Q4 2020 Beam Global Earnings Call

[music].

Good afternoon, and welcome to the beam global 2020 year and financial results and corporate update conference call all participants will be in listen only mode.

Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Please note. This event is being recorded I would now like to turn the conference over to Kathy Mcdermott Chief Financial Officer. Please go ahead.

Thank you good afternoon, and thank you for participating and participating in today's fiscal 2020 Conference call. We appreciate your support and interest and beam global and for taking the time to join our call first I did want to mention that on the SEC website is down right now so the filing will be delayed but youll.

It should be able to see the 10-K as soon as it back up and running.

Joining me today is definitely weak president and CEO and chairman of beam definitely will be sharing his thoughts and observations about the recent <unk> 2020 fiscal year and his perspective on the business.

But first I'd like to communicate to you that during this call management will be making forward looking statements, including statements that address beans expectations for future performance or operational results forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements for more information about these risks please.

Prior to the risk factors described and beam. Most recent filed periodic report on form 10-K, and most recent and any other periodic reports filed with the SEC.

The content of this call contains time sensitive information that is accurate only as of today March 30th 2021 except as required by law beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.

I would now like to take you through the financial results for the fiscal year ended December 30th 2020.

For the year ended December 31st 2020, we reported record revenues of 6 million and 210, $3 50, compared to 5 million and 111545 and fiscal 2019 and increase of 21% driven by a strong fourth fiscal quarter and.

Fourth quarter revenues were 2 million 200007 O six.

Compared to 495876, and the fourth quarter of 2019.

Revenue growth was driven by shipments to California customers, including the deployment of 29 units to Electrify America.

During fiscal 2020, we diversified our customer base compared to fiscal 2019, selling to various municipalities colleges utilities and federal agencies and.

We also diversified our product offering with sales of our ETR Twenty-twenty R. E. D. R. D C fast charging units and I solar tree D. C F C product.

And as of December 31, 2020, our contracted backlog was approximately $1 1 million.

The gross loss in fiscal 'twenty, and 'twenty with 710009, and 74 compared to 153007 and 74 during fiscal 2019.

Gross loss and the fourth quarter of 2020 was 537937 compared to 503000 or 53 in the fourth quarter of 2019.

The increase in gross loss was primarily due to initial increase in costs for the new E. D. R. 2020 unit that was launched at the end of 2019.

As we experienced with the original Edr and we expect that the operations and engineering teams will be able to improve the production process and to reduce material costs over time.

And so deployment costs were higher during 2020, because we launched our arc mobility trail are designed for the E. P. Our 2020 product late in 2020, so we weren't able to take advantage of lower cost deployment.

So as we increase our revenues, we expect to benefit from lower manufacturing costs, resulting from purchases and labor efficiencies.

Well, it's and increased fixed the fixed overhead absorption and.

In addition, we're seeing lower costs and our industry for items, such as batteries and solar modules, which we integrate into our products.

Operating expenses were 4 million, four and $96 60, and fiscal 2020 compared to 3 million and 117793 and fiscal 2019.

Operating expenses and the fourth quarter of 'twenty, 'twenty 1 million and 799 to 42 compared to 891126 and the same period of 2019.

The increase and told your operating expenses was primarily due to a 776627 increase and noncash stock based compensation expense due to the increase and stock price and the fourth quarter of 'twenty, and 'twenty, which affected the valuation of new grants.

We also increased our investment and sales and marketing expenses by 518275, which included sales staff public relations firm government consultants and other resources to help increase our revenues.

The net loss was 5 million to 13 O 25 for the 2020 fiscal year compared to 3 million 933, nine and 22 for the 2019 fiscal year.

The three months ended December 31st 2020, and net loss was 2 million 336, 524 compared to 1 million 390, Oh 54 for the same period and the prior year. This increased loss was primarily attributable to the increase in gross loss and increased operating expenses.

At December 31, 2020, we had cash of $26 million seven O. Two eight O four compared to 3 million 849, and 456 at December 31, 2019, and increase of 22 million a 53 348.

The increase resulted from proceeds of $17 4 million from two public offering net of operating expenses and $9 9 million from the exercise of warrants and the PA.

Golfing in 2019 and from early private investors.

On our working capital increased from 5 million, one and 42 719 to 28 million 163 320.

From December 31, 2019, due December 31 2020.

And with that I'll turn the call over two dozen.

Gotcha.

Thank you Stasi and us.

And in Q2, all of you who have joined US for this call and.

For your support and interest on the company.

And a lot to accomplish and I'm going to go fast and hard here.

122 was a challenge and you for everyone.

Beam are not immune to the pandemic all the effects on the U.

And the global economy, and I'm proud to say that the beam team when faced with these challenges was not found wanting.

We generated record revenues and increased our customer base and geographic reach.

And our balance sheet and on our IP portfolio and executed well and I believe to be two of the most important contracts and our history.

First being the San Diego Media network contract and the second being and federal GSA Multiple award contract.

We also closed on other state wide contract this time, with Florida, and renewed and expanded our California contract.

As Kathy just noticed noted we increased our revenues by 22%, even and a year, where our customers were subject of Lockdowns and working from home.

2020 was the highest revenue year and our history.

We added many new customers to our portfolio some large some small some government and enterprise since.

Since the beginning of the fourth quarter, we deployed product and sourcing cities across six states.

And all it was an excellent mix and contributed to an ever growing install base, which we believe will only lead to increased sales and the future.

We continue to go on intellectual property portfolio with an important new part and awarded for our U a V or drone recharging product on the Newport and pending for our wireless EV charging system.

We broadly deployed our brand new E V O 2020 model and installed the first of our smart solar tree DC fast charging solutions for medium and heavy duty vehicles.

We performed a complete rebranding of the company moving to a new and exciting Brian beam Global and you look and new logo and website you videos, you sales collateral and new marketing materials, all far superior to those who had been using before.

2020 was the euro and which we were finally able to close our forest city contract for the world's force driving on Sunshine network, which will be funded through a small ship and naming rights program.

And I believe it will be the first of many.

This new contract with San Diego and means the initiation and a very real sense of our media business unit, a unit, which I believe will generate a significant increase and high gross profit recurring revenues.

We've partnered with expert resources to try and sponsors to this network and I believe that our offering and timing could not be better.

The branding and naming rights opportunities offered by the highly visible driving on Sunshine networks, coupled with significant C. O two and all the pollution offsets maybe at a timely compelling and unique opportunity for any large corporation, who wishes to associate it with so with sustainability, while reducing its carbon impact.

Government tailwind supporting our industry will only strengthen during 2020 more nations made commitments to the end of internal combustion engine vehicles here in the United States, We saw California, and obviously outright ban on the sale of gas and diesel vehicles 14 short years from now and 22 five.

Other states are central and suite for example, Washington is on non California with a commitment to do the same by 'twenty two.

Same time, and new administration in Washington D. C. As returns you asked on the Paris accord and been very public commitments and the electrification of transportation clean energy energy security and the refurbishment of America's infrastructure.

Believe that our products and the contracts we have in place are ideally positioned to take advantage of these trends.

While there was a general and across the board decline and the sale of internal combustion engine vehicles. During 2020 electric vehicles defied expectations during the pandemic and continue to grow and sales.

A variety of contributors and led to the school not least of which was the people and polluted cities across the world for the first time experience clean air due to a reduction and miles driven by caused by the pandemic.

It seems to have been a widespread global awakening to all matters pertaining to climate and energy security.

That's all from awakening can only spell increased opportunity for being global and our products.

The weakening was not just consumer and government base, but also clearly impacted trading on the stock market, where we saw electric vehicles start performing very well and the second half Beanstalk was no exception.

And one of the results of this depreciation and our share price was that many of the warrants which were issued during our 2019 public offering exercise during 2020.

This addition of non dilutive capital received without associated banking fees contributed to our having the strongest balance sheet and our history.

We currently have almost $30 million of operating and capital no debt and several new and important institutional investors and a general increase in liquidity on our shares.

I continue to be engaged and communicating our story to the investment community on them.

Able to meet face to face with investors and prospective customers and 2020, we instituted a series and virtual tours through our factory.

Those stores were always oversubscribed and led to a significant increase and understanding of our business model business practices and the products that we manufacture and ship to customers across the country.

I've, often said that the biggest barrier to our success has been a lack of understanding of our products and our place in the markets that we target.

These virtual tours went a long way towards correcting that at least for the audience who participated and.

And we received nothing but very positive feedback from each of those events and plan to continue them, even post pandemic when I'm able to travel again, because they are so valuable and inexpensive.

Another exciting and groundbreaking force for US and 2020 was our rule and the world's first flying on Sunshine test flight of our production aircraft.

Aviation has not been and area of focus for us except to the design and patenting of are you a VR product. However, there are over 20000 day airports and the United States and we believe that the electrification of aviation will continue a pace because of the fantastic benefits that come with flying electric aircraft.

It costs about $40 an hour to keep assessing it and there are some.

<unk> electric airplanes, and talking about $4, an hour and even last one powered by our innovative products and.

Ph and gets a lot and negative crush spreads carbon footprint, and we anticipate ever increasing pressure on the governmental level to reduce pollution from aviation.

Increasing governmental pressure often leads to increase and government funding and as all pulled out from so ideally suited to deployment and airport environments, where it's very difficult to dig up the flight line and one trenching and cabling associated with traditional charging infrastructure. We do believe that this force test flight is merely act one scene, one and a much larger program, which will start to develop in 2020 one.

But what this test like really showed is that we were on the right place at the right time on.

And the products are able to charge any type of electric vehicle with any type of charge or whether it's one wheel to wheel sport wheels, 18 wheels, six wolters and the case of a draw on or even to fixed wings.

Being able to charge any type of electric vehicle with Andy and Brian and service provider of electric vehicle charging stations. It means that our Tam or total addressable market is equal to all other companies in this space and put together.

Goldman Sachs calls this a six trillion dollar infrastructure play out.

Our products and provide solutions for many of the key challenges faced by the electrification of transportation.

We also continued in 2020 to strengthen our team with the addition of two leadership positions and product development and engineering is a key differentiator for us and with that in mind. We added a director of engineering to pursue continued product development for our new offerings and value engineering, and our existing portfolio to improve quality and reduce costs and.

And last month alone we've been on so 12% increase and the energy output of our flagship <unk> product without increasing the sales price.

As part of our never ending and efforts to increase efficiency reduce costs and improve deployment velocity, we added a new and highly qualified director of operations.

Both of these leaders have many years of experience, which are absolutely germane to what we're doing and we've already seen significant improvements as a result of their efforts.

Expansion of our team is not limited to these two hires as we added more salespeople during 2020 and line with commitments, which I've been making for some time to increase our sales and marketing presence.

This year, we've extended that increase to the vital benefit delivered by our products to government agencies both.

Both at state and federal level.

Decisions are being made and Washington at the moment, which will govern the spending and bus sums of money direct to their transportation and energy infrastructure.

We have made in America shovel ready clean energy and energy security products ready to meet the demands of the spending plans.

We have room and our facility for 'twenty ex rules and the balance sheet to support it.

We've hired a full time and government relations expert with years of experience and Washington D C and Sacramento.

Currently and the process of vetting D C based consultants, who have the relationships and knowhow to ensure that beam global products are front and center when there's been spending decisions are being made.

Focusing for a moment on our 2020 revenues. It's first important to understand that we achieved record revenues during a year and which one of our largest previous contributors to revenue almost evaporated.

Not surprisingly during the year, what you've seen most people not going to the office, we've seen a precipitous decline in orders for workplace charging.

Even absent these items significant contributor and opportunities we were able to beat our previous record years revenue and increased by 22% our year over year results. We also had record fourth quarter product deliveries and record fourth quarter revenue.

I think it speaks very powerfully to the post pandemic opportunity for beam and its products we.

We do not believe that the workplace opportunities, which will cause bone loss and you were lost and food.

But post vaccine, we anticipate a return to the office and with it and renewed requirement for electric vehicle charging infrastructure. So workplace charging opportunities are now contributing to pent up demand, which will have to be mapped and the second half of this year.

Pent up demand is good news for us because it often means that people seek a rapid solution and of course, we have the fastest deployed most scalable least disruptive lowest total cost of ownership EV charging infrastructure solution available to date.

I believe that when people were charged the office later this year there'll be a significant uptick and the demand for EV charging infrastructure and all.

Because of the increase and the availability of attractive new E beam, which employees are going to want to own and drive to the office.

And if they do that just one day, a week and requirement for EV charging and remains the same as if and when they were all five days as a result, we expect a significant increase and the demand for our products from workplace charging which has and prior year's contributed as much as hot from a revenue.

While this reduction and workplace surely meant a return to a much higher percentage of government deployments during the pandemic I'm happy to point out that the mixture of new customers are still very healthy actually in 2020. Our largest single order did not come from a government entity, but instead came from Electrify America, which is of course on units and Volkswagen North America.

Electrify America is one of the top installers of EV charging infrastructure and we're very happy to have them as a customer.

We deployed 30 units for them and Central California, and we look forward to furthering and expanding our relationship with them.

Even though our government customer mix suggests increasing health and success and our customer acquisition process. We.

We had deployments from the first time, and Georgia, Kansas, North Carolina, Texas, and Utah and also from the first time, we ship north of the border to Canada.

Since the beginning of Q4, we've deployed and <unk> safety and across six states many of the new environments for us.

2020 was a year, which municipalities still from numerically the largest customer segment for US. However, we also sold to federal and state government entities and utilities, often described as competition, but in fact and important and growing customer segment for us as well as universities and enterprise.

And Reuben 19th I was and municipalities and the United States. It's all surprising that they put on such a big piece of business for us, but they all only one tiny segment of the broader market, which lays in front of us.

In November of 'twenty, and 'twenty after eight months of hard work and due diligence and federal government issued us a GSA multiple award schedule contract.

This means that any federal agency can buy our products when I went through a competitive process financially and also without doing any technology vaccine.

We've sold to federal entities, and the Pos and I can tell you that and of course that wasn't trivial vetting and competitive purchasing was time consuming and complex.

And this new contract, we should that'd be able to attract federal customers spanning all agencies, including the military and show them and easy way to buy the most easily deployed made in America EV charging infrastructure solution available.

The federal government is the world's largest consumer of gasoline on the by the administration has recently issued a commitment to electrify all 645000 vehicles and the federal fleet.

This will necessarily make the federal government one of the largest employers and electric vehicle charging infrastructure and the world.

And the administration has also committed to favor and clean energy secure energy on a bubble U S made products. When you think about it our products are almost a fairytale solution from the bite and administration from maiden America to provide clean and secure energy, which is immune to blackouts, the form and important part flat and transportation infrastructure improvements and they all for a speedy and highly scalable and.

Reliable way to create the type of EV charging infrastructure that will be absolutely necessary in order for the federal government to meet that schools are electrifying at sleep on.

And believe that our timing and securing this GSA contract is propitious and I look forward to our sales team and consultants aggressively pursuing parallel opportunities as the new administration's plans take shape.

You may have read that President license also buys and has also committed to the deployment of 500000 DC fast charging stations across America sideways and we have an excellent DC fast charging solutions and fulfill this goal we've learned and deploying our ABR DC fast charging station solutions for Caltrans and California, the tremendous value of non.

Having to extend grid connections and all the construction and electrical work that goes along with that to locations like rest areas.

You'd be on D. C fast charging solutions generate significantly more revenue for us and our standard D. Var systems, because they are packed full of more technology and more energy storage and.

In fact, the DC fast charging systems that we've deployed and California, each sell for approximately half a million dollars.

If we went to deploy just 40 of those DC fast charging solutions across America's highways, and sports and President bite and school, we generate approximately $20 million and profitable revenue, while still leaving another 490960, DC fast chargers for other to others to deploy.

And of course, we intend to go out from much bigger parts of the pie than that but just looking at this one small part one single described opportunity should help you to see why I'm. So excited about the future and a bunch of opportunity now that we have this federal multiple award schedule and purchasing contract in place.

I believe that we're looking at a complete paradigm shifting the administration's intentions were funding of electric vehicle charging infrastructure is concerned and factor all the language and intentions and I've seen and heard coming out of Washington D. C. Lead me to believe that we will see more spending annually towards our industry and we've seen and the entire last 10 years.

So the federal opportunity is very significant and as I've already stated I think we're very well positioned to take advantage of it with our made in America products that aggressive clean energy energy security and EV charging infrastructure and then for now and listened on the federal GSA contract.

But federal opportunities are by no means the only wins on our horizon and for.

Our pipeline is more volume, but bigger than it's ever been and our history, we have over $14 million worth of opportunities and entered into a pipeline report today almost 9 million of those are and the 17 to 19, 9% chance of closing bracket and we're very conservative about how we list goes on.

About 36% of these opportunities come from enterprise contracts, while the remainder of from various branches of government.

Just last week completed we completed a new agreement with Electrify America to deploy our products for a major automotive OEM and a variety of locations across the United States.

And the next few days, we anticipate receiving the largest order for our products place to date and the state of California.

All of the indicators from both government and business point to a very strong in 2020 one for us to be clear. Our pipeline report does not include any revenue from our media funded network that would be upside.

Our current backlog includes a repeat order from the city of New York still on largest municipal customer, they're particularly interested and R. E V. O 2020, because it's fun Tonight and our feet we.

We believe that this improvement to our new UV off product line will not only be attractive to the city of New York, but to anybody else and flood prone regions.

Even California's capsule Sacramento was only a few peach above sea level and as we see it continuing rise and extreme weather events and sea levels, we believe that the value of and electrical infrastructure products, which can survive inundations and almost 10 feet will become increasingly arent, particularly as we electrify transportation.

And sort of from New York City, and will likely be the last that we receive on the current contract vehicle, which expires this year we.

We believe that New York May release, a new request for proposals directed a transportable off grid zero construction zero electrical work and perhaps and I slept for EV charging infrastructure products that will continue to work joined blackouts and other grid failures and also provide a source of emergency power to first responders and others, who may need it as far as I'm aware, we're still the only company and the world.

Who produces a product which can fulfill these requirements, while fishing inside a standard legal size parking space and not reducing available parking and anyway.

We have good patents and IP protection to maintain that position.

And neither on the New York doesn't really such an RFP and we look forward very much to responding to it I'm confident in new York's experience with our new floods with PBR products will not be a disappointment to them has all the qualities of the previous generation and review our systems from which they have issued multiple purchase orders across the years, but its superior and so many ways and probably a more attractive product.

Yeah.

Our products ability to operate during grid failures is taking on increasing importance amongst those decision makers book and government and incorporations.

And as more and more electric vehicles hit and the roads the negative impacts of grid failures will become much more serious.

The United States, that's a strategic petroleum reserve to ensure that we never run out of diesel or gasoline.

There is no strategic electric resort in fact, we're already at or near capacity in many markets, particularly those markets that have the highest electric vehicle adoption rates last.

Last year, California, and multiple blackouts as high temperatures caused people to turn on the air conditioning on the utilities frequently resorted to Pee Sps or public safety power shutoff and tons of high wind to prevent wildfires.

Certainly not unusual from New York City to a blackout, so Brian and the dog days of August and.

And the recent events of Texas demonstrate that these events are not restricted to the coast, but that in fact any part of the U S spring as vulnerable to failures caused by natural events, while precipitated by states are individuals who do not have our best interests at heart.

Our products are immune to grid failures and continue to operate even and very severe weather conditions.

We're deployed from the office.

And that's what's and Nevada, and Snowy environments, like Buffalo, New York, and and horror control and conditions and the U S margin items.

Our products provide that strategic electric reserve that will be so badly needed as a reliance on electricity as a transportation fuel increases.

We've absorbed and this is being increasingly understood by those and government and business, whose job is just a direct funds towards EV charging infrastructure. We view this as another major opportunity moving forward.

One very good example of the disaster preparedness with E V. At delivers was demonstrated last year during the height of Covid when one of our municipal customers moved their E mail systems to power Covid emergency testing centers and E beam, which visited them.

No other EV charging infrastructure product could provide such service.

2021 it looks like a year, which would be full of opportunities for us to sell our products and federal state local and municipal and government entities as they electrify their fleets and seek clean secure robust rapidly deployed and highly scalable American product solutions for the opportunities and.

Anyways I'm more excited by what I consider it to be and even greater opportunity.

2021 will also be the year, and which electric vehicles moved from being the domain of elite Tesla drivers and first adopters of clean technology and to a new era, where the average U S. Consumer is confronted with an expanded portfolio and the types of electric vehicles, which I believe they will snap up enthusiastically.

Americans like to drive pickup trucks and sport utility vehicles and this year from the very first time, we'll have a whole host of electric choices from which to pick.

The electric vehicles will be superior and every way.

General Motors has joined many other Oems and announcing a switch to an entirely electric portfolio by 20 to 35 and it also drives the introduction of a new home or product to replace the previous gasoline and diesel models.

Electric Hummer will boost 1000 horsepower and zero to 60 pace of around three seconds contrast that with the previous model 300 horsepower on something like 12 seconds to get to the same speed.

And what can actually come from the Ford F 150 top selling vehicle in United States and top selling pickup truck from 42 years and a rule.

This time next year, you'll be able to select and all electric version of the F 150, which will have all the tooling and carrying capacity of the current models, but which will never need to go to a gas station require almost no maintenance and again accelerate from zero to 60 and around three seconds and it's just impossible for me to imagine U S consumers going to a dealership and selecting the old slower less.

On to dry gas or diesel models electric vehicles are just gadgets on wheels. The coolest gadgets you can never get your hands on in fact consumers love gadgets and I believe that they will adopt electric vehicles with Augusta, which will outstrip all of the aspirations of government and all the expectations of the experts who are forecasting electric vehicle penetration over the next couple of decades.

This rapid and wholesale adoption of electric vehicles will I believe resulting and equally rapid and wholesale requirement for EV charging infrastructure and consumers are typically very impatient and will not want to wait while EV charging networks are built out.

And I do not believe that the lack of charging infrastructure will result in a slowing of consumer adoption of these magnificent new products and by the <unk>.

Other side of the supply and demand equation will has to be fixed charging infrastructure will have to be deployed much more quickly and much more scalable and will not be able to rely upon the traditional methods of drawing on construction and electrical infrastructure deployments, there's never been a time and history when the demand for electrical catastrophe capacity and infrastructure has been so acute and so mass.

Yeah.

All of this bodes very well for beam because we have the world's fastest deployed most scalable most robust and lowest total cost of ownership charging infrastructure product. We don't compete with any of the existing EV charging companies, we support them all our products and leave our factory with charge point blank and nail Electrify America and other charges from integrated.

So that they can be deployed at scale rapidly and without the requirement for any construction or electrical work and without risk from grid failures and without ever generating a utility bill.

No matter, which charging company succeeds and no matter what technology to build into their EV Chargers and they will all require a source of electricity and a location where people want to park their cars and they'll need a secure mounting asset to which they can fix and we'd be charging products.

Our products, whether they be on the solar tree or the coming E beam standard will provide that source of energy and the mounting asset to any and all of them.

Our current and 52000 square foot facility and San Diego, California staff to operate one shift five days a week.

That way, we can produce about 260 units a year for approximately 17 million and annual revenue.

The results of our growth analysis shows that we could produce 2200 units per year from this factory by moving to three shifts seven days, a week and making other changes.

And I believe we're gonna have to do that and in fact, I don't believe it will be anywhere near enough capacity to satisfy the demand which is coming if we do do that.

The city of Los Angeles was recently and that's a requirement for some 84000 publicly available charged from the next few years there are around 20 million cars and the states of California. According to the Governor's office.

Using and industry ratio of 521, we can see that California will need approximately 4 million publicly available EV Chargers and order to meet its 2035 goals of banning the sale of diesel and gasoline vehicles. Even if we built 10 factories, we wouldn't come close to meet and California's requirements, but we will try.

This is not just the California opportunity, it's on all of the U S opportunity and in fact, the global opportunity our products were anywhere they can see the sky and we intend to take advantage of the opportunities across the United States and internationally, we're not cone beam, San Diego, a beam and California, or even being United States would've called being global and for a reason.

This is a global opportunity and we intend to go after it.

All of this opportunity and growth is very good news for our profitability.

Like any product development company and for that matter and manufacturing company. Our cost structure is highly dependent upon the volume of products that we run through our force our facility.

And the early stages of releasing a product our cost tend to be much higher than they'd become as our processes mature our efficiencies increase and our team becomes used to producing the products. We certainly saw that with the previous generation and B B R, which went through a dramatic reduction and cost of it and we matured.

Increased sales volumes of several other impacts on profitability as well.

First the more product we run through our facility the less each product sales was burdened by our fixed overhead costs, such as rents insurance and underutilized labor.

And as I've already mentioned, we were operating in a factory that was about 20 actually for growth current low volumes of sales has to pay for that room for growth and as a result, our gross profit so much lower than they will be when we increase throughput volume also increases our efficiencies, particularly where labor is concerned.

And then there were cost reductions, which come from increased order volume from our vendors and more batteries and solar module steel water and other components. Good policies, we buy cheaper they get.

Were fortunate and that we also have some on the market forces, which will contribute to dramatic decreases and the cost of the components, which we integrate into our and called US for example, battery sales, which are the largest single cost contributed to our bill of materials have dropped and cost precipitously. Since we first started producing EBITDA loss.

And we anticipate at least a fourfold further reduction on the price we are paying and the coming years.

The combination of all these factors provided me with a storm based on evidence to target at 50% and gross profit when we reach scale.

And in 2020, one our engineering and operations teams will identify certain sub assemblies and components currently manufactured laboriously and house, which we will outsource to contract manufacturing companies. We believe that this will simultaneously reduce our costs and increase our throughput without sacrificing the high level of quality wish we demand from our in high school assesses.

Gross profitability in 2021 will I believe be greatly improved over 2020.

This process of engineering refinements and cost reductions is ongoing for us even as we perfect. The EV, Arkansas or treat our engineering team will move its attention to the <unk> standard and then the UAV Oct after that call.

And technological improvement is a major differentiator for us.

While we were able to make our products less expensive and more productive our competition will be faced with increasing complexities and cost as they dig trenches pour concrete and pool tables ever further distances.

Our cost of electricity will never increase while the cost of grid provided electricity always has.

The capacity of renewable energy will never be exhausted all the capacity on the utility grid will be insufficient to meet the growing needs and electric vehicle charging.

We are future proofed and ways, which traditional grid connected infrastructure cannot be.

In closing let.

And let me summarize where beam is today.

We just generated record revenues during one of the most challenging years and history.

We've closed contracts with government and enterprise customers, which have the potential to deliver on our biggest wins yet.

We have a contract with the first major city to deploy our media funded recurring revenue driving on Sunshine network.

We have the largest and most active high probability pipeline and our history with new and repeat orders.

We have a robust and growing IP portfolio, which creates a barrier to entry from the competition.

We have a strong balance sheet, no debt and and active and liquid stock.

We have a talented team that's proven its ability to execute on.

All of this at a time when the indicators suggest that our targeted markets are poised for significant and rapid growth.

There has never been a Bachelor time to be doing what we're doing.

Now that concludes my comments, thank you very much.

We'll move to questions.

We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad. If you were using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two on.

Our first question comes from Greg Lewis with B T. I G. Please go ahead.

Yes. Thank.

Thank you and good afternoon, and Kathy and Desmond and.

And thanks for all your comments.

Clearly, there's a lot of a lot to cover I guess I'd start if you could talk a little bit about the the deployment and Kansas and Ed mentioned Hum.

Federal money that was part of that grant and the and that project.

Is there any any any way to kind of clear or talk about the amount of those grants and kind of as we think about opportunities and this year are there other types of similar targets were.

On the federal grants are just going to maybe push forward some demand from some of these.

Entities.

Yes, Hello, Greg and body weight and yes, I think this this actually this congress opportunity and the way it was executed as just a poor taste and a lot more similar activity to come.

What we have definitely seen and heard coming out of D. C is that very large sums of money are going to be made available from electrification of transportation. It's one of the few things that both sides of the aisle can agree upon and.

And interestingly the monies will not necessarily be spent directly through the through federal programs. Although certainly a lot of them will be and that's why it's so important to us to have this GSA contract in place, but what they're talking about is actually providing granted money through local and municipal governments and even Greg do enterprise, so that corporations and others.

We will be encouraged to deploy more electric vehicle charging infrastructure.

And of course and tend to go after all of those buckets and it's as I said, because we are sort of agnostic as to the provider of the EV charging station or service provider and.

And in fact, competing with general contractors, electrical contractors, and permitting and experts and and all the other stuff the ecosystem and providers that you would normally have to get to a grid tied charged on and Greg and the time and expense and risk associated with that.

We feel that we're in a very good position to take advantage of it was either directly with federal spend or through federal dollars, which are directed to state or local governments or as I said even through enterprise.

Okay, Great and then just if you could I thought it was interesting that you were able to improve the efficiency of the E. V. R. Could you talk a little bit about you know.

What was the driver of those efficiency gains and and I mean, I guess with the new hire that's focused on technology and engineering.

It sounds like it's a safe bet to assume that the Ark is only going and get more efficient from here.

I certainly believe it will it's like any other technology offering I mean, any one of us that's ever owned a laptop or a flat screen TV or anything else knows what this is all about right. I mean, there are going to be improvements year after year months after months week after week.

Great News for US is that our engineering team is pushing those and most of these wins were driven.

And I engineering improvements and ice, but also we're getting to benefit from the improvement and the and many of the sort of off the shelf commodities that we deploy solar modules are becoming more powerful batteries are becoming more energy dense and more reliable even as the cost of these things are reduced and so what happens here is that we get.

And opportunity to increase the productivity the power and efficiency of our product and often without actually investing and those improvements ourselves I don't see that ever ending at least not in my lifetime and as I say that what's really important for this about this for me not so much the 12%, although that's great because remember that that translates to 12%.

More electric miles delivered into vehicles each day from a single solar powered parking space, but actually the really important thing from me is more from a macro point of view as I look at the broader industry and I think to myself, hey, if I'm installing traditional grid tied EV charging the low hanging fruit opportunities are being plugged in other words, the places where you can do.

And EV charger close to an existing grid connection those are being snapped up rapidly and appropriately while they eat by the traditional grid tie charging.

Efforts those will go away and.

As they go away it will only become more expensive and more complicated to install grid tie charging further and further away from the nearest grid connection and then beyond that there simply isn't enough capacity on the grid to support all of this electrification at the very same time as our competitors costs and their complexities are going to go up dramatically.

And I believe in the coming up.

Months quarters and years, our costs will continue to be reduced through increased volumes and efficiencies and our products will get better and better and that is just technology facing off against and old kind of.

Date processes, and what happens your laptop gets better and better but you know I'd never does.

Okay, Great and then just one more from me on the sponsorship realizing that.

You want to tell us as soon as you have something to tell us once theres, a sponsorship and place, but but beyond that as I think about opportunities and other cities I know and in previous comments.

Other cities.

And are reaching out to San Diego and.

Is this something where we could start to see.

I guess as I think about the event path here should we think about our sponsorship being in place for San Diego before we hear about potentially other cities, where we could.

The sponsorship opportunity could be a solution for them.

And so that's a really good question and a lot of that is actually going to be driven by the the first sponsors that we bring in and also by the the extra entities that we have engaged and attracting those sponsored by that and why you were just so to be clear so that doesn't sound too big and we are.

Actively engaged with people, who do nothing but sell these types of sponsorship activities to transportation.

Stadiums and and all sorts of other things. So there's just nobody else Batra are qualified to do this.

And there they're essentially performance page two so they wouldn't be doing this had been and believe they can get this deal done.

So some of it will be driven by the types of sponsors and and then some of it will also just be driven by where we put our emphasis at the moment, obviously I kind of got sponsor quick enough that you know that.

And if it happened yesterday it wouldn't be soon enough from me.

So that's definitely where our main area of focus is in the meantime, the city's arent going away and Theres nothing to replace what we're offering them and there just isn't another solution like that so I suppose you could say, we feel a little bit less urgency about closing other cities and more about getting the sponsors.

Because we know that the sponsorship is the thing that drives the revenue. It's also the catalytic event that that many people and the markets have been looking for but also because we know that the other opportunities don't go away, even if we don't spend so much time and attention on them.

Okay perfect. Thank you very much for the time.

Thank you grant.

The next question is from Tate Sullivan with Maxim Group. Please go ahead.

Hi, Thank you Hi, Hi doesn't I think he mentioned electric up by America, and your prepared remarks and expanded our new agreement with the auto Oems or how how would it work with and with Electrify America acting as a conduit to and ottaway ODM or did I hear that correctly.

And you heard correctly and by the way.

And so so.

Obviously, the best partners, we have a.

Right.

Renewed agreement with Electrify America, and all chest and expanded scope of work over that which we had with them before which was specifically for their own.

Electrify net.

They electrify net American network.

Where were you know.

And not necessarily control and control of the media messaging around whats going on there, but yes. We are we are engaged with them Electrify America to do further deployments.

The planned and slated across the United States, but under a different scope of work.

Okay. Thank you and you also mentioned a large order from California, but that is not.

Our sponsorship order, it's it's something separate from either a state organization or the GSA is that can you go into more detail there.

Yeah, that's right, it's neither a sponsor.

Nor is it from GSA, the federal government and by the way I've I got a pretty clear history Ive never mentioning anything until it's closed I'd tell my teams here, if there's no income stinks and yet I feel so strongly about this and then I'll.

Repair to bring it into the into this discussion today.

You you you know, it's a repeat customer and we've had a great history with just the largest order we've ever received from them on frankly anybody else and this state and just.

It's a really great opportunity for us and continued growth and I think that's you know there have been people who have suggested over the last several months that we haven't had repeat orders from some of our major customers as I mentioned, we just had a repeat order from New York City, and we've got another repeat order and the biggest one ever from this customer.

That's just making nonsense of these comments that was made about lack of repeat orders.

And and Electrify America is the same thing, it's a fantastic company, they're they're deploying more EV charging infrastructure and anybody I'm aware of and both in on own and operate model and then and then very interestingly as well expanding that profitable business Oh, two others and look the key thing to understand and underlying gear is as I've said many times before any.

E V charging service provider any EV Chargers quality, our products provide support for that so our time is all of their times put together and I feel that 'twenty 'twenty. One is starting out in a way that no. Other year has done before for us.

Thank you. Thank you Matt last one from either for you or Kathy I understand your comments about your increase in operating expenses and hiring more people and the stock based comp, but can you talk more about cost of revenues. The elevated I mean, most of that increases and the fourth quarter. What was the timing around that is that the run rate going forward and the near term.

Can you just talk about the timing and the fourth quarter for a cost of revenues being above two five.

So, let's first of all I'll talk about our overall loss remember that a very significant chunk of that was non cash and not <unk>.

You'll see all of that in the K. It's you know it's on.

It's it's a kind of a double edged sword for us the stock price goes up and wonderful and then the impacts of any type of derivative or auctions type.

Or are on grants made to the board or anything else like that also goes up very very significantly as a result of that one of the things that we do that I'm very proud of here is that we make oct.

Options grants generally quite small options grants, but options grants to even the most junior of our employees, who met them anyone who's been with us for longer than six months and who works hard and is a great contributor. It gets a little auctions grunt Christmas and how you guys will all know that our stock was up trading around $70 and Christmas or at least when we made the grants and so that it just.

A huge impact on our.

Bottom line, but not cash and in fact cash used in operations. This year was less and Youll see this and our findings and cash used in operations last year from a variety of reasons, but this is one of them.

And as far as the gross profit line. This Oh and then and then just further to your comments, yes. We have increased some spending I was consistent and I would bring on more sales more marketing and know these government relations experts theyre not cheap, but we believe that they will pay.

Pay us back in spades.

We are as we take advantage of the day you know the.

Changing environment that we're in and I'm, certainly not gonna stay asleep at the wheel and let those all those funds slush to other people because we didn't make that put on you don't.

And make the right investments and making sure that we got in front of it and where gross profit is concerned you're quite right. The greatest impact him and the fourth quarter and this is due to two things coffee, but basically mentioned them. The first one is we were deploying for the first time heavily R. E V 'twenty 'twenty product, which is a.

A new version of our EV are just far superior and <unk>.

Anything else when you produce the first of them there are teething problems and there are various things that just cost us more money, while the team the procurement and and and tooling and everything else catches up with that process. However, I am confident that we will actually get to the point, where we're producing E. V. O 2020 brought up from less than our costs associated with.

The original E beam brought us and then of course, there's volume.

<unk> increase we got all the other benefits, which I illuminated during my comments, which I'm happy to go over with anybody in detail if they want to do it some other time.

And then the other thing that was a major impact for US was redeployed a lot on product in a hurry and the fourth quarter and we did not as Kathy said, yet have R. E. B arc mobility transportation system completed for this new model, it's different than the one that we have from department. Now. This is the transportation system that allows us to deliver these things and minutes instead of months or days.

Or weeks or even years as in the case of the grid tight competition, not having that forced us to use a lot of common carriers. So we were paying other people to drop truck. These things around we were using forklifts to unload them and putting them into site was a terribly inefficient process.

However, we do no have R E V on mobility trailer.

And in fact, they're just wrapping up the latest one of them a beautiful piece of kit, where we're selling it and two to customers who are buying the product. They just don't don't just buy the product, but they also buy the transportation system. So theres another profit and revenue center for US there now that we have that I think youre going to see it.

On a distinct a reduction and our cost to deploy and and then we will continue to drive cost out of manufacturing the product using the methods, which I described and my comments.

And and and it's only going to get better I listen I've been doing this for a long time and this is not my first go around either not my first rodeo either and I can tell you that as I walk through the factory with somebody and 20 minutes, even and even a person who's who as a lay person I can demonstrate to them and show them. How we can cut very significant costs out of our products and get to that.

50% gross profit and I'm targeting at the moment, what's important is that we drive our sales up and get that volume increase.

And then of course, the engineering and operations teams every day, sometimes seven days, a week or working on reducing costs increasing efficiency because at the end of the day don't get me wrong. We know we're here for one reason and one reason alone and not to be profitable and to and to generate shareholder returns. That's job number one we're not irresponsible about it we don't ignore it but.

You also know we've got to get the best products that we can into the right hands to generate and create that growth and a strike while the iron is hot as it were.

Great that that fully explains at fourth quarter and that thank you for all that background doesn't have a great great day.

It was nice to see and.

The next question is from Howard Hoiberg with Hornburg Enterprises. Please go ahead.

Hi, Desmond.

Good job I had a question a little bit off the beaten track here I, Google search and I have found R. E V arc product has been deployed and Utah.

Via both Jeep and Electrify America.

And I would think that this is material.

Event, and Should've been press released and announce them and how can I havent seen anything or heard anything about that.

Well first of all thanks for following us and for being engaged.

Right.

What can I say, we are often not in control of the media and news flow, where the deployment of our products is concerned because at the end of the day, we manufacture product we sell it to people. They then use it and and and it's their business how do they use it and and what they say about it.

And everything else.

Ever I'm aware of the images to which you are referring and I'm just going to leave it by saying I think that's a bloody beautiful deployment I think it's absolutely fantastic that Jeep is making it possible for their customers to drive their iconic products on Sunshine and this is exactly what I was talking about earlier when I said that Americans are going to start getting there.

And so on Suvs and pickup trucks and off road vehicles.

As I said I think electrify America is a great company too and I, absolutely applaud, what they're doing I think it's bloody marvellous and I'm glad you've seen the images.

Okay and then during this call you spoke.

And just speak a little fast wasn't mistaken.

And he said you already have 40 plus million and the pipeline that you believe has at least a 70% conversion.

That would be $28 million on a revenue already and the pipeline for 2020 one.

And if I'm correct.

And I also.

And I wasn't able to do the math quick and up again you're.

You're talking about if you if one your current factory were to increase to usually said three shifts seven days a week.

How much revenue output would that have <unk> and <unk>.

Given here and.

And then.

Elaborate on the fact that whatever that is you are expecting to need and multiple facilities.

And my and my calculations I think that revenue number would be.

Or are significant and could you elaborate on that please.

Yeah, So just to clarify on the pipeline.

Pipeline right now over $40 million and and pipeline and we are conservative about what we add to our pipeline and it has to be customers that understand the product know the price of the products have a use for the product and the potential budget for that product and we're working towards a purchase order with us and other words me, having a conversation with somebody on a cocktail bar.

And that's one used to before March of last year, and then be expressing an interest and our products doesn't end up and the pipeline it needs to be verifiable and and.

Something moving towards a purchase order and that's that's above $40 million today.

And the 17 to 19, 9%.

We have over I think just under $9 million and the 70 to 92, 9% range and again, we're very conservative where that's concerned and fight I'll tell you that there are things and there, which I believe are absolute certainties and but.

But we don't and that's we.

We don't call them that until we get ink on them and then they'll they'll move to backlog.

And again, what's interesting about that and important pointed out about that is it's the end of the first quarter, we still about three quarters of selling left ahead of us and what I think will be one of the biggest shifting gears in terms of the move to electrification of transportation that we've ever seen in fact I'm certain it will be so I feel like we're in very good shape, where that's concerned and we do have an excellent.

Pipeline to backlog revenue.

Conversion ratio historically, because we're so conservative about who gets into it and then we've got a fantastic growth backlog and revenue conversion ratio and if I just basically 100%. We've never had a product returns and we've never had and order console. So those things work really well for us, but again to be clear $40 million and the pipeline.

And just under $9 million, I think and the changing daily of course, but just under $9 million and the 17 to 19, 9% or very high probability.

Point of view now to your question about capacity, Yes, you heard me correctly and I apologize for speaking quickly I was trying to cover a lot of ground.

But yes, you heard me correctly, we are able to produce as many as 2200 units per year out of this factory with the some of the changes that I mentioned for example outsourcing.

At two two contract manufacturers some of the assemblies and components, which we currently very laborious and they make and house so that our team will move from.

Manufacturing components. So just snapping together a person who takes all day to do one thing no might opened 50 boxes and the future and just snap those things on to onto our product will move more to assembly and manufacturing and that we got so by 'twenty 200 unit seven shifts I mean, three shifts seven days a week, some automation and one of those shifts near dark I hope.

And at 2200 units a year, we will be producing something and the order of $140 million and and our annual revenue and as I say I'm targeting a 50% gross profit there because that is the cost to produce our products are coming down. We believe the demand will go up. So therefore, we won't be subject to the same pricing pressure with some of the components that.

We're deploying and then just to put that in context at 'twenty 200 units a year that would certainly be magnificent for us, but it wont scratched the tip of the tip of the iceberg, where our customer base is concerned I mentioned and my comments that Los Angeles' has expressed the goal of 84000 publicly available charges by 'twenty.

And the next couple of years. They only have 10000 deployed to date over the last 10 years. So they need to rapidly deployed scalable solution like we provide state of California. As I also mentioned will require something in the order of 4 million publicly available charges has maybe 30000 publicly available charters right now so a couple of hundred thousand day year for the next couple of decades from third.

<unk> thousand over 10 years.

And that's just California, and Los Angeles, So as I said, where we're obviously already selling all over the United States. We intend to go to Europe, which is the world's largest EV market and I was just taken over from from China.

There are products work, just as well there and they work anywhere they can see the sky. So this is a global opportunity. So another way of saying that says if we did built.

And factories, and we were producing 22 salaries and units a year, we would still nowhere near cover.

California's requirements and yet we'd be and that kind of billion plus annual revenue run rate and I think very profitably.

And and and in case, you want some data check on that number remember Goldman Sachs and it's not exactly on fanciful are dope smoking organization has suggested and this is a six trillion dollar infrastructure build out you can see where these numbers are coming from I think it actually costs more and the long run, but and anyway, we got a gigantic opportunity out there lots of room for expansion on our existing facility.

And yeah, we're we're ambitious and aggressive and that's why I said, we're being global and we will build more of these factories are soberly as demand requires them and.

And my belief as I stand here and talk to you today is that demand will require them.

Okay. Thank you.

I'm no more questions.

And <unk>.

Again, if you have a question. Please press Star then one the next question is from Sameer Joshi with H C. Wainwright. Please go ahead.

Good afternoon Desmond Thanks for taking my question.

And so just to just a further clarification on.

Some more color on the pipeline nine.

9 million of your pipeline that is has a 70% to 99% and was and a profitability does that is that as of December 31st. So is that as of right now and so has there been any like together almost and the end of March.

And that excludes any more charges right.

And that excludes any March orders, yes, unless we get parts sort of between now and midnight Tomorrow I suppose I should say.

And we probably will the way things go.

It's if that number is as of today. So they they the 9 million and the 17 to 19, 9% is as of today.

And the 40 million is also adds up to date and it's only increased since December 31st of on.

2020.

Understood and then the $1 1 million and the backlog that is also as of today right and.

Actually $1 1 million and backlog as of 12 31.

Backlog is it's weird pipeline and backlog I'm I'm, usually as an investor and a guy who's on a fair amount of M&A I'm, usually much more interested and backlog than I am and pipeline, but I'm going to tell you that as I run this business and becoming more interested and pipeline and backlog because backlog is a very very moving target. Obviously it goes up we deployed backlogs replaced by revenue.

And then backlog goes down and people are people are very nervous because backlog is going down, but it's because it's being replaced by revenue what's really important and this war are we likely to close and be able to execute upon and this calendar year and.

That's what I think I'm talking to you about when I talk about these and particularly that 17 to 19, 9%.

Likelihood kill and there's some of that will drop out of course, it's not 100%, but but again, we're at the end of the first quarter with three quarters left to sell and execute on I think it's a it's a you know we're very well positioned to continue to sell this year and in fact, I think it's gonna be a more vibrant market as the year goes on.

And we're bloody welcome to execute on our sales we make.

Yeah, understood and and also as I understand the lead times on not that long, so, let's who did all the deployment and happens pretty quickly is that right.

Yes, and in fact, we often don't have much choice and that are our largest contracted customers like New York City, and the state of California, and others have a contractual obligation on our part to deliver within 90 days of receiving a purchase order from them.

Orders of 50 units or less and then over 50 units, we got some room to chat with them about that and ask them for a bit of leeway and everything but I think you should expect and anticipate that well I don't anticipate I'll tell you my instructions to the operations team and to everybody else here is to get everything that we sell out the door as quickly as possible because I don't want to be sitting on backlog or orders.

Later on and this year, because I I I I believe there's a strong potential that we might get really busy.

Right.

And then as you look out to 2021 on a quarterly basis.

Should we expect the year over year improvement or should we expect sequential improvement and others.

Woods.

And your March 'twenty quarter was 1.3 and.

And the December quarter was 2.2, so hit the March 'twenty, one quarter would be sequentially better than December quarter, our AR would.

And you would be happy if it is better than the last year's first quarter.

Look I I wish that we could get a nice smooth and incremental growth I think it's still too early for that.

We do still see Choppiness, and the and the and the order.

You know cadence and and also in our production of those orders and partly because it's just the industry young yet.

However, I think increasingly we're going to see that Choppiness move away and that's part of the reason I like the onesie Twosies orders and in some ways Bachelor than the than the big ones and I know everybody gets excited when they see the big orders, but I'd almost rather replace them with multiples of smaller orders, which come up to the same as the bigger orders because it because that does allow us to flatten the curves of law and the only thing I think you should do.

Definitely take from this line I am definitely looking at second half. This year, we've got two things going on the first one is we.

And we need this vaccine to take impact and order for people to start going to the back to the office and we need to get we need to be post vaccine in order to see a pick up and workplace charging.

And then the other thing is because so much of this money is going to come through federal coffers on the government side. What we know is historically the federal government tends to spend money and the second and I mean, and the third and for particularly the fourth quarters. So as much as we'd like to have a nice smoothed run up at it and this year as usual, we will end up probably with a with quite a lot to do.

And just when we'd all like to take some work or time off around Christmas and new year, which I'd never seems to be and opportunity we got to take.

And just one last one from me.

Mentioned, the New York are on it.

Like need to be really needs and the next few days weeks.

Do you know, what's the timeline for anybody.

And nobody against those all of those who is at the 2021 time line like me for that.

Well so to be clear there are two things going on and New York at the moment, one I know about.

And I do not know about at all the first one that I knew about it and we have received a purchase order. So a fairly small part shortage from New York, but they want to as I say before the before our existing contract with them expires. They wanted to get their hands on our new E. V. O 2020, and that was I believe and I don't want to put words in their mouth, but I believe that was the day.

The biggest driver for them if they want this flood, but they certainly told me that they liked the floodgate product on and my belief is that they want to get their hands on it before the contracts existing contract expired and so they can play with that a little bit and as I said, that's great because New York has had great experience with our existing products and this one is only so much Bachelor and they're only gonna have a much better experience with it and aside from it.

And that's just delivers a lot more charging driving miles, but Bachelor looking flood prove more space and the parking space and all sorts of other things going on there.

Second piece of New York, which I do not know about it and I can only guess that is that.

And I'm I'm, I'm, I'm, hoping that or how should I say this let's say called it and informed hope that they will they will at some point and they're not too distant future B and a new RFP from New York to replace the existing contract, which is expiring and win the RFP comes out and we will of course aggressively respond to it last time, the RFP came out.

We were the only company that met specifications and on a product that could meet specifications and as I said and my comments are we good patents and IP protection to maintain that position. So you can call that piece of it wishful thinking from me, but it's informed by years of experience and knowing the customer and knowing the environment.

Understood.

Thanks, gentlemen for taking my questions and things of that going on.

Good day.

My pleasure Thanks Amir.

The next question is from Bob Franklin of private Investor. Please go ahead.

Hello, and thank you.

Hey, Hello, Desmond Yeah, I've been a shareholder since April of 2019.

And I'm also a been a longtime resident and San Diego, but now I live in Rochester, New York.

And I am not a financial person I'm, an engineer so I'd like to ask a techie type question that may have some impact.

The one of the metrics and the industry is this.

Our level of charging and currently we have a level two charger.

Faster charger is a known as level three but.

Ken.

Give me some insight on that is it.

Ever reasonable that photo electric driven charger would be at a level three or or not.

Sure.

So Bob first of all let me just tell you that our Kathy Mcdermott. Our CFO is also from Rochester, New York originally and she just passed me a note, saying why would anybody move from San Diego to Rochester, and said another way around.

Well actually she didn't want.

And not asked me that no. It's all of that was just like Bethesda GAAP of humor here and our plus into the channel.

Let me now so I get that and a lot I get that a lot Desmond and I got to tell you are we sure slipped back on that I moved to Rochester to join the startup company.

Okay, good and it was very exciting and and enjoyed the experience so but that's what got me from San Diego to write faster.

And I haven't I love that part of the World and I'm from a little bit further east from there and I like a bit of inclement weather every now and again, but anyway to your question.

And here's the answer and there are currently three standards of charging and United States. The day level, one level two and level. Three also sometimes referred to as D. C. Fast charging we today provide all levels of charging.

So to answer your question and not only is it realistic to expect that this can happen, but we are currently deploying D. C class charting our level III fast charging and have done for Cal try and most notably in the state of California, and rest area. So that people can pull their electric vehicles into a rest area and have more of a gas station experience I will tell you that I do.

Don't believe that D. C fast charging will be the most broadly deployed G b charging solution and the future and the reason for that is because while it is very convenient and a and a corridor type environment when you're traveling along distance most charging actually will happen and places where people were already going on at work.

And one more mall or whatever else and no one will be prepared and my view no consumer will be prepared to pay for the premium required from a much more expensive cost of deploying and on maintaining D. C pass charting if they can get most of their charging for cheap or free but and in some instances I was with our driving on Sunshine networks I don't think people are going to pay for.

On the premium of that so that that's being a little overplayed at the moment and I think part of the reason for that is because people and general light to make new technologists looked like old technologies. So they won't make EV charging looked like a gas station, but doesn't E beam driver of 10 years I can tell you that's about the dumbest idea I've ever heart.

Yeah I'm sure you've got your engineers working on it but there's got to be a balance between the two.

And you know square footage of solar panels.

And that or ease at the station and.

Speed charging.

So I'm sure that's a delicate balance and the technologies are already.

And are always changing but.

<unk> already done already done we were deploying we have the product today and we're already deploying it and it's a really good product I, just think that will end up doing more level, two and the future than the D. C past yeah.

Thank you Dan.

And thanks for being a rescue.

Yes.

This concludes our question and answer session I would like to turn the conference back over to Desmond Wheatley for any closing remarks.

I think my closing remark is the same as my closing remarks I made at the end of my opening comments, which is that there simply has never been a Bachelor and time to be doing what we're doing I'm very grateful for your on board involvement and your interest and your support there.

And there are no guarantees and life, except I can give you. This one that all of US here are pulling very hard on the same piece of rope and the same direction and we will not rest until we make a tremendous success of this company. We have the right products. We have the right timing we have good intellectual property coverage and I believe the industry is really starting to take off and a very interesting.

Wei.

And I'm very much looking forward to executing for the rest of this year and the years that come. So thank you for your time, thanks for being involved and feel free to me and touch on anytime.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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