10-K: Beam Global Outlines Securities and Risk Factors in Annual 10-K Filing

Sentiment:

Annual Report 16 April 2024 5:28 PM

Beam Global's 10-K filing details its authorized capital stock, outstanding securities, and potential risks, highlighting its position in the renewable energy and EV charging infrastructure market.

Capital raiseThe company may need to raise additional capital or financing to continue to execute and expand its business.The company has the right to sell up to $30.0 million or two million shares of its common stock over a period of 24 months to B. Riley pursuant to a Common Stock Purchase Agreement.The company could pursue other equity or debt financing.

Worse than expectedThe company's backlog decreased from $59.3 million in 2022 to $21.7 million in 2023.The company has a history of recurring losses and expects to incur additional losses in the future.The company identified a material weakness in its internal controls over financial reporting.

Summary

Beam Global's authorized capital stock includes 350 million shares of common stock and 10 million shares of preferred stock, with 14,438,270 common shares outstanding as of April 9, 2024.
The company has 410,745 public warrants outstanding, each exercisable for one share of common stock at $6.30 until April 18, 2024.
The document outlines anti-takeover provisions, including the ability of the board to increase or decrease the number of directors and fill vacancies without shareholder approval.
Nevada Revised Statutes regarding business combinations and control share acquisitions could discourage potential takeovers.
Beam Global's common stock and public warrants are listed on the NASDAQ Capital Market under the symbols BEEM and BEEMW, respectively.
The company's 10-K filing includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially.
Beam Global is a clean-technology company focused on renewable energy products for EV charging, energy storage, and disaster preparedness.
The company's products include the EV ARC, Solar Tree, and EV Standard, which are designed to be rapidly deployable and operate without grid connections.
Beam Global competes with traditional grid-tied EV charging solutions and companies in the solar and energy storage sectors.
The company's manufacturing facilities are located in San Diego, California; Broadview, Illinois; and Kraljevo, Serbia.
Beam Global's backlog was $21.7 million as of December 31, 2023, down from $59.3 million the previous year.
The company's revenue is concentrated in a few large customers, including the U.S. Army and the Department of Veterans Affairs.
Beam Global has experienced recurring losses since inception and expects to incur additional losses in the future.
The company's revenue increased from $22.0 million in 2022 to $67.4 million in 2023, with a gross profit of $1.2 million in 2023 compared to a $1.7 million gross loss in 2022.
The company's operating expenses were $17.5 million in 2023, compared to $18.0 million in 2022.
Beam Global had cash of $10.4 million at December 31, 2023, compared to $1.7 million at December 31, 2022.
The company has identified a material weakness in its internal controls over financial reporting related to inventory tracking and purchasing transactions.
The company acquired Amiga DOO Kraljevo in October 2023, expanding its manufacturing capabilities in Europe.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While there's strong revenue growth and a move to profitability, there are also significant risks, a decrease in backlog, and a material weakness in internal controls. The company's innovative products and strategic acquisitions are positive, but the financial challenges and risks temper the overall sentiment.

Positives

Beam Global's products are designed to be rapidly deployable and operate without grid connections, offering a unique solution in the EV charging market.
The company's proprietary energy storage solutions enhance safety and performance of batteries.
Beam Global's products provide a source of energy during grid outages, enhancing energy security.
The acquisition of Amiga expands the company's manufacturing capabilities and market reach in Europe.
The company's revenue increased significantly from $22.0 million in 2022 to $67.4 million in 2023.
Beam Global achieved a gross profit of $1.2 million in 2023, a significant improvement from the previous year's gross loss.
The company has a strong focus on innovation and developing new products, such as the EV Standard.
Beam Global has a diverse customer base, including federal, state, and local governments.
The company's products are eligible for various tax incentives, reducing costs for customers.

Negatives

Beam Global has a history of recurring losses and expects to incur additional losses in the future.
The company's revenue is concentrated in a few large customers, making it vulnerable to the loss of any of these customers.
The company's backlog decreased from $59.3 million in 2022 to $21.7 million in 2023.
Beam Global has identified a material weakness in its internal controls over financial reporting.
The company faces intense competition in the solar, EV charging, and energy storage industries.
The company's growth is dependent on the adoption of electric vehicles, which is subject to various factors beyond its control.
The company may need to raise additional capital or financing to continue to execute and expand its business.
The company's stock price may be volatile and subject to various factors beyond its control.

Risks

The company's stock price may be volatile or decline, and there is no guarantee of stock price appreciation.
Beam Global's quarterly results may fluctuate, and the company may fail to earn revenues or profits.
The company may have inadequate capital to continue or expand its business and may be unable to raise additional capital.
Reductions in demand for the company's products and services may occur due to competition, industry conditions, or technological obsolescence.
The company may face litigation or legal claims from outside parties.
Insufficient revenues may lead to persistent losses.
Rapid changes in raw material costs or currency fluctuations could impact the business.
The company's revenue is concentrated in a small number of customers, and the loss of one could significantly decrease revenue.
The company's growth is highly dependent on the adoption of electric vehicles, which may not gain broad market acceptance.
The company may fail to realize the anticipated benefits of acquisitions, such as Amiga.
The company may face difficulties in integrating Amiga with Beam and its operations.
The company may be subject to foreign currency exchange rate and other related risks due to its international operations.
The company faces intense competition from companies with greater resources.
The company is dependent on revenues from its EV ARC product, and a reduction in sales could have a material adverse effect.
Tariffs imposed on imported solar cells and modules could increase costs and restrict supply.
Defects or performance problems in the company's products could result in loss of customers and reputational damage.
The company may face product liability claims arising from defective products.
The company may be unable to keep up with advances in EV technology, leading to a decline in its competitive position.
The company may face intellectual property infringement claims.
The company depends on key personnel, and their loss could adversely impact operations.
Cyber-attacks or other breaches of information technology security could adversely impact the business.
The company may face litigation in the future.
The costs to develop and manufacture products may be higher than anticipated.
The company's products may not remain competitive in the future.
The company depends on key suppliers, and the unavailability of components could hinder operations.
New technologies may prove inappropriate or not gain market acceptance.
Existing regulations and changes to such regulations may present barriers to the purchase and use of the company's products.
The company's media branding and advertising strategy may not be profitable.
The availability of rebates, tax credits, and other financial incentives may impact the demand for the company's products.
Compliance with environmental laws and rules is required and could increase costs.
The company's cash and cash equivalents could be adversely affected if financial institutions fail.
The company's failure to meet Nasdaq listing requirements could result in delisting.
The company has identified a material weakness in its internal controls over financial reporting.
The company's stock price may be volatile.
Offers or availability for sale of a substantial number of shares of the company's common stock may cause the price to decline.

Future Outlook

The company expects the electric vehicle market to continue to experience significant growth, and believes its products are uniquely positioned to benefit from this growth. The company also expects to see significant improvement in gross profit margins in the near future due to increased demand, cost-cutting measures, and design changes. The company is also focused on expanding its geographic footprint, especially in Europe.

Management Comments

Management believes that the company's strategic growth plan will enable it to increase its user base and revenues while increasing profitability.
Management believes that the company's products are uniquely positioned to benefit from the growth in the electric vehicle market.
Management believes that the company's acquisition of Amiga will provide a strong growth opportunity for its products in the European market.
Management believes that the company's products are ideally suited to fulfill the requirements of American made products, clean energy, energy security, electrified transportation, and transportation infrastructure.
Management believes that the company's scalability and rapid deployment will create a significant advantage for its products and its position in the market.
Management believes that the company's products are a highly robust and secure source of power for EVs and provide a hedge against grid failures.

Industry Context

This announcement comes at a time of rapid growth in the electric vehicle market and increasing demand for EV charging infrastructure. Beam Global's focus on off-grid, renewable energy solutions positions it well to capitalize on the need for rapidly deployable and reliable charging infrastructure, especially in areas where grid connections are difficult or expensive. The acquisition of Amiga also aligns with the trend of companies expanding their manufacturing capabilities and market reach in the growing European EV market.

Comparison to Industry Standards

Beam Global's approach of providing off-grid, renewable energy-powered EV charging solutions differentiates it from many competitors that rely on traditional grid-tied infrastructure.
Unlike companies like ChargePoint and Blink that focus on EV charging services and hardware, Beam Global provides the infrastructure to support these services.
While companies like iSun offer off-grid charging solutions, Beam Global's products are transportable, have solar tracking, and do not require permitting, construction, or electrical work for installation.
Compared to EV Sheltron's container-based solutions, Beam Global's products do not reduce available parking space and are designed to withstand harsh environmental conditions.
Beam Global's products offer a lower total cost of ownership due to their renewable energy source, eliminating ongoing utility bills.
The company's ability to operate during blackouts and brownouts provides a significant advantage over grid-tied solutions.
Beam Global's patented BeamTrak sun tracking technology provides a competitive edge by generating up to 25% more electricity than fixed arrays.
The company's focus on energy security and disaster preparedness aligns with the increasing need for resilient infrastructure.
Beam Global's acquisition of Amiga is a strategic move to expand its manufacturing capabilities and market reach in Europe, a key market for electric vehicles.
The company's gross profit margin improvement from a loss in 2022 to a profit in 2023 indicates progress in its financial performance.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Internal Controls	The company identified a material weakness in its internal controls over financial reporting related to inventory tracking and purchasing transactions and the implementation of the NetSuite ERP system.	2023-12-31	The company is working to remediate the material weakness by implementing the NetSuite ERP system and establishing appropriate procedures for change management and documentation of reviews and approvals.

Legal Proceedings

As of December 31, 2023, and the date of this report, the Company is not involved in any material litigation matters.

Related Party Transactions

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

Stakeholder Impact

Shareholders face risks related to stock price volatility, potential dilution, and the company's ability to achieve profitability.
Employees may be impacted by the company's financial performance and any potential restructuring or cost-cutting measures.
Customers may benefit from the company's innovative products and solutions, but may also be affected by any product defects or performance issues.
Suppliers may be impacted by the company's financial performance and any changes in its purchasing practices.
Creditors face risks related to the company's ability to repay its debts.

Next Steps

The company intends to continue to develop and innovate new products and build a strong IP portfolio.
The company plans to increase marketing efforts to educate potential customers.
The company aims to expand its geographic footprint and customer base, especially in Europe.
The company intends to increase its gross margins by increasing production volumes, improving operating efficiencies, and reducing the cost of materials and production.
The company plans to increase leverage of outsourcing as its manufacturing process scales.
The company will continue to educate potential customers regarding federal and other government grants, investment tax credits, and other incentives available to its customers.
The company will continue to capture market share of the electrified personal and public transportation space.
The company will continue to develop and innovate new products and build a strong IP portfolio.
The company will continue to implement its NetSuite ERP system to automate operations and accounting.

Key Dates

Date	Description
2006-06-12	Beam Global was formed.
2011-08-10	Date of the 2011 Stock Incentive Plan.
2016-01-15	Effective date of Promissory Note for Deferred Compensation of Desmond Wheatley.
2017-09-18	Date of Security Agreement Purchase Order Financing and Convertible Secured Promissory Note.
2018-08-27	Date of Promissory Note and Securities Purchase Agreement for bridge loan.
2018-12-01	Date of Amendment to Promissory Note with SFE VCF, LLC.
2019-07-12	Date of Offer letter to Katherine H. McDermott.
2019-12-31	Patent issued for EV Standard.
2020-09-15	Envision Solar International, Inc. rebranded to Beam Global.
2020-11-24	Patent issued for UAV ARC.
2020-11-01	Effective date of GSA Multiple Award Schedule contract.
2021-06-09	Date of the 2021 Beam Global Equity Incentive Plan.
2022-02-16	Date of Asset Purchase Agreement with All Cell Technologies, LLC.
2022-03-04	Beam Global acquired substantially all the assets of All Cell Technologies, LLC.
2022-04-26	Effective date of GSA Blanket Purchase Agreement.
2022-09-02	Date of Common Stock Purchase Agreement and Registration Rights Agreement with B. Riley.
2023-06-12	Date of Binding Letter of Intent Agreement.
2023-10-06	Date of Share Sale and Purchase Agreement with Amiga DOO Kraljevo.
2023-10-20	Beam Global acquired Amiga DOO Kraljevo.
2023-11-15	Date of Offer Letter to Lisa Potok.
2023-12-01	Effective date of the Executive Officer Clawback Policy.
2023-12-31	End of fiscal year 2023.
2024-04-09	Date of outstanding common stock count.
2024-04-16	Date of the audit report.
2024-04-18	Expiration date of public warrants.

Keywords

EV charging, renewable energy, energy storage, solar power, electric vehicles, EV ARC, Solar Tree, EV Standard, warrants, NASDAQ, Amiga, 10-K, financial report, risk factors, internal controls

Disclaimer:The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.