What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 330 added, 276 removed, 232 unchanged (72% of the section changed)

26 unchanged sentences

insufficient revenues to cover operating costs, resulting in persistent losses;

rapid and significant changes to costs of raw

materials from government tariffs or other market factors;

rapid and significant changes to costs of raw materials

from government tariffs or other market factors;

significant currency fluctuation or foreign regulations

that could impact our business;

the preceding and other factors discussed in Part I, Item 1A, “Risk Factors,” and other reports we may file with the Securities and Exchange Commission from time to time;

the factors set forth in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We caution you that the foregoing list may not

contain all of the forward-looking statements made in this Form 10-Q.

that could impact on our business;

the preceding and other factors discussed in Part II, Item 1A, “Risk Factors,” and other reports we may file with the Securities and Exchange Commission from time to time;

the factors set forth in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We caution you that the foregoing list may not contain

all of the forward-looking statements made in this Form 10-Q.

You should not rely upon forward-looking

17 unchanged sentences

Beam is a clean-technology

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

innovation company headquartered in San Diego, California with offices 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.

Europe in Belgrade and Kraljevo, Serbia;

and in Abu Dhabi, United Arab Emirates.

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 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.

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

also 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.

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.

Our EV charging infrastructure

10 unchanged sentences

through our integrated emergency power panels.

Our charging products are

rapidly deployed without the need for construction or electrical work.

We compete with the highly fragmented and disintegrated ecosystem

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

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

Our clean-technology products are designed to replace

a complicated, expensive, time-consuming and risk prone process with an easy, robust and reliable product at a low cost of total ownership.

We provide energy storage

technologies that we believe make commodity battery cells safer, longer lasting and more energy efficient.

Our battery management systems,

and associated packaging, make batteries safer and usable in a variety of mobility, energy-security, and stationary applications.

Our charging products are rapidly

deployed without the need for construction or electrical work.

We compete with the highly fragmented and disintegrated ecosystem of general

contractors, electrical contractors, consultants, engineers, permitting specialists and others, who are required to perform a traditional

grid-tied EV charger installation construction and electrical project.

Our clean-technology products are designed to replace a complicated,

expensive, time-consuming and risk-prone process with an easy, robust and reliable product at a low cost of total ownership.

We provide energy storage technologies

that we believe make commodity battery cells safer, longer lasting and more energy efficient.

Our battery management systems, and associated

packaging, make batteries safer and usable in a variety of mobility, energy-security, and stationary applications.

Our street lighting and other

1 unchanged sentence

We are increasingly adding power electronics, energy storage,

computing, sensing and reporting to our street furniture products as we evolve them to provided greater levels of Smart Cities services.

computing, sensing, and reporting to our street furniture products as we evolve them to provide greater levels of Smart Cities services.

Beam’s renewably energized

16 unchanged sentences

chargers themselves.

We have over thirty years

of experience deploying street-lighting, transportation, energy and telecommunications infrastructure products as a result of our 2023

acquisition of Amiga in Serbia.

We have relationships with existing customers to whom we are now able to sell our renewably energized

EV charging infrastructure products as well as our Smart Cities products.

During the second half

of 2024 we significantly expanded our product portfolio with the addition of rapidly deployed and highly scalable charging

infrastructure products for electric bicycles, electric scooters, and electric motorcycles.

We also introduced de-salination as a

capability to enhance the lifesaving aspects of our disaster preparedness products.

BeamWell™ self-sufficient water treatment system converts seawater into vital freshwater.

It is equipped with four eMopeds for

efficient and rapid transport in environments such as war zones, disaster or crisis zones, where people need drinking water,

electricity and mobility most.

Our ability to make

commodity battery cells safer, longer lived and more energy efficient in bespoke enclosures is, we believe, a significant

differentiator as we move to an increasingly electrified and untethered world.

All of our renewably energized products generate

their own electricity and are stored in our integrated batteries.

Our ability to develop energy-dense, highly safe batteries in

unique shapes and sizes allows us to serve customers with specialized needs, including manufacturers of drones, robotic and

medical devices, submersibles, refrigerated transport units, and a wide range of other applications.

We are also able to enhance our

patented products which provide electric vehicle charging, energy security disaster preparedness through the creation of bespoke

energy-dense and safe battery products which are unique to our in-house portfolio.

We have over thirty years of experience

deploying street-lighting, transportation, energy and telecommunications infrastructure products as a result of our 2023 acquisition of

Amiga in Serbia.

We have relationships with existing customers to whom we are now able to sell our renewably energized EV charging infrastructure

products as well as our Smart Cities products.

During the second half of 2024

we significantly expanded our product portfolio with the addition of rapidly deployed and highly scalable charging infrastructure products

for electric bicycles, electric scooters, and electric motorcycles.

We also introduced de-salination as a capability to enhance the lifesaving

aspects of our disaster preparedness products.

converts seawater into vital freshwater.

It is equipped with four eMopeds for efficient and rapid transport in environments such as war

zones, disaster or crisis zones, where people need drinking water, electricity and mobility most.

Our ability to make commodity

battery cells safer, longer lived and more energy efficient in bespoke enclosures is, we believe, a significant differentiator as we move

to an increasingly electrified and untethered world.

All our renewably energized products generate their own electricity which is stored

in our integrated batteries.

Our ability to develop energy-dense, highly safe batteries in unique shapes and sizes allows us to serve

customers with specialized needs, including manufacturers of drones, robotic and medical devices, submersibles, refrigerated transport

units, and a wide range of other applications.

We are also able to enhance our patented products, which provide electric vehicle charging,

energy security disaster preparedness through the creation of bespoke energy-dense and safe battery products, which are unique to our

in-house portfolio.

We believe our chief differentiators

3 unchanged sentences

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 add electrical capacity to provide for the significant increase demand brought by electrified transportation, data centers, AI and the electrification of industry, without having to go through expensive, time-consuming and risky utility grid expansion (adding power stations, transmission lines and distribution infrastructure like substations);

Our ability to add electrical capacity to provide for the significant increased demand brought by electrified transportation, data centers, AI and the electrification of industry, without having to go through expensive, time-consuming and risky utility grid expansion (adding power stations, transmission lines and distribution infrastructure like substations);

Our ability to create new and patentable products which are marketable and consist of a complex integration of our proprietary technology and parts with other commonly available engineered components, which create a further barrier to entry for our competition;

Our ability to create products which provide valuable solutions to nascent industries with very large market opportunities globally;

Our geographic footprint in North America and Europe, and existing customer base and contracts.

Our geographic footprint in North America, Europe, the Middle East, and existing customer base and contracts.

Overall Business Outlook

Our revenues for the

first three months of 2025 were $6.3 million, a 57% decrease from $14.6 million for the first three months in 2024.

We believe that

the decrease in revenue is a result of uncertainty in the U.S.

Our revenues for the first

six months of 2025 were $13.4 million, a 54% decrease from $29.4 million for the first six months in 2024.

We believe that the decrease

in revenue is a result of uncertainty in the U.S.

government’s zero emission vehicle strategy.

related to the presidential election.

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.

continued investment in our sales resources, in September 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 customers.

International customers comprised 25% of all revenue as

of March 31, 2025 verses 11% for the three months ended March 31, 2024.

Revenues derived from non-government commercial entities

increased by 41% for the three months from 2024 to 2025 and were 53% of total revenues in 2025.

For the three months ended, March

31, 2025, the Company’s sales to federal, state and local governments represented 47% of revenues verses 84% of the same

period revenues in 2024.

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 from 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

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.

As we continue

to invest in our sales resources, we hired a new Director of Channel Partnerships in Europe in September 2024 to drive growth in commercial

and government sectors.

International customers comprised 37% of all revenue as of June 30, 2025 compared to 15% for the six months ended

June 30, 2024.

Revenues derived from non-government commercial entities increased by 15% for the six months from 2024 to 2025 and were

60% of total revenues in 2025.

For the six months ended, June 30, 2025, the Company’s sales to federal, state and local governments

represented 40% of revenues verses 76% of the same period revenues in 2024.

We continue to invest in sales

employees, resellers and distribution partners, 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 from 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.

4 unchanged sentences

without having to invest significantly.

We now have resellers and agents in the United States, Spain, Portugal, Italy, Caribbean, Central

America, the Balkans, the Middle East, Africa and Australia.

We now have resellers and agents in the United States, Spain, Portugal, Italy, Germany, Austria,

Switzerland, Caribbean, Central America, the Balkans, the Middle East, Africa and Australia.

The Company believes there

continues to be a high level of support for funding EV charging infrastructure from both commercial and government entities, including

a number of federal grants available under the Inflation Reduction Act.

In addition, certain of our commercial customers may benefit from

the Federal Solar Investment Tax Credit and accelerated depreciation as allowed under Section 179 of the IRS code which, we believe, provides

a competitive advantage for our products over traditionally installed EV charging infrastructure which is not eligible for these incentives.

Given these available incentives, we have invested in a federal lobbyist, a federal business development resource and a government relations

employee, who have helped to identify opportunities and increase awareness of our product and outreach with federal agencies.

continues to be a high level of support for funding EV charging infrastructure from both commercial and government entities.

in place a Multiple Award Schedule Contract with the General Services Administration (GSA) that helps streamline purchases from Federal

2 unchanged sentences

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

In the three months ended March

31, 2025, we recorded revenues of $3.0 million for federal customers, compared to $12.2 million for the same period in 2024.

to see uneven orders from quarter to quarter, especially with our federal customers, but over time we expect our revenues to grow.

commercial, non-government, revenues increased as a percentage of our revenues from 16% to 53% from the first three months of 2024 to

the first three months of 2025.

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

zero emission vehicle policies.

The new products we have brought to market offer values which are also not dependent upon US federal government

In Q2 2025, the contract was extended

until October 31, 2030.

In the six months ended June 30, 2025, we recorded revenues of $1.1 million for federal customers, compared to

$13.7 million for the same period in 2024.

We expect to see uneven orders from quarter to quarter, especially with our federal customers,

but over time we expect our revenues to grow.

Our commercial, non-government, revenues increased as a percentage of our revenues from

24% to 60% from the first six months of 2024 to the first six months of 2025.

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 U.S.

government zero emission vehicle policies.

The new products we have brought to market offer

values, which are also not dependent upon U.S.

federal government investment.

We expect the electric vehicle

2 unchanged sentences

We believe we are positioned to benefit significantly from this growth.

Additionally, by achieving compliance

with the Build America, Buy America Act, which ensures that our products are manufactured in the United States using a sufficient amount

of domestically sourced materials, we will meet federal domestic production requirements.

Furthermore, obtaining the CE mark (Conformité

Européenne) a mandatory certification indicating that a product complies with European Union (EU) health, safety, and environmental

protection standards, on EV ARC™, BeamBike™, BeamWell™ and BeamPatrol™ products, will allow our products to be

freely traded within the European Economic Area (EEA).

We believe these achievements will enhance our credibility, strengthen consumer

trust, and increase demand for our products, particularly among federal, state, and local government agencies.

As a result of the

acquisition of All Cell we now have the ability to value engineer bespoke battery solutions for our products.

All-Cell ™ batteries are ideally suited for applications where energy density, safety and bespoke enclosures require

high power in small spaces.

Drones, submersibles, recreational products and a host of micro mobility and electric vehicle products

are already benefiting from our Beam All-Cell ™ highly differentiated products.

With the continued growth of

untethered electrification, we believe there is an opportunity for increased demand in these markets and others.

Additionally, we are in compliance with

the Build America, Buy America Act, which ensures that our U.S.

products are manufactured for our U.S.

customer in the United States using

a sufficient amount of domestically sourced materials, we will meet federal domestic production requirements.

Furthermore, obtaining the

CE mark (Conformité Européenne) a mandatory certification indicating that a product complies with European Union (EU) health,

safety, and environmental protection standards, on EV ARC™, BeamBike™, BeamWell™ and BeamPatrol™ products, is

required for our products to be freely traded within the European Economic Area (EEA).

We believe these certifications our credibility,

strengthen consumer trust, and increase demand for our products, particularly among federal, state, and local government agencies.

As a result of the acquisition

of All-Cell we now have the ability to create bespoke engineered battery solutions for our products.

Beam All-Cell ™ batteries

are ideally suited for applications where energy density, safety and bespoke enclosures require high power in small spaces.

Drones, submersibles,

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

highly differentiated products.

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

demand in these markets and others.

October 2023, the Company acquired Amiga (now renamed Beam Europe), an established manufacturer of specialized steel structures and equipment,

11 unchanged sentences

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

Telcom engineers and manufacturers specialized in power electronics including 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 while reducing our costs and improving our margins.

Telcom has a well-respected and highly talented team of electrical engineers, focused on power electronics and the integration of renewables

Telcom engineers and manufacturers specialized power electronics including 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 while reducing our costs and improving our margins.

has a well-respected and highly talented team of electrical engineers, focused on power electronics and the integration of renewables

and energy storage.

9 unchanged sentences

to travelers as they arrive at, and depart from, the airport.

We also entered into an agreement with Vinci Airports, the world’s leading

private airport operator with over 70 airports under management internationally, which does not require us to pay rent because of the

amenity value that is delivered to the airport through the provision of a free driving on sunshine experience for their visitors and guests.

We also entered into an agreement with Vinci Airports, the world’s

leading private airport operator with over 70 airports under management internationally, which does not require us to pay rent because

of the amenity value that is delivered to the airport through the provision of free “Driving on Sunshine” experience for their

visitors and guests.

We believe that we may be able to repeat this model in other Vinci airports around the world.

We also believe that now that we have successfully

proved that this business model works, we can further expand it into different types of environments where there are sufficient densities

of people to make the advertising worthwhile.

We also believe that

now that we have successfully proved that this business model works, we can further expand it into different types of environments where

there are sufficient densities of people to make the advertising worthwhile.

In December 2024, we partnered

with Benzina Zero, an innovative provider of electric mopeds and scooters, electric bicycles and

micro-mobility solutions.

Benzina Zero (which is Italian for zero gasoline) is Australia’s leading e-mobility brand offering

a range of e-scooters, e-mopeds, e-bikes and e-motorcycles.

Benzina Zero work with global fleet businesses across a number of industries

including food delivery, postal delivery to eco-tourism, and boast a comprehensive dealer network Australia-wide.

Benzina Zero have appointed

distributors in Australia, Italy, United Kingdom, Ireland, Slovenia and Croatia and are also active in New Zealand, Hong Kong, Singapore,

Philippines and Finland.

We will bundle Benzina Zero e-mobility solutions with products BeamBike™, BeamWell™ and BeamSkoot™,

and will introduce Benzina’s highly ruggedized products to Beam’s existing customers and prospects globally.

This is another

approach to increase our sales channels without adding overhead costs.

Our energy security business

is also connected with the deployment of our EV charging infrastructure products and serves as an additional benefit to the value proposition

with Benzina Zero, an innovative provider of electric mopeds and scooters, electric bicycles and micro-mobility solutions.

Zero (which is Italian for zero gasoline) is Australia’s leading e-mobility brand offering a range of e-scooters, e-mopeds, e-bikes

and e-motorcycles.

Benzina Zero works with global fleet businesses across several industries including food delivery, postal delivery

to eco-tourism, and boast a comprehensive dealer network Australia-wide.

Benzina Zero has appointed distributors in Australia, Italy,

United Kingdom, Ireland, Slovenia and Croatia, and are also active in New Zealand, Hong Kong, Singapore, Philippines and Finland.

bundle Benzina Zero e-mobility solutions with products BeamBike™, BeamWell™ and BeamSkoot™, and will introduce Benzina

Zero’s highly ruggedized products to Beam’s existing customers and prospects globally.

This is another approach to increase

our sales channels without adding overhead costs.

Our energy security business is

also connected with the deployment of our EV charging infrastructure products and serves as an additional benefit to the value proposition

of our charging products which, along with their integrated emergency power panels, can continue to operate, charge EVs, and deliver emergency

12 unchanged sentences

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.

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 $0.5 million for the three months ended March 31, 2025, compared to $1.5 million gross profit in 2024.

Our gross margin

as a percentage of sales was 7.9% for the three months ended March 31, 2025.

Additionally, for the three months ended March 31, 2025,

88.4% of ARC sales reflected our price increase implemented in 2023.

Our gross profits included a negative impact of $1.0 million for

non-cash depreciation and intangible amortization.

Our gross margin net of non-cash items was 20.6%.

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

We continue to identify components and sub-assemblies that may be more cost effective to produce in our Serbian facilities,

which we believe may further reduce our costs, increase our gross margins, and significantly increase the potential output from our US-based

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

global demand for electric vehicle charging infrastructure.

They are working with our engineers to continually improve

the engineering and development of our new BeamSpot™ product.

We believe that BeamSpot™ may become our largest selling product.

In June 20, 2025, Beam entered

into a joint venture agreement with the Platinum Group L.L.C, a diversified, multi-billion-dollar

conglomerate operating in energy, real estate, finance and investing, healthcare, information technology, sports and entertainment, food

services and legal services in the Emirate of Abu Dhabi, United Arab Emirates.

Chaired by His Royal Highness, Sheikh Mohammed Sultan Bin

Khalifa Al-Nahyan, the Platinum Group UAE is recognized for its well-established and trusted relationships across government and industry.

Beam Global and the Platinum Group will form a new entity, Beam Middle East LLC, a Limited Liability Company in Abu Dhabi which

will sell and manufacture Beam Global’s patented sustainable infrastructure solutions for transportation electrification, energy

storage, energy security, and smart city development across the Middle East and African regions.

This joint venture marks a significant

milestone in our global expansion strategy and positions us to capture growth in a region projected to invest over $1 trillion in renewable

energy by 2030.

Beam Middle East will be headquartered in Masdar City, a pioneering sustainable urban community and world-class business

and technology hub.

Masdar City is located in Abu Dhabi, the capital of the UAE, strategically positioned at the center of the country’s

drive toward a net-zero future by 2050.

The Company’s gross

margin improved as a percentage of sales and was 20.3% for the three months ended June 30, 2025, up 4.4 percentage points from the gross

margin reported in for the same period in 2024.

For the three months ended June 30, 2025, 87.9% of EV ARC™ sales reflected the price

increase implemented in 2023.

The gross profits included a negative impact of $0.8 million for non-cash depreciation and intangible amortization.

The gross margin net of non-cash items was 29.5%.

The Company expects to see costs of goods sold continue to decrease over time.

continued to implement lean manufacturing process improvements and make 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.

We continue to identify components

and sub-assemblies that may be more cost effective to produce in our Serbian facilities, which we believe may further reduce our costs,

increase our gross margins, and significantly increase the potential output from our U.S.-based factories.

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 global 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.

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 U.S.

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

The financial statements and

related disclosures were prepared in accordance with U.S.

generally accepted accounting principles which require us to make estimates

and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses during the reporting period.

Significant estimates in our condensed consolidated financial statements include,

but are not limited to, accounting for acquisitions and business combinations;

initial valuation and subsequent impairment testing of

goodwill, other intangible assets and long-lived assets;

The financial statements and related

disclosures were prepared in accordance with U.S.

generally accepted accounting principles which require us to make estimates and assumptions

that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues

and expenses during the reporting period.

Significant estimates in our condensed consolidated financial statements include, but are not

limited to, accounting for acquisitions and business combinations;

initial valuation and subsequent impairment testing of goodwill, other

intangible assets and long-lived assets;

fair value of financial instruments, income taxes;

and commitments

and contingencies.

We base our estimates and assumptions on historical experience and on various other factors that we believe to be reasonable

under the circumstances, and we continually evaluate our assumptions and modify as needed.

To the extent there are material differences

between our estimates and the actual results, our future results of operations will be affected.

There have been no changes since year

end, refer back to the Company’s Form 10-K for December 31, 2024.

and commitments and contingencies.

We base our estimates and assumptions on historical experience and on various other factors that we believe to be reasonable under the

circumstances, and we continually evaluate our assumptions and modify as needed.

To the extent there are material differences between

our estimates and the actual results, our future results of operations will be affected.

There have been no changes since year end, refer

back to the Company’s Form 10-K for December 31, 2024.

Results of Operations

Comparison of Results of Operations for the

Three Months Ended March 31, 2025 and 2024

the three months ended March 31, 2025, our revenues decreased 57% to $6.3 million compared to $14.6 million for 2024.

During the three

months ended March 31, 2025, $1.0 million, or 14% of product sales, were to Federal customers.

State and Local governments customers accounted

for $2.1 million, or 33% 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.

Comparison of Results of Operations for the Three

Months Ended June 30, 2025 and 2024

For the three

months ended June 30, 2025, our revenues decreased 52% to $7.1 million compared to $14.8 million for 2024.

During the three months ended

June 30, 2025, $0.2 million, or 2% of product sales, were to Federal customers.

State and Local governments customers accounted for $2.2

million, or 32% of revenues.

Revenues derived from non-government, commercial entities represented 66% of total revenues for the three

months ended June 30, 2025 compared to 31% for the three months ended June 30, 2024.

We continue to invest in sales, marketing employees,

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

The receipt of orders may continue to be uneven due

to the timing of customer approvals or budget cycles, however we believe that as EV adoption, energy security and smart cities infrastructure

requirements increase in concert with increased availability of infrastructure funding, our business will be less impacted by specific

variations in order timing.

Gross Profit.

reported a positive gross profit of $0.5 million, a 7.9% gross margin for the three months ended March 31, 2025, compared to a gross profit

reported a positive gross profit of $1.4 million, a 20.3% gross margin for the three months ended June 30, 2025, compared to a gross profit

of $2.4 million, a 15.9% gross margin in 2024.

Additionally, 24.1% of ARC sales in 2024 reflected the price increase implemented in 2023

and 88.4% in the first three months ending March 31, 2025.

22.3% of EV ARC™ sales in 2024 reflected the price increase implemented in 2023 and

87.9% in the first three months ended June 30, 2025.

The gross profit includes a non-cash negative impact of $0.2 million for amortization

2 unchanged sentences

a 22.8% 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.

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

Operating Expenses and

Impairment of Goodwill.

Total operating expenses were $16.0 million for the three months ended March 31, 2025, compared to $4.5 million

The 2025 operating expenses included a $10.8 million goodwill impairment and a $0.8 million increase due to European acquisitions.

Based on the results of the Company’s goodwill impairment procedures, the Company recorded goodwill impairment for the single reporting

unit during the three months ended March 31, 2025.

The Company believes the goodwill impairment reported during the three months ended

March 31, 2025 is not a negative indicator of historic or current operating results and not a negative indicator of future performance

as the Company has taken significant steps to diversify its geographical reach and product offerings while focusing strategic growth.

The Company believes that the resulting non-cash charge has no impact on the Company’s compliance with its cash flows or available

Total operating expenses were $5.9 million for the three months ended June 30, 2025, compared to $7.1 million

The 2024 operating expenses included $1.7 million change in the fair value of contingent consideration which was zero in 2025

due to the goodwill impairment adjustment made in the previous quarter.

Comparison of Results of Operations for the Six

Months Ended June 30, 2025 and 2024

the six months ended June 30, 2025, our revenues decreased 54% to $13.4 million compared to $29.4 million for the same period in 2025.

Revenues derived from non-government, commercial entities increased by 15% in 2025 compared to 2024 for the first six months through June.

Revenues to non-government, commercial entities represented 60% of total revenues for the first six months ended June 30, 2025.

the first six months of 2025, revenues from California represented 22% of total revenues.

Revenues were diverse across federal, state

and local governments, as well as enterprise sector customers.

International customers comprised 37% of the revenues for the first six

months of 2025 compared to 15% for the same period in 2024, and were primarily from Beam Europe.

We continue to invest in sales and marketing

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

The receipt of orders may continue to

be uneven due to the timing of customer approvals or budget cycles, however we believe that as EV adoption increases in concert with increased

availability of infrastructure funding, our business will be less impacted by specific variations in order timing.

Gross Profit.

the six months ended June 30, 2025, our gross profit was $1.9 million, or 14.4% of sales, compared to a gross profit of $3.8 million,

or 13% of sales in the same period of 2024.

The margin improved by 1.4 percentage points, compared to prior year.

This is primarily a

result of cost improvements developed during 2023 which are now being recognized and the positive margins we are generating from the acquisition

of Amiga and Telcom.

Our gross profits were negatively impacted by $1.5 million for non-cash depreciation and intangible amortization.

Our gross profits net of non-cash items was 25.3% versus 14.9% in the prior year.

We continue to make engineering changes and work with

suppliers to improve our costs which, along with support from our Serbian facilities, we believe will continue to improve our gross profit

Operating Expenses and

Impairment of Goodwill.

Total operating expenses were $21.9 million, for the six months ended June 30, 2025, compared to $11.7

million, for the same period in the prior year.

The 2025 operating expenses included a $10.8 million goodwill impairment and a $1.5 million

increase due to European acquisitions.

Based on the results of the Company’s goodwill impairment procedures, the Company recorded

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

The Company believes the goodwill impairment

reported during the three months ended March 31, 2025 is not a negative indicator of historic or current operating results and not a negative

indicator of the future performance of our acquired entities or the Company in general have taken and continue to take significant steps

to diversify our geographical reach and product offerings while focusing on strategic growth.

The Company believes that the resulting

non-cash charge has no impact on the Company’s cash flows or available liquidity.

The $10.0 million increase

in operating expenses is mostly attributable to $10.8 million related to the change in fair value of contingent consideration, which is

non-cash, for the All Cell, Amiga and Telcom acquisitions and $0.3 million related to increases in customer accommodation expenses offset

by decreases of $0.7 million in sales commission expenses and $0.4 million in other consulting costs mostly related to Design Engineering

Total operating expenses excluding non-cash items were $8.2 million, which included $10.8 million fair value of contingent

consideration, $1.8 million depreciation and amortization, $1.8 million for non-cash compensation and $0.5 million allowance for credit

Liquidity and Capital Resources

At March 31, 2025, we had

cash of $2.5 million, compared to $5.0 million at March 31, 2024.

We have historically met our cash needs through a combination

of debt and equity financing and most recently through gross profit contribution.

At June 30, 2025, we had cash

of $3.4 million, compared to $4.6 million at December 31, 2024.

We have historically met our cash needs through a combination of debt

and equity financing and most recently through cash flow from our gross profit.

Our cash requirements are generally for operating activities

9 unchanged sentences

Net cash used in investing activities

Net cash provided (used) by financing activities

For the three months ended

March 31, 2025, our cash used in operating activities was $1.8 million compared to $3.0 million for the three months ended March 31, 2024.

Net loss of $15.5 million for the three months ended March 31, 2025 was decreased by $12.5 million of non-cash expense items that included

$10.8 million for Goodwill impairment, $1.0 million for depreciation and amortization, $0.5 million for stock-based compensation and $0.2

million in provisions for credit losses.

Cash used in operations also included a $0.7 million decrease in accounts payable, $0.7 million

decrease in accounts receivable, $0.6 million decrease in inventory and $0.1 million decrease in accrued expenses offset by $0.2 million

increase in accrued expenses related to short term taxes payable, $0.2 million increase in other long term liabilities and $0.2 million

increase in deferred revenue.

For the three months ended

March 31, 2024, our cash used in operating activities was $3.0 million compared to $0.6 million for the three months ended March 31, 2023.

Net loss of $3.0 million for the three months ended March 31, 2024 was adjusted by $1.1 million of non-cash expense items that included

depreciation and amortization of $0.9 million, employee stock-based compensation expense of $0.6 million, offset by decreases of $0.3

million provision on credit losses and $0.1 million for a change in fair value of contingent consideration liabilities.

Further, cash

used in operations included a $3.9 million increase in accounts receivable due to the increase in revenues and the timing of customer

Cash generated from operations included a $1.0 million increase in accounts payable primarily for inventory, $1.1 million increase

in accrued expenses, $0.4 million decrease in inventory, $0.3 million increase in deferred revenue and $0.2 million decrease in prepaid

expenses and other current assets.

Net cash provided by financing activities

For the six months ended June

30, 2025, our cash used in operating activities was $2.1 million compared to $0.1 million for the six months ended June 30, 2024.

loss of $19.8 million for the six months ended June 30, 2025 was decreased by $15.1 million of non-cash expense items that included $10.8

million for Goodwill impairment, $2.2 million for stock-based compensation, $1.8 million for depreciation and amortization, and $0.3 million

in provisions for credit losses.

Cash used in operations also included a $2.0 million decrease in accounts receivable, $1.9 million decrease

in accounts payable, $1.5 million decrease in inventory, $0.5 million decrease in prepaid expenses and $0.1 million decrease in other

long-term liabilities offset by $0.7 million increase in accrued expenses mostly related to short term sales taxes payable and salaries

For the six months ended June 30, 2024, our cash

used in operating activities was $0.1 million compared to cash used of $5.1 million for the six months ended June 30, 2023.

$8.0 million for the six months ended June 30, 2024 was increased by $4.2 million of non-cash expense items that included depreciation

and amortization of $1.9 million, employee stock-based compensation expense of $1.3 million, offset by decreases of $0.6 million provision

on credit losses and $1.5 million for a change in fair value of contingent consideration liabilities.

Cash used in operations included

a $3.3 million decrease in accounts receivable as well as a $1.7 million decrease in accounts payable primarily for inventory, $0.3 million

decrease in prepaid expenses and other current assets offset by $1.7 million increase in accrued expenses, $1.0 million increase in inventory,

and $0.3 million increase in deferred revenue.

Cash used in investing activities

in the three months ended March 31, 2025 and March 31, 2024 was $0.1 million related to the purchases of equipment in both years.

three months ended March 31, 2024, included a $2.7 million reduction of deferred consideration for a cash payment for the Amiga acquisition.

For the three months ended

March 31, 2025, cash used by our financing activities was $15 thousand related to repayments of note payables related to auto leases compared

to $25 thousand borrowings in the prior year.

Additionally, for the three months ended March 31, 2024, cash generated by our financing

activities included $0.3 million for the exercise of warrants net of offering expenses.

Current assets decreased

to $23.6 million at March 31, 2025 from $27.1 million at December 31, 2024, primarily due to a $2.1 million decrease in cash, $1.0 million

decrease in accounts receivable, and $0.4 million decrease in Inventory.

Current liabilities decreased $0.4 million at March 31, 2025

compared to December 31, 2024, primarily due to a $0.6 million decrease in accounts payable offset by $0.2 million increase in sales

As a result, our working capital decreased to $10.8 million at March 31, 2025 compared to $13.8 million at December 31,

in the six months ended June 30, 2025 was $0.8 million and June 30, 2024 was $3.0 million related to the purchases of equipment in both

The six months ended June 30, 2024, including a $2.7 million reduction of deferred consideration for a cash payment for the Amiga

For the six months ended June

30, 2025, cash provided by our financing activities was $2.2 million related to proceeds from the At Market Issuance Sales Agreement with

Riley Securities, Inc.,.

compared to $1.4 million related to proceeds from exercise of warrants and proceeds from public offering issuance

of common stock in the prior year.

Current assets decreased to

$22.4 million at June 30, 2025 from $27.1 million at December 31, 2024, primarily due to a $1.9 million decrease in accounts receivable,

$1.2 million decrease in cash, $1.0 million decrease in inventory and $0.6 million decrease in prepaid expenses.

Current liabilities decreased

$0.7 million at June 30, 2025 compared to December 31, 2024, primarily due to a $1.5 million decrease in accounts payable offset by $0.8

million increase in accrued expenses and sales tax payable.

As a result, our working capital decreased to $9.8 million at June 30, 2025

compared to $13.8 million at December 31, 2024.

The Company has been focused

1 unchanged sentence

2021 to 2022 and 206% from 2022 to 2023.

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

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

and sales efforts have been impactful.

The Company has improved its gross profit in 2024 and will continue to in 2025, and it is expected

to improve in the future as a result of a price increases implemented late 2023 being almost fully recognized in 2025 and benefits from

The Company improved its gross profit in 2024 which has continued in 2025, and is expected to continue

to improve in the future as a result of price increases implemented late 2023 being almost fully recognized in 2025 and benefits from

cost reductions from several design changes.

5 unchanged sentences

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

The Company may be required

to raise capital to fund its operations until it achieves positive cash flow, which is predicated on increasing sales volumes and the

continuation of production cost reduction measures.

The Company may be required to

raise capital to fund its operations until it achieves positive cash flow, which is predicted by increasing sales volumes and the continuation

of production cost reduction measures.

The Company could pursue other equity or debt financing.

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.

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.

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.

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.

Management cannot currently

predict when or if it will achieve positive cash flow.

On March 22, 2023, the Company

29 unchanged sentences

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

The At Market Issuance

program generated aggregate net proceeds of $2.2 million during the six months ended June 30, 2025.

Management believes that evolution

7 unchanged sentences

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.

There is no assurance, however, as to whether

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

Off-Balance Sheet Arrangements

5 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis