Q1 2022 Beam Global Earnings Call

Good afternoon, and welcome to the beam global first quarter 2022 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 cause Starkey followed by zero.

Speaker 1: Good afternoon and welcome to the Beam Global first quarter 2022 financial results and corporate update conference call. All participants will be in listen only mode.

Speaker 1: If you need assistance, please sign the conference specialist by pressing the Kastarki followed by zero.

After todays presentation, there will 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.

Speaker 1: After today's presentation, there will be an opportunity to ask questions.

Speaker 1: 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...

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.

Speaker 1: 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 being global conference call for the first quarter of 2022.

Speaker 2: Thank you. Good afternoon and thank you for participating in being global conference call for the first quarter of 2022. We appreciate your time today for joining us with this call. Joining me is Desmond Wheatley, President's CEO and Chairman of Beane. Desmond will be providing an update on the recent activities that being followed by a question and answer session.

P. J your time today for joining us for this call. Joining me is Desmond Wheatley, President and CEO and chairman of fee. That's no I'll be providing an update on the recent activities that team followed by a question and answer session.

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.

Speaker 2: 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.

But looking statements involve risks and other factors that may cause actual results to differ materially from those statements.

Information about these risks please refer to the risk factors described in <unk>. Most recently filed Form 10-K, and other periodic reports filed with the SEC.

Speaker 2: For more information about these risks, please refer to the risk factors described in Beans most recently filed form 10K and other periodic reports filed with the SEC. The contents of this call contains time sensitive information that is accurate only as of today, May 25, 2022.

This call contains time sensitive information that is accurate only as of today may 25th 2022.

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.

Speaker 2: Except as required by law, being disclaimed any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call.

I would like to provide an overview of our financial results for being first quarter ended March 31 2022.

Speaker 2: Next, I would like to provide an overview of our financial results for being first quarter-ended March 31, 2022.

In March 2022, we're excited to say that the company closed on its purchase of all cell technology. The addition of energy storage solutions to our EV charging product is a great partnership with many synergies from our sales and manufacturing standpoint.

Speaker 2: In March 2022, we're excited to say that the company closed on its purchase of all-self technologies. The addition of energy storage solutions to our EV charging products is a great partnership with many synergies from a sales and manufacturing standpoint.

Because this wasn't asked that purchase the first quarter of 2022 financial statements include the energy storage business. The March 4th closing date through March 31, 2022. It is not included in the prior year comparison.

Speaker 2: Because this wasn't asset purchase, the first quarter of 2022 financial statements include the Energy Storage Business from March 4th closing day through March 31st, 2022. It is not included in the prior year comparison.

For the first quarter of 2020, 'twenty, two we reported revenues of $3 8 million.

Speaker 2: For the first quarter of 2022, we reported revenues of 3.8 million, 175 percent increase over 1.4 million reported for the first quarter of 2021. This was the highest revenue quarter in the company's history, in a first quarter that is typically lower in revenue.

75% increase over $1 4 million reported for the first quarter of 2021.

Was the highest revenue quarter in company history in the first quarter that is typically lower in the.

Quarter includes 24 million, but he energy storage business.

Speaker 2: The quarter includes $0.4 million for the energy storage fit.

Our sales to state agencies and municipalities continues to be our primary market at 69% of total revenues we.

Speaker 2: Our sales to state agencies and municipalities continue to be our primary market at 69% of total revenue.

We also increased our revenues just federal customers based on our increased investment in sales resources and consultants in the federal space.

Speaker 2: We also increase our revenues to federal customers. They've found our increase investment in sales resources and consultants in the federal state.

We also saw growth in the enterprise business segment.

Speaker 2: We also saw growth in the enterprise business segment as employees are heading back to the office and looking for EV target.

Boys are heading back to the office and looking for EV charging.

Gross loss in the quarter ended March 31st 2022 was <unk> 3 million compared to <unk> 1 million for the same period in 2021.

Speaker 2: Gross logs in the quarter and March 31, 2022, was 0.3 million compared to 0.1 million for the same period in 2021.

Gross loss improved by three percentage points compared to the prior year as a result of the increased production volume, resulting in favorable fixed overhead absorption and improved labor efficiencies and utilization.

Speaker 2: The growth loss improved by three percentage points as a result of the increased production volume, resulting in favorable fixed overhead absorption, and improved labor efficiencies in utilization.

These savings were partially offset by higher material costs for steel and other components due to supply chain shortages and other inflationary pressures.

Speaker 2: These savings were partially offset by higher material costs for steel and other components to supply chain shortages and other stationary pressures.

Operating expenses were $2 million or Q1, 2022 compared to $1 1 million for Q1 2021.

Speaker 2: Operating expenses were 2 million or Q1 2022 compared to 1.1 million for Q1 2021. The increases will primarily do to the addition of all cell expenses for March. Increase investment in sales and marketing to support revenue growth and also increase legal and accounting services partially due to the acquisition.

This was primarily due to the addition of also expensive for March increased investment in sales and marketing all to support revenue growth and also increased legal and accounting services, partially due to the acquisition.

The net loss was $2 3 million or <unk> 24 cents per share for the first quarter of 2022 compared to $1 3 million or 14 cents per share for the first quarter of 2021.

Speaker 2: The net loss was 2.3 million or 24 cents per share for the first quarter of 2022, compared to 1.3 million or 14 cents per share for the first quarter of 2021.

At March 31, 2022, we had cash of $19 2 million.

Speaker 2: At March 31, 2022, we had cash of 19.2 million compared to 21.9 million at December 31, 2021.

Third to 21 9 million at December 31, 2021.

The cash decrease was primarily from operating activities and the cash payment for working capital for the purchase of volatile.

Speaker 2: The cash decrease was primarily from operating activities, and the cash payment for working capital to the purchase of all sell.

Our working capital decreased from $24 6 million at December 31, 2021, 21.8 million at March 31 2021.

Speaker 2: Our working capital decreased from 24.6 million at December 31, 2021. The 21.8 million at March 31, 2021.

Thank you.

Speaker 2: Thank you, Susan. I will now turn the call over to Desmond to provide a business update.

I will now turn the call over to Doug meant to provide a business update.

Yeah.

Well, thank you Cathy and thank you to all of you who are listening who support being global.

Speaker 3: Well, thank you, Kathy, and thank you to all of you who are listening and who support being global. I'm speaking to you today from the HCWN Wright conferences in Miami, Florida, where I've spent the last few days meeting with the investment community. So my apologies in advance for any outside noises. It's not easy for me to control the environment here, but I'll push through whatever challenges. I think come my way like I always do.

I'm speaking to you today from the H C Wainwright competencies in Miami, Florida, where I spent the last few days meeting with the investment community. So my apologies in advance for any outside noises, it's not easy for me to control the environment here, but I'll push through whatever challenges come with my way like I always do.

2021 was a year of records for beam record revenues record product deliveries and record sales.

Speaker 3: 2021 was a year of records for Beam. Record revenues, record product deliveries, and record sales.

We're continuing that record breaking streak as we head into 2022 with a new record for quarterly revenues of $3 eight of $3 8 million up from 1.4 in the first quarter 2021 and up from $3 4 million in the fourth quarter of last year.

Speaker 3: We're continuing that record-breaking streak as we head into 2022 with a new record for quarterly revenues of $3.8 million, up from $1.4 million in the first quarter of 2021 and up from $3.4 million in the fourth quarter of last year.

Brought up deliveries in Q1 of 'twenty, 'twenty, two where 250% of what they were in the same period last year.

Speaker 3: Product deliveries in Q1 of 2022 were 250% of what they were in the same period last year.

I know this is a metric which tells us much more of a story than perhaps might farcemeat yard.

Speaker 3: Now, this is a metric which tells us much more of a story than perhaps might first meet the eye, because Q1 has often been a fairly weak quarter for us. Not surprisingly, in the past, we've crammed all the revenue we can into the fourth quarter to hit full-year results, and that's typically left us in a position of starting the new year with low or no backlog sometimes.

Q1 is often being a fairly weak quarter for us are not surprisingly in the past we've climbed all of the revenue we came into the fourth quarter to hit full year results and that's typically left us in a position of starting the new year with low or no backlog sometimes.

We certainly did chroma lots of revenue into the fourth quarter of 2021 than it was in fact until now.

Speaker 3: We certainly did cram a lot of revenue into the fourth quarter of 2021, and it was, in fact, until now, the best quarter in our history. But because our sales growth was so strong in 2021, particularly towards the end of the year, we did not exhaust our backlog even during that record-breaking quarter.

Last quarter in our history, but because our sales growth was so strong in 2021, particularly towards the end of the year, we did not exhaust our backlog even during that record breaking quarter.

On the contrary, we entered 2022 with the strongest combination of pipeline and backlog we have ever hot.

Speaker 3: On the contrary, we entered 2022 with the strongest combination of pipeline and backlog we have ever had.

We also entered the year much better able to deliver on that backlog because of the excellent efforts of our operations and engineering teams and increasing our efficiency and ability to outgrow it products.

Speaker 3: We also entered the year much better able to deliver on that backlog because of the excellent efforts of our operations and engineering teams in increasing our efficiency and ability to output products.

These combined factors enabled us to make Q1 of 2020 to go from being a weak quarter has historically been the case, rather was the best quarter in our history with the highest revenues.

Speaker 3: These combined factors enabled us to make Q1 of 2022, far from being a weak quarter, as historically been the case, rather the best quarter in our history with the highest revenue.

The increase in revenues and deliveries continue to another set of trends that we put in motion during 2021.

Speaker 3: That increase in revenues and deliveries continued another set of trends that we put in motion during 2021.

Our relentless efforts to manage costs and to extract value from every facet of our business and the vendors and partners, who support us continuing to pay off in Q1 of 2022.

Speaker 3: Our relentless efforts to manage costs and to extract value from every facet of our business and the vendors and partners who support us continue to pay off in Q1 of 2022.

You'd have to be in a coma to miss the impacts of inflation across the economy and across the globe. It.

Speaker 3: you'd have to be in a coma to have missed the impact of inflation across the economy and across the globe. It seems as if everything is getting more expensive and our observation is that that has been the case during the last several quarters.

It seems as if everything is getting more expensive and our observation is that that has been the case during the last several waters.

Our cost structure was impacted in Q1 by increasing cost of inventory, which we encountered during the second half of 'twenty to 'twenty. One I'd also into the first quarter of this year.

Speaker 3: Our cost structure was impacted in Q1 by increasing costs of inventory which we encountered during the second half of 2021 and also into the first quarter of this year.

Those cost increases spanned the great variety of materials and components, which we integrate into our own caught us steel aluminium copper battery cell semiconductors, and even Monday night seems like fosters in plastic cards, all came with increased cost shift.

Speaker 3: Those cost increases span the great variety of materials and components which we integrate into our end products. Steel, aluminium, copper, battery cell, semiconductors, and even mundane items like masters and plastic parts all came with increased cost.

Shifting a very large cost component of our business was impacted by higher diesel rates, where our internal transportation resources and also by increased third party transportation costs, which are not being impacted by the same influences we are seeing.

Speaker 3: Shipping, a very large cost component of our business, was impacted by higher diesel rates for our internal transportation resources and also by increased third-party transportation costs which are no doubt being impacted by the same influences we're seeing.

And yet.

In the face of all these rising costs, which are outside of our control. We actually had a further 3% improvement in our gross profitability as a result of managing what was within our control.

Speaker 3: In the face of all these rising costs, which are outside of our control, we actually had a further 3% improvement in our gross profitability as a result of managing what was within our control.

Our teams and growing 3% of our cost structure, while everybody else is costs are going up cost per unit structure I should be really specific on that.

Speaker 3: Our teams ground 3% of our cost structure while everybody else's costs are going up. Cost per unit structure, I should be really specific on that.

I know I've been reporting for some time.

Speaker 3: And I've been reporting for some time that as our volumes increase, we see a reduced impact from fixed over.

Our volumes increase we would see a reduced impact from fixed overheads.

Also reported that labor cost per unit would come down as our production cadence increase well.

Speaker 3: I've also reported that labor cost per unit would come down as our production cadence increase. Well, the numbers make reality.

Well the numbers make reality I said my projections we.

We've seen at least a 10% increase in our Bom costs during the Covid and inflation period, and yet we've reduced our overall cost per unit produced.

Speaker 3: We've seen at least a 10% increase in our bomb costs during the COVID and inflation period, and yet we've reduced our overall cost per unit produced.

Combining the 10% increase in comp and Bom costs with our 3% improvement to gross margin. It means that actually the beam teams at about 13% impact on cost per unit reductions to internal actions.

Speaker 3: Combining the 10% increase in bond costs with our 3% improvement to gross margins means that actually the beam teams had about a 13% impact on cost per unit reductions to internal action.

And take note that the cost reductions we have cause to happen do not yet include the significant reductions in costs, we anticipate as a result of integrating our own new battery solutions onto our products instead of using third party solutions as we are still doing.

Speaker 3: And take note that the cost reductions we've caused to happen do not yet include the significant reductions in cost we anticipate as a result of integrating our own new battery solutions onto our products instead of using third-party solutions as we're still doing.

Those further savings are in our very near future.

Speaker 3: Those further savings are in our very near future.

By the way we share the opinion of many experts that pricing stability should return this year and as a result of that extra analogy and our own internal ongoing cost management efforts, we anticipate further improvements to gross profitability as the year rolls on and as our volumes increase.

Speaker 3: By the way, we share the opinion of many experts that pricing stability should return this year. And as a result of that externality and our own internal ongoing cost management efforts, we anticipate further improvements to growth profitability as the year rolls on and as our volumes increase. And we certainly do.

And we certainly do expect volumes to increase at.

At the moment, our pipeline is well over $100 million.

Speaker 3: At the moment, our pipeline is well over $100 million.

I think our new battery company pipeline to that number it takes it up significantly higher.

Speaker 3: Adding our new battery company pipeline to that number takes it up significantly higher.

We're seeing new and material opportunities from both government and enterprise.

Speaker 3: We're seeing new and material opportunities from both government and enterprise.

We have received purchase orders for our products from internationally recognized corporations and we continue to advance opportunities for our driving on Sunshine sponsored network from similarly recognizable corporate bmo's.

Speaker 3: We've received purchase orders for our products from internationally recognized corporations, and we continue to advance opportunities for our driving on sunshine sponsored network from similarly recognizable corporate BMO.

On the government side of the business, we continue to receive orders from municipal County state and federal entities.

Speaker 3: On the government side of the business, we continue to receive orders from municipal, county, state and federal entities.

We recently announced that we've been awarded a blanket purchase agreement from the federal government.

Speaker 3: We recently announced that we've been awarded a blanket purchase agreement from the federal government.

This enhancement to our previously announced general services administration contract will make it even easier for federal entities to buy our products at a time when their requirements are rapidly increasing the urgency around EV charging infrastructure is picking up steam.

Speaker 3: This enhancement to our previously announced general services administration contract will make it even easier for federal entities to buy our products at a time when their requirements are rapidly increasing at the urgency around EV charging infrastructure is picking up steam.

Many federal agencies will be taking delivery of electric vehicles in the fourth quarter of 2022 as part of the administrations requirement to move away from gasoline and diesel.

Speaker 3: Many federal agencies will be taking delivery of electric vehicles in the fourth quarter of 2022 as part of the administration's requirement to move away from gasoline and diesel. There is as yet not enough charge

There is as yet not enough charging for those vehicles.

Time consuming permitting construction and electric work make it very difficult to install traditional grid tied infrastructure on such a short timeframe.

Speaker 3: Time-consuming permitting, construction, and electrical work make it very difficult to install traditional grid-tight infrastructure on such a short time frame.

The lack of available grid circuit capacity at many of your intended EV charging locations is daily coming to light.

Speaker 3: And the lack of available grid circuit capacity in many of the intended EV charging locations is daily coming to life.

It's also important to remember how important resiliency will be to these government vehicles and for all of you be used for that matter our products the ability to continue to charge vehicles during blackouts and other utility grid is an increasingly important selling differentiator for us.

Speaker 3: It's also important to remember how important resiliency will be to these government-queed vehicles. And for all of you to be so that much.

Speaker 3: Our productability to continue to charge vehicles during blackouts and other utility grid panors is an increasingly important selling differentiator for us.

Many other EV charging companies are starting to add energy storage to their installation something we've been doing for decades, but theres rely on the grids to recharge their batteries ours do not.

Speaker 3: note that many other EV charging companies are starting to add energy stories to their installation something we'd be doing for decades but theirs rely on the grid to recharge their batteries hours do not

Felicia operators get that and as they become more reliant on evs that are becoming less forgiving of EV charging infrastructure, it's only as reliable as the grids to which it's connected.

Speaker 3: police operators get that and as they become more reliant on evs they're becoming less forgiving of evie charting infrastructure that's only as reliable as the grid to which it's connected

Of course, these circumstances are what being global's products, a dress and a unique and well protected manner.

Speaker 3: Of course, these circumstances are what being global's products address in a unique and well protected manner. Urgency is music to our ears. Like if utility grid capacity while it's alarming is a key ingredient to our success and it is very real.

Agency is music to our ears.

Lack of utility grid capacity, while it's alarming is a key ingredient to our success and it is very real.

Resiliency and the importance of maintaining vital fueling infrastructure during disasters is just what we do in.

Speaker 3: Resiliency and the importance of maintaining vital fuel infrastructure during disasters is just what we do In fact many of the critical cornerstones of our business strategy over the last many years Cornerstones which previously were not recognized broadly are now becoming central issues at both a local and national level

In fact, many of the critical cornerstones of our business strategy over the last many years cornerstones, which previously were not recognized broadly I know, becoming central issues at both the local and national level.

I believe we're firmly in the lead when it comes to addressing these challenges and so it seems do are increasingly large portfolio of customers.

Speaker 3: I believe we're firmly in the lead when it comes to addressing these challenges. And so it seems to our increasingly large portfolio of customers.

If you're looking for prudent how mainstream and recognized our products, becoming you need look no further than the front cover of the federal Highway administration's nervy, our national electric vehicle infrastructure program guidance document.

Speaker 3: If you're looking for proof of how mainstream and recognized our products are becoming, you need to look no further than the front cover of the Federal Highway Administration's Nevy or National Electric Vehicle Infrastructure Program Guidance Documentary.

This document offers program guidance on how the seven and a half billion dollar slated for EV charging infrastructure should be allocated by the states and other agencies, who will spend the money.

Speaker 3: This document offers program guidance on how the seven and a half billion dollars slated for EV charging infrastructure should be allocated by the states and other agencies who will spend the money.

The document only contains one image.

Speaker 3: The document only contains one image. It's a photograph and it's on the front cover and it's of our EVR systems, providing DC fast charging at a rest area in California. That's right, our products are the only products pictured in the spending guidance document. Google it.

It's a photograph and it's on the front cover and its of our <unk> systems, providing DC fast charging into rest of your in California. That's right. Our products are the only products pictured in the spending guidance document Google It.

A nice picture.

Further recognition at the federal level came when Congress Congressman teachers recently named US handoff products, specifically during a televised house energy and commerce hearing, saying that being global is creating the sort of innovative products that will be essential to transportation and energy in the future.

Speaker 3: further recognition at the federal level came when congress peat congressman peaters recently named us and our products specifically during a televised house energy and commerce hearing thing that being global is creating the sort of innovative products that will be essential to transportation and energy in the future.

The essential nature of our products find yet another new opportunity to shine this quarter when the Marine Corps and others used it for a wildfire arching exercise in California, or who to fall that when first looking at being global.

Speaker 3: The essential nature of our products found yet another new opportunity to shine this quarter when the Marine Corps and others used it for a wildfire fighting exercise in California. Who would have thought of that when first looking at being global?

There's just so many areas where reliable power does not rely on our liquid fuels or the utility grid is essential.

Speaker 3: There are just so many areas where reliable power that does not rely on liquid fuels or the utility grid is essential.

More and more agencies and corporations are looking to beam global to provide that power.

Speaker 3: More and more agencies and corporations are looking to be able to provide that power.

Two or three weeks ago, I was with a new very large corporate customer.

Speaker 3: Two or three weeks ago, I was with a new, very large corporate customer.

Personally met with his responsibility for around 500 buildings in the company's network.

Speaker 3: The person I met with has responsibility for around 500 buildings in the company's net.

She's done an excellent job of installing grid power charging at many of those locations and yeah. There I was meeting with her and she told me that and I quote we saved her us.

Speaker 3: She's got an excellent job of installing grid-touch charging at many of those locations. And yet, there I was meeting with her. And she told me that, and I quote, we saved her eyes.

It turns out that she needs more charging and this little those locations and it's been informed that there's not sufficient grid capacity on her Paul just to add more chargers she needs them. So she's turned to us our E. D arc product is solving a problem.

Speaker 3: It turns out that she needs more charging in those locations and has been informed that there's not sufficient grid capacity on her probes just to add more chargers, but she needs them. So she's turned to us. Our EV arc product is solving her problem.

Now I'll be commenting on this future certainty for many years and know that futures here just think of all the buildings across the U S, which have topped their capacity and we will need more charging in the future.

Speaker 3: I've been commenting on this future certainty for many years and now that future is here. Just think of all the buildings across the US which have tapped their capacity and will need more charging in the future.

The opportunity for second wave deployments for us it's fantastic.

Speaker 3: The opportunity for second wave deployments for us is fantastic.

For all those people who used up their grid capacity in the first waves of EV charging deployments that they did in the traditional grid tied method.

Speaker 3: solving for all those people who used up their grid capacity in the first waves of eb-charging deployments that they did in the traditional grid-type method. I'm very happy to solve that problem for them because they will need more chargers after they run out of circuit than they needed when they used up what was available.

Happy to solve that problem for them because they will need more chargers after they run out of circuit than they needed when they used up what was available to them.

By the way I, just took delivery of a brand new ribbon all one T pickup truck. This week I think I made the down payment of about two years ago and I can tell you it was worth the wait.

Speaker 3: By the way, I just took delivery of a brand new Rivion R1T pickup truck this week. I think I made the down payment about two years ago and I can tell you it was worth the wait.

Not to 60 in three seconds and a pickup truck you have to experience it to believe it and when you do you will be starting with one thing evs are going to own the future, they're going to do a lot sooner than many anticipate.

Speaker 3: not to 60 in three seconds in a pickup truck. You have to experience it to believe it. And when you do, you will be certain of one thing. EVs are going to own the future and they're going to do it a lot sooner than many artists.

That means that there'll be a whole lot of demand for our products because the evs will come a lot faster than the grid upgrades and I believe we will see many more customers like the one I just described to you who need charging but don't have available circuits lots and lots of new customers with urgent needs.

Speaker 3: That means that there will be a whole lot of demand for our products because the EVs will come a lot faster than the grid up grades. And I believe we'll see many more customers like the one I just described to you who need charging that don't have available circuit.

Speaker 3: Lots and lots of new customers with urgent need.

And while we're getting a lot of new attention and oldest from entities with whom we've not done business in the past, we're still providing solutions for some of our excellent current and past customers just about the best endorsement of our product you can get for.

Speaker 3: And while we're getting a lot of new attention, an order from entities with whom we've not done business in the past, we're still providing solutions for some of our excellent current and past customers. Just about the best endorsement of a product you can get.

For example, the state of California's Department of General services, who last year gave us the biggest order we received in our history. So far that is continues to order meaningful volumes of our <unk> product.

Speaker 3: For example, the State of California Department of General Services, who last year gave us the biggest order we received in our history. So far that.

Speaker 3: Continues to order meaningful volumes of our EVR product.

We recently received purchase orders for 23 more units to be delivered in the coming months.

Speaker 3: We recently received purchase orders for 23 more units to be delivered in the coming month.

The combination of year to date revenue booked backlog record high pipeline and integration of new revenues and pipeline from our battery business are setting 2022 up to be an excellent year at a launch pad for many more excellent years thereafter.

Speaker 3: The combination of year-to-date revenue, booked backlog, record-high pipeline, and the integration of new revenues and pipeline from our battery business are setting 2022 up to be an excellent year and a launchpad for many more excellent years thereafter.

We are advising our customers to get their orders in as soon as possible, especially large orders. So that we can get them into our increasingly crowded order cute.

Speaker 3: We're advising our customers to get their orders in as soon as possible, especially large orders, so that we can get them into our increasingly crowded order queue.

Our acquisition of all cell technologies, which closed on March four 2022 is moving through its integration stage of evolution.

Speaker 3: Our acquisition of all self-technologies, which closed on March 4, 2022, is moving to its integration stage of evolution.

Being global is energy storage business has already made significant sales like the $2 3 million dollar order we received shortly after closing the transaction.

Speaker 3: The Inglobal's Energy Storage Business has already made significant sales. Like the $2.3 million order we received shortly after closing the transaction.

This is adding to our backlog and revenue and we're delivering orders on those orders to date.

Speaker 3: This is adding to our backlog on revenue and we're delivering orders on those orders today.

We're also in the final stages and I'm very excited about this a development of a new bean pack battery solution for our <unk> products, which will be integrated into all EV arc soon.

Speaker 3: We're also in the final stages, and I'm very excited about this, of development of a new Beam Pack battery solution for our EVR products, which will be integrated into all EVRs soon.

We expect the first need the arts to leave our San Diego factory with Bean pack syndrome as early as the beginning of June .

Speaker 3: We expect the first EV arcs to leave our San Diego factory with beam packs in them as early as the beginning of June .

The products are being manufactured in our Chicago facility.

Speaker 3: The packs are being manufactured in our Chicago facility. I've seen them and I'm delighted with their quality, ability to scale and also crucially cost because remember, bringing down the cost of batteries will have a significant impact on bringing down our overall cost per unit.

Seen them and I'm delighted with their quality.

I looked at your scale and also crucially costs, because remember, bringing down the cost of batteries will have a significant impact on bringing down our overall cost per unit.

Battery supply chains are under a lot of pressure at the moment during the last few months, we've seen cost increases for battery cells for the first time in over the 10 years that I've been involved in this industry.

Speaker 3: battery supply chains are under a lot of pressure at the moment. During the last few months, we've seen cost increases for battery cells for the first time in over the 10 years, but I've been involved in this industry.

There are further cost increases to come before we returned to what the entire industry expect a prolonged and an extra bill lowering of battery sale prices.

Speaker 3: There are further costs increases to come before we return to what the entire industry expects. A prolonged and inextrable lowering of battery cell price.

These are extraordinary times, indeed had we not made this acquisition, it's quite possible that we would not have received sufficient bachelors to fulfill our charging businesses requirements, but we did make the acquisition and we're now about to backfill shortages elsewhere with our own superior product and a lower cost.

Speaker 3: These are extraordinary times indeed. And we not made this acquisition. It's quite possible that we would not have received sufficient backers to fulfill our charging businesses requirement, but we did make the acquisition. And we're now about to backfill shortages elsewhere with our own superior product and at a lower cost.

I'm delighted.

Even the first generation of products that we're producing are costing us less than we were paying for externally sourced product.

Speaker 3: Even the first generation of pipes that were producing a costing us less then we were paying for externally sourced product.

But I believe the cost cutting journey for battery storage is only just beginning.

Speaker 3: But I believe the cost-cutting journey for battery storage is only just beginning.

Our engineers and scientists on both sides on both the charging in the storage side of the business are working together to engineered solutions, which are ideal for our products and at significantly lower costs when the more generic products, we've been using to date.

Speaker 3: Our engineers and scientists on both the charging and the storage side of the business are working together to engineer battery solutions which are ideal for our products and at significantly lower cost than the more generic packs we've been using today.

There's never been a more important time to take control of battery supply chains, and while we still see cost increases on commodity sell steel can doctors and other components used in making these battery packs. We are confident that we can continue to reduce the cost contributions to our charter caught us.

Speaker 3: There's never been a more important time to take control of battery supply chains. And while we still see cost increases on commodity sales, steel, conductors and other components used in making these battery bags, we're confident that we can continue to reduce the cost contributions to our target product.

Remember that batteries constitute no off not far off one third of our bill of materials. So any cost savings we can achieve in this area will be meaningful to our overall cost model.

Speaker 3: Remember that batteries constitute not far off one third of our bill of materials. So any cost savings we can achieve in this area will be meaningful to our overall cost model.

Beyond that we're very excited about the other areas of our battery business and by the opportunities, which we see the world is increasingly electrifying and they moved to Untether battery powered products is playing for anyone to see.

Speaker 3: Beyond that, we're very excited about the other areas of our battery business and by the opportunities we see. The world is increasingly electrifying and the move to untethered battery powered products is playing for anyone.

We intend to advance our technology leadership in thermal management safety energy density and data. So the dollar batteries offer the best safest and most connected solution for an increasing universe of customers.

Speaker 3: We intend to advance our technology leadership and thermal management, safety, energy density, and data. So that our batteries offer the best, safest, and most connected solution for an increasing universe of customers.

Being able to provide safety from thermal runaway that as far as an explosion for those of us sort of experts I'd also superior level of data connectivity at the battery level will I believe be significant differentiators for US energy density long life safety and telemetry are key ingredients to successful battery integration and we've demonstrated ability.

Speaker 4: Being able to provide safety from thermal runaway, that's fires and explosions for those of us who are not experts, and also superior level of data connectivity at the battery level will, I believe, be significant differentiators for us. Energy density, long life, safety, and telemetry are key ingredients to successful battery integration, and we've demonstrated abilities in each area today and a roadmap of developments which will soon further enhance our leadership in these important opportunities.

In each area to date, and our roadmap developments, which will soon and further enhance our leadership in these important opportunities.

So to sum up.

We remain well capitalized we have no debt, we have record revenues record product deliveries record back line and pipeline backlog and pipeline of opportunities.

Speaker 3: We remain well-cathed by the fact that we have no debt. We have record revenues, record product deliveries, record backline and backlogging pipeline of opportunity.

We're cutting our costs even in the face of historically high inflation, and we're increasing our throughput and efficiency.

Speaker 3: We're cutting our costs even in the face of historically ionplation and we're increasing our throughput and efficiency.

We uniquely have a battery storage solution, which is central to our own products and the products of our of our battery only customers.

Speaker 3: We, uniquely, have a battery storage solution which is central to our own products and the products of our battery-only customers.

We've diversified our revenue opportunities whilst defending our most critical supply chain.

Speaker 4: We've diversified our revenue opportunities whilst defending our most critical supply chain. And we've positioned ourselves to take advantage of the unprecedented spending in EV charging, energy security and carbon reduction efforts that are taking place at both governmental and enterprise levels.

And we've positioned ourselves to take advantage of the unprecedented spending in EV charging energy security and carbon reduction efforts that are taking place at both governmental and enterprise levels.

Businesses never without challenges, but I can tell you that thanks to the efforts and dedication of the bean team hours is going according to plan for.

Speaker 4: Business is never without challenges. But I can tell you that thanks to the efforts and dedication of the Beam team, hours is going according to plan.

From my point of view being global has never been better positioned with so many growing opportunities and an improved ability to execute on them.

Speaker 3: From my point of view, Beam Global has never been better positioned with so many growing opportunities and an improved ability to execute on them. It's a great time.

It's a great time to be on the <unk> team.

Thank you for your attention and I'll now return the call to the operator and answer any questions you may have operator.

Speaker 1: Thank you for your attention, and I'll now return the call to the operator and answer any questions you may have. Operator, we will now begin the question.

We will now begin the question and answer session to.

To ask a question you May press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.

Speaker 1: To ask a question, you may press star then one on your telephone keypad. If you are using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press...

At this time, we will pause momentarily to assemble our roster.

Speaker 1: At this time, we will pause momentarily to assemble our rocks.

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

Speaker 1: Our first question is from Greg Lewis with BTIG. Please go ahead.

Hi, Greg Yeah, Hey, Thank you and good afternoon, Desmond and you know hope you're doing well.

Speaker 5: Hi, Greg. Yes. Hey, thank you, and good afternoon, Desmond. I hope you're doing well. Clearly, you're doing a good job on execution, but I did have a question. Clearly, the government-slash-military opportunity is a huge potential growth opportunity for the company. As we think about the event path of that,

Clearly in the U S doing a good job on execution, but I did have a question clearly that the government slash military opportunity as it is a huge potential growth opportunity for the company as we think about the event path.

That.

As you work with these customers how should we think about.

Speaker 5: as you'd work with these customers. How should we think about...

The timing of the ordering of the E V archs versus the ordering of the vehicles I E. R. R. R R or some of these entities.

Speaker 5: The timing of the ordering of the EV arcs versus the ordering of the vehicles, i.e., are some of these entities trying to get their hands on EV arcs ahead of ordering or is it kind of a chicken and egg and any kind of thoughts around that?

Trying to get their hands on EV arcs ahead of ordering or is it kind of a chicken and egg in any kind of thoughts around that.

Yeah, so you've uncovered multiple areas as you usually do Greg Let me just let me try and address them and the first thing I want to point out to you is that yes. The government side of our business remains very vibrant and there's a lot of growth ahead of us for that but but but cast your mind back to coffee is opening comments, where she pointed out that our traditional sort of state and municipal business was.

Speaker 4: Yeah, so you've uncovered multiple areas as you usually do, Greg. Let me just let me try and address them. The first thing I want to point out to you is that, yes, the government side of our business remains very vibrant and there's a lot of growth ahead of us for that. But but but cast your mind back to Kathy's opening comments where she pointed out that our traditional sort of state and municipal business was only 70 percent of our revenues. I mean, only. Right. That's a lot. But it also shows that there was 30 percent coming from other opportunities. And I think we're going to see an increase in that, as we've said before, post COVID-19 return to work, return to corporate type of environments. So I while I'm thrilled with the government business and we're going to continue to thrash it.

Only seven 8% of our revenues only alright, that's a law, but it also shows that it was 30% coming from other opportunities I don't think we're going to see an increase in that as we've said before post COVID-19 returned to work returning to corporate type of environment. So I, while I'm thrilled with the government business and we're going to continue to thrash it Don.

Think of us as the government only business, we're far from that now to to your other question about the sort of cadence of ordering them it might not be surprising to anybody listening to this call to find that there are government entities, who have electric vehicles, who are coming to them and do not yet have charging infrastructure in place with them I don't mean, not stunned unkind I just mean, it's it's.

Speaker 4: Don't think of us as a government only business, we're far from that.

Speaker 4: Now, to your other question about the sort of cadence of ordering, it might not be surprising to anybody listening to this call to find that there are government entities who have electric vehicles who are coming to them and do not yet have charging infrastructure in place for them. I don't mean that's sound unkind. I just mean it's one of those things no one's ever really done before so no one's really been sure on the timing of these.

One of those things no one's ever really done before so no one's really been sure on the timing of these things.

Again, we're always going to sound an indoor exploitative. This is excellent for US are the simple fact, the matter is if you were a government agency, who receives a bunch of electric vehicles in the fourth quarter of this year and you don't have any charging infrastructure. What's happening is at the moment you started to look around and figure out what does that mean and what you're learning is that by the time you go through permitting and electrical.

Speaker 4: Again, not wishing to sound unkind or exploitative, this is excellent for us.

Speaker 4: uh... the simple fact that matters if you're a government agency who receives a bunch of electric vehicles in the fourth quarter this year and you don't have any charging infrastructure what's happening is at the moment your son to look around and figure out what does that mean

Speaker 4: And what you're learning is that, but the time you go through permitting and the electrical work and construction work and environmental impact studies and figuring out that you don't have enough grid capacity in the locations where you need to put the charging in all of this. So the time you do all that, you're in serious danger of ending up with a bunch of electric vehicles with no way to charge.

Work in construction work in environmental impact studies, and figuring out that you don't have enough grid capacity and the and the locations where you need to put the charging and all that stuff. Every time you do all that you were in serious danger of ending up with a bunch of electric vehicles with no way to charge them nobody wants to see that happen that would just be.

Speaker 3: Nobody wants to see that happen, that would just be

Unhelpful in every way possible not to mention that terrible use of taxpayers' dollars. We can solve that problem for them and we have a GSA contract in place, which has now been enhanced with the BPA. The blanket purchase agreement and it means that those people who are behind or who are worried that they won't be able to get charging infrastructure traditionally installed fast enough can come to.

Speaker 4: unhelpful and every way possible, not to mention a terrible use of taxpayers dollars. We can solve that problem for...

Speaker 4: And we have a GSA contract in place, which has now been enhanced with the BPA to the blanket purchase agreement. And it means that those people who are behind or who are worried that they won't be able to get charging infrastructure traditionally installed, fast enough can come to us. And we can solve that problem for them. But by God, we're gonna have to ramp up to do that to come anywhere near meeting their requirements. And that's a central part of our focus right now.

And we can solve that problem for them, but by God, We're gonna have to ramp up to do that.

To come anywhere near meeting their requirements and that's a central part of our focus right now and then beyond that for those even those who do the grid tie charging initially like the other customer I mentioned to you they're going to run out of capacity at some point we are on the radar now we're talking to them.

Speaker 3: And then beyond that, for those, even those who do do the grid tight charting initially, like the other customer I mentioned, he's going to run out capacity at some point. We're on the radar now, we're talking to them. We've invested in government relations, we've invested in direct federal sales and other activities, and it's very gratifying.

We've invested in government relations, we've invested in direct federal sales and other activities and it's very gratifying to see how much attention we're getting at that at the federal level right. Now. So I think it's gonna be a mixture of all of the above and.

Speaker 4: see how much attention we're getting at the federal level right now. So I think it's going to be a mixture of all the above.

And in every instance, it's going to it will result in nothing but increase demand for us and I believe a very dramatic increase demand.

Speaker 4: And in every instance, it will result in nothing but increased demand for us. And I believe very dramatic increase.

Yeah, Okay, Great and then I did want to talk to you know I guess nice job on the scene.

Speaker 5: Okay great and then I did want to talk you know I guess nice job on scene the the the margin progression You know look like it was look looks like it improved a couple hundred bases point sequentially

The margin progression you know it looked like it was looks like it improved a couple of hundred basis points sequentially.

What is 300 to 300 basis points would be preserved yep Yep Yep.

Speaker 4: What is 300 basis points to be precise? Yep. Yep. What will I do?

[laughter] what has customer feedback been around you know this.

Speaker 5: What has customer feedback been around the stickiness of pricing? And the reason I asked that is...

Stickiness of pricing and the reason I ask that is you know, whether it's the steel or the or the energy storage piece or the solar panels are the wage labor you know I have to believe most of it most of the inputs and producing the unit is going higher now clearly volumes.

Speaker 5: You know, whether it's the steel or the energy storage piece, or the solar panels, or the wage labor, you know, I have to believe most of the inputs in producing the unit is going higher. Now, clearly, volumes are also improving, but what has kind of been, you know, obviously the product that

We're also improving but but what has kind of been you know obviously, it's a product that.

You know the buyers need what has been the how should we be thinking about asp's is as we kind of move forward in this year.

Speaker 5: you know the buyers need what has been that that that how she would be thinking about it you know as peace as as we kind of move forward in this year

Yes, so it's a subject where she has an awful lot of attention from us right.

Speaker 4: yes it's a subject which gets an awful lot of attention from us frankly uh... i'm i'm still very heavily focused on winning market share an increasing volume

I am still very heavily focused on winning market share and increasing volumes.

I think that it's got to be the most important thing that we do we want large orders, we want to turn them through the factory, we want a grind costs I haven't brought it I'm I'm convinced there's still a lot of room for cost reduction as we increase our volumes and so the focus is heavily on bringing in the sales now with that said we.

Speaker 4: I think that is got to be the most important thing that we do. We want large orders. We want to turn them through the factory. We want a grind cost on the product. I'm convinced there's still a lot of room for cost reduction as we increase our volumes. And so the focus is heavily on bringing in the sales. Now that's say

We have had a lot of internal discussions around.

Speaker 4: We have had a lot of internal discussions around increasing our prices.

Increasing our prices because we are very good value.

Speaker 4: because we are very good value. You know, in hundreds of deployment across the US and internationally, in just about every instance, the cost of our unit was less than the cost of a voidy construction and electrical work. And then the energy spree.

And in hundreds of deployments across the U S and internationally and just about every instance, the cost of our unit was less than the cost of avoided construction and electrical work and then the energy Street.

Essentially after that so we're very good value and that means that there's the you'd think theres an opportunity for increasing our prices and we have talked about that I can tell you right now our tendency is to not increase the sticker price of the product, but we have had discussions and actually I think where we're putting into effect some instances, where there will be a.

Speaker 4: essentially after that. So we're very good value and that means that you'd think there's an opportunity for increasing our prices and we have talked about that. I can tell you right now, our tendency is to not increase the sticker price of the product.

Speaker 4: but we have had discussions and actually I think we're putting into effect. Some instances where there will be an inflationary search charge if you like.

And inflationary surcharge if you like.

This is this is something that gives us some latitude we can remove it in the future if cost stabilizes, we anticipate and also for our costs come down and without giving people a sticker shock because they see that the price going up we're still dealing with an audience strikes me that that that that is not educated in this space and again, that's not to be unkind. They just haven't had experience with it and so we're still dealing with them.

Speaker 4: This is something that gives us some laps you. We can remove it in the future if costs stabilizes. We anticipate and also if our costs come down. And without giving people a sticker shot.

Speaker 4: because they see the price going up. We're still dealing with an audience frankly that is not educated in this way. And again, that's not to be unkind, they just haven't had experience with it. So we're still dealing with an audience who has difficulty figuring out how a charge point charger can be six and a half thousand dollars and an EVR can be sixty five thousand dollars. That sounds like it's ten times more expensive because they don't yet know how expensive it's going to be to go through the construction, electrical work and all the other things. That takes a bit of an education.

And she has difficulty figuring out how our charge point charter can be six and a half thousand doors in an EV or it can be $65000 that sounds like its 10 times more expensive because they don't yet know how expensive. It is gonna be to go through the construction of electrical work and all the other the other things that takes a bit of an education. So we want to bring them in we want to win big orders.

Speaker 4: So we want to bring them in, we want to win big orders, we want to improve our profitability through reducing costs. And as I say, there's still a lot of opportunity to do that. But we are definitely looking very seriously at responding to inflationary pressures through some pricing increases, but probably as it was delivered as a line item on the proposal at some kind of search arch, which we think the customer base will understand and probably be more ready to accept and digest and a pimple just to blanket the cost increase with our explanation.

We wanted to improve our profitability through reducing costs and as I say, there's still a lot of opportunity to do that.

But we are definitely looking very seriously at route.

Responding to inflationary pressures are through some pricing increases, but probably as it was delivered.

Delivered as a line item on the proposal at some kind of a surcharge, which we think the customer base will understand and probably be more ready to accept and digest that a simple just simply didn't get cost increases without explanation.

Okay, Yeah that makes a lot of sense. Thank.

Speaker 5: okay that makes a lot of sense uh... thank you for the time everybody

Thank you for the time everybody.

Thanks, Craig.

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

Speaker 1: The next question is from Tate Sullivan with Maxim Group. Please go ahead.

Hello, Thank you Hi Desert Hello, It doesn't I met you going back to your comments on the Bean pack did I hear you say are you going out and replacing the batteries and <unk> that are already deployed.

Speaker 4: Hello, Jackson. Thank you. Hi, Des. Hello, it doesn't us. You're going back to your comments on the bean pack. Did I hear you say, are you going out and replacing the batteries in EV arcs that are already deployed?

Or is that just in future.

Speaker 4: The faster that doesn't it? Future? EDRs? No, no, no, we will not do that. We've had no requirement to do that. No, they've got so exciting about the BIM pack is that we are, you know, we acquired also technology of March 4th.

No no no we will not do that with no requirement to do that but what's so exciting about the impact is that we are you know we acquired all cell technology on March 4th that wasn't very long ago, telling me goes back very very quickly when you're doing this stuff and yet the teams have been working very hard in mind, the engineering teams in San Diego.

Speaker 4: That wasn't very long ago. Time goes by very very quickly when you're doing this stuff. And yet the teams have been working very hard, the engineering teams in San Diego on the charging side of the business and on the energy storage side of the business. And they have already produced a custom tailored pack for our product, the Beam Pack.

Chartering side of the business and on the.

Energy storage side of the business and they have already produced a custom tailored pack for our products the bean pack and we have not been installing them.

Speaker 4: And we have not been installing them in our products today. So what's important for you to understand, the other call is to understand, or the other listeners to understand, is that the gross profits that you're seeing right now do not reflect the reduction in cost that we anticipate from using our own internal battery packs. However, those packs are being produced.

And our products to date, so what's important for you to understand that the other callers to understand Oh. The other listeners to understand is that the gross profits that youre seeing right now do not reflect the reduction in costs that we anticipate from using our own internal battery packs. However, those products are being produced.

As I'm speaking to you and through through an incredibly accelerated time line and they will be introduced into our products I believe the first week of June when we get when we when we get the first shipment of our Chicago facility in San Diego to enter into a Cvs is not the first week of June it will be sometime in June and so what that means is that for.

Speaker 4: even as I'm speaking to you and through an incredibly accelerated timeline and they will be introduced into our products. I believe the first week of June when we get the first shipment out of our Chicago facility in San Diego to go into first EVR. So not the first week of June , it will be some time in June . And so what that means is that from that time forward, the EVRs will be going out with our own custom.

That time forward the E V opex will be going out with our own custom battery packs in them those are better we'll get will get better.

Speaker 4: battery packs in them. Those are better. We'll get better, make a better product essentially. It's easier to integrate them into our product, which will mean ultimately a reduction in labor cost of integration. And most importantly, they're a good, de-alesce expensive because we're only paying the cost of our species. We're not paying the margins.

Make a bachelor of product essentially it's easier to integrate them into our block, which would mean ultimately a reduction in labor cost of it and integration and most importantly, they're a good deal less expensive because we're only paying the cost basis, we're not paying a margin.

Nothing else that's just the beginning of that cost reduction. So that's the key thing to understand it's not that we would we would contemplate replacing boxes in the field because we're not having any problems with any of the boxes. We have in the field, but certainly moving forward our products will have our own integrated box save us a lot of money back for our products and also gives us an opportunity to really start grinding out costs in a few.

Speaker 4: and everything else. That's just the beginning of that cost reduction move. So that's the key thing to understand. It's not that we would contemplate replacing batches in the field because we're not having any problems with any of the batches we have in the field. But certainly moving forward, our products will have our own integrated packs, save us a lot of money, better product. And also give us an opportunity to really start grinding out costs in the future. And they just want another thing, one other comment I want to make about the bean pack.

And then just one other thing I'll add one other comment I want to make about the bean pack.

It turns out that the the kilowatt hour requirements that we have for our products come in increments, which are very similar to lots of other users.

Speaker 4: It turns out that the kilowatt-hour requirements that we have for our products come in increments which are very similar to lots of other users' kilowatt-hour requirements. That's not all that surprising, really.

Users kilowatt hour requires no that's not all that surprising really when you think about it and as a result of this bean pack that we're making we intend for it to become a core and standard battery pack that we can mass produce and not only put into our own products, but also used extensively in other peoples applications.

Speaker 4: And as a result of this, this bean pack that we're making, we intend for it to become a core and standard battery pack that we can mass produce, and not only put into our own products, but also use extensively in other people's applications.

And so that once we do that that will allow us to move to further automation in the manufacturing of those packs and further mass production, which will result, we believe in further cost reductions and go up more revenue opportunities because now we have customers who have had to wait for a solution of the spoke solution or an engineered solution or something we will be able to handle that.

Speaker 4: And so once we do that, that will allow us to move to further automation in the manufacturing of those packs and further mass production, which will result, we believe, in further cost reductions and a lot more revenue opportunities, because now customers who have had to wait for a solution, a bespoke solution or an engineered solution or something, we'll be able to hand them something that solves all their problems, you know, not off the shelf exactly, but without having to go through a lot of development. So there's a whole lot of opportunity coming out of this battery business. Every day, I thank God I did that, I made that acquisition, particularly in light of the supply chain and everything else, but it's going to have excellent ripple down effects across many aspects of our business.

Something that solves all the problems.

No off the shelf exactly but without having to go through a lot of development. So there's a whole lot of opportunity coming out of this battery business I am time everyday I. Thank God I did that made that acquisition, particularly in light of the supply chain and everything else, but it's gonna have excellent ripple down effects across many aspects of our business.

Yeah, and great point I'm seeing other charging companies start to try to do battery products as well too and then circling back on the customer with 500 buildings I imagine they can quite compelling analysis on how much they're paying for extra electricity or charging as well is that customer. If you can share a repeat customer or is that a new potential customer.

Speaker 5: Yeah, and great point on seeing other charging companies start to charge to do batteries and products as well too. And then circling back on the customer with 500 buildings, I imagine they can do a quite compelling analysis on how much they're paying for extra electricity for charging as well. Is that customer, if you can't share a repeat customer, or is that a new potential customer?

By the way just just on your first comment, let's remember that those batteries. The other EV charging companies are integrating into their EV charging installations are grid dependent and so you're not getting resiliency out of that you when or if the grid goes down you're not recharging those batteries I think it's very important I pointed that out because I don't want people thinking that that.

Speaker 4: By the way, just on the first comment, let's remember that those batteries that other EV charting companies are integrating into their EV charting installations are grid dependent.

Speaker 4: And so you're not getting resiliency out of that. When the grid goes down, you're not recharging those batteries. I think it's very important to point that out because I don't want people thinking that what we've been doing for 10 years is being replicated by others. It isn't. Just adding batteries to a grid-tied installation maybe gives you one more charge for a vehicle, but it doesn't get you that kind of resiliency that we offer to all our customers. And that's a key differentiator for us. But to answer the core part of your question, the customer with the 500 buildings that I was talking, it's a new customer.

You know what we've been doing for 10 years is being replicated by others not it isn't just adding batteries to a grid tight installation maybe gives you one more charged for a vehicle, but it doesn't get you that kind of resiliency that we offered to all our customers and that's a key differentiator for us but to answer your the core part of your question.

The customer with 500 to 500 buildings that I was talking no. It's a new customer and you're absolutely right that they have a lot of data I think the really important takeaway from that is this second wave deployment thing.

Speaker 4: And you're absolutely right, they have a lot of data. I think the really important takeaway from that is this second wave deployment thing. People often say to me, oh well, someone's already got EV Chargers, so therefore you don't have an opportunity with them. Well, that may be true today.

People, often say to me Oh, well someone who has already got E. V. Charter. So therefore, you don't have an opportunity with them well that may be true today, but as there are more and more ribbons and F 150, lightnings and and and and all of the incredible variety of electric vehicles are coming out here in the parking lots are just going to be full of B E vs. They're all going to expect a charge.

And while all these building operators who have already deployed.

You know to their great credit by the way who have already deployed a grid tied EV charging we're going to discover is that the next wave or perhaps the wave. After the next wave will be either massively more expensive because we don't have to dig a lot more trenching and putting a lot more electrical infrastructure or just impossible.

Because I can tell you what happens is when you. It's not just your own building that runs out of capacity your own parking lot that runs out of capacity pretty soon you get to the point, where the local substation that serving all the buildings around your runs out of capacity and then that will require a substation upgrades and that's a very expensive and time consuming process and of course weren't enough substation.

Speaker 4: up great and that's a very expensive and time consuming process and of course when enough some stations up to be upgraded You need a new power station and all the transmission infrastructure that goes along with it So this is a kind of a dominoes thing which is certainly coming. I've been saying it for 10 years A lot of people rolled their eyes when I was saying it now it's a reality which people are having to live with We are solving the problem and it ends up being a bigger and bigger opportunity for us as every day goes by as every EV is sold and as every EV charger is installed on the grid that's one left that will be able to be installed on the grid as we move forward We saw it that's very local way with this existing customer and again, I just love hearing that you saved our

The upgraded you need a new power station and all the transmission infrastructure that goes along with it. So this is a kind of a domino's thing, which is certainly coming I've been saying it for 10 years a lot of people roll their eyes, when I was saying it no. It's a reality, which people are having to live with we are solving the problem and it ends up being a bigger and bigger opportunity for us.

As every day goes by as every EV is sold and its every EV Chargers installed on the grid. That's one less that will be able to be installed on the grid as we move forward. We saw a very local way with this existing customer and again I'd just love hearing that you saved our us She said I mean, that's just fantastic too.

Here from it from any customer, particularly a brand new one with a huge opportunity.

We are not deploying it all 500 of our buildings don't start writing me notes about that or anything else, where it's where we're just at the beginning with our but she's a fantastic that she she Craig tells them that she views us in the way that she does.

As is usually the case so that's when we end up deploying it you know a.

A few products for our customer and it's quite a few by the way so it's not one or two but but when we do that they they they more often than not come back for more.

Speaker 4: so it's not one or two uh... but uh... when we do that uh... they they they more often do not come back for more

Okay. Thank you that's it.

Thank you Ted.

The next question is from James Mcculloch of private Investor. Please go ahead.

Hello, James Yeah, Yeah, two questions.

First one is is there any R&D going on to improve the survivability of the systems.

And adverse weather events, obviously, that's probably your key differentiator as well as that construction cost issue, but just one survivability is there any way whether its a dismantling our solar panels or anything that can be done to improve the survivability and an adverse weather.

Speaker 4: uh... in adverse weather events obviously that's probably your key differentiator

Speaker 4: construction cost issue, but just on survivability, is there any way, whether it's dismantling solar panels or anything that could be done to improve the survivability in an adverse weather event? That's the first question. And then the second question was on international market opportunities. If there's a concerted effort, whether it be in Europe or Australia, Southeast Asia to

Van.

The first question and then the second question was on international market opportunities if.

There's a concerted effort with our whether it be in Europe or Australia.

With East Asia too.

Too.

Speaker 4: to penetrate markets and if so, if there's any discussion going on on a on-travy green field or as a tour list.

Penetrated markets and if so if there's any discussion going on on a on JV greenfield or or.

Or is there or is it too early for that kind of a capital investment.

Yes. So those are both excellent questions lets talking about survivability far so let's talk about the reality is exist today.

Speaker 4: Yes, so those are both excellent questions. Let's talk about survivability first and let's talk about the reality as it exists today.

Are we our product is.

Re teach no actually an improvement of five miles per hour previously was raised at a 120 mile per hour winds that means when I say raised it I mean, an independent agency is taking a look at the thing done all their calculations inside that will survive 120 mile per hour winds. We have just increased that now to 125 miles. So if I sound like a lot, but I'm sorry, what about those the win.

Speaker 4: is rated now, actually, an improvement of five miles per hour. Previously, it was rated at 120 mile per hour winds. That means when I say rated, I mean an independent agency is taking a look at the thing, done all their calculations and said that we'll survive 120 mile per hour winds. We have just increased that now to 125 miles. Five miles doesn't sound like a lot, but I tell you what, those wind events of those sorts get exponentially more rare for every mile per hour. You add to the sort of equation. That's what they're rated for. We know that they have survived 185 mile per hour, category five winds in the Caribbean. And we know that we got a letter. We have this letter. So from our customer who's the government, government down there saying that our products were the only thing that survived those, those hurricane storms that I went right over the top of it. I frankly even I was surprised. I know we build a very robust product, but even I was surprised that we survived the first to sheer porosity when I saw videos of, you know, holding swine around and stuff like cars being overturned.

Events that those sorts get exponentially more rare for every mile per hour you adds to the the are they the sort that sort of equation now that's what the rates before we know that they have survived 185 miles per hour a category five wins in the in the Caribbean and we know that we got a letter we have this metro so from a customer who is the government.

Government on there, saying that our products were the only thing that survived those there was hurricane storms that I went right over the top of it I think even I was surprised I know, we built a very robust brought up but even I was surprised that we that we survived the first the shear ferocity when I saw videos of buildings flying around and stuff like that and cars being overturned.

That's a very robust from that point of view now the other thing is in terms of advancing it.

Speaker 4: It's a very robust from that point of view. Now the other thing is in terms of advancing it, just a couple of years ago, we were not flood proof.

A couple of years ago, we were not flood Bruce.

Well, we were flooded proof to about six and a half inches actually today the product is slug group to nine and our feet.

Speaker 4: Well, we were flood-proof to about six and a half inches, actually. Today, the product is flood-proof to nine and a half feet.

Feet two requires a nine and a half the inundation to destroy our product and that is incredibly rare and the sorts of locations, where we're deploying you know waist-high Walter Yes, you know in the streets and that sort of stuff storm surge or whatever else, but not in a heartbeat almost never happens and so what that means is when you when you compare up during a hot.

Speaker 4: It requires a nine and a half foot inundation to destroy our product.

Speaker 4: And that is incredibly rare in the sorts of locations where we're at the point. You know, waste high water, yes, you know, in the streets and that sort of storm surge or whatever else. But nine and a half feet almost never happens. And so what that means is when you compare our product during a hurricane idol or something like that, when you compare our products to grid-tide infrastructure, which are all destroyed during those sorts of events, and don't forget, it's not just the charger that conduits the transformers, the switch gear, everything leading up to that charger, everything that's in that flood zone destroyed. As we ripped out, grid expense and disruption and replaced our products on the other hand, the minute the water is rolled back, you can move a car up and then charge them. And in fact, if you dare, you can even approach them during the flood event and plug into the emergency power panel from a boat or something. I don't know if that's happened yet, but it will one of these days because we're still have power up there available during those types of events. So we've made a lot of advances already. Those are two, you know, increasing the wind speed and the flood proofness, and I'll tell you, we'll never stop working to make the product better. But I don't think, actually, that we really need to concentrate a lot on resiliency at the moment. Certainly, one of the other aspects that we've done is, because we've got this battery technology company, who's, to current chief claim to fame is their ability to prevent thermal runaway. Stop batteries catching fire and exploding and doing all the other things like that. Certainly integrating those into our product gives it yet more resiliency and more safety. But it's already very, very robust.

Oregon, Idaho or something like that when you compare our products the grid tied infrastructure, which are all destroyed during those sorts of imagine don't forget it's not just the charger the conduit the transformers switchgear everything leading up to that charter everything thats in the flood zone destroyed absolutely ripped out great expand some disruption and replace our products on the on the other hand the minute the waters a roll back you can move.

The car up to them and charge them and in fact, if you dare you can even approach them during the floor debate.

Plug into the emergency power panel from a boat or something I don't know if that's happened yet, but it will one of these days because we're still a power up their available during those types of events. So we've made a lot of advances already that that those are too you know increasing the wind speed and the flood proofing has proven that's come up and I'll tell you we will never stop.

Working to make the product better, but I don't think actually that we really need to concentrate a lot on resiliency at the moment certainly one of the other aspects that we've done is because we've got this bought this battery technology company, whose to current chief claim to fame is their ability to prevent thermal runaway salt batteries catching foreign exploding and doing all the other.

Things like that certainly integrating those into our product gives us yet more resiliency.

More safety, but it's already very very robust.

Any improvements that we can make it we will of course do that Oh.

Speaker 4: any improvements that we can make to it, we will of course do that as to the never-ending process of improvement. To your question about international expansion, I've made no secret. I'm very interested in going to Europe . Whether we acquire our way into Europe , partner our way into Europe , or bootstrap our way into Europe is still a work in progress. I'm looking at opportunity.

And through that and never ending process of improvement.

To your question about international expansion and I've made no secret.

I'm very interested in going to Europe .

Whether we acquire our way into Europe , part, Norway into Europe , or bootstrap, our way into Europe is still a work in progress. So I'm looking at all opportunities, but it's a definitely the biggest need V market in the world I think our products will be more popular than they are in the United States, you know Edinburgh, where I'm from Scotland. If you dig down six inches you go back three or 300 years of hits.

Speaker 4: but it's definitely the biggest EV market in the world. I think our products will be more popular there than they are in the United States. You know, Edinburgh, where I'm from in Scotland, if you dig down six inches, you go back 300 years of history. And so digging trenches and foundations and all that sort of stuff, the Europeans are much more sensitive about environmental impact of those sorts of things. Being able to bring a product and drop it off and charge cars with nothing but locally generated renewable energy seems like a real winner. And by the way, it more than seems like I know it. I've had enough conversations with people over there. So I'm very intent on going to Europe . We've got a lot on our plate at the minute. We just finished this acquisition, looking at other opportunities, but yes, it's a high priority for me to go there. And you brought up Australia. It's interesting that you brought up Australia because of course they're very far behind on EVs, but they do have a new administration now who's gonna hopefully reverse Australia's trend of ignoring the climate and the environment, which is what they've been doing for the last several decades. But one of the areas that we've seen a lot of interest in Australia, frankly, is with aircraft.

Great.

So digging trenches and foundations and all that sort of stopped the Europeans are much more sensitive about environmental impact if those sorts of things being able to bring a product and dropped the often charge cards with nothing but locally generated renewable energy. It seems like a real winner I'm, probably a bit more of a it seems like I know what I've had enough conversations with people over there so I'm very intent on go.

To Europe , we've got a lot on our plate at the minute. We just finished this acquisition looking at other opportunities, but but yes. It's a high priority for me to go there and you brought up Australia. It's interesting that you brought up Australia because of course, they're very far behind on Evs, but they do have a new administration know who's going to hopefully reverse Australia as trend of ignoring that.

Climate and the environment, which is what they've been doing for the last several decades, but one of the areas that we've seen a lot of interest from Australia. It frankly is with aircrafts.

Last year, we set the world record for the longest flight of production electric airplanes anywhere, it's a real world record by the way it would make it up and oddly enough. We go what pressure that we got a lot of people coming to us from Australia, where of course, they have a much higher rate.

Speaker 4: Last year, we set the world record for the longest flight of a production electric airplane anywhere. It's a real world record, by the way, we didn't make it up.

Speaker 4: And all enough, we go all up press for that and we got a lot of people coming to us from Australia. We're of course they have a much higher reliance on small aircraft because the vast distances that are deflying doctors and things like that. And so we get a lot of interest from them because they need charging infrastructure just like everybody else does. It's very difficult to put charging infrastructure into airports, but we can not for us. Very easy for us to do it.

Reliance on small aircraft because of the vast distances that they have to come you know you are flying doctors and things like that and so there's a lot of it we've got a lot of interest from them because they need charging infrastructure just like everybody else does it's very difficult to put charging infrastructure at the airports, but we can stop but not for us very easy for us to do it. So just trying to be funny that you brought up Australia I must admit it's not.

Speaker 4: So it's just really funny that you brought up Australia. I must admit, it's not a big area of focus for us at the moment. Europe is a much bigger area of focus, but I intend to expand internationally where that often said, we're called being global, not being the San Diego.

A big area of focus for us at the moment Europe is a much bigger area of focus, but I intend to expand internationally, where as I've often said, we're called Bien global not being in San Diego.

I remember in one of your I think it was a year ago and one of your conference calls our quarter was impacted by a freight charge on our shipment to the I think it was the state of Hawaii.

Speaker 4: I remember in 180, I think it was a year ago when he reconfitted calls. The quarter was impacted just by a freight charge on a shipment to the, I think, was the state of Hawaii. It was a contracted price which included freight and obviously, when you're dealing with, it's fairly heavy equipment from understand and you're dealing with some pretty significant freight costs I'm guessing. So, it sounds like that's a, it sounds like Europe would be a truck.

But yeah, there was a contracted price, which included freight and obviously when you're dealing with.

Fairly heavy equipment from understand and are you dealing with some pretty significant freight costs I'm guessing so.

It sounds like that's a.

It sounds like Europe would be a tremendous opportunity not.

Not just given the growth in E vs and the political climate, but I would guess also you might have to have some fairly unique solutions there too so.

Speaker 4: growth in EVs in the political climate.

Speaker 4: I would guess also you might have some fairly unique solutions there.

You're quite right and by the way you actually bring up something else very interesting and I, probably should've mentioned it in my comments I'm very intent on bringing battery manufacturing from Chicago.

Speaker 4: You're quite right. And by the way, you actually bring up something else very interesting, and I probably should have mentioned it in my comments.

Speaker 4: I'm very intent on bringing battery manufacturing from Chicago into San Diego, not at the expense of Chicago, in addition to Chicago, and that's because it will make a lot of sense for us to make, produce our new proprietary batteries right where we produce our charging products in our San Diego factory. We've got some space to do that there. I'm really interested in doing that, particularly because a lot of government incentive money to help me get that done. And similarly, we are considering moving

To San Diego, nor are they expensive Chicago in addition to Chicago and that's because it will make a lot of sense for us to make produce our new proprietary batteries right, where we produce our charging products in our San Diego factor, we've got some space to do that they are really interested in doing that particularly because a lot of government incentive money to help me get that done I'm. Similarly.

We are considering.

Moving some EV arc manufacturing in our own chartering products manufacturing into the Midwest again, not at the expense of San Diego is inexpensive move and a big part of the reason for that is what you just pointed out it brought us or heavy and bulky we shipped a lot of them to the northeast into other parts of the country. It would be a lot less expensive a lot more efficient to do that from the Midwest. So these are things, which.

Speaker 4: some EVO manufacturing and our other charging products manufacturing into the midwest again not the expensive sand ego is an expensive move

Speaker 4: And a big part of the reason for that is what you just pointed out, products are heavy and bulky. We ship a lot of them to the northeast and to other parts of the country. It would be a lot less expensive, a lot more efficient to do that from the Midwest. So these are things which are very much on the whiteboard, on the roadmap for planning. And we generally get to things. We generally do what we say we're going to do. Sometimes it takes a bit longer than I want it to. But if we're planning it, we generally do it.

We're very much on our you know on.

On the whiteboard on the roadmap and for planning.

And we generally get to things, we generally do what we say we're going to do sometimes it takes a bit longer than that I wanted to but if we if we're planning that we generally do it.

Okay. Thank you.

Thank you.

Again, if you have a question. Please press Star then one please standby as we poll for questions.

Speaker 1: Again, if you have a question, please press star then one. Please stand by as we pull for questions.

Showing no further questions. This concludes our question and answer session I would like to turn the conference back over to Desmond Wheatley for any closing remarks.

Speaker 1: showing no further questions. This concludes our question and answer session. I would like to turn to the conference back over to Desmond Wheatley for any closing remarks.

I think we've covered a lot of stuff here today.

Speaker 4: I think we've covered a lot of stuff here today.

We just had a record breaking quarter following a record breaking year, we've got record breaking pipeline and backlog combinations.

Speaker 4: We just had a record-breaking quarter following a record-breaking year. We've got record-breaking pipeline and backlog combinations. Our new battery company and the ops team is doing a fantastic job of producing products and getting out. As I said earlier, it's never without challenges, but that's what we're here to do. If it was easy, everybody would be doing it, right?

Our new battery company.

And the ops team is doing a fantastic job of producing product and getting it as I said earlier its never without challenges, but that's what we're here to do it.

Easy everybody would be doing it right I, it's just.

The thing is positioning very well for us for the future of electric vehicles for the requirement of EV charging infrastructure like we make and I'm thrilled to be doing what I'm doing for a living so thank you all for the opportunity.

Speaker 4: Everything is positioning very well for us, for the future of electric vehicles, for the requirement of the EV charting and for structure like we made, and I'm thrilled to be doing what I'm doing for a living. So thank you all for that opportunity. Thank you all for listening today, and for being involved with, and with being, like I said, it's a great time to be on the bean team.

Thank you all for listening today and for for for being involved with and it's been like.

It's a great time to be on the bidding team. Thank you.

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

Speaker 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

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