What changed in this filing

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Item 1. Financial Statements

2025-05-15 compared with 2024-11-14 · 460 added, 440 removed, 378 unchanged (70% of the section changed)

3 unchanged sentences

except share and per share data)

September 30,

Three Months Ended

Current assets

13 unchanged sentences

Note payable, current

Deferred consideration, current

Contingent consideration, current

Operating lease liabilities, current

7 unchanged sentences

Total liabilities

Commitments and contingencies (Note 10)

Stockholders' equity

Preferred stock, $ 0.001 par value, 10,000,000 authorized, none outstanding as of September 30, 2024 and December 31, 2023.

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 14,773,901 and 14,398,243 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.

Preferred stock, $ 0.001 par value, 10,000,000 authorized, none outstanding as of March 31, 2025 and December 31, 2024.

Common stock, $ 0.001 par value, 350,000,000 shares authorized, 15,043,045 and 14,835,630 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively.

Additional paid-in-capital

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Three Months Ended

Nine Months Ended

September 30,

Cost of revenues

Operating expenses

Income/Loss from operations

Impairment of goodwill

Loss from operations

Other income (expense)

Interest income

Other (expense) income

Other income (expense)

Interest expense

Income/Loss before income tax expense

Income tax expense

Net Income/Loss

Net foreign currency translation adjustments

Total Comprehensive Income/Loss

Net loss per share - basic

Net loss per share - diluted

Weighted average shares outstanding - basic

Weighted average shares outstanding - diluted

Loss before income tax expense

Net foreign currency translation benefit (expense)

Total Comprehensive Loss

Net Loss per share - basic/diluted

Weighted average shares outstanding - basic/diluted

The accompanying unaudited notes are an integral

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Balance at December 31, 2024

$ ( 104,643 )

Stock issued for director services - vested

Stock issued to (released from) escrow account - unvested

Stock-based compensation to consultants

Employee stock-based compensation expense

Warrants exercised for cash

Sale of stock under Committed Equity Facility

Impact of foreign currency translation

Net income (loss)

Balance at March 31, 2025

Stock issued for director services - vested

Stock issued to (released from) escrow account - unvested

Settlement of earnout related to acquisition

Employee stock-based compensation expense

Proceeds from issuance of common stock, pursuant to public offering

Warrants exercised for cash

Sale of stock under Committed Equity Facility

Net income (loss)

Balance at June 30, 2023

Stock issued for director services - vested

Stock issued to (released from) escrow account - unvested

Employee stock-based compensation expense

Warrants exercised for cash

Expenses to maintain Committed Equity Facility

Net income (loss)

Balance at September 30, 2023

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders'

$ ( 120,166 )

Balance at December 31, 2023

Stock issued for director services - vested

Stock issued to (released from) escrow account - unvested

Employee stock-based compensation expense

1 unchanged sentence

Impact of foreign currency translation

Net income (loss)

Balance at March 31, 2024

Stock issued for director services - vested

Stock issued to (released from) escrow account - unvested

Employee stock-based compensation expense

Warrants exercised for cash

Impact of foreign currency translation

Sale of stock under Committed Equity Facility

Balance at June 30, 2024

$ ( 101,314 )

Stock issued for director services - vested

Stock issued to (released from) escrow account - unvested

Employee stock-based compensation expense

Proceeds from issuance of common stock, pursuant to public offering

Stock option exercise and restricted stock unit vestings (cashless)

Impact of foreign currency translation

Stock issued for acquisition and expenses

Balance at September 30, 2024

$ ( 100,017 )

The accompanying unaudited notes are an integral

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(Unaudited, in thousands)

Nine Months Ended

September 30,

Three Months Ending

Operating Activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Provision on credit losses

Common stock issued for services

Change in fair value of contingent consideration liabilities

Impairment of goodwill

Employee stock-based compensation

1 unchanged sentence

Amortization of operating lease right of use asset

Abandoned patent costs

Stock Compensation expense for non-employees

Changes in assets and liabilities:

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Accrued expenses

Operating lease liability

Sales tax payable

3 unchanged sentences

Investing Activities:

Acquisition, net of cash acquired

Purchase of property and equipment

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Financing Activities:

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

Taxes paid related to net share settlement of equity awards

Proceeds from warrant exercises

Repayments of note payable

Borrowings of note payable

Payments of equity offering costs

Proceeds from issuance of common stock, pursuant to public offering

Net cash provided by financing activities

Net cash provided (used) by financing activities

Effect of exchange rate changes

Net (decrease) increase in cash

Net decrease in cash

Cash at beginning of period

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Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Fair value of common stock issued as consideration for business combination

Purchase of property and equipment by incurring debt

Purchase of property and equipment by incurring current liabilities

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

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corporation, and its subsidiaries.

Beam is a sustainable technology

innovation company based in San Diego, California;

Broadview, Illinois;

Belgrade and Kraljevo, Serbia.

We develop, design, engineer, manufacture

and sell high-quality, renewably energized infrastructure products for electric vehicle (“EV”) charging, energy security and

disaster preparedness.

We also manufacture highly energy-dense battery solutions in safe, compact and unique form-factors.

Beam is a clean-technology

innovation company headquartered in San Diego, California with factories in the U.S.

in San Diego, California and Broadview, Illinois

and in Europe in Belgrade and Kraljevo, Serbia.

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

infrastructure products for electric vehicle (“EV”) charging, infrastructure for Smart Cities (the interconnected physical

and digital elements within a city that utilize technology to enhance efficiency, sustainability, and quality of life for residents),

energy security and disaster preparedness and highly energy-dense battery solutions in safe, compact and unique form-factors.

Additionally,

we manufacture street lighting, communications and energy infrastructure products.

Beam’s products enable vital and highly valuable

energy production 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, which we believe are ideal for the rapidly growing mobile and stationary

equipment product market which often requires electrical energy without being connected to the electrical grid.

Beam’s products and

proprietary technology solutions target the following markets:

electric vehicle (EV) charging infrastructure;

we manufacture steel structures with electronic integration such as street lighting, cell towers and energy infrastructure products as

well as power electronics including invertors, charge controllers, power supplies and LED lighting.

Beam’s energy storage products

provide high energy density in safe, compact and bespoke form-factors, which we believe are ideal for the rapidly growing mobile and

stationary equipment product market which often requires electrical energy without being connected to the electrical grid.

products and proprietary technology solutions target the following markets :

security and disaster preparedness;

· Smart Cities infrastructure;

· Energy storage solutions;

energy security and disaster preparedness;

mobile and stationary equipment;

charging infrastructure;

· Transportation infrastructure products;

power electronics and telecommunications equipment

electronics and telecommunications equipment

Basis of Presentation

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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 months and nine

months ending September 30, 2024 and 2023, and our financial position as of September 30, 2024, 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.

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

31, 2025 and 2024, and our financial position as of March 31, 2025, 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

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Significant estimates in the accompanying financial statements include the allowance for certain expected credit

losses (CECL), 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.

losses, 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

Recent pronouncement not yet adopted

In October 2023, the FASB

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with early adoptions prohibited.

In November 2023, the Financial

Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 requiring enhanced segment

ASU 2023-07 requires disclosure of significant segment expenses regularly provided to the chief operating decision maker

(“CODM”) included within segment operating profit or loss.

Additionally, ASU 12 2023-07 requires a description of how the

CODM utilizes segment operating profit or loss to assess segment performance.

The requirements of ASU 2023-07 are effective for annual

periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company's annual

reporting requirements will be effective for the year ending 2024 and interim reporting requirements will be effective beginning with

the first quarter of fiscal 2025.

Early adoption is permitted, and retrospective application is required for all periods presented.

Company is in the process of analyzing the impact of ASU 2023-07 on its related Condensed Consolidated Financial Statements.

In December 2023, the FASB

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The Company maintains its

cash in banks and financial institutions that at times may exceed federally insured limits.

The Company has not experienced any losses

in such accounts from inception through September 30, 2024.

As of September 30, 2024, approximately $ 4.1 million of the Company’s

cash in banks and financial institutions deposits that at times may exceed federally insured limits.

The Company has not experienced any

losses in such accounts from inception through March 31, 2025.

As of March 31, 2025, approximately $ 1.5 million of the Company’s

cash deposits were greater than the federally insured limits.

Major Customers

The Company continually assesses

the financial strength of its customers.

We are not aware of any material credit risks associated with our customers.

of our third quarter revenues were derived from pre-funded federal, state and local government programs, and the remaining 48 %

were derived from commercial customers that we believe have good credit or, alternatively, favorable payment terms which minimizes our

credit risk with respect to such customers.

For the three months ended September 30, 2024, no single customer accounted for more than

10% of total revenues and for the nine months ended September 30, 2024, one customer accounted for 18 %

of total revenues, with no other single customer accounting for more than 10% of total revenues.

At September 30, 2024, accounts receivable

from two customers accounted for 19 %

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

31, 2023, accounts receivable from four customers accounted for 11 %,

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

the three months ended September 30, 2023, the Company’s sales to federal, state and local governments represented 82 %

A summary of the allowance for credit losses for

the nine months ending September 30, 2024 and December 31, 2023:

Summary of allowance for credit losses

September 30,

For the three months ended

March 31, 2025, one customer accounted for 12 % of total revenues and for the three months ended March 31, 2024, two customers accounted

for 30 % and 18 % of total revenues, each with no other single customer accounting for more than 10% of revenues.

At March 31, 2025, accounts

receivable from one customer accounted for 15 % of total accounts receivable and at March 31, 2024, accounts receivable from three customers

accounted for 22 %, 18 % and 14 % of total accounts receivable each with no other single customer accounting for more than 10% of the accounts

receivable balance.

For the three months ended March 31, 2025 and 2024, the Company’s concentration of sales to federal customers

represented 14 % and 58 % of revenues, respectively and the concentration of sales to state and local governments represented 33 % and 26 %

of revenues, respectively.

Foreign Operations

The following summarizes

key financial metrics associated with the Company’s continuing operations:

Schedule of concentration risk

Assets - Serbia

Assets - U.S.

Liabilities - Serbia

Liabilities - U.S.

Total Liabilities

Sales - Serbia

Total Revenues

Net Loss - Serbia

Net Loss - U.S.

Total Net Loss*

Total Net Loss for the three months ending March 31, 2025 was $15.5 million compared to $3.0 million

The 2025 net loss increase mainly included $ 10.8 million of non-cash impairment for Goodwill and $0.4 million in allowances

for credit losses.

Impairment of Goodwill

The Company operates as one

operating segment and reporting unit and therefore evaluates goodwill for impairment as one singular reporting unit annually during the

fourth quarter or more often when an event occurs, or circumstances indicate the carrying value may not be recoverable.

The determination

of the fair value of the reporting unit requires us to make significant estimates and assumptions.

Due to the inherent uncertainty involved

in making these estimates, actual future results could differ.

Changes in assumptions regarding future results or other underlying assumptions

could have a significant impact on the fair value of the reporting unit.

During the three months ending

March 31, 2025, the Company continued to experience a decline in its stock price resulting in the total market value of its common stock

outstanding (“market capitalization”) being less than the carrying value of the reporting unit.

Management believes this decline

in market value is due to a variety of factors, as further described below.

Considering the circumstances and indicators of potential

impairment described above, management performed an interim quantitative goodwill impairment test as of March 31, 2025.

Management first

considered whether any impairment was present for the Company’s long-lived assets, concluding that no such impairments were present.

The Company does not have any indefinite lived assets other than goodwill.

The Company concluded

that the sustained stock price decline in the Company’s common stock and its market capitalizations as of March 31, 2025 is a

triggering event which requires us to perform a quantitative goodwill impairment test.

We determine the value of goodwill largely

based on our stock price.

The results of the Company’s test for impairment of goodwill as of March 31, 2025, utilizing

recent trends in stock price over a reasonable period, indicated that the fair value of goodwill fell below its book value.

the results of the goodwill impairment procedures, the Company recorded a $ 10.8

million goodwill impairment for the single reporting unit during the three months ended March 31, 2025.

Accounts Receivable

The Company does business

and extends credit based on an evaluation of each customer’s financial condition, generally without requiring collateral.

reviews accounts receivable on a periodic basis to determine if any receivables may become uncollectible.

Management’s evaluation

includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, dialogue

with the customer, the financial profile of a customer, our historical write-off experience, net of recoveries, and economic conditions.

Exposure to losses on receivables is expected to vary by customer due to the financial condition of each customer.

The Company estimates

future credit losses based on the age of customer receivable balances, collection history and forecasted economic trends.

monitors exposure to credit losses and maintains allowances for anticipated losses considered necessary under the circumstances.

of the allowance for credit losses for the three months ended March 31, 2025 and December 31, 2024:

Schedule of accounts receivable

(Dollars in thousands)

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End of Period

Allowance for credit losses as a % of total Accounts Receivable

Fair Value Measurement

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prepaid expenses and current assets, accounts payable and other current liabilities, all approximate fair value due to their short-term

nature as of September 30, 2024.

The Company had Level 3 liabilities as of September 30, 2024.

There were no transfers between levels

during the reporting period.

nature as of March 31, 2025.

The Company had Level 3 liabilities as of March 31, 2025.

There were no transfers between levels during

the reporting period.

Schedule of contingent consideration

1 unchanged sentence

Change in fair value

Contingent Consideration as of September 30, 2024

Contingent Consideration as of March 31, 2025

Significant Accounting Policies

During the nine months ended

September 30, 2024, there were no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the

year ended December 31, 2023.

Earnings (Loss) Per Share

Basic net income (loss) per

share is computed by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during the periods

presented using the treasury stock method for options, restricted stocks and warrants.

Diluted net income (loss) per share is computed

By giving effect to all potential dilutive common share equivalents outstanding for the period.

For periods in which Beam has reported

net losses, diluted loss per share is the same as basic loss per share, as the effects of common stock equivalents outstanding and shares

issuable upon conversion of convertible debt instruments are antidilutive and, therefore, excluded from the calculation of diluted loss

Options to purchase 703,658

shares of common stock and warrants to purchase 200,000

shares of common stock were outstanding at September 30, 2024.

Options to purchase 363,598

common shares and warrants to purchase 618,395

shares of common stock were outstanding at September 30, 2023.

The following table presents the calculation of basic and diluted

loss per share:

Calculation of earnings (loss) per share

Three Months Ended

Nine Months Ended

September 30,

(in thousands, except per share data)

Numerator for basic and diluted loss per share - net income (loss)

Number of shares used in basic computation

Denominator for diluted loss per share - weighted-average number of shares of common stock outstanding

Loss per share

During the three months ended

March 31, 2025, there were no changes to our significant accounting policies as described in our Annual Report on Form 10-K for the year

ended December 31, 2024.

Net Loss Per Share

Basic net loss per share is

computed by dividing the net loss by the weighted average number of shares of common stock outstanding during the periods presented.

net loss per common share is computed using the weighted average number of common stock outstanding for the period, and, if dilutive,

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.

The following shares were

not included in the computation of diluted loss per share:

Schedule of anti-dilutive

Stock Options

The Company assesses its segment

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of $ 15.5 million (which includes $ 12.5 million of non-cash expenses) and $ 3 .0 million (which includes $ 1.1 million of non-cash expenses)

and net cash used in operating activities of $ 3.1 million and $ 13.8 million for the nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024, the Company had a cash balance of $ 4.9 million and working capital of $ 17.9 million.

Based on the Company’s

current operating plan and the available working capital that can be converted to cash (specifically the accounts receivable balance of

approximately $ 11.3 million), 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 under which the Company

issued 281,157 shares for approximately $ 3 .0 million.

The facility was terminated on October 1, 2024.

The Company’s outstanding

warrants generated $ 0.7 million and $ 0.3 million of proceeds during each of the nine months ended September 30, 2024 and 2023, respectively.

Warrants to purchase 282,334 shares of common stock which were issued as part of our 2019 public offering expired on April 18, 2024.

Company has a warrant outstanding to purchase up to 200,000 shares of our common stock at an exercise price equal to $ 17.00 per share

that expires in March 2028 and that could generate up to an additional $3.4 million of proceeds, conditioned upon the market price of

our common stock and the warrant holder’s ability and decision to exercise them.

and net cash used in operating activities of $ 1.8 million and $ 3 .0 million for the three months ended March 31, 2025 and 2024, respectively.

March 31, 2025, the Company had a cash balance of $ 2.5

million and working capital of $ 10.8

Based on the Company’s current operating plan and the available working capital that it believes can be converted to

cash (specifically the accounts receivable balance of approximately $ 7.1

million), 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.

On April 11, 2025, the Company

entered into an At Market Issuance Sales Agreement with B.

Riley Securities, Inc., pursuant to which the Company has the right, but not

the obligation, to sell up to $ 8 million in shares of its common stock, subject to certain terms and conditions.

In March 2023, the Company

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Although the Company believes

that it will become profitable in the next few years as our revenues grow, we improve our gross profit and we leverage our overhead costs,

that it will become profitable in the next few years as our revenues grow, our gross profit improves and we leverage our overhead costs,

we expect to continue to incur losses for a period of time.

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BUSINESS COMBINATIONS

Amiga DOO Kraljevo

October 20, 2023, the Company acquired Amiga DOO Kraljevo (“Amiga”), pursuant to a Share Sale and Purchase Agreement dated

October 6, 2023 (the “Purchase Agreement”) by and among the Company and the owners of Amiga (the “Sellers”).

to the terms of the Purchase Agreement, the Company acquired all the equity stock of Amiga from the Sellers in exchange for cash and common

With respect to the cash portion of the purchase price, the Company paid to the Sellers 4.6 million euros ($ 4.9 million) at closing

and an additional 2.5 million euros ($ 2.7 million) was paid on January 2, 2024.

With respect to the equity portion of the purchase price,

the Company issued to the Sellers an aggregate of 451,807 shares of our common stock.

Sellers are eligible to earn additional shares of the Company’s common stock if Amiga meets certain revenue milestones for the years

ended December 31, 2024 and 2025 (the “Earnout Consideration”).

The Earnout Consideration that Sellers are eligible to receive

is equal to two times the amount of revenue of Amiga (“Amiga Net Revenue”) that is greater than specific revenue targets for

each of the years ended December 31, 2024 and 2025.

The Earnout Consideration will be paid in the Company’s stock for each annual

target period and will be calculated based on the volume weighted average price of Beam’s common stock for the thirty trading days

prior to the end of the applicable measurement period.

In no event and under no circumstances will the Company issue to the Sellers an

amount of the Company’s common stock that exceeds 19.99% of the total outstanding common stock of the Company immediately prior

to the closing.

An estimate of the fair value of the contingent consideration has been recorded in the opening balance sheet.

February 16, 2024, the Company and the Sellers entered into an amendment to the Purchase Agreement to remove the requirement that the

Sellers shall be providing services to Amiga as a condition to receive the Earnout Consideration.

During the nine months ended

September 30, 2024, the Company recorded $ 4.5 million of income related to the fair value adjustment of the liability for Earnout Consideration.

located in Serbia, is engaged in the manufacture and distribution of steel structures with integrated electronics, such as streetlights,

cell towers, and ski lift towers.

The acquisition of Amiga is assisting in introducing our products to Europe, increasing and diversifying

our revenues, enhancing our manufacturing and engineering capabilities, accelerating the development of BeamSpot™ (formerly named

EV Standard™) and other products both in Europe and the US, adding new customer segments in both Europe and the US, and we believe,

increasing barriers to entry for future competition, and advancing Beam’s position as a leader in the green economy.

The acquisition was accounted

for as a business combination in accordance with Accounting Standards Codification (ASC) 805, Business Combinations .

Goodwill represents

the premium the Company paid over net fair value of tangible and intangible assets acquired.

On November 7, 2023, Amiga

changed its name to Beam Europe LLC.

On August 30, 2024, the Company

acquired Telcom d.o.o Beograd (“Telcom”), pursuant to a Share Sale and Purchase Agreement dated as of August 30, 2024 (the

“Agreement”) with the owners (the “Sellers”) of Telcom.

Telcom is a business located in Serbia and engaged in

the manufacturing of telecommunications equipment.

Beam acquired all of the equity stock of Telcom from the Sellers in exchange for cash

and Beam common stock.

The total purchase price was subject to adjustment based on the amount of cash held by Telcom at closing.

on Telcom’s cash balance at closing equal to approximately EUR 220,298 , Beam paid to the Sellers a purchase price equal to EUR 815,298

which was paid to the Sellers as follows:

(i) EUR 430,000 cash and (ii) issued 82,506 shares of Beam common stock.

At closing, Telcom

had a positive working capital balance of approximately EUR 500,000 which consisted of (i) a cash balance equal to EUR 220,000, accounts

receivables of approximately EUR 115,000, inventory of approximately EUR 275,000 and accounts payable of approximately EUR 110,000.

addition to the above payments, the Sellers are eligible to earn up to EUR 250,000 (the “Earnout Cap”) in additional shares

of Beam common stock if Telcom meets certain revenue milestones for fiscal years 2024 and 2025 (the “Earnout Consideration”).

The Telcom Earnout Consideration that Sellers are eligible to receive for 2024 will be equal to the amount the net revenue of Telcom (“Telcom

Net Revenue”) exceeds EUR 850,000 for 2024 up to the Earnout Cap.

Provided that Sellers Earnout Consideration was less than the

Earnout Cap, the Sellers will be eligible for additional Telcom Earnout Consideration in 2025 if (i) 2025 Telcom Net Revenue exceeds 2024

Telcom Net Revenue, and (ii) 2025 Telcom Net Revenue exceeds $850,000.

The Telcom Earnout Consideration for 2025 will be calculated based

on the amount the 2025 Net Revenue exceeds the 2024 Net Revenue subject to the Earnout Cap.

In no event, will the Sellers Earnout Consideration

for 2024 and 2025, in the aggregate, exceed the Earnout Cap.

The Earnout Consideration for each period will be calculated based on the

volume weighted average price of Beam’s common stock for the thirty trading days prior to the end of the applicable calendar year.

In no event and under no circumstances will the Sellers receive from Beam or will Beam issue to the Sellers in connection with the transaction

“Telcom Agreement”) with the owners (the “Telcom Sellers”) of Telcom.

Telcom is a business located in Serbia and

engaged in the manufacturing of telecommunications equipment.

Beam acquired all of the equity stock of Telcom from the Telcom Sellers

in exchange for cash and Beam common stock.

The total purchase price was subject to adjustment based on the amount of cash held by Telcom

Based on Telcom’s cash balance at closing equal to approximately EUR 220,298 , Beam paid to the Telcom Sellers a purchase

price equal to EUR 815,298 which was paid to the Telcom Sellers as follows:

(i) EUR 430,000 cash and (ii) issued 82,506 shares of Beam

common stock.

At closing, Telcom had a positive working capital balance of approximately EUR 500,000 which consisted of (i) a cash balance

equal to EUR 220,000, accounts receivables of approximately EUR 115,000, inventory of approximately EUR 275,000 and accounts payable of

approximately EUR 110,000.

In addition to the above payments,

the Telcom Sellers are eligible to earn up to EUR 250,000 (the “Earnout Cap”) in additional shares of Beam common stock if

Telcom meets certain revenue milestones for fiscal years 2024 and 2025 (the “Telcom Earnout Consideration”).

The Telcom Earnout

Consideration that the Telcom Sellers are eligible to receive for 2024 was equal to the amount the net revenue of Telcom (“Telcom

Net Revenue”) exceeded EUR 850,000 for 2024 up to the Earnout Cap.

The Company issued 27,836 shares of stock valued at $ 0.1 million

as payment for the 2024 Telcom Earnout Consideration.

The Telcom Earnout Consideration was less than the Earnout Cap, and the Telcom Sellers

will be eligible for additional Telcom Earnout Consideration in 2025 if (i) 2025 Telcom Net Revenue exceeds 2024 Telcom Net Revenue, and

(ii) 2025 Telcom Net Revenue exceeds $850,000.

The Telcom Earnout Consideration for 2025 will be calculated based on the amount the 2025

Net Revenue exceeds the 2024 Net Revenue subject to the Earnout Cap.

In no event, will the Telcom Earnout Consideration for 2024 and 2025,

in the aggregate, exceed the Earnout Cap.

The Telcom Earnout Consideration for each period will be calculated based on the volume weighted

average price of Beam’s common stock for the thirty trading days prior to the end of the applicable calendar year.

In no event and

under no circumstances will the Telcom Sellers receive from Beam or will Beam issue to the Telcom Sellers in connection with the transaction

Beam’s common stock in an amount that exceeds 19.99% of the outstanding common stock of Beam immediately prior to closing.

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represents the premium the Company paid over net fair value of tangible and intangible assets acquired.

The valuation of the Earnout

Consideration was performed using a discounted cash flow analysis to determine the fair value of the contingent consideration, which

includes estimates and assumptions such as forecasted revenues of Telcom, discount rates, and the milestone settlement value.

valuation includes the use of unobservable inputs, it is considered to be a Level 3 measurement.

The fair value of the Earnout Consideration

will be reassessed on a quarterly basis with the change recorded to operating expenses.

Change in the fair value of the Earnout Consideration

during the nine months ended September 30, 2024 is as follows (in thousands):

Schedule of change in the fair value of earnout consideration - Telcom

The valuation of the Telcom

Earnout Consideration was performed using a discounted cash flow analysis to determine the fair value of the contingent consideration,

which includes estimates and assumptions such as forecasted revenues of Telcom, discount rates, and the milestone settlement value.

such valuation includes the use of unobservable inputs, it is considered to be a Level 3 measurement.

The fair value of the Telcom Earnout

Consideration will be reassessed on a quarterly basis with the change recorded to operating expenses.

Change in the fair value of the

Earnout Consideration during the three months ended March 31, 2025 is as follows (in thousands):

Schedule of change in the fair value of the

earnout consideration

Balance as of December 31, 2024

Acquisition of Telcom

Balance as of September 30, 2024

The following table summarizes the estimated fair

value allocation of consideration exchanged for the estimated fair value of tangible assets acquired and liabilities assumed at the acquisition

The estimated fair value for working capital is generally equivalent to the net book value of the acquired assets and liabilities

on the acquisition date.

Fair value assigned to property, plant and equipment is based on real estate appraisals, market value comparisons,

or acquired net book value of recently acquired assets.

The valuation of the contingent consideration is based on a discounted cash flow

analysis using the Company’s forecasted results for the operations for the two years subject to revenue earn-out targets.

Consideration is comprised of the following

(in thousands):

Change in Fair Value

Balance as of March 31, 2025

The following table summarizes

the estimated fair value allocation of consideration exchanged for the estimated fair value of tangible assets acquired and liabilities

assumed at the acquisition date.

The estimated fair value for working capital is generally equivalent to the net book value of the acquired

assets and liabilities on the acquisition date.

Fair value assigned to property, plant and equipment is based on real estate appraisals,

market value comparisons, or acquired net book value of recently acquired assets.

The valuation of the contingent consideration is based

on a discounted cash flow analysis using the Company’s forecasted results for the operations for the two years subject to revenue

earn-out targets.

Consideration is comprised

of the following (in thousands):

Schedule of consideration comprised

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to assets and liabilities at fair value (in thousands):

Schedule of consideration to assets and liabilities

Schedule of consideration

to assets and liabilities

Assets Acquired

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Net assets acquired

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

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 believed it to

be probable that the maximum amount of Telcom Earnout Consideration would be earned and therefore accrued the full amount in the opening

balance sheet.

The estimated fair values were assigned to identifiable assets acquired and liabilities.

Pro Forma Unaudited Financial Information

The unaudited pro forma financial

information summarizes the combined results of operations of Beam Global, Amiga and Telcom as if the companies had been combined as of

the beginning of the nine months ended September 30, 2024 and 2023 (in thousands):

Schedule of pro forma financial information

September 30,

Net Income (Loss)

The following unaudited pro

forma financial information summarizes the combined results of operations of Beam Global and Telcom as if the company had been acquired

as of the beginning of the three months ended March 31, 2024 (in thousands):

Schedule of pro

forma financial information

The pro forma financial information

is presented for information purposes only and may not be 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, 2024 and 2023.

In addition, the unaudited 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 unaudited pro forma financial information includes adjustments to

reflect the incremental amortization expense of the identifiable intangible assets and transaction costs.

acquisition been completed at the beginning of the three months ended March 31, 2024.

In addition, the unaudited 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 unaudited pro forma financial information includes adjustments to reflect the incremental

amortization expense of the identifiable intangible assets and transaction costs.

The statement of operations,

in the table above, for the nine months ended September 30, 2024 includes revenues of $ 0.5 million and loss from operations of $ 50 thousand

in the table above, for the three months ended March 31, 2024 includes revenues of $ 0.2 million and income from operations of $ 8 thousand

from the acquired Telcom business.

For the nine months ended September 30, 2023 includes revenues of $ 4.1 million and loss from operations

of $ 0.4 million from the acquired Amiga business and revenues of $ 0.5 million and gain from operations of $ 5 thousand from the acquired

Telcom business.

Inventory consists of the following (in thousands):

PREPAIDS AND OTHER CURRENT ASSETS

Prepaid expenses and other

current assets are summarized as follows (in thousands):

Schedule of prepaid expenses and other

current assets

Vendor prepayments

Prepaid insurance

Total prepaid expenses and other current assets

Inventories are stated at the lower of cost and

net realizable value.

Costs are determined using the first in-first out (FIFO) method.

As of March 31, 2025 and 2024, inventory consists

of the following (in thousands):

Schedule of inventory

September 30,

Finished goods

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Schedule of property and equipment

September 30,

Office furniture and equipment

6 unchanged sentences

Depreciation expense during

the three months and nine months ended September 30, 2024 and September 30, 2023 was $ 0.7 million, $ 2.1 million, $ 0.1 million and $ 0.3

million, respectively.

INTANGIBLE ASSETS

The intangible assets consist of the following

(in thousands):

the three months ended March 31, 2025 and 2024 was $ 0.7 million for both years.

For the three months ended March 31, 2025 and 2024, depreciation

expense recognized in Operating expenses was $ 0.1 million in both years and $ 0.6 million and $ 0.1 million in Cost of Goods Sold, respectively.

GOODWILL AND INTANGIBLE ASSETS

The following table presents

the Company's goodwill asset:

Schedule of goodwill asset

Beginning balance

Foreign exchange

Ending balance

Intangible assets, net, as of March 31, 2025 and

2024 consists of the following (in thousands):

Schedule of intangible assets

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Intangible assets

September 30, 2024

March 31, 2025

Gross Carrying Amount

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Intangible assets

Amortization expense during

the three and nine months ended September 30, 2024 and September 30, 2023 was $ 0.2 million, $ 0.7 million, $ 0.2 million and $ 0.8 million,

respectively.

ACCRUED EXPENSES

expense for each of the three months ended March 31, 2025, and 2024 was $ 0.2

Amortization expense for intangible assets held as of December 31, 2024, will be $ 1 .0

million for each of the years 2025 – 2028.

Amortization expense recognized in Operating expenses for the three months ended

March 31, 2025 and 2024 was $ 0.1

million and $ 0.2

million in Cost of Goods Sold, respectively.

ACCRUED EXPENSES AND LONG-TERM LIABILITIES

The major components of accrued expenses

are summarized as follows (in thousands):

and long-term liabilities are summarized as follows (in thousands):

Schedule of major components of accrued expenses

September 30,

Accrued Expenses:

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Acquired long-term liability

of $ 3.4 million consists of $ 3.3 million restructuring debt settlement from the acquisition of Amiga.

The debt restructuring was entered

into in 2021 for a nine-year term with six years and three months remaining at September 30, 2024.

Payments are due quarterly as a percentage

of the remaining balance due and carry no interest.

of $ 3.4 million consists of a restructuring debt settlement from the acquisition of Amiga.

Approximately $ 0.5 million is current and included

in other accrued expenses and the rest is categorized in long-term liability.

The debt restructuring was entered into in 2021 for a nine-year

term with five years and 9 months remaining at March 31, 2025.

Payments are interest free, not secured, and due quarterly as a percentage

of the remaining balance due.

$ 23 thousand consists of non-current liabilities related to the acquisition of Telcom.

Approximately $ 32

thousand is current and included in other accrued expenses and the rest is categorized in long-term liability.

In May 2023, the Company purchased

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Legal Matters:

From time to time, we may

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

As of September 30, 2024,

after consulting with legal counsel, management believes there were no pending or threatened lawsuits that could reasonably be expected

to have a material effect on the results of our operations.

The Company may from time

to time become party to actions, claims, suits, investigations or proceedings arising from the ordinary course of our business, including

actions with respect to intellectual property claims, breach of contract claims, labor and employment claims and other matters.

Any litigation

could divert management time and attention from the Company, could involve significant amounts of legal fees and other fees and expenses,

or could result in an adverse outcome having a material adverse effect on our financial condition, cash flows or results of operations.

Actions, claims, suits, investigations and proceedings are inherently uncertain, and their results cannot be predicted with certainty.

We are not currently involved in any legal proceedings that we believe are, individually or in the aggregate, material to our business,

results of operations or financial condition.

However, regardless of the outcome, litigation can have an adverse impact on us because

of associated cost and diversion of management time.

As of March 31, 2025, after consulting with legal counsel, management believes 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:

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There was no Federal income

tax expense for the nine months ended September 30, 2024 or 2023 due to the Company’s net losses.

Income tax expense represents

the 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, 2024 and no benefit has been provided for the quarter-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.

tax expense for the three months ended March 31, 2025 or 2024 due to the Company’s net losses.

Income tax expense represents the

minimum state taxes due.

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

As of March 31, 2025, no benefit has been provided for the quarter-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

Committed Equity Facility

2022, the Company entered into a Common Stock Purchase Agreement and Registration Rights Agreement with B.

Riley Principal Capital II,

LLC under which the Company issued 281,157 shares for approximately $ 3 .0 million.

As consideration for B.

Riley’s commitment to

purchase shares of the Company’s common stock, the Company issued B.

Riley 10,484 shares of its common stock in both September 2022

and April 2023.

The facility was terminated on October 1, 2024.

Company issued 281,157 shares under the Purchase Agreement for $ 3 .0 million in proceeds, of which $ 0.5 million was offset by the offering

costs as of September 30, 2024.

Market Issuance Sales Agreement

On April 11, 2025, the Company

entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B.

Riley Securities, Inc.

pursuant to which the Company has the right, but not the obligation, to sell shares of their common stock having an aggregate offering

price of up to $ 8 million, subject to certain terms and conditions.

Stock Options

Option activity for the nine months ended September

Stock options may be granted

to new and existing employees and other eligible participants under the Company’s equity incentive plan.

New employee option grants

generally have a term of ten years and vest ratably over four years.

Option activity for the three months ended March

31, 2025 is as follows:

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Outstanding at December 31, 2024

Outstanding at September 30, 2024

The stock options terminate ten (10) years from the date of grant or

upon termination of employment.

Outstanding at March 31, 2025

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 paid during the life of the options granted during the nine months ended September 30, 2024 and 2023:

Schedule of assumptions for options granted

Nine months ended

September 30, 2024

Nine months ended

September 30, 2023

Expected volatility

89.04 % - 90.37 %

90.2 % - 94.5 %

Expected term

6.5 - 7 Years

Risk-free interest rate

3.67 % - 4.25 %

3.55 % - 4.47 %

Weighted-average FV

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

This model incorporates certain assumptions for inputs

including a risk-free market interest rate, expected dividend yield of the underlying common stock, expected option life and expected

volatility in the market value of the underlying common stock based on our historical volatility.

The Company uses the simplified method

to estimate the expected term.

The expected term of stock options granted to employees is equal to the contractual term of the option

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting

restrictions and are fully transferable.

In addition, option valuation models require the input of highly subjective assumptions including

the expected stock price volatility because the Company’s stock options and warrants have characteristics different from those of

its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate.

There were no option grants

in the three months ended March 31, 2025.

The Company’s stock

option compensation expense was $ 0.2 million and $ 0.4 million for the three and nine months ended September 30, 2024, and $ 0.1 million

and $ 0.3 million for the three and nine months ended September 30, 2023.

There was $ 1.8 million of total unrecognized compensation costs

related to outstanding stock options at September 30, 2024 which will be recognized over 4 .0 years.

Total intrinsic value of options outstanding

and options exercisable were $ 18 thousand and $ 0.2 million, respectively, as of September 30, 2024.

The number of shares of common stock

underlying stock options vested and unvested as of September 30, 2024 were 355,034 and 348,624 , respectively.

option compensation expense was $ 0.1 million and $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively, and there

was $ 1.3 million of total unrecognized compensation costs related to outstanding stock options at March 31, 2025 which will be recognized

over 3.5 years.

There were no options issued or exercised in the three months ended March 31, 2025.

The number of stock options vested

and unvested as of March 31, 2025 were 395,531 and 255,373 , respectively.

Stock-based compensation expense is generally included in selling,

general and administrative expenses in the consolidated statement of operations.

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”).

For the RSUs, 50% vested upon the grant date, 25% vested on February 1, 2024 and 25% will vest

on February 1, 2025.

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

metrics during the three-year period ending December 31, 2024.

142,500 PSUs and 35,625 RSUs

remain outstanding as of September 30, 2024, with weighted-average grant-date fair values of $ 13.05 each.

In November 2022, the

Board approved a stock grant under the Company’s 2021 Equity Incentive Plan, consisting of (i) a one-time grant of 142,500

restricted stock units (“RSUs”) and (ii) a target number of 142,500

performance restricted stock units (“PRSUs”) to further incentivize and align the CEO’s interest with the

For the RSUs, 50% vested upon the grant date, 25% vested on February 1, 2024 and 25% vested on February 1, 2025.

of shares issuable under the PSUs were determined based on the achievement of performance metrics specific to the Company that were

measured at the end of fiscal year 2024.

The fair value of both the RSUs and PSUs were based on the stock price of $13.05 per share

on the date of grant.

The PSUs were reviewed to determine estimated performance over the term and then a factor was applied

ranging from 0% to 150% of the grant date fair value.

As of December 31, 2024, based on the specific performance metrics set by the

Company, the target number of shares underlying the PSUs was increased by 44,531

shares of common stock for a total of 187,031

shares granted under the PSU.

There have been no further grants as of the three months ended March 31, 2025.

A summary of activity of the RSUs for the three

months ended March 31, 2025 is as follows:

Schedule of RSU activity

Weighted Average Grant Date Fair Value

Unvested at beginning of 2025

Unvested at end of 2025

Stock compensation expense

related to the RSUs and PSUs was $ 0.3 million and $ 0.9 million during the three and nine months ended September 30, 2024, with $ 0.5 million

in unrecognized stock compensation expense remaining to be recognized over 5 months as of September 30, 2024.

related to restricted stock units was $ 35 thousand during the three months ended March 31, 2025.

Stock compensation expense related to

performance stock units was $ 0.2 million during the three months ended March 31, 2025.

There are no further unrecognized stock compensation

expenses remaining to be recognized at this time.

Restricted Stock Awards

The Company issues restricted

stock to its non-employee members of its board of directors as compensation for such members’ services.

Such grants generally vest

ratably over four quarters.

The Company also previously

issued restricted stock awards 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.

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

Such grants generally vest ratably

over four 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, 2024 is as follows:

awards for the three months ended March 31, 2025:

Schedule of restricted stock awards

2 unchanged sentences

Nonvested at December 31, 2024

Nonvested at September 30, 2024

Nonvested at March 31, 2025

Stock compensation expense

related to restricted stock awards was $ 0.4 million and $ 0.3 million during each of the nine months ended September 30, 2024 and 2023

respectively.

As of September 30, 2024,

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

related to restricted stock awards was $ 0.1 million for the three months ended March 31, 2025 and $ 6 thousand for the three months ended

March 31, 2024.

Fair values of restricted stock vested during each of the three months ended March 31, 2025 and 2024 were $ 0.1 million

and $ 2 thousand, respectively.

As of March 31, 2025, there

were unvested shares of common stock representing $ 0.3 million of unrecognized restricted stock grant expense which will be recognized

over 9 months.

In 2023, the Company

issued warrants to purchase up to 200,000

shares of the Company’s common stock at a price per share equal to $17.00 to a consultant for services to be provided over a

five-year period.

The warrants were immediately exercisable but are subject to repurchase by the Company until the required service

During the three months

ended March 31, 2025, the Company had exercisable warrants to purchase up to 200,000

shares of the Company’s common stock at a price per share equal to $17.00 issued to a consultant for investor relations

services to be provided over a five-year period starting in March 2023.

The warrants are immediately exercisable but are subject to

repurchase by the Company until the required service is provided.

The fair value of such warrants was $8.05 per share or $ 1.6

1 unchanged sentence

This model incorporated certain assumptions for inputs

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

During the nine months ended September 30, 2024, $ 0.2

million was recorded as expense and $1.1 million of cost has not been recognized and will be recognized over the next 3.5 years.

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 warrant was recorded to prepaid expenses and other current assets to be recognized over the service period.

During the three months ended March 31, 2025, $ 0.1

million was recorded as expense and at March 31, 2025, $1.0 million of cost has not been recognized and will be recognized over the

next 3 years.

These warrants are not cashless and expire on March 31, 2028.

A summary of activity of warrants outstanding

for the nine months ended September 30, 2024 is as follows:

for the three months ended March 31, 2025 is as follows:

Schedule of activity of warrants outstanding

Number of Shares of Common Stock Underlying Warrants

Weighted Average Exercise Price

Exercisable at December 31, 2023

Outstanding at September 30, 2024

Exercisable at September 30, 2024

Exercisable warrants as of

September 30, 2024 have a weighted average remaining contractual life of 3.5 years.

The intrinsic value of the exercisable shares of the

warrants at September 30, 2024 was $ 0.0 .

Warrants to purchase 282,334 shares of common stock at an exercise price equal to $ 6.30 which

were issued in our 2019 public offering expired on April 18, 2024.

Outstanding at December 31, 2024

Outstanding at March 31, 2025

The warrant outstanding as

of March 31, 2025 expires in March 2028.

The intrinsic value of the shares of common stock underlying the warrants at March 31, 2025 was

For each of the identified

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Product sales

4 unchanged sentences

Total revenues

Percentages of our revenues

derived from customers located in California during the three months ended September 30, 2024 and 2023 were 21 % and 14 %, respectively.

During the nine months ended September 30, 2024 and 2023, California customer revenues were 25 % and 28 %, respectively.

Our international

sales represented 20 % and 8 % of revenues in the nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024 and

December 31, 2023, deferred revenue was $ 1.6 million and $ 1.2 million, respectively.

These amounts consisted mainly of customer deposits

in the amount of $ 1 .0 million and $ 0.7 million for September 30, 2024 and December 31, 2023, respectively, and prepaid multi-year maintenance

plans for previously sold products which account for $ 0.9 million and $ 0.5 million for September 30, 2024 and December 31, 2023, respectively,

and pertain to services to be provided through 2031.

The following table disaggregates

gross revenue from our clients by significant geographic area for the three months ended March 31, 2025 and 2024:

Schedule of disaggregates gross revenue

For the Three Months Ended

United States

Total revenue

During the three months ended

March 31, 2025 and 2024, 14 % and 58 % of revenues were derived from federal customers, while 33 % and 26 % were from state and local governments,

respectively.

In addition, 25 % of revenues in the three months ended March 31, 2025 were sales made outside of the United States compared

to 11 % in the prior year.

At March 31, 2025 and 2024,

deferred revenue was $ 1.9 million and $ 1.5 million, respectively.

These amounts consisted mainly of customer deposits in the amount of

$ 0.7 million and $ 0.9 million for March 31, 2025 and 2024, respectively, and prepaid multi-year maintenance plans for previously sold

products which account for $ 1.2 million and $ 0.6 million for March 31, 2025 and 2024, respectively, and pertain to services to be provided

through 2035.

Revenue recognized during the three months ended March 31, 2025 and 2024 which pertained to revenue deferred in prior years

was $ 48 thousand and $ 27 thousand respectively.

The balance of contract assets

is driven by the difference in timing of when revenue is recognized from performance obligations satisfied in the current reporting period

and when amounts are invoiced to the customer.

The balance of contract liabilities is driven by the difference in timing between when

cash is received pursuant to a contract and when the Company’s performance obligations under the contract are satisfied.

The following table provides

the activity for the contract liabilities recognized (in thousands):

Schedule of contract liabilities

For the Three Months Ended

Beginning Balance

Recognized in revenue

Ending Balance

SEGMENT REPORTING

The Company has a single reportable segment focused

around providing clean-technology innovation focused on providing high-quality, renewably energized products.

The Company’s chief

operating decision-maker (the “CODM”), who is the Chief Executive Officer, assesses performance for the reportable segment

and decides how to allocate resources using net income (loss) as the primary measure of profitability.

The CODM is not regularly provided

with specific segment expenses, but focuses on revenue, gross profit, and net income.

Expense information, including cost of sales, can

be easily computed from the provided information.

These segment (and consolidated) measures of profitability are shown in the statements

of operations.

The measure of segment assets are reported on the balance sheets as total assets.

RISKS AND UNCERTAINTIES

The continuing impacts of rising interest rates,

inflation, changes in foreign currency exchange rates and geopolitical developments, such as the imposition of tariffs and shifts in international

alliances, have resulted, and may continue to result, in a global slowdown of economic activity, which may decrease demand for a broad

variety of goods and services, including those provided by the Company’s clients and as a result, the Company, while also disrupting

supply channels, sales channels and advertising and marketing activities for an unknown period of time.

Additionally, recent changes to

policy implemented by the U.S.

Congress, and the Executive Branch and the responses of other nations to such actions have impacted

and may in the future impact, among other things, the U.S.

and global economy, international alliances and trade relations, unemployment,

immigration, healthcare, taxation, the U.S.

regulatory environment, inflation and other areas.

As a result of the current uncertainty

regarding economic activity, the Company is unable to predict the size and duration of the impact of its revenue and its results of operations,

if any, of actions taken to date and those that may occur in the future.

The extent of the potential impact of these macroeconomic factors

on the Company’s operational and financial performance will depend on a variety of factors, including the extent of geopolitical

disruption and its impact on the Company’s clients, partners, industry and employees, all of which are uncertain at this time and

cannot be accurately predicted.

The Company continues to monitor the effects of these macroeconomic factors and intends to take steps

deemed appropriate to limit the impact on its business.

can be no assurance that precautionary measures, whether adopted by the Company or imposed by others, will be effective, and such measures

could negatively affect its sales, marketing, and client service efforts, delay and lengthen its sales cycles, decrease its employees’,

clients’, or partners’ productivity, or create operational or other challenges, any of which could harm its business and results

of operations.

SUBSEQUENT EVENTS

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What changed 10-Q

Item 1. Financial Statements