale of stock under Committed Equity

Balance at March 31, 2023

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

Warrants exercised for cash

Balance at June 30, 2022

Stock issued for director services - vested

Stock issued to escrow account - unvested

Stock option expense

Warrants exercised for cash

Stock option exercise (cashless)

Stock issued for Committed Equity Facility

Balance at September 30, 2022

The accompanying unaudited notes are an integral

2 unchanged sentences

(Unaudited, in thousands)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities:

3 unchanged sentences

Change in fair value of contingent consideration liabilities

Compensation expense related to grant of stock options

Employee stock-based compensation

Amortization of operating lease right of use asset

Amortization of debt discount

Changes in assets and liabilities:

9 unchanged sentences

Working capital payment for acquisition

Purchases of equipment

Purchase of property and equipment

Funding of patent costs

1 unchanged sentence

Financing Activities:

Taxes paid related to net share settlement of equity awards

Proceeds from sale of stock under committed equity facility, net of offering

Proceeds from warrant exercises

Payments of equity offering costs

Net cash provided by financing activities

7 unchanged sentences

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

Issuance of stock for Committed Equity Line

Warrants issued for services to non-employee

Shares issued for services to non-employee

The accompanying unaudited notes are an integral

3 unchanged sentences

Nature of Operations

Beam Global, a Nevada corporation

(hereinafter the “Company,” “us,” “we,” “our” or “Beam”), is a cleantech innovation

company based in San Diego, California.

We develop, design, engineer, manufacture and sell high-quality, renewably energized infrastructure

products for electric vehicle (“EV”) charging, outdoor media, and energy security and disaster preparedness as well as safe

and compact, highly energy-dense battery solutions.

Beam’s infrastructure products enable electric vehicle charging and reliable

electrical power in locations where it is either too expensive or too impactful to connect to the utility grid, or where the requirements

for electrical power are so important that grid failures, like blackouts, are intolerable.

Beam’s energy storage products provide

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

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

On March 4, 2022, the Company

acquired substantially all the assets of All Cell Technologies, LLC (“All Cell”), an energy storage solutions and technologies

company based in Broadview, Illinois.

Refer to note 3, Business Combination for additional details.

Beam Global, a Nevada corporation (hereinafter the “Company,”

“us,” “we,” “our” or “Beam”), is a sustainable technology innovation company based in

San Diego, California.

We develop, manufacture

and sell high-quality, renewably energized infrastructure products for electric vehicle charging infrastructure, energy security,

disaster preparedness and outdoor media advertising.

We also produce proprietary energy storage battery products.

Vehicle (EV) charging infrastructure products are powered by locally generated renewable energy and enable vital and highly valuable

services in locations where it is either too expensive, too disruptive or impossible to connect to a utility grid, or where the

requirements for electrical power are so important that grid failures, like blackouts, are intolerable.

We do not compete with EV

charging companies;

rather, we enable such companies by providing infrastructure solutions that replace the time consuming and

expensive process of construction and electrical work which are usually required to install traditional grid-tied EV chargers.

also do not compete with utilities.

Our products provide utilities with another tool to deliver reliable and low-cost electricity to

EV chargers and, in the case of a grid failure, to first responders and others, through our integrated emergency power panels.

also provide energy storage technologies that make commodity battery cells safer, longer lasting and more energy efficient and our

battery management systems (BMS) and associated packaging make batteries safe and usable in a variety of mobility, energy-security

and stationary applications.

Our charging infrastructure

products are rapidly deployed without the need for construction or electrical work.

We compete with the highly fragmented and disintegrated

ecosystem of general contractors, electrical contractors, consultants, engineers, permitting specialists and others who are required to

perform a traditional grid-tied EV charger installation construction and electrical project.

Our clean-technology products are designed

to replace a complicated, expensive, time consuming and risk prone process with an easy, low total cost of ownership, robust and reliable

Basis of Presentation

4 unchanged sentences

In management’s opinion, all adjustments (consisting of normal recurring adjustments

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

30, 2022 and 2021, and our financial position as of September 30, 2022, have been made.

The results of operations for such interim periods

are not necessarily indicative of the operating results to be expected for the full year.

and reclassifications) necessary to present fairly our results of operations and cash flows for the three months ended March 31, 2023

and 2022, and our financial position as of March 31, 2023, have been made.

The results of operations for such interim periods are not

necessarily indicative of the operating results to be expected for the full year.

Certain information and disclosures

5 unchanged sentences

The preparation of financial

statements in conformity with GAAP 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.

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 contingent consideration

liability, 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.

Recent Accounting Pronouncements

8 unchanged sentences

reasonable and supportable forecasts that affect the collectability of the financial assets.

The standard is effective for the Company

beginning January 1, 2023.

The adoption of this guidance is not expected to have a material effect on our financial statements.

The Company adopted this standard effective

January 1, 2023 with no material effect on the financial statements.

Concentrations

4 unchanged sentences

The Company has not experienced any

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

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

losses in such accounts from inception through March 31, 2023.

As of March 31, 2023, approximately $ 0.9 million of the Company’s

cash deposits were greater than the federally insured limits.

On March 10, 2023, Silicon

Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, which immediately appointed

the Federal Deposit Insurance Corporation (“FDIC”) as receiver.

At the time, the Company maintained all of its cash deposits

All deposits and substantially all of the assets of SVB were transferred to Silicon Valley Bridge Bank, N.A.

which is no longer affiliated with SVB.

On March 27, 2023, First-Citizens Bank & Trust Company entered into an agreement with the

FDIC to purchase substantially all loans and certain other assets and assume all customer deposits and certain other liabilities of SVBB.

The Company has full access to all of its deposited funds with SVBB and we have also established deposit accounts at Bank of America.

Major Customers

The Company continually assesses

the financial strength of its customers.

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

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

three months ended September 30, 2021, revenues from one customer accounted for 74 % of total revenues and for the nine months ended September

30, 2021, revenues from one customer accounted for 36 % of total revenues, with no other single customer accounting for more than 10% of

At September 30, 2022, accounts receivable from two customers accounted for 25 % and 11 % of total accounts receivable with no

other single customer accounting for more than 10% of the accounts receivable balance.

At December 31, 2021, accounts receivable from

four customers accounted for 30 %, 22 %, 13 % and 10 % of total accounts receivable with no other single customer accounting for more than

10% of the accounts receivable balance.

For the nine months ended September 30, 2022 and 2021, the Company had a heavy concentration of

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

The Company continually

assesses the financial strength of its customers.

For the three months ended March 31, 2023, two customers accounted for 80 %

Army) and 10 %

of total revenue, respectively.

For the three months ended March 31, 2022, three customers accounted for 22 %, 16 %

of total revenues each.

At March 31, 2023, accounts receivable from the U.S.

Army accounted for 76 %

of total accounts receivable with no other single customer accounting for more than 10% of the accounts receivable balance.

December 31, 2022, accounts receivable from three customers accounted for 30 %, 15 %

of total accounts receivable each with no other single customer accounting for more than 10% of the accounts receivable balance.

the three months ended March 31, 2023 and 2022, the Company’s sales to federal, state and local governments represented 86 %

of revenues, respectively.

Significant Accounting Policies

During the nine months ended

September 30, 2022, there were no changes to our significant accounting policies as described in in our Annual Report on Form 10-K for

the year ended December 31, 2021.

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

assets and fair value measurements.

Business Combination

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

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.

Goodwill and Indefinite-lived Intangible Assets

Upon acquisition, identifiable

intangible assets are recorded at fair value and are carried at cost less accumulated amortization.

Identifiable intangible assets with

finite lives are amortized on a straight-line basis over their estimated useful lives except for customer relationships, for which the

amortization is recorded on an accelerated method over the estimate useful life.

The carrying values of intangible assets with finite

lives are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Goodwill represents the excess

of the purchase prices of an acquired business over the fair value of the underlying net tangible and intangible assets.

The Company is

required to assess goodwill and other indefinite-lived intangible assets for impairment annually, or more frequently if circumstances

indicate impairment may have occurred.

The Company first assesses qualitative factors to determine whether it is necessary to perform

the quantitative goodwill impairment test, including macroeconomic conditions, industry and market considerations, and our overall financial

If, after completing the qualitative assessment, it is determined it is more likely than not that the estimated fair value

is greater than the carrying value, the Company concludes no impairment exists.

Alternatively, if the Company determines in the qualitative

assessment, it is more likely than not that the fair value is less than its carrying value, then the Company performs a quantitative goodwill

impairment test to identify both the existence of an impairment and the amount of impairment loss, by comparing the fair value of the

reporting unit with its carrying amount, including goodwill.

If the estimated fair value of the reporting unit is less than the carrying

value, then a goodwill impairment charge is recognized in the amount by which the carrying amount exceeds the fair value, limited to the

total amount of goodwill allocated to that reporting unit.

The goodwill annual assessment test is performed in the fourth quarter of every

year or when an event occurs, or circumstances change such that it is reasonably possible that an impairment may exist.

Fair Value Measurements

The fair value of assets and

liabilities are based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement

Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs.

We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable,

to measure fair value:

1 — Quoted prices in active markets for identical assets or liabilities.

2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets

or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable

market data for substantially the full term of the assets or liabilities.

3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets

or liabilities.

The carrying amounts of financial

instruments such as cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate the related fair

values due to the short-term maturities of these instruments.

During the three months ended

March 31, 2023, there were no changes to our significant accounting policies as described in in our Annual Report on Form 10-K for the

year ended December 31, 2022.

Net Loss Per Share

3 unchanged sentences

potential common stock outstanding during the period.

Potential common stock consists of the incremental shares of common stock issuable

upon the exercise of stock options, stock warrants, convertible debt instruments or other common stock equivalents.

Potentially dilutive

securities are excluded from the computation if their effect is anti-dilutive.

Potential common stock consists of shares of common stock issuable upon the exercise

of stock options, stock warrants, or other common stock equivalents.

Potentially dilutive securities are excluded from the computation

if their effect is anti-dilutive.

Options to purchase 346,758

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

shares of common stock and warrants to purchase 624,306 shares of common stock were outstanding at March 31, 2023.

Options to purchase

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

These options

and warrants were not included in the computation of diluted loss per share for the three and nine months ended September 30, 2022 and

2021 because the effects would have been anti-dilutive.

269,433 common shares and warrants to purchase 505,714 shares of common stock were outstanding at March 31, 2022.

These options and warrants

were not included in the computation of diluted loss per share for the three months ended March 31, 2023 and 2022 because the effects

would have been anti-dilutive.

These options and warrants may dilute future earnings per share.

The Company follows ASC 280-10

for “Disclosures about Segments of an Enterprise and Related Information.” Management assesses its segment reporting based

on how it internally manages and reports the results of its business to its chief operating decision maker.

For periods through the date

of the All Cell acquisition, the Company had, and reported in, one reportable segment.

Subsequent to the acquisition of All Cell, management

continues to review financial results, manage the business and allocate resources on an aggregate basis.

Therefore, financial results

continue to be reported in a single operating segment.

The Company has a history

of net losses.

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

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

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

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

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

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

revenue forecast.

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

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

At September 30, 2022, the

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

Based on the Company’s current operating plan,

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

The Company believes that it will become profitable in the next few

years as our revenues continue to grow, we improve our gross margins and we leverage our overhead costs, but we expect to continue to

incur losses for a period of time.

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

Common Stock Purchase Agreement and Registration Rights Agreement with B.

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

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

note 10 for further information).

Furthermore, we could pursue other equity or debt financings.

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

ended September 30, 2022 and 2021, respectively.

There is no guarantee that profitable operations will be achieved, the warrants will

be exercised or that additional capital or debt financing will be available.

The Company assesses its segment

reporting based on how it internally manages and reports the results of its business to its chief operating decision maker.

reviews financial results, manages the business and allocates resources on an aggregate basis.

Therefore, financial results are reported

in a single operating segment.

The Company has a

history of net losses for the three months ended March 31, 2023 and 2022 where

the Company had net losses of $ 3.8

million (which includes $ 0.9

million of non-cash expenses) and $ 2.3

million , respectively, and net cash used in operating activities of $0.6 million and $1.9 million, At March 31, 2023, the

Company had a cash balance of $ 1.0

million and working capital of $ 5.5

The working capital balance is reduced by a current liability of $6.8 million for contingent consideration, which is

a non-cash, all stock earn-out payment associated with the 2022 acquisition of AllCell Technologies.

Based on the Company’s

current operating plan, the Company believes that it has the ability to fund its operations and meet contractual obligations for at

least twelve months from the date of this report.

In 2022, the Company entered into a Common Stock Purchase Agreement and

Registration Rights 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 (see note 11 for further information).

The Company issued 37,741

shares in January and February 2023 for $ 0.7

million under this agreement.

The Company’s outstanding warrants generated $ 0.1

million of proceeds during each of the three months ended March 31, 2023 and 2022.

In March 2023, the Company secured

million credit facility with OCI Group to support our working capital requirements.

Furthermore, we

could pursue other equity or debt financings.

The Company believes that it will become profitable in the next few years as our

revenues continue to grow, we improve our gross margins and we leverage our overhead costs, but we expect to continue to incur

losses for a period of time.

There is no guarantee that profitable operations will be achieved, the warrants will be exercised or

that additional capital or debt financing will be available on a timely basis, on favorable terms, or at all, and such funding, if raised, may not be sufficient to meet

our obligations or enable us to continue to implement our long-term business strategy.

In addition, obtaining additional funding

or entering into other strategic transactions could result in significant dilution to our stockholders.

BUSINESS COMBINATION

On March 4, 2022, the Company

completed its acquisition of substantially all the assets of All Cell Technologies, LLC (“All Cell”), a leader in energy storage

We believe this strategic acquisition will increase and diversify our Company’s revenue, gross profitability, manufacturing

capabilities, intellectual portfolio and customer base.

The Company purchased substantially all of the assets and business of All Cell

for 1,055,000 shares of Beam Common Stock (“Closing Consideration”) plus an additional $0.8 million in cash for the net working

On March 4, 2022, the

Company completed its acquisition of substantially all the assets of All Cell Technologies, LLC (“All Cell”), a leader

in energy storage solutions.

We believe this strategic acquisition will increase and diversify our Company’s revenue, gross

profitability, manufacturing capabilities, intellectual portfolio and customer base.

The Company purchased substantially all of the

assets and business of All Cell for 1,055,000

shares of our common stock (“Closing Consideration”) plus an additional $0.8 million in cash for the net working

capital held by All Cell at closing.

In addition, All Cell is eligible

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”).

to earn an additional number of shares of our common stock if the acquired 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 Beam Common Stock

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

from energy storage products used in Beam Global products will not be considered as contributing to the Earnout calculation.

The preliminary fair value

of consideration transferred consisted of the following (in thousands):

(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 which exceeds

the greater of either $13.5 million or 135% of the 2022 cumulative revenue, capped at $20.0 million.

Any revenues exceeding $20.0 million

in 2023 will not be eligible for the Earnout Consideration.

The maximum aggregate number of shares of our common stock that we will issue

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

Revenue from energy storage products

used in Beam Global products will not be considered as contributing to revenue in the Earnout calculation.

The fair value of consideration

transferred consisted of the following (in thousands):

Schedule of Noncash or Part Noncash Acquisitions

3 unchanged sentences

The following table summarizes

the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date (in thousands):

the fair values of assets acquired and liabilities assumed as of the acquisition date (in thousands):

Schedule of assets acquired and liabilities assumed

1 unchanged sentence

Property, plant and equipment

Right-of-use asset

Intangible assets, including goodwill

1 unchanged sentence

Customer deposits

Lease liability

Total liabilities assumed

Total assets and liabilities assumed

The estimated fair values

assigned to identifiable assets acquired and liabilities assumed are provisional pending the finalization of the working capital and purchase

price allocation and are based on the information that was available as of the acquisition date to estimate the fair value of assets acquired

and liabilities assumed.

The Company believes that information provides a reasonable basis for estimating the fair values of assets acquired

and liabilities assumed, but the Company is waiting for additional information necessary to finalize those fair values.

Therefore, the

provisional measurements of fair value reflected are subject to change and such changes could be significant.

The Company expects to complete

the allocation of purchase price as soon as practicable, but no later than one year after the acquisition date.

The Company incurred $ 0.1

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

operating expenses in the statement of operations.

million of transaction costs during the year ended December 31, 2022, directly related to the acquisition that is reflected in operating

expenses in the statement of operations.

Goodwill represents the excess

9 unchanged sentences

with the change recorded to operating expenses.

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

30, 2022 is as follows (in thousands):

Change in the fair value of the Earnout Consideration during the year ended December

31, 2022 and the quarter ended March 31, 2023 is as follows (in thousands):

Schedule of fair value earnout

2 unchanged sentences

Change in estimated fair value

Balance as of September 30, 2022

The preliminary fair values

assigned to identifiable intangible assets and goodwill acquired are as follows ($ in thousands):

Balance as of December 31, 2022

Change in estimated fair value

Balance as of March 31, 2023

The fair values assigned

to identifiable intangible assets and goodwill acquired are as follows ($ in thousands):

Schedule of acquired intangible assets

13 unchanged sentences

estimated useful lives except for customer deposits which uses accelerated depreciation.

Pro Forma Financial Information

The following pro forma financial

information summarizes the combined results of operations of Beam Global and All Cell as if the companies had been combined as of the

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

Pro Forma Unaudited Financial Information

The following pro forma unaudited

financial information summarizes the combined results of operations of Beam Global and All Cell as if the companies had been combined

as of the beginning of the year ended December 31, 2021 (unaudited and in thousands):

Schedule of Pro Forma Information

Three Months Ended September 30,

Nine Months Ended September 30,

The pro forma financial information

is presented for information purposes only and is not indicative of the results of operations that would have been achieved had the acquisition

been completed at the beginning of the nine months ended September 30, 2021.

In addition, the pro forma financial information is not a

projection of future results of operations of the combined company, nor does it reflect the expected realization of any synergies or cost

savings associated with the acquisition.

The pro forma financial information includes adjustments to reflect the incremental amortization

expense of the identifiable intangible assets and transaction costs, as well as removes the impact of the debt that was not acquired by

Year Ended December 31,

The pro forma unaudited financial

information is presented for information purposes only and is not indicative of the results of operations that would have been achieved

had the acquisition been completed at the beginning of the year ended December 31, 2021.

In addition, the pro forma unaudited financial

information is not a projection of future results of operations of the combined company, nor does it reflect the expected realization

of any synergies or cost savings associated with the acquisition.

The pro forma unaudited financial information includes adjustments to

reflect the incremental amortization expense of the identifiable intangible assets and transaction costs, as well as removes the impact

of the debt that was not acquired by the Company and payments to a non-employee.

The statement of operations

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

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

Broadview Lease

As part of the acquisition,

the Company assumed a facility lease located in Broadview, Illinois, and recorded $ 0.2 million in right-of-use asset and lease liability.

The lease term ends on August 31, 2023 and contains clauses for annual rent escalation.

Total minimum rental payments remaining as of

September 30, 2022 was $ 0.1 million .

for the year ended December 31, 2022 includes revenues of $ 5.2 million and loss from operations of $ 10.1 million , respectively, from the

acquired All Cell business.

PREPAID EXPENSES AND OTHER CURRENT ASSETS

2 unchanged sentences

Schedule of Other Current Assets

September 30,

Vendor prepayments

Related party receivable

Deferred equity offering costs

Prepaid insurance

Related party receivable

Total prepaid expenses and other current assets

Related party receivables

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

as of March 31, 2023 and December 31, 2022 consisted primarily of payroll related taxes due for stock-based compensation.

Inventory consists of the following (in thousands):

Schedule of Inventory

September 30,

Finished goods

6 unchanged sentences

Schedule of property and equipment

September 30,

Office furniture and equipment

5 unchanged sentences

Property and equipment, net

INTANGIBLE ASSETS

The intangible assets consist of the following

(in thousands):

Schedule of intangible assets

Gross Carrying Amount

Accumulated Amortization

Weighted -Average Amortization Period (yrs)

Developed technology

Customer relationships

Intangible assets

ACCRUED EXPENSES

2 unchanged sentences

Schedule of accrued expense

September 30,

Accrued vacation

1 unchanged sentence

Vendor accruals

Accrued warranty

Other accrued expense

4 unchanged sentences

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

As of September 30, 2022,

there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

As of March 31, 2023, there

were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

Other Commitments:

2 unchanged sentences

Since inception,

the Company entered into sales agent agreements whereby sales agents would receive a fee equal to a percentage of revenues generated by

agreements with vendors where the vendor may provide marketing, investor relations, public relations, technical consulting

or subcontractor services, vendor arrangements with non-binding minimum purchasing provisions, and financial advisory agreements where

the financial advisor would receive a fee and/or commission for raising capital for the Company.

the Company entered into agreements to act as a reseller for certain vendors;

joint development contracts with third parties;

agreements where the Company would pay a referral fee to the referrer for business generated;

sales agent agreements whereby sales agents

would receive a fee equal to a percentage of revenues generated by the agent;

business development agreements and strategic alliance agreements

where both parties agree to cooperate and provide business opportunities to each other and in some instances, provide for a right of first

refusal with respect to certain projects of the other parties;

agreements with vendors where the vendor may provide marketing, investor

relations, public relations, software licenses, technical consulting or subcontractor services, vendor arrangements with non-binding minimum

purchasing provisions, and financial advisory agreements where the financial advisor would receive a fee and/or commission for raising

capital for the Company.

There was no Federal income

tax expense for the nine months ended September 30, 2022 or 2021 due to the Company’s net losses.

Income tax expense represents

minimum state taxes due.

As a result of the Company’s history of incurring operating losses, a full valuation allowance has been

established to offset all deferred tax assets as of September 30, 2022 and no benefit has been provided for the year-to-date loss.

a quarterly basis, the company evaluates the positive and negative evidence to assess whether the more likely than not criteria have been

satisfied in determining whether there will be further adjustments to the valuation allowance.

tax expense for the three months ended March 31, 2023 or 2022 due to the Company’s net losses.

Income tax expense represents minimum

state taxes due.

As a result of the Company’s history of incurring operating losses, a full valuation allowance has been established

to offset all deferred tax assets as of March 31, 2023 and no benefit has been provided for the year-to-date loss.

On a quarterly basis,

the company evaluates the positive and negative evidence to assess whether the more likely than not criteria have been satisfied in determining

whether there will be further adjustments to the valuation allowance.

STOCKHOLDERS’ EQUITY

Stock Issued For Acquisition

The Company issued 1,055,000

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

See further discussion

Business Combination.

Stock Issued For Services

During the three months

ended March 31, 2023, the Company issued 6,444

shares of its common stock in exchange for marketing services to be provided over a six-month period.

The fair value of such stock

issued is $ 0.1

million and was recorded to prepaid expenses and other current assets upon issuance to be recognized over the service

Committed Equity Facility

On September 2, 2022, the

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

Riley Principal Capital, LLC (“B.

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

discretion, to sell to B.

Riley up to $ 30.0

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

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

On September 2, 2022,

the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B.

Pursuant to the

Purchase Agreement, the Company has the right, in its sole discretion, to sell to B.

Riley up to $30.0 million, or a maximum of 2.0

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

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

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

Sales and timing of any sales are solely at the election

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

Sales and timing of any sales are solely at the

election of the Company, and the Company is under no obligation to sell any common stock to B.

Riley under the Purchase Agreement.

As consideration

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

stock and will issue an additional 10,484

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

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

Other than the issuance of

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

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

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

As consideration for B.

Riley’s commitment to purchase shares of the Company’s common stock, in September 2022, the

Company issued B.

shares of its common stock and will issue an additional 10,484 shares of its common stock or a cash payment of $150,000, at the

Company’s sole discretion, sometime after the first VWAP purchase occurs.

The Company incurred an aggregate

1 unchanged sentence

stock issued to B.

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

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

Awards Under Stock Incentive Plans

Riley upon the execution of the agreement and the additional comment shares of 10,484, which was recorded to prepaid

expenses and other current assets on the Balance Sheet to be offset against future proceeds from the sale of the Company’s common

stock under the Purchase Agreement.

During the three months ended

March 31, 2023, the Company issued 37,741 shares under this agreement for $ 0.7 million in proceeds, of which $ 0.5 million was offset by

the offering costs.

Stock Options

Option activity for the nine months ended September

Option activity for the three months ended March

31, 2023 is as follows:

Schedule of option activity

Contractual Life

Outstanding at December 31, 2022

Outstanding at June 30, 2022

The Company’s stock option compensation

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

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

There was $ 1.0 million of total unrecognized compensation

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

Number of stock options

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

Restricted Stock

Outstanding at March 31, 2023

The fair value of each option

is estimated on the date of grant using the Black-Scholes option-pricing model using the assumptions in the table below and we assumed

there would not be dividends granted for the options granted during the three months ended March 31, 2023 and 2022:

Assumptions for options granted

Three months ended March 31,

Expected Volatility

97.40 % - 97.41 %

Expected Term

Risk-free interest rate

1.55 % - 1.71 %

Weighted-average FV

The Company’s

stock option compensation expense was $ 0.1

million for each of the three months ended March 31, 2023 and 2022, and there was $ 1.2

million of total unrecognized compensation costs related to outstanding stock options at March 31, 2023 which will be

recognized over 3.7

Total intrinsic value of options outstanding and options exercisable were $ 2 .0

million and $ 1.7

million , respectively, as of March 31, 2023.

The number of stock options vested and unvested as of March 31, 2023 were 267,975

respectively.

Restricted Stock Units

In November 2022, the

Company granted 142,500

restricted stock units (“RSUs”) and up to 142,500 performance stock units (“PSU”) to its Chief Executive

Officer (“CEO”).

50% of the RSUs vested upon grant, with 25% vesting on February 1 st of 2024 and 2025.

number of shares that will be earned under the PSUs will be determined based on the achievement of specific performance metrics

during the three-years ending December 31, 2024.

There was no activity during the three months ended

March 31, 2023.

142,500 PSUs and 71,250 RSUs remained outstanding as of March 31, 2023, with weighted-average grant-date fair values of

$ 13.05 each.

Stock compensation

expense related to the RSUs and PSUs was $ 0.3

million during the three months ended March 31, 2023, with $ 2.3

million in unrecognized stock compensation expense remaining to be recognized over 1.9

years as of March 31, 2023.

Restricted Stock Awards

The Company issues restricted

stock to the members of its board of directors as compensation for such members’ services.

Such grants generally vest ratably over

four quarters.

The Company also issues restricted stock to its CEO, for which generally 50% of the shares granted vest ratably over four

quarters and the remaining 50% vest ratably over twelve quarters.

The common stock related to these awards are issued to an escrow account

on the date of grant and released to the grantee upon vesting.

The fair value is determined based on the closing stock price of the Company’s

common stock on the date granted and the related expense is recognized ratably over the vesting period.

A summary of activity of the restricted stock

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

awards for the three months ended March 31, 2023 is as follows:

Schedule of restricted stock award activity

2 unchanged sentences

Nonvested at December 31, 2022

Nonvested at September 30, 2022

As of September 30, 2022,

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

over approximately 2.3 years.

A summary of the number of shares of common stock

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

Schedule of common stock warrant

Nonvested at March 31, 2023

Stock compensation expense

related to restricted stock awards was $ 0.1

million during each of the three months ended March 31, 2023 and 2022.

As of March 31, 2023, there

were unreleased shares of common stock representing $ 0.2 million of unrecognized restricted stock grant expense which will be recognized

over 1.75 years.

During the three months

ended March 31, 2023, the Company issued 200,000

warrants with a $17.00 strike price to purchase the Company’s common stock for investor relations services to be provided over a

five-year period.

The awards are immediately exercisable but are subject to repurchase by the Company until the required service is

The fair value of such warrants was $ 8.05

per share or $ 1.6

million on the date of grant using the Black-Scholes option-pricing model.

This model incorporated certain assumptions for

inputs including a risk-free market interest rate of 3.86 %,

expected dividend yield of the underlying common stock of 0 %,

expected life of 2.5

years and expected volatility in the market value of the underlying common stock based on our historical volatility of 99.6 %.

The fair value of the warrants was recorded to prepaid expenses and other current assets to be recognized over the service period.

At March 31, 2022, $ 1.6

million of cost has not been recognized and will be recognized over the next 5.0

A summary of activity of warrants outstanding

for the three months ended March 31, 2023 is as follows:

Schedule of common stock warrant activity

Number of Warrants

Weighted Average Exercise Price

Outstanding at December 31, 2022

Outstanding at September 30, 2022

Outstanding at March 31, 2023

Exercisable at March 31, 2023

Exercisable warrants as of

March 31, 2023 have a weighted average remaining contractual life of 1.05 years.

The intrinsic value of the exercisable shares of the

warrants at March 31, 2023 was $ 4.1 million .

For each of the identified

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Product sales

4 unchanged sentences

Total revenues

During the three and nine

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

During the three

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

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

At September 30, 2022 and

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

These amounts represented customer deposits in the

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

plans for previously sold products which account for $ 0.3 million and $ 0.2 million for September 30, 2022 and December 31, 2021, respectively,

and pertain to services to be provided through 2028.

During the three months ended

March 31, 2023 and 2022, 60 % and 48 % of revenues were derived from customers located in California, respectively.

In addition, 10 % and

4 % of revenues in the three months ended March 31, 2023 and 2022 were international sales, respectively.

At March 31, 2023 and December

31, 2022, deferred revenue was $ 1.1 million and $ 1.4 million , respectively.

These amounts consisted mainly of customer deposits in the

amount of $ 0.7 million and $ 1.0 million for March 31, 2023 and December 31, 2022, respectively and prepaid multi-year maintenance plans

for previously sold products which account for $ 0.4 million and $ 0.3 million for March 31, 2023 and December 31, 2022, respectively, and

pertain to services to be provided through 2029.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements