What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-04-11 compared with 2024-04-16 · 281 added, 222 removed, 186 unchanged (73% of the section changed)

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security, disaster preparedness and outdoor media advertising.

The Company has designed five

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.

Our product lines include:

The Company has multiple product

lines that incorporate our proprietary technology.

Our off-grid EV charging and energy security products produce 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.

Versions of our charging infrastructure products are modified to support EVs, eMotorcycles,

eBikes, desalination and auxiliary power.

Our Smart Cities products combine structural elements with built in electronics, renewable energy

generation, battery storage, sensors and IoT capabilities.

These products are scalable and attractively designed and include:

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 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.

The electronics are elevated to the underside of the sun-tracking 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 and a certified wind rating of 160 miles per hour.

Solar Tree® DCFC – Patented off-grid, renewably energized and rapidly deployed, 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 comprised of four interconnected EV ARC™ systems and a 24kW DC fast charger.

EVStandard 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.

BeamSpot™ – patent issued on December 31, 2019 and currently.in the process of initial installation.

A streetlight, EV charging and emergency power product which uses an existing streetlight’s foundation and a combination of solar, wind, grid connection and onboard energy storage to provide curbside charging and emergency power.

BeamBike™ - rapidly deployed, construction free, solar-powered charging system based on the patented EV ARC™ platform which generates and stores its own clean electricity, accessed through twelve integrated, weatherized 120 V outlets supporting any eBike charger.

Supports 12 eBikes and is available with or without bundled eBike packages.

BeamPatrol™ - Rapidly deployed and easily transported, the BeamPatrol™ station allows law enforcement and safety personnel to charge and quickly access nimble, quiet and responsive motorcycles without the need for any additional infrastructure or fuel.

This innovative solution is ideal for law enforcement, customs and border patrol, the military, park services, air and seaport operations and any situation where the ability to rapidly gain access to an environment, without alerting targets of the operation, is required.

BeamPatrol™ and the motorcycles it supports generate low to no maintenance or fuel costs and provide a highly reliable mobility solution while assisting in the carbon reduction efforts of the agencies that use the product.

Available with, or without bundled eMotorcyles.

BeamWell™ - based on the patented EV ARC™ system, is a self-sufficient, self-contained operational system for use in war zones and remote or disaster areas where only salt, brackish or dirty water is available because a reliable clean water supply is not available or has been interrupted.

The BeamWell™ system provides three essential services to regions in crisis:

it turns seawater into fresh water, which is then stored in an integrated 3000-liter tank that is replenished daily;

it provides a source of electricity which can be used for medical or communications devices as well as cooking and lighting;

and it charges four integrated and bundled Benzina Zero electric mopeds for the rapid distribution of food, water, medications or other vital resources, to those in need.

Smart Cities Infrastructure products – Street lighting, street furniture, communications infrastructure products, energy infrastructure products, with electronics integration including renewable energy sources, battery storage, sensors and IoT integration.

UAV ARC™ - patent issued on November 24, 2020 and currently under development.

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

With the acquisition of All

Cell Technologies, LLC (“All Cell”) in March 2022, we 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.

Drones, 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.

October 20, 2023, we acquired Amiga DOO Kraljevo (“Amiga”) a business located in Serbia and engaged in the manufacture and

distribution of steel structures with electronic integration, such as streetlights, cell towers, and ski lift towers.

In addition to their

current products, Amiga has engineering, product development and manufacturing capabilities which we believe are well suited to

manufacture and sell Beam’s current products in the European market.

Also, Amiga is one of Europe’s leading manufacturers

of streetlights and Beam believes it is well positioned to develop and manufacture Beam’s patented EV Standard™ for sale in

both Europe and the U.S.

We believe this provides Beam with a growth opportunity to sell its products in the European market through Amiga’s

extensive customer base.

Beam AllCell™ designs,

manufactures and sells custom, high-quality, bespoke lithium-ion energy storage solutions.

Our world-class battery engineering team rigorously

creates unique battery formats and shapes to the highest standards, delivering highly flexible solutions that maximize power in compact

Our patented PCC™ phase change material, manufactured in-house, provides passive thermal management solution and critical

safety features against thermal runaway.

Our proprietary Smart BMS, designed by the Company, further differentiates our products, ensuring

superior customer satisfaction.

Our battery is ideal for applications requiring high energy density, high power, and safe, space

efficient enclosures.

Our batteries power drones, submersibles, medical devices, recreational products and micro-mobility solutions.

Company is integrating these advanced batteries and technologies into our new product designs under development.

On October 20, 2023, Beam

acquired Amiga DOO Kraljevo (“Amiga”), a business located in Serbia and engaged in the

manufacture and distribution of steel structures with electronic integration, including (i) infrastructure products for public

(ii) infrastructure products for mobile telephone, networks and transmission lines;

(iii) infrastructure products for tram,

trolleybus, and railways;

(iv) infrastructure products for contact networks, masts, portals and semi-portals for road and railway signaling;

(v) large steel lattice structures for specific purposes (e.g., stadiums, factories, power plants, etc.);

and (vi) distribution and command

electrical cabinets.

Amiga has engineering, product development and manufacturing capabilities which are well suited to manufacture and

sell Beam’s current and future products in the European market.

As a large European manufacturer of streetlights, Amiga is well

positioned to assist in the development of the BeamSpot™ for both the European and US markets.

On August 30, 2024, Beam acquired

Telcom d.o.o.

Beograd (“Telcom”), a business located in Serbia and engaged in the manufacturing of power electronics and telecommunications

Telcom engineers and manufacturers specialized power electronics includer invertors, charge controllers, power supplies and

LED lighting.

Telcom has electrical engineering, product development and manufacturing capabilities which Beam believes are ideally suited

to improve the Company’s current and future products for the global market.

Telcom has a well-respected and highly talented team

of electrical engineers, focused on power electronics and the integration of renewables and energy storage.

We believe that there is a

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We are agnostic as to the EV charging service equipment or provider and integrate best of breed solutions

based upon our customer’s requirements.

based upon our customers’ requirements.

For example, our EV ARC™ and Solar Tree® products have been deployed with Chargepoint,

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We believe our chief differentiators

for our electric vehicle charging infrastructure products are:

for our electric vehicle charging and energy security infrastructure products are:

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 proprietary and patented energy storage 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 products which are marketable and are 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.

Beam’s revenues increased

from $22.0 million in 2022 to $67.4 million in 2023.

We believe this was the 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 our increased investment in sales and marketing resources over

the past two years which has increased awareness of our products.

During the year ended December 31, 2023, 64% of product sales were to

Federal customers, a 569% increase over the prior year, primarily due to several large orders received in late 2022, including a $29.4

million order through Techflow, Inc.

for the US Army (IMCOM), an $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.

State and Local governments accounted for 16% of revenues driven by a $5.3 million order from New York City to deliver EV ARCs TM

throughout the city.

Revenues from our energy storage products were $8.5 million in 2023, a 63% increase over 2022 revenues.

as a result of our acquisition of Amiga in October 2023, we reported revenues of $3.4 million for the period from October 20, 2023 through

December 31, 2023.

our ability to continuously create new and patentable marketable inventions by integrating our proprietary technology and parts, and other commonly available engineered components, which create a further barrier to entry for our competition;

our international operations in two of the three largest automotive markets in the world today.

Beam’s revenue as of

December 31, 2024 was $49.3 million compared to $67.4 million in 2023.

Although a decrease year over year, this was a 124% increase over

December 31, 2022 revenue of $22.0 million.

We believe that the decrease in revenue is a result of order timing, uncertainty in the U.S.

government’s zero emission vehicle strategy related to, and following the presidential election and evolving certification requirements

for energy storage systems requiring updates to our EV ARC™ products which we believe will be completed in the first quarter of

These matters have particularly impacted our larger federal customers and we do not believe that they signify any fundamental reduction

in demand for our products.

Our pipeline of prospective customer orders has increased during the same period, although we cannot be sure

of when, or if, those prospective orders will turn into actual sales.

As we have continued investment in our sales resources, in September

of 2024, we hired a new Vice President of Sales in the U.S.

and a new Director of Channel Partnerships in Europe to drive growth in commercial

and government sectors.

Revenues were diverse across federal, state and local governments, as well as enterprise and education sector

International customers comprised 25% of the revenues as of December 31, 2024 verses 15% for the year ended December 31, 2023.

Revenues derived from non-government commercial entities increased by 229% for the twelve months from 2023 to 2024 and were 38% of total

revenues in 2024.

For the twelve months ended, December 31, 2024, the Company’s sales to federal, state and local governments represented

62% of revenues verses 80% of total revenues in 2023.

We continue to invest in sales employees, marketing resources, diversifying our

product portfolio with new product offerings and expanding our geographic footprint to reduce our reliance on single large orders of our

EV ARC™ product by federal agencies, although we believe that that opportunity still exists.

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 and our new and

existing products are brought to larger international audiences, our business will be less impacted by specific variations in order timing.

We have in place a Multiple

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

We have also continued to

invest in our federal business channel which has helped us to identify federal opportunities and increased awareness of our product and

outreach with federal agencies.

In addition, there continues to be 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.

Strength in federal orders continued

with a new order announced in January 2024 from the U.S.

We have continued to invest

in our federal business channel, which has helped us to identify federal opportunities and increased awareness of our product and outreach

with federal agencies.

In the beginning of 2024, we saw strength in federal orders with a new order announced in January 2024 from the

Army Corps of Engineers, Army Material Command (AMC) for $7.4 million.

acquisition of Amiga in October 2023, we now have a facility in Europe that can manufacture and sell Beam products for the European market.

Europe is the largest market in the world for electric vehicles and is a strong proponent of clean energy.

We believe there is a lot of

potential for growth in this region.

We also 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 this growth.

A number of federal tax incentives remain, like the 30% federal

solar tax credit and Rule 179 accelerated depreciation, which provide strong financial incentives for many of our targeted commercial

In addition, there continues to be support for funding EV charging infrastructure at the state level.

With our acquisitions of Amiga

and Telcom, we now have a facility in Europe that can manufacture and sell Beam products for the European market.

Europe is the largest

market in the world for electric vehicles and is a strong proponent of clean energy.

We believe there is a lot of potential for growth

in this region.

We also 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 this growth.

Our geographic expansion into Europe and our additional business development activities

in the Middle East and Africa are, we believe, also providing opportunities for growth which are not dependent on, or impacted by, shifts

in US government and zero emission vehicle strategies.

The new products we have brought to market offer values which are also not dependent

upon US federal government investment.

The EU has mandated a transition to zero emission vehicles

by 2035 and they are heavily focused on green and sustainable energy.

An increase in electric vehicles adoptions will increase the demand

for charging infrastructure.

We believe that our sustainably energized EV ARC TM and BeamSpot™ products can play a major

role in the provision of EV charging infrastructure in Europe.

Our energy security business

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large private enterprises with substantial facilities, and vehicle fleet operators.

We continue development of

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.

Beam Europe’s team of engineers is integrated with Beam’s U.S.

team which Beam believes will provide a valuable enhancement and acceleration of product development cycles.

Drones, submersibles, recreational products and a

host of micro mobility and electric vehicle products are already benefiting from our Beam All-Cell ™ highly differentiated

With the continued growth of untethered electrification, we believe there is an opportunity for increased demand in these markets

We are in development on our

newest patented products which include- BeamSpot™, UAV ARC™ and others, which we expect will continue to expand our product

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

Amiga is one of

Europe’s largest manufacturers of streetlights and has a team of qualified structural, electrical and civil engineers who are experts

in the field of development and deployment of street lighting.

They are working with our engineers in San Diego and Broadview to continually

improve the engineering and development of our new BeamSpot™ product.

We believe that BeamSpot™ may become our largest selling

product when available for sale.

BeamSpot™ is currently in the process of being installed and we received our first order for that

product within two months of it being launched.

In addition, EV ARC™,

BeamBike™, BeamWell™ and BeamPatrol™ products have fulfilled the requirements to receive the CE mark (Conformité

Européenne), a mandatory symbol indicating that a product meets European Union (EU) health, safety and environmental protection

requirements, allowing it to be freely traded within the European Economic Area (EEA).

The Company reported a positive

gross profit of $1.2 million for 2023, compared to a $1.7 million gross loss in 2022.

The gross profit benefited from increased volume

resulting in increased fixed overhead absorption, partially offset by an increase in fixed overhead spending (including indirect headcount,

service support, depreciation for capital to increase capacity, etc.).

We realized labor efficiencies because of the higher volume being

produced, but this was partially offset by a higher labor rate due to the use of temporary agencies to meet our delivery requirements.

Material costs increased during the Covid-19 pandemic, but we have seen some reduction in costs in the second half of 2023 for certain

steel components and cells.

Our engineering team has implemented some design changes during 2023 which reduced the bill of materials for

the EV ARC TM , improving our product margins especially in Q4 2023.

This was partially offset by $0.1 million increase in warranty

cost and $0.5 million increase in scrap due to a favorable adjustment in 2022.

We continually review the components and sub-assemblies

which we manufacture or assemble in-house to determine if costs can be reduced further if we outsource, and we are constantly looking

for cost reductions on our purchased parts.

We implemented a price increase on our EV ARC TM which we began to quote in 2023

and we should begin to benefit from in 2024, after our proposals convert to orders and are delivered to our customers.

We expect the increase

in demand for electric vehicle charging infrastructure to continue and as such we do not anticipate any negative impact on our price increase.

We expect to get a full-year benefit from the design changes implemented in 2023, which should also increase our 2024 gross profit.

volumes will also continue to provide favorable fixed overhead absorption in the future.

The combination of the increase in demand for

electric vehicle charging infrastructure and our revenues, and the cost cutting measures described above lead us to believe that we will

see significant improvement in our gross profit margins in the near future.

gross profit of $7.3 million for 2024, compared to $1.2 million gross profit in 2023.

Our gross margin improved as a percentage of sales,

year over year, and was 14.8% for 2024, up thirteen percentage points from the gross margin reported in 2023.

The increase was primarily

because we have implemented cost improvements in late 2023 as a result of design changes to the EV ARC TM as well as operational

improvements and positive margins generated from the acquisition of Amiga.

Additionally, for the year ending December 31, 2024, 24.1%

of ARC sales reflected the price increase implemented in 2023.

Our gross profits included a negative impact of $3.2 million for non-cash

depreciation and intangible amortization.

Our gross margin net of non-cash items was 21.2%.

We expect to see our costs of goods sold continue

to decrease over time.

We have continued to implement lean manufacturing process improvements and making engineering changes to our products

which we expect to result in cost reductions.

Many of the components that we integrate into our products are manufactured by others.

is consistent with our strategy to take advantage of the investment by large and well-funded organizations in the improvement, and reducing

costs, of various components and sub-assemblies which we integrate into our final product.

We continue to identify components and sub-assemblies

that may be more cost effective to outsource, which we believe may further reduce our costs, increase our gross margins, and significantly

increase the potential output from our factory.

We expect that the receipt of orders may be inconsistent quarter over quarter, however,

we expect that in the long term, our revenues will grow as we expand our product offerings and geographic reach and because we expect

to see a significant increase in the demand for electric vehicle charging infrastructure.

As such we do not anticipate significant pricing

pressure on our products.

The increase in demand for electric vehicle charging infrastructure and, we believe, over the long term, our

revenues, combined with the cost-cutting measures described above, lead us to believe that we will continue to see improvement in our

gross margins in the future.

Beam Europe has the capability to perform several activities which we outsource in the US.

We believe that

in combination with a generally less expensive operating environment in Serbia, we will be able to produce our products in Europe less

expensively than in the U.S., even as we continue to reduce our costs in the U.S.

Critical Accounting Estimates

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If we determine that

it is more likely than not that we will realize a deferred tax asset that currently has a valuation allowance, we would need to reverse

it is more likely than not that we will realize a deferred tax asset that currently has a valuation allowance, we will need to reverse

the valuation allowance, reflecting an income tax benefit in our statements of operations at that time.

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and performance stock units.

We measure and recognize compensation expense for all share-based payments based on an estimation of grant

We measure and recognize compensation expenses for all share-based payments based on an estimation of grant

date fair value of our share-based awards.

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Fiscal Years Ended December 31, 2024 and 2023

ended December 31, 2023, our revenues increased 206% to $67.4 million compared to $22.0 million for 2022.

During the year ended December

31, 2023, $41.2 million, or 64% of product sales, were to Federal customers which increased by 544% over the prior year, primarily due

to several large orders received in late 2022, including a $29.4 million order through Techflow, Inc.

for the US Army (IMCOM), an $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.

State and Local governments accounted for 16% of revenues and included

a $5.3 million order from New York City to deliver EV ARCs TM throughout the city.

Revenues from our energy storage products

were $8.5 million in 2023, a 63% increase over 2022 revenues.

In addition, as a result of our acquisition of Amiga in October 2023, we

reported revenues of $3.4 million for the period from October 20, 2023 through December 31, 2023.

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.

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, 2024, our revenues decreased 27% to $49.3 million compared to $67.4 million for 2023.

Although a decrease year over

year, this was a 124% increase over December 31, 2022 revenue of $22.0 million.

During the year ended December 31, 2024, $15.5 million,

or 32% product sales, were to Federal customers.

State and Local governments customers accounted for 30% of revenues.

We continue to invest

in sales, marketing and government relation 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 timing.

Gross Profit/(Loss).

Company reported a positive gross profit of $1.2 million for the year ended December 31, 2023, compared to a $1.7 million gross loss in

As a percentage of sales, the margin improved by nine percentage points.

The gross profit includes a non-cash negative impact of

$0.8 million for amortization of intangible assets resulting from the All Cell acquisition.

Without this non-cash expense, gross profit

for 2023 would be $2.0 million.

The gross profit benefited from the increased volume resulting in increased fixed overhead absorption,

partially offset by an increase in fixed overhead spending (including indirect headcount, service support, depreciation for capital to

increase capacity, etc.).

Direct headcount realized labor efficiencies as a result of the increased throughput, with a partial offset

due to higher temporary agency labor rates when rapid delivery of products to customers were required.

Material costs increased during

the Covid 19 pandemic but are finally showing some reduction in the second half of 2023 for certain materials and components.

Our engineering

team has implemented design changes during 2023 which reduced the bill of materials for the EV ARC TM , improving the product

margins especially in Q4 2023.

Gross profit on EV ARC™ products at the unit level increased by 197% from Q4 2022 to Q4 2023.

had a $0.1 million increase in warranty cost and a $0.1 million scrap cost which was a $0.5 million increase due to a favorable adjustment

We expect to benefit from a price increase that was introduced in 2023 and should be reflected in orders delivered in 2024.

Additionally,

we expect to get a full-year benefit from the design changes and material cost reductions that began in late 2023 which should improve

our 2024 gross profit margin.

In addition, as we expect the Company to grow in the future, we expect our fixed overhead absorption to

continue to improve.

Company reported a positive gross profit of $7.3 million, a 14.8% gross margin for the year ended December 31, 2024, compared to a gross

profit of $1.2 million, a 1.8% gross margin in 2023.

As a percentage of sales, the margin improved by thirteen percentage points primarily

because we have implemented cost improvements in late 2023 as a result of design changes to the EV ARC TM as well as operational

improvements and positive margins generated from the acquisition of Amiga.

Additionally, 24.1% of ARC sales in 2024 reflected the price

increase implemented in 2023.

The gross profit includes a non-cash negative impact of $0.7 million for amortization of intangible assets

resulting from the All Cell acquisition.

Without this non-cash expense, gross profit for 2024 would be $8.0 million, a 16.3% gross margin.

Our engineering team has continued to implement design changes during 2024 which reduced the bill of materials for the EV ARC TM ,

improving the product margins throughout 2024.

We expect the Company’s revenue to grow in the future and our fixed overhead absorption

to continue to improve.

Operating Expenses.

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The 2024 operating

expenses included a $5.5 million expense to increase ithe fair value of contingent consideration related to the All Cell acquisition but

the 2023 expense was only $0.3 million resulting in a $5.3 million benefit in.

2023 operating expense increases included $1.1 million

for commissions due to the increase in revenues, $0.8 million for operating expense for Amiga for Q4 following the acquisition, $0.8 million

for salaries, benefits and related costs due to increased headcount, $0.7 million for increased consultants primarily for R&D related

to the development of the new EV Standard™ product as well as for public relations, investor relations and recruiting, $0.3 million

for audit, legal and filing fees primarily due to the acquisition, $0.2 million for increased board fees, $0.2 million of expenses related

to the ERP implementation and $0.7 million of additional increases.

expenses included $3.8 million increase due to having a full year of operations of the Serbian acquisitions offset by a decrease in operating

expenses for our U.S.

operations of $2.3 million.

The $1.5 million increase in 2024 operating expense includes a benefit of $4.7 million related to the non-cash

change in fair value of contingent consideration for the Amiga acquisition, offset by $3.8 million increase in operating expenses for

Beam Europe (full year of operations), increase of $0.7 million for salaries, benefits and related costs, increase of $0.6 million for

stock option expenses, increase of $0.4 million for audit, tax and outside service consultants and $0.4 million increase in customer service

accommodation costs.

Liquidity and Capital Resources

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We have historically met our cash needs through a combination

of debt and equity financings and more recently through gross profit contributions.

Our cash requirements are generally for operating

activities and acquisitions.

of debt and equity financing and more recently through gross profit contributions.

Our cash requirements are generally for operating activities

and acquisitions.

Management believes the Company’s

present cash flow will enable it to meet its obligations for twelve months from the date of these financial statements.

Management will

continue to assess its operational needs and seek additional financing as needed to fund its operations.

Our cash flows from operating,

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Net cash used in investing activities

Net cash (used in) provided by financing activities

Net cash provided by financing activities

For the year ended December

31, 2024, our cash used in operating activities was $2.2 million compared to $13.3 million for the year ended December 31, 2023 Net loss

of $11.3 million for the year ended December 31, 2024 was decreased by $3.7 million of non-cash expense items that included $3.7 million

for depreciation and amortization, $3.6 million for stock-based compensation and $0.8 million in amortization of operating leases offset

by $4.4 million for change in fair value of contingent consideration liabilities pertaining to the true-up of the earnout payment for

Cash used in operations included a $0.9 million decrease in accounts payable, $0.6 million decrease in noncurrent liabilities related

to the long term deferred tax liability, a $0.2 million decrease in accrued expenses related to short term taxes payable, $0.2 million

increase in inventory and $0.1 million increase in prepaid expenses and other current assets.

In addition, cash provided by operations

included $8.2 million decrease in accounts receivable and $0.4 million increase in deferred revenue.

For the year ended December

31, 2023, our cash used in operating activities was $13.3 million compared to $18.1 million for the year ended December 31, 2022.

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For the year ended December

31, 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.

Cash provided by operations included

a $1.3 million increase in accounts payable primarily for inventory and $0.9 million increase in accrued expenses.

For the year ended December

31, 2023, cash used in investing activities included $4.7 million cash for the acquisition of Amiga, net of cash acquired, $0.9 million

for the purchase of equipment to increase the throughput in our facilities to meet the increased production levels and $0.1 million for

spending on patents.

Cash used in investing activities 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.

31, 2024, cash used in investing activities was $4.1 million which included $2.7 million cash for payment of deferred consideration in

connection with the acquisition of Amiga, $0.8 million for the purchase of equipment to increase the throughput in our facilities and

$0.5 million cash for the acquisition of Telcom, net of cash acquired.

Cash used in investing activities in the year ended December 31,

2023, included $4.7 million cash for the acquisition of Amiga, net of cash acquired, $0.9 million for the purchase of equipment to increase

the throughput in our facilities to meet the increased production levels and $0.1 million for spending on patents.

For the year ended December

31, 2023, cash generated by our financing activities included $25.4 million proceeds from a public offering to fund our acquisition of

Amiga and for working capital, $2.1 million from the sale of stock under our committed equity facility and $0.2 million proceeds from

public warrant exercises.

In 2022, cash generated by 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.

Current assets increased to

$40.7 million at December 31, 2023 from $19.9 million at December 31, 2022, primarily due to an $8.7 million increase in cash and $11.5

million increase in accounts receivable.

Current liabilities increased to $16.9 million at December 31, 2023 from $13.2 million at December

31, 2022, primarily due to a $6.9 million increase in accounts payable, $2.7 million deferred consideration, current for a cash payment

owed for the Amiga acquisition and $1.0 million increase in accrued expenses, partially offset by a decrease of $6.8 million for contingent

consideration, due to payment of the 2022 earnout for All Cell in 2023.

As a result, our working capital increased to $23.8 million at

December 31, 2023 compared to $6.8 million at December 31, 2022.

31, 2024, cash generated by our financing activities was $1.2 million which included $0.8 million proceeds from public warrant exercises,

and $0.5 million from the sale of stock under our committed equity facility offset by $0.2 million used for restricted stock unit vesting.

In 2023, cash generated by our financing activities was $27.7 million which included $25.4 million proceeds from a public offering to

fund our acquisition of Amiga and for working capital, $2.1 million from the sale of stock under our committed equity facility and $0.2

million proceeds from public warrant exercises.

Current assets decreased

to $27.1 million at December 31, 2024 from $40.7 million at December 31, 2023, primarily due to a $7.9 million decrease in accounts receivable

and $5.8 million decrease in cash.

Current liabilities decreased to $13.3 million at December 31, 2024 from $16.9 million at December

31, 2023, primarily due to a $2.7 million decrease in deferred consideration, current, for a cash payment owed for the Amiga acquisition

paid at the beginning of 2024, $0.8 million decrease in accounts payable and $0.3 million decrease in accrued expenses, partially offset

by an increase of $0.1 million contingent consideration and $0.1 million in other current lease liabilities.

As a result, our working

capital decreased to $13.8 million at December 31, 2024 compared to $23.8 million at December 31, 2023.

While the Company did not identify

an impairment as of December 31, 2024, it has noted a decline in stock price during the first quarter of 2025 that may indicate a decrease

in the fair value of the Company which could trigger an impairment.

The Company is in the process of conducting an assessment to

determine if an impairment is indicated and believes a material impairment of goodwill is possible during 2025.

The Company has been focused

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2021 to 2022 and 206% from 2022 to 2023.

The Company reached a positive gross profit in 2023 and it is expected to continue to improve

in the future as a result of a price increase and a full year benefit from cost reductions from several design changes implemented in

2023, most of which occurred later in the year.

As revenues increase, we expect to continue to see our fixed overhead costs spread over

more units, which will reduce the cost per unit further.

The Company started to see some material cost reductions in the latter part of

2023, especially with steel and battery cells, and we expect this trend to continue.

This combined with engineering and manufacturing

improvements should result in increasing gross profit margin on the EV ARC™ in the future.

Even though there was a decrease in revenues by 27% from 2023 to 2024, we believe our marketing

and sales efforts have been impactful.

The Company improved its gross profit in 2024, and it is expected to improve in the future as a

result of a price increases and benefits from cost reductions from several design changes.

As revenues increase, we expect to continue

to see our fixed overhead costs spread over more units, which will reduce the cost per unit further.

The Company continued to see material

cost reductions as synergies are recognized, especially with steel and battery cells, and we expect this trend to continue.

This combined

with engineering and manufacturing improvements should result in increasing gross profit margin on the EV ARC™ in the future.

The Company may be required

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continuation of production cost reduction measures.

Currently, the Company has the right to sell up to $30.0 million or two million shares

of its common stock over a period of 24 months (see note 12 for further information) to B.

Riley pursuant to a Common Stock Purchase Agreement

entered in September 2022.

Otherwise, we could pursue other equity or debt financing.

Furthermore, there are outstanding warrants to purchase

610,745 shares of our Common Stock at December 31, 2023, of which 410,745 will expire in April 2024.

The Company could pursue other equity or debt financing.

The proceeds from these offerings

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when or if it will achieve positive cash flow.

There is no guarantee that profitable operations will be achieved, 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.

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 22, 2023, the Company

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To date, Beam Global has not drawn on this line of credit.

October 20, 2023, Beam completed an acquisition of Amiga DOO Kraljevo (“Amiga”).

Amiga is a business located in Serbia

and engaged in the manufacture and distribution of steel structures with electronic integration, such as streetlights, cell towers, and

ski lift towers.

Amiga currently has engineering, product development and manufacturing capabilities which we believe are well

suited to manufacture and sell Beam’s current products into the European market.

Also, Amiga is one of Europe’s leading manufacturers

of streetlights and Beam believes it is well positioned to develop and manufacture Beam’s patented EV Standard™ for sale in

both Europe and the U.S.

This will provide a growth opportunity for Beam to sell its products in the European market through Amiga’s

extensive customer base.

Management believes

that evolution in the operations of the Company may allow it to execute its strategic plan and enable it to experience profitable growth

in the future.

Management believes that evolution

in the operations of the Company may allow it to execute its strategic plan and enable it to experience profitable growth in the future.

This evolution is anticipated to include the following continual steps:

addition of sales personnel and independent sales

channels, reductions in direct costs due to engineering and manufacturing improvements, continued 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 operations.

There is no assurance, however,

as to if or when the Company will be able to achieve those operating objectives.

addition of sales personnel and independent sales channels, reductions

in direct costs due to engineering and manufacturing improvements, continued 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 operations.

There is no assurance, however, as to if or

when the Company will be able to achieve those operating objectives.

Off-Balance Sheet Arrangements

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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